The SchifferLine
Timely Real Estate News…………………………………..1 May 2021
Federal reserve holds steady on rates, purchases
Chairman Jerome Powell announced the Federal Reserve was keeping its key interest rate near zero and said it plans to continue supporting the economic recovery, while acknowledging recent progress in growth and employment. Fed officials voted unanimously at their April 28 meeting to maintain the central bankās policies, aimed at holding down borrowing costs, until the economy heals further from the effects of the Covid-19 pandemic.
Powell added that amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened. The sectors most adversely affected by the pandemic remain weak but have shown improvement. Inflation has risen, largely reflecting transitory factors he stated.
Fed officials also indicated they would hold rates steady until the labor market is back to full strength and inflation has reached the central bankās goal of averaging 2%. Powell said those conditions are unlikely to materialize this year, and most Fed officials indicated last month that they expect to hold off on raising rates until 2024 at the earliest.
***********************************************************
Home-price growth accelerated to new highs
As home-buying continues to be strong and the number of homes available for sale hold near record lows, home-price growth accelerated to a new 15-year high in February.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 12% in the year that ended in February, up from an 11.2% annual rate the prior month. February marked the highest annual rate of price growth since February 2006.
The Commerce Department also reported the homeownership rate inched higher to 65.6% in the first quarter, up from 65.3% a year earlier and slightly down from 65.8% in the fourth quarter of ā20. For households headed by someone under 35 years old, a key source of homebuying demand, the homeownership rate rose to 38.1% from 37.3% a year earlier.
Thus data remains consistent with the hypothesis that COVID has encouraged potential buyers to move from urban apartments to suburban homes, according to Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices.
***********************************************************
Pending home sales grow 1.9% in March
Future home sales are looking better based on the recent pending home sales report which showed an increase in March, snapping two consecutive months of declines, according to the National Association of Realtors (NAR). All but one of the four major U.S. regions experienced month-over-month gains in March, while each area recorded year-over-year growth.
The Pending Home Sales Index ā a forward-looking indicator of home sales based on contract signings, rose 1.9% to 111.3 in March. Year-over-year, contract signings jumped 23.3%, with the difference due in large part to the pandemic-induced lockdown in March 2020. The index in the west grew 2.9% in March to 94.5, up 29.8% from a year prior.
According to NAR chief economist, Lawrence Yun, the increase in pending sale transactions for March is indicative of high housing demand. He added that with mortgage rates still very close to record lows and a solid job recovery underway, demand will likely remain high.
According to the NAR, low inventory has been a consistent problem, but more inventories will show up as new home construction intensifies in the coming months, as well as from a steady wind-down of the mortgage forbearance program. Although these moves won’t immediately replenish low supply, they will be a step forward.
Existing-home sales are projected to rise by 10% in 2021 to reach 6.2 million in 2021, while the median home price is anticipated to increase by 9% in 2021 to $323,900.
Future home sales are looking better based on the recent pending home sales report which showed an increase in March, snapping two consecutive months of declines, according to the National Association of Realtors (NAR). All but one of the four major U.S. regions experienced month-over-month gains in March, while each area recorded year-over-year growth.
The Pending Home Sales Index ā a forward-looking indicator of home sales based on contract signings, rose 1.9% to 111.3 in March. Year-over-year, contract signings jumped 23.3%, with the difference due in large part to the pandemic-induced lockdown in March 2020. The index in the West grew 2.9% in March to 94.5, up 29.8% from a year prior.
According to NAR chief economist, Lawrence Yun, the increase in pending sales transactions for March is indicative of high housing demand. He added that with mortgage rates still very close to record lows and a solid job recovery underway, demand will likely remain high.
According to the NAR, low inventory has been a consistent problem, but more inventories will show up as new home construction intensifies in the coming months, as well as from a steady wind-down of the mortgage forbearance program. Although these moves won’t immediately replenish low supply, they will be a step forward.
Existing-home sales are projected to rise by 10% in 2021 to reach 6.2 million in 2021, while the median home price is anticipated to increase by 9% in 2021 to $323,900.
***********************************************************
Median prices are mixed bag on Westside
In a detailed review of all Los Angeles County home sales for March 2021 provided by a local escrow company, shows an across-the-board inconsistency as to whatās up, whatās down. Not unusual, it is par for the course these days.
For example, in Beverly Hills, which covers three zip codes, the most active area was 90210, which had 44 sales in March this year, with a median sales price of $4.744 million, down 21% compared to a year ago. For 90211, there were 4 sales at a median sales price of $3.578, a 60% increase over March 2020, and down the road at 90212, prices were down 2% at $2.538 million for 2 sale.
Bel-Air was up 2% for 18 sales for March, with an MSP of $2.180 million. Brentwood, however, was down 11.7% to $3.288 million, and Westwood was up 4.1% on 35 sales with an MSP of $3.288 million.
The data does vary from the MLS data we provide each month, but not by much. What their data shows are home price sales/sq. ft. ā Beverly Hills 90210 ā $1,277/ft; 90211 ā $1,135/ft; 90212 ā $902/sf; Bel-Air was at $860/sf; Brentwood ā $1,132/sf., and Westwood ā $1,081/sf.
***********************************************************
U.S. luxury home sales surge 42%
In a trend that we have been witnessing here on Los Angelesā Westside, luxury sales performed better than all other property classes nationwide, rising 41.6% in the first quarter of 2021.
Luxury homes in that quarter had a median sale price of $975,000, a 14.7% increase from the same period in 2020. The report categorizes properties as either luxury, expensive, mid-priced, affordable, or most affordable. By contrast, sales of mid-priced homes rose by only 5.9%while sales of affordable homes rose 7%.
What I am seeing on the Westside is a resurgence of median sales price growth in all of the market areas I represent. There is a ābuying spreeā kicking in now as weāre in the middle of the normally hot spring selling season, but it has really been going all year. It is a 12-month selling season as limited inventory, combined with the strong demand to live here, that is kicking up the competition, where multiple offers now are the norm.
As I reported in the last SchifferLine, the early birds get first in line and start by offering more than the listed price. Homeowners are now expecting this reaction ā but a word of caution: If your home is not in pristine condition and priced competitively, you cannot expect to see multiple offers. Tread carefully – please call me to help you in properly marketing, pricing your property as well as managing your expectations, an important component to the marketing of a home! I recently had an experience where my clients expected to get multiple offers and have their home sell over asking, unfortunately that did not happen, and they were disappointed.
***********************************************************
Law of supply-demand at work hereā¦.
It can appear that we are making progress in the housing market ā and we are. It depends on your point of view. Buyers are frustrated with increasing home prices and combined with low inventory across the country as existing home sales fell in March.
The National Association of Realtors, (NAR), reported the month of March saw that total existing-home sales, which included single-family homes, townhomes, condominiums, and co-ops, decreased by 3.7%. Whatās happening is the consumers are facing much higher home prices, falling affordability, but many remain in the market ā where else can they go? According to Lawrence Yun, NARās chief economist, “The sales for March would have been measurably higer had there been more inventory,” he added. “Days-on-market are swift, multiple offers are prevalent, and buyer confidence is rising.ā
Yun said although mortgage rates have risen a tick, they are still at a favorable level and the economic outlook is promising, and since half of the adult population has received the Covid-19 vaccination, data show encouraging dynamics of more supply and strong demand in housing.
***********************************************************
Growth spurts in first quarter
The U.S. economy is growing rapidly as the pandemic begins to ease up across the country, with GDP at 6.4% for the first quarter, a remarkable achievement. With more than 20 million losing their jobs since the pandemic hit mid-March 2020, Americans are now getting back to work according to President Biden, who stated that within the first 100 days in office, 1.3 million new jobs were created.
The near record GDP of 6.4% left the worldās largest economy within 1% of its peak, reached in late 2019, just before the coronavirus pandemic reached the U.S. Households, many of them vaccinated and armed with hundreds of billions of dollars in federal stimulus money, drove the first-quarter surge in output by paying more for cars, bicycles, furniture, and other big-ticket goods. The federal government also stepped-up spendingāon vaccines and aid to businesses. ā
According to the Wall Street Journal, a year ago the economy was sharply contractingāoutput in the second quarter fell by a record annual rate of 31.4%āand the unemployment rate soared to 14.8% last April, a post-World War II high. In all of 2020, the economy contracted 2.4% when comparing fourth-quarter output to a year earlierāthe first downturn since the 2007-2009 financial crisis.
Congress responded quickly, approving several packages totaling roughly $5 trillion in aid for households and businesses.
***********************************************************
Think about it: Earth Day should be all year!
We are now making April āEarth Monthā, not just for one day anymore. This could not come at a more crucial time. In Los Angeles today, we are once again facing drought conditions, and predictions for one of the worse fire seasons on record. With the exceptionally low amount of rain, we received this past rainy reason, we are once again facing a drought which will and does contribute to the danger of the fires. This is a critical time for all of us because we all know what can happen to us during fire season, which is now all year, too!
Earth Day was created by Gaylord Nelson, a junior Democratic senator from Wisconsin along with other politicians with the thought of channeling young peopleās energy towards environmental campaigning. The date of April 22 was chosen because it fell between spring break and finals for about 20 million people in the US alone!
In a study released by the Los Angeles Times of Ozone layers, Los Angeles/Long Beach was #1, Bakersfield #2, and San Diego-Chula Vista-Carlsbad #7. For year-round pollution Bakersfield was #1, and Los Angeles-Long Beach #4, and for short term pollution, Bakersfield was #4 and Los Angeles #6.
We all need to do our part to protect Mother Earth and keep it safe not only for ourselves but for future generations.
***********************************************************
We Lost Another One
Living in the Santa Monica Mountains I like a lot of you have seen these beautiful, yet scary cats wondering around. According to a recent supplement in the Los Angeles Times, there is a campaign to create a massive wildlife crossing to help save our āBig Catsā from extinction. There are believed to be two dozen mountain lions existing in Los Angeles County. Five kittens were born last summer.
One of the most famous of our local Mountain Lions, (P-22) is now isolated in Griffith Park. He is famous because he has crossed multiple freeways, many times and survived. The last one we lost (P-78) was in December and he was hit crossing the 405 in the Sepulveda Pass. Currently there are 7 adult cats on the Santa Monica Mountains, 3 in the Simi Hills north of the 101 and 1 in Griffith Park. The National Park Service tracks them with the collars they have installed on them.
Since the National Park Service began collaring and studying mountain lions in and around the Santa Monica Mountains in 2002, six catsā deaths have been attributed to some kind of rat poison in their system. Building more wildlife crossings and ridding the ecosystem of dangerous rodenticides will help. 27 of 28 mountain lions have tested positive for exposure to one or more anti-coagulant rodenticides (rat poison).
Rat Poison has killed not only mountain lions but many of the animals and birds that make up our natural habitat.
Some safety tips should you encounter one of these beautiful creatures:
– Supervise pets and children outdoors Keep pets inside at night – Donāt leave food of any kind outside – Donāt hike or run alone – Keep children close to you and pick them up if you spot a cougar – Do not approach a cat or kittens Make yourself appear larger by raising your arms and waving them slowly – Make noise, sound defiant, not afraid – Slowly back away, keeping eye contact with the lion – If you are attacked, fight back with hands and rocks. Protect your head and neck.
Letās all do our part to protect the animal population.
***********************************************************
To Mask or Not. That is the question!
I donāt know about you but having had both of my vaccines and have given them the necessary two weeks to be fully effective, I find it confusing to know when and when not to wear my mask. According to the Los Angeles Times here are some helpful hints:
Outdoor Gatherings ā If you want to attend a small outdoor gathering with those who are both vaccinated and unvaccinated, you should be able to be mask less.
Safety guidelines once vaccinated ā Visiting a barber or hair/nail salon, an uncrowded mall or museum, using public transportation, going to a small indoor gathering of unvaccinated people, in door movie theatre, high intensity gym, indoor religious service ā you should continue to wear your mask.
Being in a crowd ā in a crowded indoor setting and venues such as packed stadiums, concerts, where there is an increased inability to maintain safe distances from one another ā the recommendation is that we continue to wear our masks.
I love seeing all of the personalized masks around.. donāt you?
How are you or did you celebrate Cinco de Mayo? I would love to hear your stories. We had some yummy Mexican food and did some favorite āhat dances!.
***********************************************************
Looking for inventory to sell
As I mentioned earlier in showing my previous listing here in Bel Air Crest I have received a number of requests for other homes for sale in the community of which there are no Canyon homes available at the moment. If you are at all considering selling your home, please let me know as I now have a long list of both clients and agents who want to live here. Perhaps we can get your home sold without it even going on the market.
Call me – ..Carole – 310 442-1384 or ceschiffer@gmail.com
Carole Schiffer, Realtor Coldwell-Banker Residential Brokerage/Brentwood Office 310-4421384 (office) or e-mail me at carole@caroleschiffer.com www.caroleschiffer.com
CalBRE 00677619
Ā©2021 Coldwell Banker Real Estate LLC. Coldwell Banker is a registered trademark licensed to Coldwell Banker Real Estate LLC 234567An Equal Opportunity Company. Equal Housing Opportunity. Owned and Operated by NRT LLC
You must be logged in to post a comment.