Timely Real Estate News…………….. I March 2018
When you’re hot, you’re hot… market sizzles
Surely, it’s not the weather getting hotter, though with the crazy weather we have perhaps it is, but perhaps, it is the real estate market.! Home prices in Southern California had another ’sizzling’ month as prices jumped 11.4% in January, the largest year-over-year gain in 44 months as the region’s already ‘hot’ housing market got even hotter. The double-digit rise in the median price put it at $507,000, which was lower than December’s peak of $509,500 when the six-county region surpassed bubble-era highs of $505,000 in 2007, according to a report out Tuesday by research firm CoreLogic, San Diego.
If you’ve been reading the Schiffer Line for the past year, this is not a surprise as I have been writing about the continued monthly price increases which are not necessarily great news for those looking for housing.
The one-month reduction in December in the median price isn’t expected to spark a trend. Adjusted for inflation, the region’s median is still nearly 13% below the 2007 peak. Home prices have been rising each month on a year-over-year basis for more than five years. In addition to an improving economy, low mortgage rates have lifted the market and enabled borrowers to pay more for a house, as long as they can come up with their down payment and qualify for the loan which is a process that has gotten easier lately.
Riverside and San Bernardino counties — the region’s most affordable areas — represented a larger share of all activity in January compared to a year ago, which put downward pressure on the regional median price. New home sales in the region were up 26% year-over-year, but overall sales, including resale homes and condominiums, were down a slight 1.5%.
Absentee buyers, mostly investors and vacation-home buyers, bought 24.5% of all homes sold in January, said Andrew LePage, research analyst with CoreLogic. That was up from 23.1% in December and up from 22.5% in January 2017. High rents in Southern California are motivating investors who want to acquire houses and lease them to tenants as well.
While prices are up, housing unit sales declined
That’s why prices are up because of the scarcity of housing across the board — everywhere, not just in Southern California. According to the National Association of Realtors, January existing-home sales dropped 3.2%, the largest decline since 2014, as continued inventory shortages are to blame for the two-month slump.
Existing home sales decreased 3.2% to a seasonally adjusted annual rate (SAAR) of 5.38 million in January — dipping from a downwardly revised 5.56 million in December 2017.
This month’s sales pace is 4.8% below January 2017 and is the largest annual decline since August 2014 (5.5%) and the slowest pace since September 2017 (5.37 million). Unsold inventory is at a 3,4-month supply…which is low. “With rising wages and a strong economy, demand is high,” said Lawrence Yun, chief economist for the NAR, “but the dangerously low supply is hampering the sales pace (units) once again.”
On the California front, as I related in my last Schiffer Line, we need a minimum of 186,000 housing units each year to handle the increase in population, and yet, we only can deliver 100,000 units…which causes California serious shortages.
High-end sales down in West Los Angeles
Last year was a ‘booming’ market for high-end sales for the West Los Angeles market. However, in looking at the report from January 2018, which reflects sales made the end of last year, the sales volume sales is down. There have been 59 closed escrows of $5 million-plus homes this year, versus 61 at this time last year. Of these sales, 15 were $10 million-plus, versus 27 a year ago, down 47%. Only four of these sales were $20 million-plus homes versus 13 in last year (down 69$).
The four buyers of the $20-million homes were three Americans, one Canadian, and the areas in which the homes were located were two in Malibu, one each in Bel-Air and Brentwood.
The good news is that there are 52 pending sales of $5 million-plus homes and 16 of these are in the $10 million-plus range. Only one is in the $20 million-plus area.
“Must do’s” before you list your home
Terrific news: You have decided to list your home…so now what? Well, the fun is just beginning. Here are some handy hints I will share with you before I put that For Sale sign on your front lawn:
All of these “must do’s” may sound elementary – -and they are, but many homeowners really overlook these very simple tasks that can affect the successful sale of your home…1) Make sure the doorbell rings…2) Service your heating and cooling system – make sure it’s working before you have an open house…3) Check all the light bulbs…4) Check the smoke detectors…5) Deep clean and de-clutter — everywhere…inside and out..6) Clear out the garage (generally the men like to inspect the garages!), 7) touch up surfaces — repaint and/or clean all of your flat surfaces.
Yes, I know this is really Selling House 101…but you would be surprised at how many homeowners forget to take care of the basics…and you can do most of these simple chores yourself.
Where is everyone going? “Hot markets” are waiting
Because millennials, Generation Xers, and baby boomers are in different stages of their lives, they are seeking different types of real estate markets that meet their specific needs.
The National Association of Realtors found the hottest locations for each age bracket is based on migration data for each of the major U.S. metros, home-search activity, and the percentage of positive change in home ownership for each city from 2016 to 2018.
The research shows that millennials are lured to places with strong technology and cultural centers, Gen Xers favor more affordable markets, and baby boomers are heading to the Sun Belt.
Top markets for Millennials are seeking booming job markets — starting with San Francisco, Seattle, Houston, Dallas and Washington D.C. (no Southern California location made the top eight.) Generation X is looking for housing affordability where they can meet the needs of a growing family — Houston, Miami, Dallas, Washington D.C. and Riverside — the top 5.
What do Baby Boomers want? They’re looking to downsize and are looking for homes that require little maintenance and perhaps located in a 55-plus community. Their top 5 include Phoenix, North Port, FL, Miami, The Villages, FL, and Austin. Riverside is ranked No. 7.
Despite market swings….” we have a strong economy…”
New Federal Reserve Chair Jerome Powell stated that the central bank can stay its current course of gradual rate increases in light of a positive forecast for economic growth…and that’s good news to hear.
“Some of the headwinds the economy faced in previous years have turned into tailwinds…” was his message before the House Financial Services committee this week. He received high marks for his first presentation, although rate hikes are a certainty for the balance of the year.
The Fed chief downplayed the recent stock market correction and the concern that rising interest rates would hinder growth. “We do not see these developments as weighing heavily on the outlook…for the economy,” he stated.
Do pets have a vote? Some think so….
A home buyer recently called her agent and asked if her dog could see the condominium…the home buyer had already seen the house and was on the verge of making an offer. However, she apparently wanted a second opinion — the lady and the dog arrive…and the dog is paraded around from room to room — wagging his tail while inspecting the nooks, grannies and floors. “OK…looks like we have a win-win here…” She bought the condo…the dog apparently approved.
Are pets that important? A national survey found that 89% of pet owners would walk away from a home purchase if the property had restrictions against pets, while 61% would not buy a home or have it altered if they believed that it was not a pet-friendly environment.
It is no secret that millennials love dogs and research found that a third of millennials who had already purchased their first home said they were influenced by the need to have a space for a dog. After all, they’re a member of the family, too.
I personally miss having a dog, but with my busy schedule and the concern about the critters living in the hills also, I just have to enjoy my friends and client’s dogs
First of all, thank you to everyone who expressed concern about my lovely cute Mother who unfortunately fell and hit her head and had a brain bleed. We call her Teflon Kelly! She spent a little time in Neuro ICU, and is now home and doing well.
I missed seeing everyone at the 25th Anniversary Brunch for our wonderful Bel Air Crest Property Mangers Fiona & Rick Cole. I understand it was a lovely party. Sorry to have missed it.
Work wise, I am very busy. Trying to find properties for my varied clients and buyers/tenants for my lease listings. I am looking for a 20,000 minimum FLAT lot (or a house on a qualifying lot) in a gated community for a specific client. Please contact me if you know of one. Also, I have a fabulous home on Thurston in Bel Air coming up for lease the end of March. I will have photos on my web site the first of next week. We are asking $11,750. And the house is really great!
Please let me know how I might assist you or someone you know with your real estate needs.
Carole Schiffer, Realtor Coldwell-Banker Residential Brokerage/Brentwood Office
310-442-1384 (office) or e-mail me at firstname.lastname@example.org www.caroleschiffer.com
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