The SchifferLine
Timely Real Estate News…………………….1 March 2021
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Please don’t forget
I am hosting the presentation on the homeowner’s insurance situation on the 10th of March. Please contact me and I will be more than happy to send you the link. ceschiffer@gmail.com
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Southern California prices and sales jumped in January
While home prices were surging around the U.S., prices, and sales they also jumped in Southern California’s six-county region this January.
The six-county region’s median price rose 13% from a year earlier to $599,500 last month, according to data released Monday by data firm DQNews. Sales also increased 13.5%.
The data shows the hot housing market has extended into the new year. January marked the fifth consecutive month in which sales increased by double digits. It was the sixth straight month that saw a double-digit increase in the median price — the point at which half the homes sold for more and half for less.
Real estate agents and other experts say several factors are behind the competitive market during the pandemic. One is that the cost to borrow has plunged, with the average rate on a 30-year fixed mortgage dropping below 3% for the first time ever.
In Los Angeles County, median prices rose 12.6% to $690,000 while sales climbed 14.3%. Orange County media prices rose only 6.7% to $799,000, but sales rose 22%.
Some experts predict home prices will rise less this year than last year, because values can only get so high. Stay tuned!
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Home prices in U.S. skyrocketed in December
Home prices continue to march upward. S&P/Case-Shiller, a national real estate tracking firm, confirmed home prices continued their steady upward trend fueled by inventory shortages and low mortgage rates.
In December, home prices in the U.S. increased by 10.4% year over year to the monthly S&P/Case-Shiller U.S. National Home Price Index, up from 9.5% growth in November. The trend of accelerating prices that began in June 2020 has now reached its seventh month and is also reflected in their 10- and 20-City Composite Index (up 9.8% and 10% respectively).
The market’s strength continues to be broadly based: 18 of the 19 cities for which we have December data rose, and 18 cities gained more in the 12 months ended in December than they had gained in the 12 months ended in November. Historically low inventory all across the country is leading to the kind of fast-paced value appreciation observed for months as buyers try to obtain a limited number of available homes by making higher offers. Phoenix, Seattle, and San Diego saw the greatest increases in home prices at 14.4, 13.6 and 13%%, respectively.
“Persistent buyer demand amid severely undersupplied housing market has undeniably pushed home prices to new highs in 2020,” CoreLogic Deputy Chief Economist Selma Hepp said in a statement last year. “In looking ahead to 2021, pressure on home prices will likely remain strong until either mortgage rates increase or more homes are available for sale,” Hepp stated.
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Home sales could be 20% if they were available
That’s a big “if” — the answer, of course, is that the inventory simply isn’t there. But according to Lawrence Yun, Chief Economist for the National Association of Realtors, home sales could easily be 20% higher if more homes were for sale.
Existing-home sales—completed transactions for single-family homes, townhomes, condos, and co-ops—rose 0.6% in January compared to December 2020 and are up nearly 24% over a year ago, the NAR reported last Friday. All four major regions of the U.S. recorded double-digit annual gains for home sales in January.
“Home sales continued to ascend in the first month of the year, as buyers quickly snatched up virtually every new listing coming on the market,” Yun says. Seventy-one % of homes sold in January were on the market for less than a month, according to NAR’s report.
While most of the economy has felt the toll of the lingering COVID-19 pandemic, the housing sector has remained a bright spot, Yun adds. Sales remain high and home prices have continued to rise, adding equity to home sellers.
According to Yun, home sales are continuing to play a part in propping up the economy. With additional stimulus packages likely to pass and several vaccines now available, the housing outlook looks solid for this year. Yun predicts employment to increase, which could spur even more homebuying over the coming months. He predicts existing-home sales to reach at least 6.5 million in 2021.
Some key stats — Home prices jumped 14% over a year ago…Inventory was down, however, by 24%…. First-time buyers comprised 33% of sales in January, up slightly from a year ago when it was 32%.
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44% of Milliennials would buy home from photos only
The ‘virtual real estate world has taken hold as a new study shows 44% of millennials would buy a home now from a photo alone. This just shows how far this generation is willing to go to become homeowners, according to Clever Real Estate, a national real estate research firm.
From crushing student loan debt, stagnant wage growth to booming home prices, there is plenty of obstacles preventing millennials from pursuing homeownership. However, the pandemic and the ensuing dive in interest rates pushed this group to leave the sidelines and make a purchase before rates and prices rise again.
Clever Real Estate’s latest market survey of 1,000 millennials revealed just how committed they are to homeownership, with 30 % of respondents saying “COVID-19 pushed them to begin house hunting earlier than they originally planned.” In addition to upping their homebuying timeline, a majority of millennials were willing to purchase a fixer-upper (71% or could be persuaded to purchase a home sight unseen (80%).
For those willing to make an offer sight unseen, they would need someone to tour the home on their behalf (59%), find a listing at a ‘great price point’ (51%), or find a new build with no previous owners (39%). Respondents also said sellers would need to offer repair credit, perhaps cover the closing costs, or pitch another concession to sweeten the deal (39%). .
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Fed stays the course during pandemic
Jerome H. Powell, the Chair of the Federal Reserve, told lawmakers that the economic rebound from the pandemic recession still had further to go and reiterated that the central bank planned to keep up its growth-stoking policies, which include rock-bottom interest rates and large-scale bond buying.
“The economic recovery remains uneven and far from complete, and the path ahead is highly uncertain,” Powell said in prepared remarks he delivered to the Senate Banking Committee last week.
“Although there has been much progress in the labor market since the spring, millions of Americans remain out of work,” Powell stated
Unemployment has come down sharply after surging last year, but the official job rates remain at nearly double its February 2020 level and probably understates the extent of weakness in the labor market.
Likewise, consumer spending has bounced back but the service sector remains subdued. The Fed slashed interest rates to near-zero last March and is buying about $120 billion in government-backed bonds each month, policies aimed at fueling lending and spending.
Congress and the White House have also provided support in the form of enormous spending packages, and Democrats are now pushing for another $1.9 trillion in relief for workers and businesses.
Some economists have warned that inflation could take off as vaccines allow consumer activity to pick up and as the government pumps money into the economy, but Fed officials have generally played down those concerns. Powell said that inflation dynamics generally do not “change on a dime” and that if unwanted price pressures arise, the Fed has the tools to push back on them.
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Did you miss the Los Angeles Alligator Farm? Probably!
In Los Angeles, eccentric residents aren’t difficult to find. Few stand out as much as “Alligator Joe” Campbell and Francis Earnest, the exceptionally unique Angelenos who ran an alligator farm in the early 20th century.
At the California Alligator Farm, which operated in the Lincoln Heights neighborhood of Los Angeles between 1907 and 1953, visitors forked over a quarter to see more than 1,000 gators of all sizes and ages. The farm had 20 ponds for the trained alligators, and the animals performed daily in front of large crowds.
In a 1910 article, it describes how the alligators were captured, how the eggs were incubated and even how the animals exercised. “With a strong line and a big steel hook baited with pork, it is as easy to catch an alligator as to catch some trout with a minnow,” Inkersley wrote, “but you must know what to do with your alligator when you have caught him.”
Tiny alligators were reportedly sold to park guests, who would also pay to ride them, watch them ride down slides, feed on live chickens and wrestle with people.
Despite signs admonishing visitors not to “throw stones at the alligators, spit on, punch or molest them in any way,” adults and children regularly handled alligators at the farm. Some were even stolen by college pranksters.
Eventually, visitors to the Alligator Farm dwindled, so it was moved to nearby Buena Vista and then to Florida. Though it’s been a half-century since alligators roamed the neighborhoods of Los Angeles, perhaps the unbridled, over-the-top, rules-be-damned spirit of the bizarre park lives on within the city itself.
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Breaking News
After much frustration, I finally got m appointment for my second vaccination. I got caught up in the delay of the shipment of the materials from the east coast because of the horrible snowstorms they had last week. My date is the 25th. I must admit that I have mixed feelings about getting the vaccine: not looking forward to the reaction, but oh so glad to have it be over with.
As some of you may know, both my assistant & I have been working out of my home office since the beginning of August while they remodel the office and rework the space as Coldwell Banker, like so many other businesses understand that the large, beautiful space we have on the top floor of the Union Bank building in Brentwood is being underutilized as more and more agents have been working at home, pre-Covid so they will now be sub leasing a small portion of our space. Sometime in mid-March or so, my assistant Janelle & I will be moving back into the CB space. Once that happens, I will begin the fun chore of replacing the carpet in my house and re-panting the interior. Oh Joy!!!!!
Keeping Busy
I continue to keep busy with buyers, and still looking for more listings. In addition, I have 3 mentees, including my assistant Janelle so training them also keeps me on my toes. Two of the three are gearing their buying prospects towards income property, one in Santa Monica exclusively. I love this as I generally don’t concentrate on income property, and Janelle lives in Westlake Village which is also a little different perspective for me in working more of the San Fernando Valley… …. So, bottom line, the teacher is also the student, and I love learning new things, and also know that this newfound knowledge is great for me with my clients.. If you have any interest in income property or the San Fernando Valley, please do not hesitate to let me know how I can assist you.
Local news update
The two primary battles facing the Westside other than the on-going homeless situation are the proposals for the rapid transit system that would take traffic from the Valley to LAX.
The other day the Los Angeles Times came out with an editorial against one of metro rail formats which is one of the formats being considered. Those studies continue to take place. The other battle is the potential construction of the Berggruen Institute on the last undeveloped acreage in the Santa Monica Mountains immediately adjacent to the Mountaingate community. Both of these programs are on-going studies, and in the case of the Berggruen project is in court and both will probably be going on for the next number of years. If you want more specific information please contact me.. ceschiffer@gmail.com
Please let me know how I can assist you with any and all of your real estate needs. I am here to help you.
As always
Stay safe!
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