Timely Real Estate News…………………………………………… 1 September 2010 *********************************************************************************************************************************************
When was the last time you were on a roller coaster?
You don’t have to travel to Magic Mountain to get on “Colossus” — their classic dual track wooden coaster — to feel the thrill of looking up to the top of the climb and then to see yourself plunge to the bottom, traveling at what feels like the speed of sound and getting whipped from side to side and top to bottom. This was a great thrill when you were 16 but not after 30.
As you grow older, especially in Los Angeles, all you have to do to simulate this ride is read your daily paper or listen to TV about the real estate market and/or the economy. You’re up…you’re down…you’re whipped from side to side, and you haven’t moved an inch.
Welcome to the Real Estate Ride. Perusing the Los Angeles Times these past few days, you see where July home prices declined 27.2% in the United States according the National Association of Real Estate.
According to the LAT article, the big drop, which was worse than what many analysts had expected sent stock markets tumbling as investors feared a double dip in housing. The blue-chip Dow Jones industrial average fell more than 1%, as did the S&P 500, a broader measure of stocks last week.
The National Association of Realtors said that the seasonally adjusted annual rate of sales was 3.83 million units in July in 2010, a drop from the downwardly revised 5.26-million-unit rate in June 2010 and a 25.5% drop from the 5.14-million-unit level of 2009.
That was bad enough news……and then the LAT reported that there are more and more homes in the $1 million range that are in foreclosure or facing foreclosure. The ending of the $8,000 tax credit for first-time buyers has greatly affected the real estate market — the bloom off that tax-incentive rose is gone for good. But that had little affect on the $1,000,000+ plus homes that are upside down and now are in the bank’s hands.
All of this, of course, plays tricks on us. And if you ended your roller coaster ride after these two great pieces of news, you would have missed some of the ‘up’ news — Standard & Poor’s/Case-Shiller reported that June sales were up 1.2% across the nation, with Los Angeles reporting a 9.2% increase in home prices over 2009 for the same period. Minneapolis, San Francisco and San Diego all reported double-digit increases.
Now, this is the news you’re reading as you’re going up the coaster. As you read on, you discover that all this good news isn’t expected to last as more foreclosed homes come on the market. Case-Shiller goes on to predict that home prices are going to drop another 8% and bottom out in 2011. That’s right. We haven’t hit bottom yet.
OK, OK….I wanna get off this ride. .
Fortunately, there is some good news that isn’t coming at you at roller-coaster speed. As I have reported, location is still the predominant driver in the real estate business. And where we live has more to do with home prices than reading the Los Angeles Times Gloom and Doom section. As I reported in the last SchifferLine, median sales prices for three of the four areas I cover are near 2009 prices — we haven’t lost our mo-jo as have many other cities in the US or in Los Angeles County. For example in my office for the first three weeks of August of this year, we had 94% of opened transactions as compared to the same time period in 2009. Also in checking the numbers from the multiple listing service of July 2009 vs. July 2010, they are most interestingā¦. In July of 2009 there were 355 active listing in all price ranges in Beverly Hills, Beverly Hills Post Office, Bel Air and Brentwood, vs. 499 in 2010 in the same areas.
In July 2009 there were no pending escrows vs. 13 in Beverly Hills, 12 in BHPO, 12 in Bel Air and 17 in Brentwood this year As for a comparison of closed escrows for 2009 vs. 2010, in 2009 there were 11 in Beverly Hills, 12 in BHPO, 15 in Bel Air, and 11 in Brentwood vs. 13 in Beverly Hills, 12 in BHPO, 14 in Bel Air, and 15 in Brentwood in 2010. So when you look at the numbers, even though there were a few more closed escrows in 2009, and when you take into consideration the fact that there were no pending (all contingencies had been removed, and they are just waiting to close escrow) vs. properties in the pending category in 2010, the numbers are equal or perhaps even a little better!
What makes our Westside so special, of course, is that we continue to have incredible, natural and man-made assets that make this one of the greatest places on Earth to live. I know that sounds a bit like Chamber-speak, but it is true. This past week I have had an interesting situation going on. I have had a beautiful large Custom home in Bel Air Crest, both for lease and for sale. In the past week, we have had three different potential lessees all wanting to lease the house and take occupancy in about a week. This in addition to other agents who also had lease clients for the house! I am very intrigued by all of these potential lessees who needed something now!!! Whatās up with that????
I can tell you that while we all know that the banks are more than reluctant to make loans today, and we all have the horror stories to share, this is also an excellent time to buy real estate. The majority of people that really make money in real estate have bought in a challenging market such as we are in today. With interest rates being what they are; Now is the time!!
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So what is the scoop?
Really, there is no bad news. Last week, I spent three days at a Success Seminar hosted by my business coach, Tom Ferry. One of the underlying themes of the three days is that we all have to get our Swagger Backā¦ Swagger ā āHow one presents him or herself to the world. Swagger is shown from how the person handles a situation. It can also be shown in the personās walk, talk or dressā. How is your swagger?
There are buyers and sellers out there who are anxious to complete deals. Prices remain firm for sellers who have priced their homes realistically, but if you’re thinking of getting what you might have gotten three years ago, forget it. There is a ‘new normal’ — and sales volumes, which are running ahead of 2009 for this year, indicate that buyers are making deals. The normal today is going to be location-based and driven by condition of the home and presentation to the buying public. Every neighborhood has its own strengths and weaknesses — and you will need an experienced Realtor, like me, to help you through the process. If you’re a serious seller, you have to price your house right or it will sit, and frankly, you’ll lose deals and money at the end of the day….so call me.
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It’s Back to School Time….pen and ink?
My niece, Morgan, enters her senior year at USC and is in the middle of Rush Week, which can be so demanding on everyone, and my nephew, Connor, is taking a gap year and heading to Europe for six weeks to discover what life is like. Oh, how I envy them….what a great opportunity it is (and was) to be in their shoes….to experience your college years or traveling, rather carefree, to Europe. Oh, well, that vacation is, hopefully, in my near future.
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Just how much do you need a Smartphone?
One of the other things we talked about at my conference last week was the ever increasing use of āthe smart phoneā. Did you know that if you have an discount membership with Best Buy and your Smartphone is registered as part of that membership, very soon, every time you walk into a Best Buy store, you will receive an email telling you of a coupon you can use to purchase a specific item, then you can scan your phone on the bar code of the package, and off you go.. No credit card, nada except your phone! This is coming very soon to a store near you, yes my dear, Big Brother is really here! āSmartphoneās have become a way of the life these days….just like we no longer carry paper airline tickets or maps or even lugging a laptop from city to city. We have really “smart” phones that do it all.
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School lunch tray dilemma
With kids returning to school now, I thought this might be a timely issue to address.
When you consider the millions of students in the USA alone; the humble school lunch tray does have an impact.
In New York City public schools alone, 850,000 Styrofoam trays are used each school day and then thrown away. Often the trays are incinerated. Styrofoam lunch trays are by no means an environmentally friendly product.
If the means of disposal isn’t incineration, but landfill; Styrofoam takes a very long time to break down, taking up a huge amount of space in what is already an overburdened waste stream. When expanded polystyrene enters aquatic environments, creatures may also ingest it; causing intestinal blockage that ultimately leads to death. Expanded polystyrene is a common plastic found in the Great Pacific Garbage Patch.
While Styrofoam can be recycled, facilities for doing so are few and far between and given the bulk of its volume is air, transporting it to recycling facilities also presents cost and environmental challenges.
Styrofoam lunch tray alternatives:
Schools play an important role in teaching our children good environmental stewardship and if school lunches are being served up on an environmentally damaging product; it’s not a great example to set.
However, this isn’t just a school problem, it’s a school community problem – parents, students and the government bodies overseeing the funding and regulation of schools need to be involved in a solution.
Some schools have recognized the disadvantages of Styrofoam outweigh the advantages and have gone back to reusable trays. To address the cost issues involved with washing the trays, volunteer programs have been set up, enlisting the help of students and parents. Other schools are trialing compostable lunch trays made from bagasse, which is a waste product associated with sugar cane processing. While the cost of bagasse trays is decreasing, they are still quite a bit more expensive than Styrofoam; so some schools undertake fundraisers to help buy the trays. While a couple of cents extra per tray doesn’t sound like much, start multiplying that by thousands of meals a week and the costs really add up. Given the environmental/health issues involved though, parents have reportedly been quite responsive to supporting bagasse tray initiatives.
Bagasse isn’t the only type of compostable tray available – some are made from corn waste or recycled cardboard. To learn more about the options available and pricing, try searching on Google using the following terms:
compostable school lunch trays
biodegradable school lunch trays
recyclable school lunch trays
Biodegradable/compostable trays still don’t address the costs involved with waste removal and if they just go to landfill; they don’t actually compost and take a long time to break down.
Something that sprang to mind to address the waste issues would be setting up composting facilities on-site and the resulting compost used on school grounds; helping to reduce grounds maintenance costs. This would be an interesting student project in itself; very relevant to topics such as Science or Agriculture; so it could become a part of curriculum.
Sometimes there are no quick fixes, so it’s a case of tackling a problem a bit at a time and reducing harm. A great initiative occurring in New York City public schools since March this year is “Tray less Tuesday”. On Tuesdays, food is served in containers made from recycled paper that has a clay based coating to prevent leakages. While it’s just one day a week, the initiative is slashing the amount of expanded polystyrene tray waste by 20% – and that’s quite significant when viewed as a percentage of the 850,000 trays a day used in New York City schools.
Tray less Tuesday type initiatives also help raise awareness among parents and students of the issues involved with Styrofoam; which can help in garnering support for further reductions in the future.
The other way to tackle the problem of lunch trays is to look at dealing with other forms of lunch related waste – such as wasted electricity, food, water and other forms of packaging. One school took this approach and lessened their cafeteria related waste from 6 dumpsters a week to two, and the savings then went towards re-introducing reusable lunch trays.
While not as flashy as solar panels on gymnasium rooftops, dealing with the expanded polystyrene lunch tray problem is a big step in greening our schools. Or we could revert to the old standard of bringing your lunch to school.
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What properties do I have that might interest you or someone you know? I have a few. In Bel Air Crest, I have one Custom Home for sale, two Canyon homes available for lease, two Canyon homes for sale and another Custom home that will be coming on the market in the next week; in Mountaingate, I have two homes listed for sale, one pocket lease, and another pocket of a home coming on the market for sale, and in Brentwood, another home coming on the market for lease in the next week as well as one coming up for sale also in the next week.. On Sat, September 11th, you will be able to see some of these listings on my full page ad in the View section of the Los Angeles Times.
