Timely Real Estate News………………………………1 September 2018
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Californiaâs housing market took a step back
As I have been reporting the past few months, our housing market continues to suffer from two primary challenges: #1 â rising prices, which is keeping many out of the market, and #2 â lack of inventory, which is causing rising prices everywhere. As reported in my last issue of The Schiffer Line, sales volume and the # of units sold in the areas I cover are behind over 5%from last yearâs total as of July 2018.
On an annual basis for the third consecutive month according to the California Association of 
Realtors, the state’s housing market backpedaled in July as higher interest rates and rising home prices eroded housing affordability and dampened demand.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 406,920 units in July. Julyâs sales figure was down 0.9% from the revised 410,800 level in June and down 3.4% compared with home sales in July 2017 of 421,460.
CAR reported the Southern California Region housing market was essentially flat compared to last year with sales ticking up 0.1%. Ventura County led the region with a 9.4% sales increase, followed by a modest uptick of 1.3% in Riverside. The core employment centers of the region continued to struggle as Orange and Los Angeles counties saw sales declines of 0.9% and 1.4%, respectively. Sales in San Diego inched up 0.7% in July. I will give you a complete updated report on our local housing market in the September 15 issue of The Schiffer Line as well as the quarterly update at the end of September.
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Home buyers want to âsimplifyâ the process
Itâs no surprise many home-buyers reach a point of total frustration in the process of purchasing a home these days. Paperwork and more paperwork. Fannie Maeâs National Housing Survey revealed home buyers want the mortgage process to be less onerous and faster. But they also want more personal interaction as they navigate a transaction and very big decision in their life.
According to the survey, as the Amazons and Ubers of the world continue to raise the bar for âconsumer-gradeâ experiences, home buyers have made it clear that itâs also time for the home purchasing and mortgage processes to change. I have been in the process of re-financing both the loans on my home in Coronado and here in LA and the process has been painful at best. The amount of paper work they require is crazy, particularly as in both cases, we are staying with the same lender who currently has the loans and we are in excellent standing for both. But with the changing regulations that exist today, in some cases that doesnât really matter.
Overall, borrowers say they want less paperwork. They said gathering the necessary financial information to apply and get approval for a loan is the most difficult part of the mortgage process, which was particularly true for those over the age of 45 or those whoâve purchased more than one home in their lifetime. A few highlightsâŚ
* 72% prefer to fill out application online
* 70% prefer to submit all documents online
* 65% prefer a person to explain mortgage terms, options
* 58% prefer a person help in reviewing documents
Borrowers do like the idea of a digitizing the application if it would speed up the process. The 
majority of home buyers surveyed also said theyâd like to see the mortgage processâfrom application to closingâcompleted in one month. That is five days less than the current median process takes, which averages about 45 days.
But in the end, home buyers want more personal interaction in the process. And thatâs where a good real estate agent can assist in the process. Generally the lender I work with has some excellent programs that will make the entire process much easier and faster.
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Germs love your kitchen
And why not? Itâs their restaurant. Prices are good (free). Great menu (same as yours). Self-serve (means immediate gratification). Open 24 hours (open holidays). Think of âgermsâ as your permanent (unwanted) house guest who pay no rent, and can be so very hard to get rid of!
In a report issued by NSF International, who tracks this sort of thing, it was found that the kitchen, not the bathroom, was the âgermiest” place in the house. Luckily, you can easily conquer any potential contagion with a little elbow grease, bleach and a bunch of coffee to ramp up your motivation and tackle all the surfaces and more in your kitchen. Here are some handy tipsâŚ.
* Dish sponge â put in microwave to clean and toss every 2 weeks
* Kitchen sink â donât put raw meat in disposal and clean every two weeks with tablespoon of bleach and gallon of water.
* Pet bowls and toys â ranked the #4 dirtiest place for germs. Rinse well and wash pet toys regularly
* Coffee reservoir âgerms love dark places. Put in white vinegar and rinse. Read brewerâs instructions.
* Knives in holder â another popular place. Clean out wood holder with bleach, rinse, dry thoroughly. Only place âcleanâ knives in holder.
Germs love humansâŚand weâre our own best enemy, are we not? YUK!!!!
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Home prices to continue rise, no let up
Is this good news? Depends on where you sit. If youâre sitting in your living room, looking at the for-sale sign in your front yard, thereâs a smile on your face. If youâre a homebuyer, looking at the for-sale sign from your car, not so much.
CoreLogic, the San Diego-based real estate research firm and truth sayer, reported that while 
the U.S. median sale price has risen by almost 7% over the past year, the principal-and-interest mortgage payment on that median-priced home has increased more than 14%.
Moreover, in their latest Home Price Index Forecast, CoreLogic suggests U.S. home prices will be up 5.0% year-over-year in May 2019, while some mortgage rate forecasts suggest the mortgage payments homebuyers will face at that point will have risen close to twice that. And this comes in a market that has marked differences between what home sellers want and what homebuyers can afford.
The U.S. median sale price in May 2018 â $226,674 â was up 6.7% year over year, while the typical mortgage payment rose 14.3% because of a nearly 0.6 percentage point rise in mortgage rates over that one-year period. In a review of projected mortgage rates, CoreLogic concluded that rates will rise about 0.31 percentage points by May 2019.
So, itâs a matter of whether youâre sitting in your living room or in the car in front of your dream home as to whatâs fair or not fair. One thing is happening in our Westside neighborhoods, sales volume has been below last year which means that price over reaching doesnât always work. One national firm predicts that by 2020, the U.S. housing market is going to become a buyerâs market. My recommendation to sellers â be price sensitive and competitive. Over-pricing doesnât work.
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âGo Bagsâ for Emergencies
The recent earthquake in Los Angeles County, registering 4.4 in La Verne, should prompt all of us to be prepared for any emergency that might require us to evacuate our homes. Here is a list of items youâll need as recommended by FEMA and fire departments:
#1 Pick a backpack or a nylon camperâs laundry bag with a drawstring.
#2 Take photos of all the rooms along with your valuables, and scan all of your important documents which should include all of your medicines, first aid kits, driverâs license, deed to house, will or trust, medical records, proof of insurance, social security cards, birth certificates and list of personal contacts, kids immunization records, petâs paperwork. and any other heirlooms or valuable antiques, art. Place on flash drive or upload it to the cloud (I use carbonite).
#3 Enough supplies to last at least two weeks â water, (one gallon per day/person), non-perishable food, first-aid kit, flashlight, batteries and chargers, clothes, diapers, pet supplies, charging cords for all devices, laptop, radio, (portable and/or hand-crank and batteries for same) multi-use knife, duct tape, toiletries, rope, whistle, cash (plenty), blanket, work gloves, running shoes or boots, several daysâ worth of clothes, moist towelettes, garbage bags, and plastic ties for sanitation purposes, local maps in case GPS is not working. .and breathing masks for all. Also, we should never let the gas tank in our cars go below ½ because if and/or when the power goes out, the gas pumps will not work.
These âgo-bagsâ should be in our homes, cars and offices. In addition, FEMA recommends you have an escape plan and route for all family members, and insure your phones are charged fully every day. Emergency kits should be stored in every family car as well. Be safe. Not sorry.
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Time out: Itâs time for some âforest bathingâ
Letâs take a pause, OK? We all spend way too much time on our âdevicesâ, too much time on the freeway, and finding parking spaces. Isnât it time to get away from all of this for a well-deserved respite?
May I suggest: âForest Bathingâ. What is this? âForest bathingâ does not involve soap or 
rubber ducks, but it is an adaptation of the Japanese practice shinrin-yoku, which translates to forest bath, or taking a relaxed walk through nature. The Japanese government has recognized the practice since 1982 as a scientifically proven way to reduce stress, improve mood and even boost the immune system.
Offered originally at the Los Angeles County Arboretum in Arcadia, the concept of Forest Bathing can occur anywhere where one can immerse themselves in a plot of pure nature â tall trees, flora and fauna, and the quietness of the forest where only your thoughts can be heard.
Forest Bathing guide, Ben Page, reflected that by consuming the power of nature in the forest, one becomes more relaxed and peacefulâŚyou can feel the energy emitting from these bastions of nature and you realize how much you have been missing by simply going into the forest and experience nature as it was intended. âYou can see so much in a tree, it will blow your mind,â Page said.
The next time youâre on the 405 or 10, think about taking a âforest bathâ and taking some well-deserved time off with Mother Nature.
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Housing market feeling more âbearishâ
While the housing market continues to be somewhat of a challenge: Nationally housing starts grew only 0.9% in July from the prior month. This isnât necessarily good news. Rather than a mere aberration, this could signal the emergence of a bearish ânew normalâ in housing. Why? A slowdown in the growth rate of the adult population is one factor. The less obvious trend is behavioral: Todayâs young adults (think Millennials) are no longer rushing to set out on their ownâand their parents are no longer yearning for an empty nest. Barring a drastic reversal in this trend, the housing market will have to cope with sustained slow growth for years to come. More than a third of Millennials are still living with their parents â delaying marriage, and thus delaying a need for a home.
America remains mired in by far the weakest housing market of the postwar era. New housing
starts over the last 12 months weigh in at of +1.2 million. Thatâs barely half of where it stood at the peak of the last business cycle. And, in fact, it is lower than at the peak of any business cycle going back almost all the way to World War II. Historical data on the U.S. housing stock reveal that even the America of then — the 1950s –out built the America of the 2010s. I find that amazing.
We donât have Baby Boomers to carry us through another robust housing growth period, and weâll have to either be satisfied with the new âlow-growth normalâ or figure out a way to spur housing development. That doesnât seem likely, does it?
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Speakers Corner
I know I am aging myself, but there is a fabulous classic song, âSeptember Songâ that makes me feel realize just how quickly this year is passing. With that having been said, I hope you had a wonderful Labor Day holiday!
What is happening in my life, both real estate and otherwise. First personal: my wonderful, cute 96-year-old Mom continues to enjoy her life partially to the assistance we have from her two caregivers, that make our lives so very much easier by being there 24/7. Thank you Enriquita & Rosie.
Professionally, I am very busy. I have a new listing coming up in Bel Air Crest after the 
holidays as we need to finish painting, and staging it. It is a 3/2.5, plus den for $1,995,000. I can probably start to show it the end of the 2nd week of the month, so if you have anyone for it, please let me know. With my listing in Mountaingate, the buyers who want to be in either of those two communities keep me on my toes.
I do want to share some of my thoughts about pricing and âlistening to the universeâ. At the end of the day, what matters as pertains to price is what the sellers and buyers will agree to, and if one has a property that is not properly priced, and continues to linger on the market and receive offers substantially below what they are asking, then in my humble opinion that is the universe talking to us, and we all need to be listening.
As always, I am here for any and all of your real estate needs, big or small. My personal app, Carole Schiffer is being launched this week, so keep your eyes peeled for the notice and donât forget to follow me at Facebook page http://www.facebook.com/CaroleSchifferRealtor, my LinkedIn page http://www.linkedin.com/in/caroleschiffer and @caroleschifferrealtor on Instagram.
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