The SchifferLine
Timely Real Estate News…………………….15 April 2021
***********************************************************
March was a âwowâ month as sales, prices zoom
March came in like the lion it is supposed to be â with sales volumes and prices zooming upward. With the year starting in the negative compared to January 2020, sales volume for the five communities I report on took off like a rocket â Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood â were up 22% to $1.007 billion compared to $813 million this time a year ago. There were some big sales that drove the volume higher, especially in Bel-Air/Holmby Hills which had sales of $18 million and $27 million, not unusual for this high-end market. Beverly Hills had one for $15 million, as did BHPO, and Brentwood had two at $10 million and one at $13 million in March.
One of the true stars on LAâs Westside was Pacific Palisades, a community I also cover, which had a total of $426 million in sales through March, which is 122% higher than they had in the same period in 2020. The other leaders in sale volume increases were Brentwood with $92 million ahead of 2021, followed by Bel-Air/Holmby Hills with $54 million plus, Westwood/Century City was ahead by $49 million, Beverly Hills by $20 minion and only BHPO down by $9 million compared to the first three moons of 2020. Also, has I have oft mentioned, these stats are from the MLS, and does not take into account any private sales.
Despite the dramatic turnaround in sales, buyers are still scrambling for quality properties, and you can be assured that these properties will most likely have multiple offers, and as I research for my clients, targeted homes are often sold before I can get the client out to see the property. So, buyers â Beware! Start early with an experienced agent such as myself and expect a challenging journey. Also, please know, this is the market is all over. I have some clients that are moving to Florida and are experiencing the same rapid, fast paced market there. Patience and tenacity are a virtue for both of us!
***********************************************************
Median sales prices keep doing the expectedâŚ.
Nothing is more predictable when supply is down, demand goes upâŚat a price! Median sales prices are zooming upward in the communities I report on.
We are clearly ahead of the same first-quarter results from 2020, as median sales prices across the board continue their upward climb. Brentwoodâs median sales price is 20% higher than 2020 at $3.462 million; Beverly Hills is up 15% at $6.475 million; BHPO is also up 15% at $3.202 million; Bel-Air/Holmby Hills is up 13% at $2.210 million and Westwood/Century is down, however, by 5% at $2.470 million. Pacific Palisades is up 12% at $3.291 million.
Median sales prices reflect that âmedianâ only â half of the homesâ sales prices are below the median price, and half are above it. It is not the standard average. What I have noticed is that buyers are coming âarmedâ with all-cash offers. I agree that all-cash offers can have a definite advantage in todayâs market â because sellers are not eager to wait for financing to be approved or long contingencies. As a result, buyers are waiving some of their contingencies, loan, appraisal, and or physical inspections Obviously this practice can be risky, but buyers want to place themselves on a level playing field with all cash buyers. At the same time, all cash buyers many times want the benefit of a discount which might be higher than a buyer with some or all of the normal contingencies. The sellerâs decision can be made on the terms of the offer, and I have seen sellers choose a non all cash offer because the terms of the offer are better. My favorite lender, Simon Atik at Great Rate Affinity has a program whereby he can qualify a non-cash buyer as a cash buyer because they do a number of pre-approval steps in qualifying the buyer, that take a little longer to do, but it gives the buyer the advantage of being in essence an all-cash buyer. Not to worry we are still doing sales with non-all-cash offers⌠it is done all the time, but those buyers with $$ may have a definite advantage in today’s hotly competitive market. Letâs talk as to how you can get into the game!
`
A word about interest ratesâŚat our sales meeting this week, Simon discussed that we are currently still seeing low interest rates â 3.125% for a 30-year-fixed loan, although it is projected to be at 3.95% or 4% by the end of the year. The number of re-finance applications are lower; however, purchase applications are growing, which generally means multiple offers across the board. Lenders have let it be known; however, they are installing tougher requirements for second homes and investment properties as they believe that are at a higher risk. Simon also shared the information that the economic recovery we are experiencing is the fastest since 2014!
***********************************************************
Good news continues for high-end
For the high-end market on the Westside, we are far ahead of last year in closed sales. The number of closed sales of $5 million-plus through March 21, 2021, is 214, versus 130 at this time last yearâ up 65%. Of these, 65 are $10 million-plus, and there were 37 closed sales of $10 million-plus at this time last year, up 76%. Ten of these sales are $20 million-plus, and there were nine closed sales of $20 million-plus at this time last year.
We are still slightly down in the closed sales of $30 and $40 million this year. There are two closed sales of $30 million-plus this year, and there were five closed sales of $30 million-plus at this time last year. There is only one $40 million-plus sale so far this year versus two sales at this time last year.
What is also good news is that we have never seen so many pending sales. There are 106 pending sales of $5 million-plus and 65 of these are $20 million-plus and 10 are for over $20 million.
Of the current 10 sales of $20 million-plus, eight buyers are American, one is Indonesian.. The 10 sales of $20 million-plus are: four in Malibu, three in Beverly Hills, one each in Sunset Strip, Bel Air and Brentwood.
There is good news coming down our real estate path. With LA County opening up, unlocking mass attractions, including my favorite, the Hollywood Bowl, life seems to be better this Spring. Now all we need are April Showers. We need rain.
***********************************************************
Emerging trends in real estate
The COVID-19 pandemic has caused a mass disruption to the way people live and work and prompted sweeping economic fallout felt throughout the world according to the Urban Land Instituteâs take on emerging trends in real estate. Global leaders are still coming to grips with the long-term impact to the real estate industry. While the Asian Pacific region appears to be leading the recovery, the U.S. is also posting growth to many of its real estate sectors and 
seeing some evolve to better compete in the post-pandemic world.
Here are a few of the trends highlighted in Urban Land Instituteâs report on real estate trends that are on the radar for global real estate markets:
Real estate continues to attract capital. Low interest rates are fueling interest in real estate across the globe. âMost industry leaders interviewed for this report believe the inherent attraction of real estate income is even stronger this year than in pre-COVID times,â according to the ULI report.
Unknowns loom for the office sector. The office sector, however, is more difficult for real estate leaders to predict. The rise of remote working, the increasing concern for the health and wellbeing of employees, and the lessening appeal of long commutes in big cities could negatively impact leasing activity this year and next year. Many large firms could delay corporate decisions on office space or commit to a greater reliance on remote working. Many real estate leaders predict employees will eventually return to the office, even if in more of a âhybridâ working model.
ESG tops more agendas. The impact of carbon emissions from the built environment remains a pressing issue for more companies, and theyâre placing a greater emphasis on environmental, social, and governance agendas. Though decarbonization and climate change have been rising up the agenda for years, it is only in the past 18 months that these issues have moved to the foreground of the industryâs thinking the ULI report notes.
Re-imagined retail. The physical brick-and-mortar retail sector has faced the increasing threat of online competitionâeven more so since the pandemic. But investors are not shying away from seeking out new opportunities in retail, particularly as they view some falling prices in the sector. As such, retail could be acquired and repositioned either as more usable retail formats or re-envisioned as something completely different, such as residential or urban logistics.
***********************************************************
A list you donât want to be on â where termites are worse
Watch out in Miami, Los Angeles, and Tampa, Fla.: These places can be hotbeds for termites, according to a nationaltermite treatment company, 2021 Top 50 Termite Cities List. Los Angeles ranks #2, San Francisco #11, San Diego #12.
They report an uptick in termite treatments across the country over the past year. âWith people spending more time at home in 2020, termites and termite damage were likely observed more frequently than in previous years,â They further say, âParallel to this, 2020 held a record-breaking number of storms and hurricanes offering what termites need most in lifeâmoisture.â
The wood-chewing insects have been blamed for causing costly damage to homes.
Property owners should beware that termites like to gravitate to wooden structures, such as porches and decks; firewood leaning against the house; soil that stays damp long-term from leaking faucets or water retention areas near the foundation; and dead trees or other landscaping near the house. Time to check out the âneighborhoodâ.
***********************************************************
Cryptocurrency is creeping into real estateâŚ
A major real estate company in Los Angeles is making a long-term bet on the growth of cryptocurrency. The 
company announced last week that it will start accepting bitcoin as form of a rent payment at its residential and retail properties.
âWe believe that cryptocurrency is here to stay,â they said last week at a âPower Lunchâ program. âWe believe that bitcoin is the right investment for us. Weâve allocated a percentage of what would normally go into the capital markets into bitcoin.â
This Los Angeles based, privately held company is both investing in bitcoin and accepting it as a form of payment. It has partnered with Gemini, a cryptocurrency exchange and custodian. Properties under their brand include outdoor malls, luxury apartments, mixed-use properties, and more.
In a statement, the firm said that it is committed to bringing decentralized retail payment options to its guests through âuncomplicated, efficient, and safe transactions protected by blockchain technology.â
This philosophy reflects the thinking of a growing number of companies that are accepting cryptocurrency as payment, including Tesla, Morgan Stanley, and PayPal, among others.
***********************************************************
Demand for pools, hot tubs isâŚhot
Blame Covid -19. New in-ground residential pools saw a 21% uptick in 2020 in installation compared to 2019, a spokesperson for the Pool & Hot Tub Alliance, an industry research group stated.
This is historic growth for the industryâthe next closest period was in 1983 with 16% growth over a much smaller base according to the Alliance.
Hot tubs are also in demand, with some areas reporting a 400% uptick. Manufacturers are reporting a six-month wait to fulfill hot tub orders. Pool & Hot Tub Alliance members report theyâre already contracted out with new orders to fulfill even into 2022.
Since the pandemic, real estate professionals are reporting pools have become a major selling point. Pools also have become one of the most popular keyword searches on real estate listing sites.
***********************************************************
My world and welcome to itâŚ..
It seems with the opening of the world; the real estate market is moving even faster than it has been. I have a new listing of a Canyon home in Bel Air Crest, and due to the timing of having the photographs taken and uploaded, it went on the MLS without the photos. Within 3 hours of it going on the MLS, I have already received three requests for showings! By the time you get this, the photos will be online, and who knows, we may already have an accepted offer! The listing price is $2,525,000 for this lovely 4/3.5 home of approx. 2916 Sq. feet with light everywhere and views!. Please let me know if you know someone who might be interested in seeing it. Donât think it will last long.
I find myself in the position of once again training a new assistant, Doug, so please say âhelloâ when you have an opportunity to meet and speak with him. He has 10 yearsâ experience of selling real estate out of state and will be my mentee while he is being trained in the way of California real estate. I am also enjoying being a mentor to six (6) mentees all in different stages of beginning their real estate careers, one of whom just closed escrow on a 10-unit complex in Santa Monica. And got engaged to be married!
Speaking of the world opening up, have you found that the traffic in our beloved West Los Angeles is pretty much back to what it was pre COVID? They are still in the process of remodeling my office at Coldwell Banker in Brentwood, so until they are finished sometime in June (it was supposed to be last November!) I will continue to be working out of my home office. I must admit that I enjoy not driving as much, but very much enjoy getting out and spending time with friends and look forward to the time when my family will be able to visit here, or I can go there. In the meantime, please DONâT FORGET TO CONTINUIE WEARING THOSE MASKS, GET YOUR VACCINE IF 
YOU HAVENâT ALREADY DONE SO, AND PRACTICE SOCIAL DISTTANCING.
Please remember that I am here for you for all of your real estate needs and or questions
carole@caroleschiffer.com – ceschiffer@gmail.com – 310 442-1384
You must be logged in to post a comment.