Timely Real Estate News…………………………………………………15 December 2010
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Happy Holidays and Happy New Year….can you believe? 2011!!!
It is with great joy that I wish you all a….Happy Hanukkah….Merry Christmas and Happy Kwanza. No matter what makes your holiday special, the fact we all live in one of the most wonderful places on the Planet makes you special, too! For me this is the time of year for reflection and focusing on how lucky I am to have the family, friends and life that I live….. I hope that you feel the same way. As this is the last SchifferLine of the year, I also want to thank you for all of your feedback and comments this past year and look forward to hearing from you and seeing you all next year.
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Numbers don’t lie…or do they? Median sales prices continue upward
I am always anxious at the beginning of each month when the MLS issues its previous month’s statistics for the four communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air, and Brentwood. Each month, I quickly scan the ‘stats’ to see how we’re doing…..and guess what? We’re not doing too badly. Median sales prices for three of the four communities I report on are all up over MSP for 2009 — Beverly Hills is up 6%; Beverly Hills Post Office is up 6% also; and Bel-Air is up 7%. Brentwood, which has been down all year, is still hovering at 19% below 2009 median sales prices. November was an anomaly, however, when compared to the previous months of 2010. For example, Beverly Hills had a median sales price of $3.840 million for single family residence in October 2010. But for November, there was a drop of 63% to $1.400 million. Why could a relatively stable upscale community such as Beverly Hills have such a dramatic loss in MSP? Simple: There were 11 sales of over $3 million in October 2010 vs. only two sales of over $3 million in November 2010. So you can see how volatile these monthly MLS statistics can be — it’s unwise to take a snap shot of one month and consider that the trend for the year. And this occurs in all of the four communities I report on each and every month.
Bel-Air is another example of a volatile, one-month phenomenon: Bel-Air was up 41% in November over October 2010, and it was 82% over November 2009 for November 2010….but the median sales price for Bel-Air in November 2009 was under $1 million, or $992,000, its lowest MSP for all of last year. Naturally, Bel-Air’s stats for November were going to jump…..so that’s why I try to take the monthly MLS statistics with the proverbial ‘grain of salt’.
Again, you have to look at the Median Sales Prices for each community for the year-to-date: Beverly Hills is up 6% over 2009; Beverly Hills Post Office is also up 6%; and Bel-Air is up 7%….Brentwood is down 19%.
Sales volume continues to stride ahead of 2009: Sales volume for these four communities is up 19% for the year to $1.504 billion.
Monthly statistics are what they are: A 30-day snapshot of the market. You have to step back and view the whole year to get a handle on the pricing trends for our communities. And so far, we should be grateful for the upward trends on the Westside.
The other part of this equation is how the MLS does their stats… as I have reported in the past; I take issue with how they do their analysis and continue to do so. So while these figures are basically correct, they are not the “holy grail” either.
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Luxury homes take hits? Some do, some don’t.
There may be some validity to the front-page story in the Los Angeles Times on Monday, December 13….”Luxury Home Prices Shaky”, but you have to keep it all in perspective. In my opinion, this was an article geared toward getting those
“so important eyeballs” that everyone is looking for today, and it boarded on being sensational, just the thing to get those eyeballs, but when you really read the article and compare it with what we know, at least in my opinion you get a totally different perspective on what they are saying.
So let’s start with the definition of a Luxury home from a price point of view… “Luxury” homes, as defined by the LA Times story is any home over $1 million, but for Coldwell Banker on the Westside, it is over $2 million.
These stories — over time — can cause havoc with homeowners’ mindset because they do not always reflect the reality of their specific community or neighborhood Westside real estate has certainly taken a ‘hit’ — like every other upscale community in the nation.
So what is “…shaky” in our market? As you have seen with the monthly statistics from the MLS for November 2010, we are seeing that median sales prices for homes in mostly luxurious markets have actually increased over 2009 — approximately 6.5% in Beverly Hills, Beverly Hills Post Office and Bel-Air. While prices are down compared to over three years ago in all areas, we have been making a steady comeback. But here is where the analysis needs more focus: If you purchased a home for over $2 million during the last three years — when home prices started their decline (by as much as 25%), then your home value could well be substantially less than what you paid for it. If you purchased your home, say five or 10 years ago, chances are your home value is well over what you paid for it: So unless you have some “fancy financing” on your home, you’re not underwater, so to speak. I do not want to denigrate the loss in value all of us have experienced in our homes, I have as well, but in the scheme of things we are all still doing OK. right????
When you read how a Bel-Air mansion was originally on the market for $35 million and sold for less than $10.5 million several years later (as was the case with Nicolas Cage’s home in Bel-Air), one can argue that this is typical for what is happening in the luxury home market. (Parenthetically, it should be mentioned that Cage bought the house for $6.5 million from Tom Jones in 1998, and it eventually went into foreclosure.) But, let’s look at the original price of $35,000,000…. Was the house really worth that much to begin with? Probably not, so when we hear about a property owner taking a hit like that. I would suggest that we also look at what the price should have been from the get go and perhaps have a different perspective on the entire picture.
What is typical today in the luxury home market is that every home on the market is unique and every buyer is unique as well. I have sold several homes recently where the seller purchased the home in the last five years and paid 25% or more than they sold it for, meaning this is not a ‘paper loss’ — but a real loss. Sellers don’t like to do that, of course, who can blame them. As with most sensational headlines, the real story is often not told. Frankly, there are many sellers who will put unrealistic prices on their homes in any price range — not just in luxury homes — and if they are unwilling to lower their price so it will sell, the home will sit. There are buyers are there — that is obvious. As I reported on the increased sales volumes for this year clearly demonstrate that buyers are in the marketplace, but they are much more discerning and sophisticated, too.
So when a seller refuses to adjust the sales price to a more realistic price, what do we call that? Ego perhaps! Strong-willed sellers will keep an unrealistic price on their home — perhaps because 1) they don’t need to sell and don’t need the $$; and/or 2) they do not want to reveal any perceived weakness in their financial condition. The question I always ask my sellers who seem unwilling to face reality is: Would you pay this price for your home if you were in the market today?
Still, it’s a delicate and strategic process to help my clients arrive at a price that will get their home sold in the quickest time possible. I constantly remind any seller than an unrealistic price will only prevent you from selling your home. The Westside landscape is littered with sellers who refused to understand that simple supply-and-demand principal. Remember, if you have a line, your price is too low: If you don’t have a line, your price is too high.
What will the future bring? We don’t really know. All indications are that the market will continue to strengthen, probably slower than we all would like, but strengthen none the less. Of course, there are still those foreclosures out there that are referred to as “shadow inventory”, which are properties that for whatever the reason the lenders have taken back, but have yet to put on the market. They could impact the growth of the market, but we will have to wait and see.
In the end, your best chance to maximize your opportunity in the real estate market is to retain an experience, seasoned professional Realtor who knows your neighborhood. As one Coldwell Banker’s top 1% agents, I can assure you that I not only know your neighborhood, but I can guide you professionally and effectively through the entire process. I am here to serve you.
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Recycling coffee grounds
While I am not a coffee drinker, I do love the smell of coffee as it is brewing, and from time to time a decaf cappuccino!
I use the term “recycle” rather loosely as recycling means to make more of the same product from waste from that product. A more accurate term in relation to coffee grounds would be reuse, repurpose, up cycle or down cycle, but recycle is a word that seems to be an umbrella term these days – and some folks do actually recycle coffee grounds it seems
Here’s some quick tips for reusing coffee grounds:
Use coffee grounds as a plant fertilizer. Sprinkle the grounds around the base of the plant then dig them in a little. They can also be sprinkled directly on your lawn.
– Add the grounds to compost piles to enrich nutrient content – the grounds contain Nitrogen, Phosphorus, Potassium, Calcium, Magnesium and Sulfur. Phosphorous is becoming scarce, so we need to conserve it as much as possible.
– Add water to the grounds and allow to stand for a day or two. Drain off and then use as a liquid plant fertilizer – cold coffee that you’d usually toss down the sink can also be used in this way.
– After drying the grounds thoroughly, add them to an old stocking. Tie off the ends and then use in cupboards and your refrigerator as an odor absorber. Alternatively, you can just place the dried grounds in a container of some sort.
– Rubbing your hands with used coffee grounds will remove strong smells such as onion or fish.
– Grounds can be used as a scourer for greasy pots and pans
– A ring of coffee grounds around sensitive plants can discourage ants and some other pests.
– Use as a wood stain. Allow them to soak in a small amount of water overnight (or hot water for a shorter period), then drain off. The amount of water you use will determine how dark the stain is. Also good for touch-ups to mahogany furniture.
By the way, a good tip for how *not* to use coffee grounds. Don’t try to get rid of them via your kitchen sink. They’ll stick to grease in the drain and form the basis for further build-up. Over a period of time this will totally clog the drain.
In the mean time.. Please enjoy your favorite cup of “Joe”.
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Do you know someone that wants to live in Malibu? I have a fabulous new listing right on Las Flores beach in Malibu. If you are not familiar with Las Flores, it is a dry beach (not all of the beaches are dry which enable you to actually sit on the beach) and is close to “town”. This wonderful contemporary home was built in 2003 and was just recently updated and upgraded by the current owner. It is 4/4.5 with approximately 40 feet of beach frontage, and an approximately 900 sq foot deck off the sensational master. We are asking $8,950,000 and it is being sold completely furnished, from soup to nuts! So if you want to live in “the boo”, or know someone who does… please let me know… All you will need is your toothbrush and clothes.
