Timely Real Estate News………………….. 15 April 2018
Happy Income Tax Day!
I don’t know who is happier, our accountants or the tax payers that tax day has almost come and gone, except for those who file for an extension. For those of you who are getting a refund… Enjoy!
Celebrating Earth Day — April 22. Do it!
It’s time to focus on what’s beneath, around, and above us…. Planet Earth. All of us will be celebrating Earth Day — this annual event on April 22. And I have some recommendations for you — Celebrating Earth Day begins at home!
When it comes to going “green,” people often focus on the big things. However, smaller practices that grow into habits can go a long way, especially when the whole family is pitching in, but you can start building good green habits right now – you’ll be surprised how easy it can be.
Repair faucets – Just one drop of water per second adds up to 1,300 gallons of wasted water every single year.
Replace light bulbs – Compact florescent lamps CFLs use a quarter of the energy of standard light bulbs and last up to 10 times longer.
Use natural cleaning products – Green products are becoming more and more popular but baking soda and a 50/50 mix of vinegar and water are also simple, natural cleaning agents that can handle most degreasing and disinfecting jobs in your home.
Garden the organic way – Use natural pesticides when necessary, a trowel and a sturdy pair of gloves are often all you need to remove weeds.
Keep up with car maintenance – Over 700 million gallons of gasoline are wasted each year due to under-inflated tires, and millions of gallons more due to improper maintenance. Regular tune-ups will help you save money and the environment.
Walk or ride a bike – Whenever possible, consider walking or biking to where you need to go instead of driving. It won’t just save you gas, it also helps reduce the amount of carbon dioxide being produced by your car, which causes air pollution.
Go meatless one day per week – Reducing meat consumption saves water, energy and even cuts down on air pollution.
Reuse whenever possible – Everyone knows that recycling is good for the environment, but reusing is even better. Bring your own thermos to the coffee shop, use multi-use plastic containers for lunches and food storage, and don’t forget your reusable grocery bags at the store.
Unplug appliances – Everyday appliances such as televisions, phone chargers, desk top computers, etc., continue to draw power and use up energy – even when they’re turned off. Make sure to unplug those items when they are not in use.
Go paperless – Many companies offer electronic options for purchasing and maintaining products, eliminating the need to send or receive paper bills.
Use cloth napkins – Paper napkins are a top disposable item at home. It’s not only impractical but also hazardous to the environment. Replace them with cloth napkins instead which you can use over and over again.
Sales volume back up and so are prices…
March came in like a lion with a 10.3% increase in total sales volume, overcoming a slow start when sales volume was down 10% for January for the five communities I report on regularly each month. Through the end of March, total sales volume was $801 million vs. $726 million for Beverly Hills, Beverly Hills Post Office, Bel Air-Holmby Hills, Westwood/Century City, and Brentwood.
That’s good news. Rising home prices were not the only reason for the increase in total sales. There was a 6.8% increase in the number of single-family homes sold — from 172 homes this year vs. 161 homes in 2017. Inventory is plaguing real estate markets everywhere in the country, so even a minor increase is welcomed news. We are seeing strong open house attendance and if a property is properly priced, multiple offers is the rule. But we are still finding some houses sitting in a seller’s market because some homeowners have exaggerated opinions of their home values, which causes them to miss qualified buyers who are genuinely interested in purchasing the homes (the past few weeks I have been involved in multiple offers for both buyers/sellers & lessors!). However, we are still finding some houses sitting in a seller’s market because some homeowners have exaggerated opinions of their home values, which causes them to miss qualified buyers who are very knowledgeable and genuinely interested in purchasing the homes.
Median sales — a mixed bag.
Median sales prices were up in three of the five communities I report on — Beverly Hills was up 17% through the first three months of 2018 at $6.948 million…Bel-Air/Holmby Hills was up 18% at $2.550 million MSP….and Westwood/Century City was up 16% at $2.303 million. Two other markets were down — Beverly Hills Post Office was down 10% to $2.376 million…and Brentwood was down 15% to $3.205 million through the first three months. Malibu’s median sales price was down 9% to $2.437 million.
Median sales prices compared to a year ago have shown that Beverly Hills continues to be the “top dog” on the Westside — with MSP increase of 40% over this time last year — at $6.754 million for the month of March 2018. Brentwood had a stellar month — with MSP increase of 39% at $3.800 million for March, and Westwood/Century City was up 20% for March at $2.412 million. BHPO was down 15%, Bel-Air/Holmby Hills was down 8%, and Malibu was down 5% for March 2018 compared to March 2017.
So, what is the market telling us? Through three months of 2018, we’re seeing a strong return of sales volume which is caused by both higher prices and a very modest increase in inventory. We’re seeing also that the average Sales Price to Original Listing Price — always a good gauge on the critical price factor — was down to 88% for March, one of the lowest levels in recent months. This means that homes priced higher than the market will sustain are sitting longer and sellers are having to reduce their prices to move their homes.
I can understand why some sellers are over-pricing their homes…because all they have to do is read the paper and realize that inventory is lacking everywhere, and well, “…why shouldn’t we take advantage of this situation?” But buyers are much savvier today — they do their research on the Internet before venturing out…and they’re better informed about pricing and trends. I have found my clients are much more demanding and informed than ever before…which is the way I like it!
Millennials are ‘itching’ to buy a house…FOMO is here
While we’ve been reading about Millennials flocking back to their parent’s homes by the droves, many are also experiencing the “FOMO” complex — the fear of missing out. Millennials are landing better jobs, with high salaries, and they’re getting married and having kids, and they’re tired of living with their parents.
In a national survey of 2,000 adults, the Bank of America discovered that millennials are “itching” to purchase a home…they see photos of homes on social media that their friends bought, and they’re thinking…” What about me”? The FOMO factor is driving many to develop a pathway to a home purchase, and the exposure to their friends who have made that leap is pushing them closer to buying a home of their own.
Millennials make up 65% of first-time buyers, according the National Association of Realtors. The survey revealed that when shown photos of friends or contemporaries a picture of homes purchased by others on social media, a third stated that “if they can do it, so can I!”
A quarter said that they fear of “missing out.” ….and another quarter told themselves…” It’s time to grow up and buy.” And to put this into a more emotional context, 23% said they were jealous of the homes bought by friends and acquaintances. Thirty-six percent of adults under 35 owned a home at the end of 2017, up from 34.1% in early 2016, according to research firm Veritas Urbis and the Census Bureau. And more than a third of all home purchases were made by Millennials in the 12 months ending last July, making the group the most active generation of buyers, according to an NAR survey.
Is there a Fed rate hike in our future? Probably.
All signs point to the Federal Reserve leaning toward a slightly faster pace of raising rates with the growth outlook positive and confidence in hitting their inflation target strengthened according to the Fed’s March minutes released this week. Even with the weak jobs report for March — 103,000 added for the month – the Fed is confident that the economy is strong and raised the GDP projection growth at 2.7% vs. a previous 2.5%
At their March meeting, the first under Chairman Jerome Powell, Fed officials lifted interest rates by a quarter percentage point and mostly penciled in two or three more moves this year. The central bank’s current target is a range of 1.5% to 1.75%, after the March hike.
On a related front, the low jobs report was “a bit soft” according to the NAR’s chief economist, Lawrence Yun, who stated that the heavy snow in parts of the country, and the uncertainty related to a potential trade war may have hindered companies in hiring.
The NAR believes that the 3% GDP growth target “does look easily possible in upcoming quarters.” That’s good news, especially for real estate mortgage lenders, buyers and sellers.
Homeowners amassing trillions in home equity
Rising home prices are increasing home equities across the United States in an unprecedented way. Homeowners are sitting on $5.4 trillion in ready cash, the most ever. And it’s growing every day!
The amount of equity in today’s homeowners are able to tap is at the highest level on record…more than 10% than at the pre-recession peak in 2005. Homeowners are tapping into this equity to invest in income properties and taking advantage of bulging equities in their home.
I have been working with many clients over the years in helping they strategize the use of their home equity to purchase investment properties. And if you’re sitting on an attractive trove of home equity. Please give me a call — Carole — 310-442-1384.
My Real Estate Perspective
Would you believe multiple offers for leases? I have a lovely lease on Thurston in Bel Air, and in the last week, we have received multiple offers and are in the process of negotiating with both prospective tenants. The rental amount $11,750 a month. Also, I have been involved in a multiple offer on a beautiful home in a gated community in Bel Air. As it is a property that was fortunately not damaged in the horrible Skirball fire in December but did incur some smoke damage and a claim was issues and approved, we are dealing with some difficulty in obtaining fire insurance coverage and rates so the battle goes on while we all figure this out. In the meantime, I have some other listings coming up including a new listing at 12547 Promontory in Mountaingate. It has a lovely large yard, with golf course views, 5 bedrooms, 4.5 baths, and is priced at $2,540,000. I also have a listing for a lease in Bel Air Crest that will be coming on the market in June. We have to find a replacement home for them, but it is a totally remodeled 3/2.5 home and will be priced at $8900 a month. Please let me know how I can assist you with all of your real estate needs, and check out my web site, email@example.com.
Carole Schiffer, Realtor Coldwell-Banker Residential Brokerage/Brentwood Office 310-442-1384 (office) or e-mail me at firstname.lastname@example.org www.caroleschiffer.com
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