Timely Real Estate News………………………………….. 1 November 2019
U.S. buyers facing higher prices…good news for some
According to S&P CoreLogic Case-Shiller National Home Price Index, around the U.S., home prices picked up in August but are losing momentum in larger markets, a potential boon for buyers.
National home prices rose 3.2% in August, up from 3.1% in July, but in some of the largest cities in the country, markets are struggling, which could benefit homebuyers. Prices in the nation’s 10 major cities rose 1.5%, down from the 1.6% gain in July. On the index’s 20-city composite, prices were 2% higher, unchanged from July’s gain. On the Westside, we’re seeing prices steadying on the Westside, hovering around 2018 prices at this time of year.
The housing sector — a pillar for the U.S. economy — rebounded this summer following a weak start to the year, helping to ease recession fears. At the same time, lower mortgage rates have given homebuyers a reprieve.
Recent data, however, has remained mixed. The pace of existing-home sales fell in September after two months of gains, according to the National Association of Realtors. Meanwhile, new-home sales dipped last month, the Commerce Department said. The batch of weaker-than-expected housing data could be temporary, some analysts said.
Fresh housing data released October 29, signaled the housing market is continuing to gain strength. Meanwhile, the homeownership rate climbed to 64.8% in the third quarter, up from 64.4% a year earlier, the Commerce Department reported.
Fed to the rescue? Don’t count on it for future
Just as everyone expected, the Federal Reserve lowered its benchmark rate by a quarter of a point for the third straight time, to a range of 1.5% to 1.75%. Chairman Jerome H. Powell poured cold water on the idea that more rate cuts are coming in the near future.
Fed officials have described the rate cut as essentially an insurance against the risks to the American economy from the U.S.-China trade war and weakening global growth, which are threatening to undercut what since the summer has been the longest economic expansion in U.S. history.
The Commerce Department said U.S. economic growth slowed further in the third quarter, with business investments and net exports contracting for the second straight quarter, even as the housing market gained momentum and consumer spending grew at a slower but still-healthy pace
According to the Fed, trade friction between the globe’s two largest economies has disrupted business operations and spending, as have other risks and uncertainties such as Britain’s messy exit from the European Union.
At the end of the day, Chairman Jerome Powell said that our monetary policy is in a good place” ….and was basically hitting the ‘pause’ button.
Millennials love haunted houses….
Millennials are 13 times more likely than baby boomers to purchase a home that may, indeed, be home already to ghosts, according to a recent survey of 1,000 Americans.
Although millennials are more likely to believe in the supernatural, the brokerage says that’s not the reason why this generation is willing to share their space with a ghost or two. Haunted or stigmatized homes with sketchy histories often come with lower price tags that better fits millennials’ budgets as they search for their first home.
Many (31%) are interested in spending under $200,000, which can severely limit their options throughout much of the country the report stated. There are other reports that have Millennials in the high-end market for their homes.
In a previous report, it was noted that 67% of millennials are willing to buy a fixer-upper, which jives with our current finding and suggests millennials might be more willing to deal with character flaws, like faint whispers in the dead of night.
Beyond generational differences, the report revealed a clear contrast between genders and their willingness to live in a haunted home. Men are twice as likely to live near a cemetery, 2.4 times more likely to purchase a haunted home, and three times more likely to live in a home where someone was murdered. The Beverly Hills home where the sons killed both of their parents a few years ago, lingered on the market until a murder mystery writer both it because “he loved the vibe in the house”.
Pending home sales up…good news
Pending home sales grew in September, marking two consecutive months of increases, according to the National Association of Realtors (NAR). The four major regions were split last month, as the Midwest and South recorded gains but the Northeast and West reported declines in month-over-month contract activity.
The Pending Sales Index is an indicator based on contract signings, rose 1.5% to 108.7 in September. Year-over-year contract signings jumped 3.9%. An index of 100 is equal to the level of contract activity in 2001.
Historically low mortgage rates played a significant role in the two straight months of gains, according to Lawrence Yun, NAR’s chief economist. “Even though home prices are rising faster than income, national buying power has increased by 6% because of better interest rates,” he said. “Furthermore, we’ve seen increased foot traffic as more buyers are evidently eager searching to become homeowners.”
Hillavators? Home owners get a rise….
Locating your home on a steep hillside? No problem. We now have “Hillavators” — elevators for steep hills, but you may be more familiar with these transport vehicles such as funiculars or cable cars. Of course, what they’re doing is making hillside homes more accessible.
Expansive, one-of-a-kind views are a significant selling point for luxury homes, which often garner bids that are 30% to 50% more than the asking price for the home if they have such a feature. We know that a killer view can serve as a ‘steep’ motivator for investing in a “hillavator” because it is practical, a sound investment, and opens up the market to a select buyer group who want something “spectacular” and they’re willing to pay for it.
For years, luxury homeowners in California have found a unique way to increase their home’s accessibility and value by installing hillavator to make the journey from their residence to a private beach, bay or entertainment area more manageable.
These outdoor elevators are built with weatherproof materials and are customized to handle larger passenger loads and steeper inclines. Homeowners should expect to spend at least $20,000 for an outdoor elevator…but the final cost depends on several factors. — the terrain, local building codes and permit costs, plus system type, capacity requirements, and aesthetic choices. “Going up?” Yes.
“Wishcycling” takes hold…. reality sets in
Visiting the Burbank recycling center is like stepping into an archaeological dig. Everywhere there is evidence of consumption — kombucha bottles, cardboard delivery packages, plastic water bottles, toothpaste tubes, vitamin bottles and plastic bags.
“Our garbage tells our story,” said Burbank’s recycling coordinator Kreigh Hampel. “It drives home how disposable our lives are.”
In a recent story in the LA Times, it was noted that not long ago, these byproducts of a throwaway lifestyle found a market in China, allowing Americans to toss their garbage in recycling bins with a seemingly clean conscience. But in late 2017, China imposed a stringent ban on imports of certain scrap papers and plastics, creating a glut of material and roiling the global recycling industry.
Now, as still more nations prepare to follow China’s lead, California’s recycling industry is struggling, posing hard choices for a state that prides itself on its image as an environmental beacon.
We are living in a pretend world of “wishcycling” according to industrial ecology professor Roland Geyer at UC Santa Barbara. “What we’ve tried hasn’t worked.” Big changes in the way we produce goods and package them will have to take place. Companies that once turned a profit selling used yogurt containers and water bottles now have accumulating piles of garbage and no place to sell it. And they’re closing down.
Within Los Angeles County alone, three recycling centers and two materials recovery facilities have closed since 2018, and as profits dwindle, many are operating at a loss and potentially risk closure. So, this remains a major environmental challenge for all of us.
Red Hot California – No Kidding
It was reported the other day that we had 13 fires in the State of California! That is an amazing scary number. It is a totally tragic situation that we are in. I know for myself I have been driving around with my “go bag” and all of my important documents for the last 3 weeks, and suddenly last Monday my fears were confirmed when at 2:00 am I heard the helicopters and planes flying over my house and looked out my bedroom window and the horrible orange flow of a fire. I went to the managers ‘office of Bel Air Crest and spent the last few days helping them out, answering phones, etc. (with all of the road and freeway on and off ramp closures I was not sure I would be able to get home if I left).
One of those days I had to drive through one of the side Canyons to get from BAC to Santa Monica and that ride took 3 hours, and in the course of that ride while I was sitting in my car I was shocked to see the amount of city owned and privately owned vegetation wrapped around power lines just waiting to go up in flames. It was and is a disaster waiting to happen!
We all need to work with our elected officials to make sure that they trim these trees and dead plant material as well as work within our neighborhoods to have EVERYONE trim their brush!
One of my friends in my office lost her house in the Getty fire, and nearly lost her life (her hands and hair were slightly burned). She lost everything as she had not time to get out. She cannot replicate her home as it was approximately 75% glass and could not approval to re-build it today. I watched it going up in flames on the TV in the BAC manager’s office.
Many times, I have talked about us all being pro-active in the preparation for an emergency, earthquake, fire. Please heed the warnings and requests that are being made. It is very important.
As a result of the recent fires, many of the insurance companies are pulling out of the state and those who are remaining are raising their premiums. The increase of the premiums could potentially skyrocket. There is some movement in the legislature to hopefully mitigate these increases.
How is our local real estate market?
For those of you who receive my quarterly update, I hope you saw to turn the page with the report over as it was printed on two sides with the report for ’19 on one side and ’18 on the other. Depending on the area, you can see how we have fared from one year to the next.
Communities on the Westside continue to struggle in the high-end market segment. The number of closed sales is still below last year. There have been 434 closed sales of $5 million plus this year versus 477 currently last year, down 9%. Of these, 125 were $10 million-plus and there were 134 $10 million-plus closed sales at this time last year, down 7%.
Thirty-two of these sales were $20 million-plus this year, and there were 38 closed sales of $20 million-plus at this time last year down 16%….and 15% of these sales were $30 million-plus this year and there were 17 at this time last year (down 12%).
In the $40 million-plus category, 7 were sold this year vs. 8 closed sales at this time last year, down 12.5%.
As of last week, there are 70 pending sales of $5 million-plus and 18 of these are $10 million-plus, 5 are $20 million-plus, 2 are $30 million-plus, and one is $40 million-plus.
In the $20 million-plus range, sales were made to 22 from America, 2 Saudi Arabia, two China, one Qatar, and one UK. The areas of the 32, $20 million-plus sales are: 9 in Beverly Hills, 9 in Bel Air, 5 in Malibu, 3 in Brentwood, 3 in BHPO and one each in Holmby Hills, Westwood and the Palisades.
My office is busy and all of us are buzzing along, though I must admit the fire activity this week, along with Halloween trimmed our sails a little.
Please let me know how I can assist you with all your real estate needs. I look forward to hearing from you.
Contact me at firstname.lastname@example.org or 310 442-1384. Looking forward to hearing from you.
Carole Schiffer, Realtor Coldwell-Banker Residential Brokerage/Brentwood Office 310-442-1384 (office) or e-mail me at email@example.com www.caroleschiffer.com
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