The SchifferLine
Timely Real Estate News……………………………………..15 August 2020
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Sales down for July – not a surprise!
As expected, home sales were down for July, the 6th month we have endured this pandemic, but
median sales prices were up across the board, which has not been the norm this year.
Total sales for the five communities I report on — Beverly Hills, Beverly Hills Post Office,
Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood, have reached a total of $1.819 billion in single-family residence sales, compared to $2.332 billion through July 2019. This represents a decline of 19%, which is about the average from around the nation as real estate sales have taken the Covid-19 hit.
The big sales winner was Beverly Hills Post Office, up $158 million over the past year. The losers in sales through July 2020 were Bel-Air/Holmby Hills, down $256 million, followed by Brentwood, off $224 million, Westwood/Century City minus $84 million, and Beverly Hills down $43 million. We are seeing somewhat of a slowdown in sales in the higher-end markets, which have always led sales performance in our area. There are a lot of high-end sales in escrow, which should change the numbers significantly in next month’s report.
BTW, have you heard that Prince Harry and Meghan have moved out of the house they were leasing in the Beverly Hills area, and have purchased a home in Montecito for $14,700,000?
Malibu and Malibu Beach sales were up a combined $472 million compared to $291 million a year ago this time of year, a 62% increase, where there are a large number of $10 million-plus homes on the market.
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Median prices are all up…. good news
Prices are holding up during Covid-19 period, as we have seen increases — not by much — in all 
of the five markets I report on. Beverly Hills Post Office was up 21% at $3.330 million, Westwood/Century City was up 19% at $2.225 million, followed by Bel-Air/Holmby Hills a 6% increase to $2.330 million, with both Beverly Hills at $6.362 million and Brentwood at $3.3350 million both up 2%. Malibu Beach median sales prices was $7.495 million, up 20% from last year, and Malibu was down 7% at $2.499 million.
In comparing July’s numbers to 2019, median sales prices were trending lower, with only BHPO showing a strong positive increase of 24% compare to 12 months ago. Westwood/Century City was up 2%, but the other areas were all down with Beverly Hills reporting a 45% decline in median sales prices, followed by Brentwood with a minus 39% and Bel-Air Holmby Hills down 16%.
What is the market telling us? Sales are being made — that is a given, and as I have noted for years, homes that are competitively priced and well positioned are going to sell. The fact that sales are down is not a reflection that the market is off, it just means that in our market, where we have an abundance of very high-end properties in the $5 million-plus range and up, our sales can fluctuate wildly from month to month. From where I sit in Coldwell Banker’s Brentwood office, we remain busy, and homes that are attractive and priced correctly are all getting multiple offers. That means only one thing: Buyers are still hungry…. but discriminating. I heard from another agent in my office about a property that had 58 offers! I do not know where or what it was, but will share the news with you when I find out.
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Mortgage applications up, multiple offers dominate|
Buyers are on the hunt! Make no mistake: Buyer demand remains robust, with mortgage applications 22% higher than they were a year ago. Those homebuyers surveyed planning to purchase in the next 12 months — found that three out of four have had their plans impacted by the pandemic — and one out of four want to move or speed up their move as a direct result of the pandemic. With mortgage rates hitting a new low of 2.88% the week ending August 6, this month is shaping up to be the home-buying peak of 2020 (typically, the month of May sees the most home buying activity).
According to the California Association of Realtors, multiple offers and bidding wars are holding strong in California’s luxury markets, and as more employees are able to work from home, rents are being driven down in expensive metro areas.
There does seem to be a mismatch between buyer demand and available inventory, with listings down 6.8% last week. That sellers remain cautious — even with homes selling so fast and often facing multiple offers — suggests recovery may be slower than hoped for, and buyers who are eager to purchase may not be able to afford to. Still, from where I sit, I see these increases in mortgage applications as a strong, positive sign for our local market. There is also a great increase in the amount of re-financing applications as well. In speaking with my favorite loan officer, Simon Atik of Guaranteed Rate Affinity, the lenders are processing purchase applications before and/or faster than re-fi’s.
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Core consumer prices jump…good news? Sort of….
Consumer prices, excluding food and energy rose the most in one month in nearly 30 years in July, but the unexpected increase is seen more as a recovery from the Covid-19 recessionary hit rather than the start of an inflationary spiral.
Core inflation, less food and energy, was up 0.6%, and is now running at a 1.6% rate year over year on an unadjusted basis, according to the Bureau of Labor Statistics. That is the biggest jump since January 1991, but it is still considered to be a low rate and it is below the Fed’s 2% target.
Motor vehicle insurance was up 9.3% in July, on top of a 5.1% increase in June. Wireless telephone services rose 3.6%. Goods also rose. Prices for used cars and trucks climbed 2.3%, while new car prices increased 0.8%. Airline fares also rose, up 5.4% in July, on top of a 2.6% jump in June. Shelter costs rose 0.2%, or 2.3% year over year. The cost of food at home fell 1.1%, after rising 0.7% in June. Food away from home also rose 0.5% in both June and July, as restaurants reopened and consumers could have more meals outside of their homes.
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Homeowners finding ’stuff’ to do during pandemic…
Is sitting around beginning to get on your nerves? Well, for others, the pandemic has prompted many homeowners to take on updates and renovations projects.
More than three-quarters of nearly 1,000 homeowners surveyed in July say they have carried out at least one home improvement project since the start of the COVID-19 outbreak, according to a new survey from porch.com
More importantly, homeowners have spent a median of $17,140 on improving their homes since the pandemic began, with an average of five improvement projects per household. To fund these household projects, 38% dipped into savings, 23% used credit cards, and 13% used their government stimulus checks.
Outdoor projects have been among the most popular. 61 % of homeowners reported doing upgrades to their garden, patio, or renovating the structure of the house, the survey shows. 58 % also made improvements inside, such as repainting walls, adding new flooring, or renovating a bathroom. What are you doing in your house? Share with me… carole@caroleschiffer.com. I am replacing the flooring in most of my house, have installed the fire vents I discussed recently in the Schiffer, and am considering installing solar panels.
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Rapid Transportation Plans for the Bel Air Area
I am not sure how many of you have taken the time to read the mailing we received from the Bel Air Association a few weeks ago. It contains some critical information that all of us living in the area need to be aware of. The information that follows I have taken directly from the mailing itself.
As reported in this mailing, in 2016 Angelenos passed Measure M which allowed for additional funding and construction of transportation projects. We all know about the traffic conditions in the Sepulveda Pass area, and with that in mind, to relieve North/South traffic congestion it has been proposed that an underground rail line running from Sherman Oaks to the 10 Freeway and ultimately to LAX be constructed. Not only would the funds provided in Measure M be utilized ($9 Billion), but private companies are being asked for proposals for public/private partnerships to cover the expected costs over the initial $9Billion. The current Metro proposals would ultimately cost $15-20 Billion to complete. The goal is to not only improve the traffic problems in the area, but to have the project completed in time for the Olympics that will be held here in Los Angeles in 2028.
Metro has proposed 4 scenarios that appear to take 4 different routes through Bel Air.
1. One scenario places the tunnel under portions of Bel Air Road and Beverly Glen.
- Another has the subway running under Stone Canyon Road before veering off at the reservoir and heading towards Stradella and Roscomare.
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Another one has the subway running under the Westside of Bel Air, near Glenroy, Thurston, and Bentley before traveling above ground along Sepulveda, likely blocking the entrance to Bel Air Crest.
4. The 4th proposal would be for an elevated monorail using the existing center median of the 405. This would stretch from Sherman Oaks to LAX, and would fit within the monies approved 2016, and could be completed in time for the Olympic Games that are coming to Los Angeles in 2028.
This is just a small example of the information contained in this mailing. I don’t know about you, but it all sounds alarming to me! In my humble opinion, it is critical for all of us to make our voices heard as whatever is done, needs to have community involvement, and there definitely will be something done. For more information, please go to www.belairassociation .org/Metro. Or info@belairassociation.org.To look at the maps of the proposed projects, please go to metro.net/projects/Sepulveda corridor.
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Strange Times for Everyone
Living under the dome of Covid-19 has made for strange and difficult times for everyone. I am constantly amazed by people’s creativity in how we are teaching our students with the various programs of home schooling vs. in the classroom schooling, things to occupy oneself while staying at home, etc.
The same has held true for conducting real estate business today. The old ways of meeting with clients both buyers and sellers has changed, perhaps never to go back to the way it was.
The majority of listing consultations are being done virtually, and on line, and we do not see any open houses any more where a property is held open for the world to see during specific hours. Instead if there is an open house, it is done by appointment only with specific times assigned to specific buyers.
I have found that there is still a great deal of “business” being conducted as evidenced by the stories above, but that a great deal of business in being done by a minority of agents. Fortunately, I find myself among the group that is doing the business.
As we head into the general election, and the holidays, it will be interesting to see how the market is impacted, particularly by the election.
I look forward to hearing from you as to how I can assist you with all of your real estate needs.
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