Timely Real Estate News……………………………..I September 2017
Harvey disaster…costliest in history
As we watch the devastation from Harvey in Houston, one wonders what natural disaster could befall Los Angeles and Southern California? What a tragedy for the residents of Texas and Louisiana, where the economic loss is estimated to be more than $190 billion, more than twice that of a combined loss of Katrina and Sandy hurricanes.
In comparing Harvey to Los Angeles’s last natural disaster, the 1994 Northridge earthquake was the costliest natural disaster to have occurred in the United States at the time. And today, it is the third largest economic loss with damage estimated to have reached $20 billion in damages and $49 billion in economic loss (that would translate to $33 billion and $80 billion in today’s dollars for a total of more than $113 billion).
The breath of Harvey’s path and incessant rains will result in parts of Houston, the nation’s 4th largest city, to be uninhabitable for weeks and possibly months due to water damage, mold, disease-ridden water, and all that follows this 1,000-year flood. According to AccuWeather. The $190 billion loss translates to a 1% economic hit to the gross national product.
There has been an outpouring of help from everywhere in the U.S. for Houston’s residents…and unfortunately there are a lot of scammers preying on them as well. Area and national lenders have stopped foreclosure proceedings and insurance companies were quickly dispatched to handle the massive claims that will be filed.
Insurance..should you have it?
Depending on where you live, I would certainly recommend earthquake insurance, and if you live in a flood-prone area, such as canyons or flat lands, flood insurance would also be advisable.
Many of us have relatives in Texas and while Houston is 1,550 miles from Los Angeles, you can’t help but feel you’re also a part of this tragedy…could it happen here? It already has…1994. Be safe and be alert.
Your personal emergency preparedness
A disaster supply kit consists of basic items your household may need in the event of an emergency. You should have a kit at home, in your car, and at your office — try to include a pair of comfortable shoes in case you need to walk to a shelter area. It’s best to assume that in the event of an emergency or natural disaster, roads will be inaccessible by vehicles, and public transportation will be shut down.
Try to assemble your kit well in advance of an emergency.
You may need to survive on your own after an emergency (the fire dept. is saying possibly as long as two to three weeks after a massive earthquake!). Local officials and relief workers will be on the scene after a disaster but they cannot reach everyone immediately. You could get help in hours or it might take days.
Additionally, basic services such as electricity, gas, water, sewage treatment and telephones may be cut off for days, even a week or longer. Your supplies kit should contain items to help you manage during these outages.
Water, food, and clean air are important things to have if an emergency happens. Each family or individual’s kit should be customized to meet specific needs, such as medications and infant formula. It should also be customized to include important family documents.
Recommended supplies to include in your Basic Kit:
Water, one gallon of water per person per day, for drinking and sanitation, at least a 14-day supply of non-perishable food. Battery-powered radio and a NOAA Weather Radio with tone alert and extra batteries for both. Flashlight and extra batteries. First Aid kit. Whistle to signal for help. Infant formula and diapers, if you have an infant. Moist towelettes, garbage bags and plastic ties for personal sanitation Dust mask or cotton t-shirt, to help filter the air. Plastic sheeting and duct tape to shelter-in-place. Wrench or pliers to turn off utilities. Hand operated can opener for food (if kit contains canned food)
Clothing and Bedding:
If you live in a cold weather climate, you must think about warmth. It is possible that the power will be out and you will not have heat. Rethink your clothing and bedding supplies to account for growing children and other family changes. One complete change of warm clothing and shoes per person, including: A jacket or coat. Long pants. A long sleeve shirt. Sturdy shoes. A hat and gloves. A sleeping bag or warm blanket for each person
You should also have a good amount of cash with you, and please never go below a half tank of gas in your car. When the power goes out, the pumps at the gas station will not work!!!
A great local source for picking up everything you might need is SOS Safety Products in Van Nuys, 800-479-7998. Again, be prepared and safe!
Economy picks up…employment, GDP up
Private employers accelerated their hiring in August, adding a robust 237,000 net new jobs in a sign that the labor market remains strong and should start pushing up wages. The figures released Wednesday by Automatic Data Processing exceeded analysts’ expectations of 185,000 and were a significant improvement over an upwardly revised 201,000 net new private-sector jobs in July.
More good news…the U.S. economy also grew faster than initially thought in the second quarter, demonstrating its quickest pace in more than two years, and there are signs that the momentum was sustained at the start of the third quarter.
Gross national product (GDP) increased at a 3.0% annual rate in the April-June period, the Commerce Department said in its second estimate on Wednesday. The upward revision from the 2.6% pace reported last month reflected robust consumer spending as well as strong business investment.
Growth last quarter was the best since the first quarter of 2015 and followed a 1.2% pace in the January-March period. Economists had expected that second-quarter GDP growth would be raised to a 2.7%rate. It is interesting to note that Warren Buffet said that while this is a good number, “.it sure doesn’t feel like three percent.”
Retail sales and business spending data so far suggest the economy maintained its stamina early in the third quarter.
You would think that all of this is making the housing recovery needle move…but it is not. Prices, as you’ll read elsewhere in The Schiffer Line, are up, but the anemic lack in the new housing sector continues to plague our housing inventory problem. And we continue to get mixed messages on home sales — up in some areas, down in others. With the robust labor market and strong growth, the Fed is now looking to increase interest rates in December. We will see how the end of the year plays out with the Fed and with the economy. President Trump’s goal was to reach 3%…we’ll see. Also, we will need to see what impact Hurricane Harvey has on the overall national economy. It is too early to know.
Existing home sales up…South and West lead the way
According to the National Association of Realtors, increased buyer demand in July pushed up existing home sales in the South and West, but there were large declines in the Northeast and Midwest. Again, Harvey is going to have an impact on this going forward. Total existing-home salesare completed transactions that include single-family homes, town homes, condominiums, and co-ops, slipped 1.3% to a seasonally adjusted annual rate of 5.44 million in July from a downwardly revised 5.51 million in June. July’s sales pace is still 2.1% above a year ago, but is the lowest of 2017.
(Note — I want to point out that this is a “national story” and when we’re talking about housing sales in the West, that doesn’t mean sales data in Los Angeles or Southern California will match…and this month they don’t…so please read the next story. Thanks.)
Lawrence Yun, NAR’s chief economist, says the second half of the year got off on a somewhat sour note as existing sales in July inched backward. “Buyer interest in most of the country has held up strongly this summer and homes are selling fast, but the negative effect of not enough inventory to choose from and its pressure on overall affordability put the brakes on what should’ve been a higher sales pace,” he said. “Contract activity has mostly trended downward since February and ultimately put a large dent on closings last month.”
Total housing inventory at the end of July declined 1.0% to 1.92 million existing homes available for sale, and is now 9.0% lower than a year ago (2.11 million) and has fallen year-over-year for 26 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.8 months a year ago. Increases in existing home sales were up in the South by 2.2% and in the West by 5%. Median sales prices were up everywhere with the continued housing shortage.
New single-family homes fell in July
Whoops…. this is what is happening in the crazy U.S. housing market — one sector is up, another down, and coming down in July was “new” single-family home sales, which dropped to their lowest level in seven months.
The Commerce Department recently said new home sales tumbled 9.4% to a seasonally adjusted annual rate of 571,000 units last month, the lowest level since December 2016. The percentage drop was the largest since August 2016 and confounded economists’ expectations for a 0.3% gain.
June’s sales pace was revised upwards to 630,000 units from the previously reported 610,000 units. Home sales in May also were not as weak as previously reported, taking some of the sting from July’s report.
New home sales, which account for 9.4% of overall housing sales, are volatile month-to-month and are drawn from building permits. Still, sales declined 8.9% on a year-on-year basis.
The “not-so-good-news” is that current data shows a plunge in both housing starts and permits in July, which is an unexpected decline which means the housing market is facing continued challenges in meeting housing shortages in all markets. Again Harvey will have an impact here as homes and buildings will be repaired and re built.
Southern California sees 2.3% drop in sales
CoreLogic revealed recently that while home prices surged in July, sales dipped 2.3% from a year earlier, in part because of the shortage of listings. However, median sales prices surged within the six-county Southern California market — median sales prices climbed 7.7% from a year earlier to $501,000. That was the greatest jump in nearly 2 1/2 years and put the median price just $4,000 shy of its all-time high set in the summer of 2007.
Remember, however, these prices in 2017 compared to 2007 have not taken into consideration the 11% increase in inflation since then.
Both Los Angeles and Orange counties saw large individual increases in median prices — with LA up 8.1% to $575,000 and OC rising 7.9% to %690,000. And as I have said repeatedly, prices are just going to continue escalating as long as our inventory remains low.
A different story — luxury home sales take off …
According the latest data on homes selling for more than $5 million in Los Angeles, sales are literally ‘booming’. We are far ahead of last year in high-end sales. There have been 381 sales of $5 million-plus homes so far, this year as compared to 316 homes at this time last year.
There have been 116 closed sales of $10 million-plus versus just 89 a year ago. Of those sales, there have been 36 sales of $20 million-plus this year versus 15 last year, and there were only 13 homes sold for all of 2016, and we have five months to go. Seventeen of these sales of over $30 million at this time last year, and only four closed sales of $30 million.
We have abroad representation of buyers….in the 36 $20 million-plus sales category, most buyers were Americans (26) Chinese (3) English (2), Scottish (1), Canadian (1), Indonesia (1) and one yet unidentified. Nine sales were in Malibu, seven in Beverly Hills, six in Beverly Hills Post Office, three in Holmby Hills, two in Sunset Strip, and one each in Los Felix, Santa Monica, and Pacific Palisades.
I am very proud to announce that the Los Angeles Company of Coldwell Banker Real Estate joined the national and raised thousands of dollars for the Red Cross to help the people of Texas in their hour of need!
Also, Please Join us!
On the weekend of the September 10-11, my office will be at the Westwood Petco, 1873 Westwood Blvd., in cooperation with KarmaRescue.com to assist in the adoption of dogs and cats. If you are thinking of adding a furry pet to your family, please come by and say hello. I love dogs but do not have one because I am really never home. I will be working there on Sunday, and am totally afraid that I will want to take every single dog home with me!
My Real Estate World as It Stands Today
It has been a whirl wind for me the last two weeks. My lovely listing of a 1+ den, 1/3/4 bath townhouse in Mountaingate set off a firestorm of activity, which resulted in 6 offers in 4 days. My sellers accepted one of the offers, over asking, and unfortunately the buyer changed her mind and so this past week, we started the game all over again, and again had 4 offers. One of which my clients have once again accepted, so fingers crossed this one will stick! In addition, I have been speaking with several buyers and sellers all of whom I will be working with, but they all seem to want to wait until the beginning of the year to next Spring to get rolling. Since we do not know where we will be next year and have the issue of low inventory now, it is going to be interesting to see what happens when “they are ready to pull the trigger”. I do, however, have my sensational furnished lease listing in Bel Air Crest for $11,000/month just waiting for that special someone(s) to make it their own.
Check out the virtual Tour www.11738ipswich.com
Please let me know how I might assist you with your real estate needs.
Please call me at 310-442-1384…thanks, Carole.