Timely Real Estate News…………………………………..1 March 2019
Home sales drop for third month….
We are seeing sales slipping behind last year’s numbers – not surprising to us on the Westside as sales volume has taken a downward turn. According to the National Association of Realtors, existing-home sales experienced a minor drop for the third consecutive month in January. Of the four major U.S. regions, only the Northeast saw an uptick in sales activity last month.
Total existing-home sales completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 1.2% from December to a seasonally adjusted annual rate of 4.94 million in January. Sales are now down .085% from a year ago (5.40 million in January 2018).
Lawrence Yun, NAR’s chief economist, stated home sales were the lowest since November 2015. But nationally, median home prices (including all types) was up 2.8%. Please be aware prices are not dipping, just the sales volume. In fact, as I have mentioned in the past, I check the “hot sheet” from the multiple listing every day, and as a study for just one day, of the seven (7) homes that had closed escrow that on were on the report for that day, four (4) of them sold at either the asking price (without a previous reduction in price) or over asking.
It’s catching — sales dip in California, too
Housing demand in California remained subdued for the ninth consecutive month in January as economic and market uncertainties sent home sales to their lowest level since April 2008, according to the California Association of Realtors.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 357,730 units in January, according to information collected by C.A.R. from more than 90 local realtor associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2019 if sales maintained the January pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
January’s sales figure was down 3.9% from the revised 372,260 level in December and down 12.6% from home sales in January 2018 of 409,520. January marked the ninth consecutive month of decline and the sixth month in a row that sales were below 400,000, dipping to the lowest level since April 2008.
As always, I will be reviewing sales and pricing conditions for the communities I cover each month in The SchifferLine — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood. See my next SchifferLine on March 15.
High-end sales feeling it, too…
We are behind in our high-end sales on the Westside, which follows the trends set last year. Sales in the $5 million-plus category are lagging compared to January 2017 — there have been 39 closed sales of $5 million-plus this year versus 52 in 2018, a drop of 25%.
The numbers are better for $10 million-plus homes, as there have been 15 closed sales versus 16 in this range last year. Of these, five were $20 million-plus compared to four this time a year ago. And of these, there was only one sale of $30 million-plus, which occurred in both 2018 and 2019. Buyers for the $20 million-plus homes were three Americans, one British and one unidentified. Three of the sales for these five homes were located Bel-Air, one in Sunset Strip, and one in Beverly Hills.
Economists make predictions…again
This is what economists do — make predictions. One thing we do know, they’re not always unanimous in looking at the future. However, more than three-quarters of business economists expect the United States to enter a recession by the end of 2021, though a majority still estimate the Federal Reserve will keep raising interest rates this year.
Ten % believe a recession will begin this year, 42% project one next year, and 25% expect a contraction starting in 2021, according to a semiannual National Assn. for Business Economics survey released last week. The rest of the poll of nearly 300 members conducted from Jan. 30 to Feb. 8 expect a recession later than 2021 or expressed no opinion.
The projections come ahead of the Commerce Department’s release this week of the advance reading for fourth-quarter gross domestic product, which was delayed by the partial shutdown of the U.S. government. Economists surveyed by Bloomberg projected that growth cooled to a 2.5% annualized rate in the final months of 2018 from 3.4% in the third quarter. Thirty-six %t of the survey panel said the existing tariffs, if they remain in place, could further drag the economy down. We’ll see what happens with the current China-U.S. trade talks — the market seems to think there is positive news forthcoming.
Broken heart drives Millennials home again.
Student loan debt and rising housing costs in the last few years have been cited as the chief reasons why many young adults are continuing to move back in with their parents. But a new Homes.com study suggests the real trigger may be a broken heart.
Since the Great Recession, which thwarted many millennials’ plans to move out on their own, an improving labor market has not done much to lure these young adults out of their parents’ houses. Why are they staying? In a recent survey of 500 “boomerang” millennials, 33% of 26- to 30-year-olds who moved back home cited a divorce or breakup as the primary reason for returning to their parents’ nest. Thirty-seven % of 31- to 35-year-olds and 2% of 36- to 40-year-olds say the same, the survey shows.
For millennials, a combination of a breakup and unstable finances may be sending them back home. Couples who live together may help each other financially by splitting housing costs. But after a breakup, the costs may be too much for one person to carry. Also, young adults may be moving back home for emotional support to help them recover post-breakup. “Home is a safe place a lot of times,” Grant Simmons, vice president of Homes.com stated, “perhaps it’s just a safe place to get your act together and start fresh.” Recent studies show that parents are eager to see their kids move out and gain home ownership.
Desert puts on a ‘blooming’ show
Don’t let the cold weather fool you — the desert is going to put on a spectacular show…and it’s starting now. Despite the recent string of cold weeks that might slow down the wildflower bloom in Southern California, it won’t be enough to halt it.
The recent rain mix with the predicted sun and high temperatures in the coming week will give the wildflowers the extra boost they need for a full bloom this season, recently said Toni Alexander, a retired Anza-Borrego Desert State Park volunteer naturalist. “The sun next week will give the flowers a chance to come to full bloom,” Alexander said. “But also keep in mind that not all wildflowers bloom at the same time.”
During the last week of February and early March, wildflower hunters will be able to find flowers along the north side of San Diego County Highway S-22, between mile markers 30 and 35, and the end of Di Giorgio Road in Borrego Springs. According to Alexander, the best thing to do is take a drive in this beautiful desert and head towards Borrego Springs. “But what people have to do, to really experience the wildflowers, is get down on their hands and knees and smell them because they are glorious.”
Throughout the city of Borrego Springs, and at the state park, information booths will be set up to let people know where to find the biggest blooms. Currently purple verbena, dune primrose, brown-eyed primrose, popcorn flowers, desert dandelions and desert lilies are in bloom.
Caution: If you’re thinking of seeing the spectacular wildflowers in the desert, make sure you know your way around, arrive early, and be prepared for traffic. Most estimate the numbers of visitors to the Anza-Borrego region between 250,000 and 500,000, overloading roads and services. According the local research center, they’re better prepared this year. Enjoy our deserts! You might even encounter some snow!
Baby It’s Cold & Wet Outside
Atmospheric rivers…what we face in future
We just learned that February was the coldest month in over 60 years for Los Angeles County, an achievement we all experienced as we hustled in and out of cars and into offices and homes. We even had snow flurries in Malibu, Pasadena, and Monrovia. I love wearing my hats, gloves and scarfs!
The snowpack in the Sierra is already 111% of normal for this time of year, and we have already surpassed our average rain fall in Los Angeles County, and its still winter.
So, what is fueling this change in weather? If you’re not already familiar with this term — “atmospheric rivers” — you will be hearing more about them. Atmospheric rivers are long, narrow bands of water vapor that are pushed across the Pacific Ocean by gusty winds. When strong enough, they can account for a disproportionate amount of the annual precipitation — between 30% and 40% — on the West Coast, according to experts. In 2016, a series of intense atmospheric rivers helped ease California’s epic drought by producing record rain and snow in Northern California.
There have already been predictions of mega storms that could have disastrous effects on Southern California, with some scientists starting that a mega storm could provoke monstrous damage to Southern California. Scientists call it California’s “other big one,” and they say it could cause three times as much damage as a major earthquake ripping along the San Andreas fault.
We are already preparing for these mega storms as the U.S. Army Corps of Engineers are working to make our flood control channels and dams (Hansen, Whittier Narrows) ready for these 90-year storms. Let’s hope we do not experience one of these mega storms…we’ve had enough cold and wet weather for a while. One other interesting fact to take note of, we are not out of the woods as pertains to the drought that we have been experienced for the last few years, particularly as a most of the rain water from our recent storms went directly into the ocean according to a recent article in the Los Angeles Times.
So, Carole how is business?
Generally, business is good. Thank you. I have a wonderful new listing of an elegant condo in the Westwood Ambassador building in Westwood, and we are having a great response. It is a first-floor corner unit that is very light and bright with large open rooms, and the prevailing comments are “It feels just like a home!” We are asking $1,050,000 and it is very easy to see. So, if you know anyone interested in making a life style change of any kind, please let me know and I will be more than happy to show it to you and them. There are a few listings coming up in Bel Air Crest, Mountaingate and Westwood Hills, but there is always room for more business.
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