Timely Real Estate News………………………………..I5 August 2017
Everything is up…prices, volume, # sold
The song “Everything’s Coming Up Roses” might be appropriate this month as all of the monthly signature data points came up positive, including the # of homes sold year to date compared to a year ago. We actually increased the # of sales for the five communities I report on regularly (Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City and Brentwood) from 467 units sold to 497 through July 31. Considering inventory has been lagging for some time, it’s a small increase but still significant.
Sales volume increased again, from $1.887 billion through the first seven months of 2016 to $2.200 billion for 2017, a 17% increase…when looking at the stats from a month over month perspective, they are down a bit but still strong and substantially ahead of this time last year. Median sales prices for the year are up as well, with only Bel-Air/Holmby Hills down (8%). Beverly Hills’s median sales prices through end of July were up 5% to $5.610 million; BHPO was up 16% to $2.492 million; Westwood/Century City was up 6% at $2.028 million, and Brentwood was up 14% to $3.161 million. Once again, we all need to remember these numbers only reflect the transactions reported in the multiple listing services. With the limited amount of inventory, we are dealing with, there are afew private sales taking place which don’t get reported in the MLS, and skew the “official numbers”.
Culver City, a hot market on the Westside, is showing a 4% increase in median sales price though July, but sales volume — due to lack of inventory — was down 12% to 112 million.
Median sales prices for July disappoint….
What? Wait a minute — you just said they were up. Yes, I know you thought this was all good news, but the vagaries of the market and ups/downs that occur every year as monthly #s can vary greatly from year-to-date #s. July median sales prices were down in Beverly Hills (19%) compared to July 2016…BHPO was down 40%…Bel-Air/Holmby Hills was down 27%…and Brentwood was down 30% for last month. Only Westwood/Century City and Culver City were up, 28% and 17% respectively.
Again, you should look at year-to-date results to get a true feel for the market. Every city, every neighborhood, continue to show how the market is fluctuating from month to month. But overall, the market — with increased units sold — is not only holding its own but improving. That is the good news. Inventory is still not at acceptable levels, and we probably won’t see it reaching a more normal market (like pre-2007) for some time. I always address some of these inventory issues as it pertains to our market. Inventory is a national issue, if not a crisis — it just feels like one.
Culver City’s coming-out party….
It’s called the “unremitting makeover” from suburbia to a pedestrian-friendly destination with upscale restaurants, gastropubs, and innovative businesses and is picking up speed with the Expo Line now zipping through town. In a review by the Los Angeles Times, Culver City is taking on a ‘marquee’ status similar to what Venice Beach is experiencing to the West.
The 15-year transformation has already turned the formerly insulated bedroom community into more of an urban hub, but even bigger changes are coming. Developers are staking claim to over $1 billion worth of new projects that will rise close to the light-rail tracks. That work is already started with one of the nation’s biggest transit-related projects — the $300 million Ivy Station complex.
They are planning for 200 apartments, a 148-rrom boutique hotel, a 200,000-sq. ft. office building, shops, restaurants, and underground parking for commuters heading either to downtown Los Angeles or to Santa Monica and the beach.
Because it stands midway between those cities where the line terminates, its builders hope Ivy Station will be a “Goldilocks” housing op
Forward-looking index turns around…
The national Pending Home Sales Index, which is produced by the National Association of Realtors, reversed course in June and saw an increase in contract activity in all regions except the Midwest.
The Index, which is based on contract signings, climbed 1.5% to 110.2 in June from an upwardly revised 108.6 in May. At 0.5%, the index last month increased annually for the first time since March. Could this be a trend? We hope so…because this Index is a predictor of future
Baby Boomers aren’t going anywhere
According to the National Association of Realtors, they are one of the reasons we’re not seeing more homes on the market. The number of residential houses available to buy is at a 20-year low as the appeal of McMansions wanes and Baby Boomers grow increasingly reluctant to trade up or down from their current homes, according to a survey by Realtor.com. Again, please don’t forget that this is a national survey.
More than half of its survey respondents, or 59%, said they are not planning to sell their houses in the next year. Nationally, there was a 4.3-month supply of homes on the market in June — the time it would take to run out of homes for sale if no new units were added — down from 4.6 months a year ago and a normal inventory of six months, according to the National Association of Realtors.
The crunch has driven up home prices. The S&P CoreLogic Case-Shiller national home price index was up 5.6% in May from a year earlier, hitting an all-time high. Some markets are frothier, with average home prices up 13.3% in Seattle and 7.9% in Dallas.
Where would we go? The same condition facing first-time buyers also challenges anyone selling their home and seeking another, either down-sizing (most likely) or something more spacious for hobby-enthusiasts who just want more room. Home ownership for Baby Boomers is at 78% which represents 33 million homes. That’s twice as many as Millennials.
Boomers don’t really want to re-settle — their lives, their friendships, their connectivity to their communities…” why would I want to leave all of that?” They’re ‘happy’ with their homes….and living in a condo in the city doesn’t appeal to most. And we’re not talking about an insignificant percentage of the U.S. — people age 55-74 make up 21% of the population compared to 16% in 1985…that’s a big jump. And they’re retiring at a rate of 10,000 per day
Venice Beach is not ‘best-kept secret’ anymore….
While homes in Bel-Air, Beverly Hills and Pacific Palisades are attracting more notoriety, the reality is that Venice Beach turns out to be one of the more costly real estate markets when you measure the “cost-per-square-foot” value. Basically, the rule of thumb is that when a property is smaller the cost per square feet goes up. This is to a degree what is happening in Venice. The lots are smaller (generally 30x 90), thus the homes are smaller.
While the leader in Los Angeles County is Pacific Palisades — one of Los Angeles City’s residential areas but not an incorporated city, has the highest cost per square foot at $1,694 — it is Venice that is garnering the attention because for decades it was never on everyone’s radar. It was always a sleepy, don’t-go-there type of a run-down area populated by small lots, questionable characters and goings-on that didn’t attract families or the well-to-do, upwardly mobile types who preferred traditional communities such as Santa Monica or Brentwood.
Not anymore. Silicon Beach has exploded…techies, found Venice Beach to be “perfect” — this was a place where they could fit in…and they have descended on this beach city, driving up prices to the point it ranks #2 in Los Angeles County as the most expensive place to purchase a home at $1,440 per square foot. Bel-Air is at $778/sf…Beverly Hills is at $1,049 per square foot. The median sales price for a one-bedroom in Venice has increased 54%.
So, if you want to kick yourself for not investing in Venice years ago, go ahead. You won’t be alone.
The Fed is probably steady through 2017. . Maybe
Depending on what you read and/or who you listen to the bets are on that the Fed is not going to raise interest rates until next year. The already skeptical markets now give the Federal Reserve just a 1-in-3 chance of hiking interest rates in December, after a fifth weak reading of consumer inflation. The consumer price index for July was at 0.1%, below expectations.
And since inflation is a blow to its target of 0.2%, the Fed is not going to raise interest rates according to Fed observers. And the markets expect just one hike for 2018. Mortgage rates, therefore, should remain at their relatively low rates for the remainder of 2017.
Cal State freshmen excused from remedial classes….
In a bold move to improve graduation rates and accelerate students through their course work towards a degree, the Cal State system will not require students to take remedial classes in math or English starting this Fall. Those courses are now gone.
Students will be given help — if they need it. By 2018 each campus will have to create a way to assist first-year students who generally need help with math or English. “This will make college more affordable as less courses will be required, especially for remedial course work which doesn’t count toward your degree in the first place,” said a senior strategist for academic success in the chancellor’s office. “We have a system that admits you and then says you are relegated to these classes that don’t get you any credit.”
The University has made it explicitly clear that they are not going to be compromising its academic quality origin. The philosophy is that this change will give students more time to concentrate on those classes/subjects to earn their degrees. These changes have already taken place in colleges and universities around the country and have proven to be very effective.
Are you ready for the Eclipse?
Next Monday, August 21st. we will be experiencing a total solar eclipse! It will be very exciting and people are making arrangements and in some cases traveling miles to view it. We need special glasses to watch, and we need to be very careful in purchasing them as there are a number of counter fit ones out there and they will damage your eyes. Here is what you need to know. Regular sun glasses are not dark enough. The American Astrological Society (AAS) has issued a list of 12 approved companies that manufacture and/or sell eclipse glasses and handheld solar viewers which have been verified by an accredited testing laboratory to meet the ISO 12312-2 international safety standard. Anything else will damage your eyes. There are a number of sources that you can purchase these glasses from. Please go to their web site to get the list of those 12 companies.
One the most desirable places to view the total eclipse is north of Bend, Oregon in Madras which is about 45 minutes away. The eclipse will begin at 9:16am and peak at 10:21 approximately on the 21st. Even if you are not in Oregon, you will be able to experience the eclipse, the effect will not be great. We won’t see much of it here in Los Angeles…but you can depend on plenty of TV coverage.
What is your opinion? I would love to hear your opinion as to the new format (larger headlines, different font color) for the SchifferLine.. so please let me hear from you. Thanks
My Real Estate News
I have two new and very different listings! The first one is in Mountaingate at The Terrace, and it is a one plus den. The den has a ¾ bathroom and can be used as a second bedroom, and the master has a lovely sitting room with fireplace and French doors that lead to the garden. It is looking for your personal touch to make it perfect, and is priced for sale at $1,100,000.
The second one is a scrumptious house in Bel Air Crest. It is being offered for lease completely furnished at $11,000 a month. This very special house is unique in that only of two this floor plan were built and we are looking for a very special tenant as well. 3 Bedrooms, 2/3/4 baths, den, and French doors leading to the garden. The seller might consider selling it as well. Photos of both of these homes are on my web site… caroleschiffer.com. As always, I am available for any and all of your real estate needs.