Timely Real Estate News……………………………………………15 April 2011
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We take our lumps…but we’re faring better than most
Despite soaring unemployment, a state with more than $24 billion in the red, and over $500 billion in unfunded pension costs….California, surprisingly, is faring better than most states according to a report by USC on April 5 published by the Los Angeles Times.
Using data from the US Census and other sources to compare such as homeownership and employment growth between the recession of the early 1990s and the recent “Great Recession” (as they call it), California poverty level peaked in 1993 at 23.8% but went down to 16% in 2009….but even though unemployment (real and unreal) went over 12%; despite an economic downturn, median household income in home values and real dollars grew over the last decade.
On a positive note about sinking home prices, the report added “…we might hope that these reduced housing prices also have lowered the barrier to homeownership for countless others,” referring to many who were permanently dislodged from the status of homeowners to renters.
We see it everywhere — housing prices still dramatically below values in the mid-to-late 2000s, and yet, we continue to see our Westside’s resiliency that has prevented home equity from being driven into the ground as it has occurred in many other areas in the US.
Shadow inventory of 1.8 millions could, however, prolong slump
Just when you thought it was safe to go into the housing waters, you read that there the “glut of troubled homes not yet on the market represents a nine-month supply at the current sale pace”. That’s in addition to the 3.49 million previously owned homes already on the market, according to Santa Ana mortgage research firm, Core Logic. When you combine these numbers, you are looking at an estimated 16.8 months of shadow inventory on the market, up from the 15.3 months in January 2010. (“Shadow Inventory” is defined by Core Logic, as a property that is in foreclosure…has a loan 90 days past due or has been taken back by a lender and is not yet listed for sale.”)
Does this affect your home value? Of course, it does — but as I have pointed out in practically every issue of the SchifferLine, every home and every neighborhood are different. We have all seen how our home values decline when a foreclosed home in your neighborhood is sold at a substantial discount, meaning your home takes its lumps, too.
Yes, location still makes a huge difference and our Westside location continues to boast the finest neighborhoods, shopping, dining, and school assets. But always, the critical factor in determining your home’s true value is when it is put on the market — price, always, is the determining factor! Properly priced homes sell well and quickly. Homes that are not priced correctly within its environment will sit. And sit.
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Sales volume lags behind 2009 and prices continue their ups, downs
You must get tired to hearing my tales about the roller coast ride going on with Westside real estate. I wonder, sometimes, why I ever picked real estate as a career, especially in these up/down times when we have experienced such wild swings over the past two years, but then I know why, I really love what I do, lumps and all!!!. For example, last March 2010, we were 76% ahead of sales volume for the first quarter….but this year, we are 24% behind for the four communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air, and Brentwood. And even though we’re slowly increasing our volume percentage each month since January, we’re obviously not where we want to be.
For example, Beverly Hills is 48% over the median sales price for March 2010 yet it “posted a 83% drop in median sales price last March compared to March 2009. Beverly Hills Post Office is up a whopping 73% in median sales price for March 2011 but a year ago, it slipped 23% when compared to a year earlier — which is nearly a 100% swing. Bel-Air is down 31% over last year, but Brentwood — always lagging in 2010 — is up 8%.
Again, one has to take a step back and not just look at the monthly #s because they are deceptive — a large sale (or many) can skew a community’s median sales price by many percentage points. Two communities are performing ahead of 2010 for the first quarter 2011 in year-to-date median sales prices — Beverly Hills is up 3% and Beverly Hills Post Office is up 35%. Both Bel-Air (-37%) and Brentwood (-21%) are down for the first quarter.
There were some large sales (over $3 million) in all four communities in last March; Beverly Hills had seven over $3 million; Beverly Hills Post Office had two; Bel-Air had two also, but had one for $25 million; and Brentwood had three — with one for $26 million. This all speaks well for the higher priced market.
What’s behind the numbers?
Yes, the glut of bank-owned homes on the market has driven prices down everywhere in the United States, as we have discussed above. And it’s not going to necessarily get better with the shadow inventory looming on our horizon (more foreclosed homes coming our way). Pricing strategies, however, indicate that over-pricing is one of the major contributors to the lower prices and laggard sales volume. All one has to do is compare “sales price” to “original sales price” to see that homes not priced right will not only sit — but the final selling price will be substantially below what the seller originally wanted. The MLS tracks these #s every month, and in the past strong real estate years we saw this ‘ratio’ was in the mid-90s percentile in all communities I report on. Beverly Hills and Beverly Hills Post Office homes closing escrow in March 2011, sold at 86% of their “original listing price”. Bel-Air performed much better at 96% of the OSP and Brentwood was at 91% of OSP.
The MLS is replete with examples in all four areas that I report on where the final selling price was substantially lower than the original selling price. For example, a home in Beverly Hills was listed for $6.996.000 in June 2010, and closed escrow in March 2011 for $5,800,000. An estate in Brentwood was listed for $28,900,000 on September 20, 2010, and sold for $26,000,000 on March 31, 2011. Originally the house had been listed with another agent for $35,000,000 and it sat on the market for about a year! And on and on. The point is this — homes not properly priced will sit longer on the market than homes that are priced right.
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Everyone’s Favorite Day of the Year – April 15th – NOT
Since 1955, Tax Day is usually on April 15. When April 15 falls on a weekend, Emancipation Day, or any other holiday, tax returns are instead due on the following business day.
Federal income tax was introduced with the Revenue Act of 1861 to help fund the Civil War. That Act stipulated that income tax “shall be due and payable on or before the thirtieth day of June”. There is an unsubstantiated claim that the first income tax was paid only by the very wealthy, and they tended to spend their summers vacationing. The filing deadline was March 1 in 1913 and was changed to March 15 in 1918 and again to April 15 in 1955. Today, the filing deadline for U.S. federal income tax returns for individuals remains April 15 or, in the event that the 15th falls on a Saturday, Sunday or holiday, the first succeeding day that is not a Saturday, Sunday or holiday. Tax Day occasionally falls on Patriots’ Day, a civic holiday in the Commonwealth of Massachusetts and Maine. When this occurs the tax deadline is extended by a day.
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Sepulveda Pass/405 construction continues without a break
The 405 construction project in Sepulveda pass continues day and night. We’ve all experienced ‘surprises’ when we thought it was ‘safe’ to take one of our favorite ‘ways’ home, only to find a surprise detour or traffic clogged — and nowhere to go.
Starting at 10 pm on April 8 for 12 hours, Kiewit, the contractor for the freeway construction, began placing k-rail, restriping the intersection at Wilshire and Sepulveda and installing temporary lighting and signals at Wilshire Blvd and Sepulveda Blvd. During this installation the traffic lights at Wilshire and Sepulveda will be turned off and traffic control officers will direct traffic.
Upon completion, Wilshire Blvd will have one less center lane in each direction from Bonsall to Veteran. All turn lanes will remain open. There will be K-rails placed around the median of both westbound and eastbound Wilshire to create a work zone for the bridge widening. This new configuration will remain in place for one year.
Church Lane will be closed at Sunset starting April 30th for 3 months. This is due to electrical vaults being moved and the onramp being reconfigured. The Getty on-ramp will be closed 20 hours a day during the week for 7 months beginning April 14th. The ramp will be open from 6 am – 10 am and closed from 10 am – 6 am during weekdays. The on-ramp will be closed 24 hours a day during the weekend. The Skirball southbound on-ramp will always be open when the Getty on-ramp is closed.
Changes are taking place every day with various street, on ramp, etc. closures. Please check the sites listed below to get the latest information
Email: I405 @metro.netWebsite: www.metro.net/I405
Twitter: http://click.icptrack.com/icp/relay.php?r=1017197659&msgid=1659563&act=85D6&c=395186&destination=http%3A%2F%2Ftwitter.com%2FI_405
Facebook: www.facebook.com/405projectNixle: nixle.com Project Hotline: 213.922.3665
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Earth Day is about celebrating our wonderful Planet…….
You’d think that Earth Day has been around since….well, would you believe 1970? Founded by Senator Gaylord Nelson as an environmental teach-in on April 22, 1970. The concept literally took root, and is now a globally celebrated event in 175 countries. April 22 seemed like a good day to start this celebration because it corresponds to spring in the Northern Hemisphere and autumn in the Southern Hemisphere. And it doesn’t stop there — there are many communities who celebrate Earth Week that focus on environmental issues. At the SchifferLine, we literally celebrate Earth Something every issue with our Green Tips — I want to share with all of you my commitment to be environmentally sensitive and compliant for what is good for Mother Earth. And the United Nations has now designated April 22 as International Mother Earth Day. (Don’t forget Mother Nature!)
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How to celebrate earth day in the kitchen
Cover up – Where possible, cover up your pots and pans. This will help your food to cook more quickly and generates a higher temperature allowing you to turn down the stove. Taking the heat off – Instead of turning off the stove when the food is done, experiment a little with switching it off just before the food is cooked. An electric fry pan can be switched off a minute or two earlier, and oven up to 10 – 20 minutes depending on how well it’s insulated and sealed. It may not sound like a huge saving, but particularly with electric stoves, the dollars will add up. Nuke it – Instead of boiling water in a pan; zap it in a microwave instead. Be prepared -Always ensure your ingredients are prepared as much as possible before turning on the heat. Slow food – In the 70’s, crock pots were all the rage. These were heavy pots that took ages to cook anything, but cooked at a very low temperature. The idea was to switch it on before you head off to work and by the time you came home, the food was done saved power and the end results were delicious too! Hot stuff – Not ready to eat just yet? Instead of having the stove top going to keep it warm, wrap the pot up in a towel – this will help insulate it for quite a while. Splurge on pots and pans – Resist buying cheap pots and pans – they’ll cost you more in the long run. A good sturdy, thick walled set will last you a lifetime and while they take a little longer to heat up, the heat distribution is better and they’ll also store heat for longer. Glass and ceramic pots and pans are said to be the most efficient. The right pan for the job – If you can see the heating element or the gas flame is licking a little on the side of the pot or pan, it’s too small and much of the heat is being wasted. Keep the door closed – How’s your oven door glass looking? It’s worth spending the time to keep it clean so you can see in rather than opening the door to check on the food. Water, water everywhere – Only use as much water as you need in a pot. Every extra drop requires more energy to heat and will increase the cooking time.
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My inventory…
I have some stellar properties for your consideration. They range from fabulous Canyon homes in Bel Air Crest, one with a price reduction from $1,360,000 to $1,325,000, another Canyon home listed for $1,725,000 is 4/3.5 and is newer. In addition, I have also the last custom lot available in Bel Air Crest. In Mountaingate, in The Terrace, I have a great 1 bedroom, sitting room and den with golf course views listed for $1,085,000 and an amazing home on the beach in fabulous Malibu listed for $8,099,000. Please let me know if you have anyone for any of these properties or any need any additional real estate assistance.
