Timely Real Estate News………………………………………1 September 2011
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Labor Day is traditional end of summer……and the dog days of summer begin
Summer finally “hit” — temperatures soared this past week and while we will find Labor Day to be the unofficial end of summer — we know it isn’t. It never is in Southern California. Kids are back to school…college football season kicks off….and of course, political season begins (again). We are in what is called the “Dog Days” of Summer.., you might ask as do I where did that expression come from? The expression has an interesting history……Dog Days are the hottest, most sultry days of summer in late August. They can also define a time period or event that is very hot or stagnant, or marked by dull lack of progress. The name comes from the ancient belief that Sirius, who also called the Dog Star, and is in close proximity to the sun, was thought to be responsible for the hot weather. The Romans considered Sirius to be the “Dog Star” because it is the brightest star in the constellation. Dog Days were popularly believed to be an evil time “when the seas boiled, wine turned sour, Quinto raged in anger, dogs grew mad, and all creatures became languid, causing to man burning fevers, hysterics, and phrensies”. In recent years, the phrase “Dog Days” or “Dog Days of Summer” have also found new meanings. The term has frequently been used in reference to the American stock market(s). Typically, summer is a very slow time for the stock market, and additionally, poorly performing stocks with little future potential are frequently known as “dogs.
A casual survey will usually find that many people believe the phrase is in reference to the conspicuous laziness of domesticated dogs (who are in danger of overheating with too much exercise) during the hottest days of the summer. When speaking of “Dog Days” there seems to be a connotation of lying or “dogging” around, or being “dog tired” on these hot and humid days.
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I look forward to my favorite time of year — when autumn leaves appear setting the landscape aglow in oranges and reds. Summer isn’t over as we know that September and October is also the start of fire season.
For me, Labor Day weekend finds me enjoying the “last weekend in summer at Coronado Shores. This holiday finds my niece, Morgan, who is finishing up some missed classes at USC before applying for dental school attending the first USC football game of the season (go UCLA), and my nephew, Connor, after taking a year off between high school and college in Montreal to begin his college education at Concordia University, a four year business University located in the heart of Old Town Montreal with a philosophy of total business immersion. I cannot wait to visit him there as I have only been to the West Coast of Canada! As I said, there are some things that end with Labor Day — but there are many wonderful new events that are just beginning also.
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Coldwell Banker’s parent company controls 25% of US residential real estate market
Coldwell Banker is America’s largest and most successful real estate company. A division of NRT which owns a number of real estate companies, Coldwell Banker currently has 720 company-owned CB offices nationwide, staffed by 44,000 real estate agents vs. 60,000 agents just a year ago. According to Bruce Ziff, president of NRT, which is a division of Realogy, the holding company, nationally the company has seen a 30% drop in the number of sales units per year and approximately 50% drop in rental units. Nationally, one out of four real estate transactions are NRT transactions. Ziff pointed out that NRT in Southern California is having its 2nd best year during the past four years. And currently, he stated, there is a 9 1/2-month supply of unsold properties — of which 30% are in the distressed category (foreclosed/bank owned or short sales). “The smart money is in the market,” Ziff stated, and the majority of people impacted by the negative economy is directly related to their education level. He noted that the majority of NRT clients have college degrees or higher….”they’re better educated.”
In Brentwood’s Coldwell Banker office the number of transactions (by either a buyer or seller) is off 26% from a year ago, but the average price per transaction is up 28% or $1,368,000 compared to $1,060.000 in 2010. Listings also are down for year-to-date, while the volumes continue to be ahead in three of the four communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air, and Brentwood. Coldwell Banker continues to gain market share as the industry contracts in these economic times. Because we are positioned as the premier real estate company, we attract smarter buyers and smarter sellers — who want the very best representing them, especially in these economic tough times. Something to think about.
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New York, New York, it’s a helluva town
Bi-coastal residents, who own property on the Westside LA and NY (or thereabouts) are pleased to know that Manhattan real estate is booming along, even though it’s in the middle of the summer doldrums. Sales were 3% higher in July 2011 vs. July 2010. Condo sales were up 10% than a year ago, but co-op sales dropped 3%. Average sale prices for both condo and co-ops were up 2% and 4% respectively according to the Stillwell Report. Stillwell is a member of the Corcoran Group, which is a member of the NRT family.
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The luxury market is zipping along….and It’s a Small World Isn’t It?
When was the last time you sold or purchased a home that made headlines in the local newspaper or on the 5 o’clock news? Not lately? Of course, if you purchased or sold your home for over $100 million you’d be right up there with Candy Spelling who had her family home on the market — at one time — for only $150 million. But it was Petra Ecclestone who paid a reported $85 million for the 56,400 square foot home that is basically a fixer in Holmby Hills.
According to Betty Graham, president of Coldwell Banker Previews International Division of NRT, the ultra luxury market ($10 million and above) is proving its resilience in Southern California. For example, in the Greater Los Angeles area, Coldwell Banker Residential Brokerage closed 32 transaction sides (representing either buyer or seller) in excess of $10 million this year to date, compared to only 15 at of this time last year. “The exotic luxury market’s rebound is attributed to several factors — including smart money’s confidence in real estate, lower prices, lower interest on jumbo loans, and a higher return on investment compared with other assets.”
“From Montecito to Beverly Hills, smart buyers have already seized the opportunity to invest in the future of luxury real estate as an asset” Betty stated. We are seeing a large number of foreign investors in our
market place. For example, at my open house in Bel Air Crest last weekend, with the heat that we had I had four parties, one from Russia, another from Indonesia, another from China, and one from here in the
good olde USA. This is a wonderful example of “Smart Money”, an expression we are hearing a lot lately. People are using their money wisely.
However, while the luxury market is being fueled by the super wealthy, other credit-worthy buyers are having a tough time getting loans. NAR chief economist, Lawrence Yun, said” there is a tug and pull on the market. “Affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers,” he said. “Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that could stimulate additional economic activity and create jobs.”
Jobs continued to be the prime culprit in California’s recovery, rising to over 12% and hanging there. UCLA’s Anderson School forecast predicted that the California would experience a slow recovery through the end of 2011.
As part of this conversation, the new rating system for the condition of properties from the appraisal perspective goes into effect today. The rating goes from 1 – 6, with properties in the 1 – 4 range, being acceptable for a loan consideration (depending on all of the other requirements being met), and those homes with a rating of 5 -6 will be very difficult to obtain loans for. There will be a separate loan consideration process applied to homes that are being sold for lot value or with a great deal of work necessary to be done.
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Short Sales on rise — unclogging the mess?
According to First Capital Mortgage executive John Ciolino, Coldwell Banker’s mortgage consultant, banks are agreeing to more short sale transactions, and short sales are taking less time to sell. This, in turn, is helping to clear large inventories of distressed properties more efficiently, says James J. Saccacio, Realty Trac CEO, in releasing new housing data this week.
“This is a glimmer of hope that lenders are getting more realistic,” Rick Sharga, senior vice president of Realty Trac, told Bloomberg News. “It’s a win for borrowers to avoid foreclosure, buyers who could purchase a house in better condition and banks that lose less money, which is also a win for taxpayers.” John points out that there continues to be large inventories of homes whose owners are “upside down” — they owe more than the home is worth or to put it another way — they have no equity. According to 1st American Core Logic, there are 650,000 homeowners who have negative equity in their home.
For homeowners who are upside down, there are several options:
1) Do nothing — keep paying your current mortgage until you reach the break-even point;
2) Apply for a loan modification which may lower payments, but with the same high mortgage loan
balance. This may not make a lot of sense. Reports show that only 25% of loan modifications are granted.
3) Foreclosure — stop making payments. Which results in eviction, ruined credit and loan worthiness, and
becoming a renter for extended period of time.
4) The Short Sale ASAP program – The home owner short sales their existing home and thus eliminates all negative debt, and then simultaneously buys a similar replacement home at today’s low property values. This is a very interesting new program. Once you have reached an agreed upon short sale amount with your lender, and VERY IMPORTANT, HAVE KEPT CURRENT ON YOUR MORTGAGE PAYMENTS, you can purchase a replacement home for an amount less than the ORIGINAL loan balance on the house being short sold. You can also have a very low down payment. This is an excellent way to enable you to still own a home rather than renting.
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Mulholland Schools face traffic challenges…..please note
With the private schools having started this past week, and the public schools starting next week, we are seeing more traffic on the Mulholland Bridge because of the removal of those two lanes during the famous Carmageddon weekend. The Mulholland Education Corridor Association (MECA) has launched a program to encourage parents to reduce the number of car trips along to/from school during this construction period. The schools in MECA include Berkeley Hall School, Curtis School, Mirman School, and Westland School. Participation has grown to include American Jewish University, Bel Air Presbyterian Church, Skirball Cultural Center, and the Stephen S. Wise Temple and Schools.
The efforts by MECA include staggered start times at all schools, including dismissal times. These staggered times pace school traffic along the corridor and prevent a “critical mass” of students commuting at one time.
MECA is also utilizing 13 different bus routes to help minimize school traffic along the Mulholland corridor. The average cost per student utilizing buses is approximately $2,400/year, and the schools subsidize these routes to help families utilize this service. Please check with your school regarding new class schedules and bus information.
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Tech Tips…..Watch out for new LinkedIn “social ads”
Did you know that according to a recent article in the Los Angeles Times, 80% of employers who are looking for a new employee go directly to Linkedin.com to search for the best candidates? If you’re looking to move on to a new job, you know that you have to have your ‘act together’ on linkedin.com. Social media, including Facebook pages, are now being used in the measuring mix to evaluate new employees: These are some of the thought processes an employer is going through – “Just how socially adept are you? Are you up to speed in social media? Do you understand the nuance
being well connected in today’s mobile society?”
Linkedin.com did an ‘end ‘run’ on their 100 million subscribers last month. They launched “social ads” which are turning linked.com users into cheerleaders for business. They use individuals’ names and photos to promote products or services that individuals had recommended or companies they followed. This prompted a huge uproar, and forced linkedin.com to change its policy. What is the new policy? Linkin.com will now say that the ads state that people in your network recommend a product, service or company.
If you want to opt out, here’s what you do:
To opt out of social ads: 1. Click on your name in the upper right corner. Select “Settings” from the drop-down menu.2. Click on “Account.”.3. Click on “Manage Social Advertising.”.4. Uncheck the box next to “LinkedIn may use my name, photo in social advertising” and click “Save”.
To opt out of promotional content from partners: 1.Click on your name in the upper right corner. Select “Settings” from the drop-down menu.2. Click on “email preferences “. 3. Click on “Turn on/off partner In Mail”.4. Uncheck the boxes and click on “Save changes.”
To limit the data third-party applications can access: 1. Click on your name in the upper right corner. Select “Settings” from the drop-down menu.2. Click on “groups, companies & applications”. 3. Click on “View your applications”.4. Check the boxes next to any applications you don’t want to access your information, and click “Remove.”.5. Go back to “Groups, Companies & Applications”.6. Click on “Turn on/off data sharing with 3rd party applications”. 7. Uncheck the box next to “Yes, share my data with third party applications”. 8. Click on “Save changes”.
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What is happening in my personal Real Estate world?
Despite the “Dog Days of Summer”, I have been quite busy. Last week I attended a wonderful and exciting three day seminar given by my business coach Tom Ferry, and I am in the process of incorporating many of the thoughts and ideas into my real estate practice. I am working with a number of buyers and in the process of negotiating a few offers on both leases and purchases as well as showing my wonderful listings in both Bel Air Crest and Mountaingate. Currently I am representing five sellers and am expecting to get another three to four listings in the next few weeks. Please give me a call at 310 442-1384 and I will be happy to share any and all of this information with you and assist you in any way I can.
