Timely Real Estate News………………………………………………….15 December 2013
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Happy Holidays!I want to wish you all Happy Holidays — this is a lovely, wonderful time of year.
Enjoy the holidays from Carole Schiffer Realtor!
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UCLA Anderson Forecast — challenging year ahead
The country’s tepid growth in its gross domestic product isn’t creating enough good jobs to build a strong middle class, according to a UCLA report released Wednesday. “Growth in GDP has been positive, but not exceptional,” UCLA economists wrote in their quarterly Anderson Forecast. “Jobs are growing, but not rapidly enough to create good jobs for all.”
Real GDP growth — the value of goods and services produced after adjusting for inflation — is 15.4% below the 3% growth trend of past recoveries, wrote Edward Leamer, director of the UCLA Anderson Forecast. More robust growth will be necessary to bring this recovery in line with previous ones.
Though GDP growth has been lackluster since the recession ended, the sustained housing recovery is expected to boost GDP over the next couple of years and further bring down the unemployment rate the report stated.
Economists predict the U.S. jobless rate will fall to 6.9% by the end of 2014 and edge down to 6.4% by the end of 2015. GDP growth is expected to average 1.9% this year, 2.9% in 2014 and 3% in 2015.
Despite the less-than-rosy outlook for the U.S., California’s economic picture is brighter in large part because of demand for California goods, such as computers and other technology, UCLA economists said. The Golden State outperformed the U.S. in the rate of payroll jobs growth in the 12-month period that ended in April 2013. Only Utah has added jobs faster than California.
California’s job growth has been spread across several industries, including leisure and hospitality and white-collar jobs in the professional and business services sector.
But construction, which has long been a drag on the state’s recovery, is propelling economists’ optimism about future growth — albeit with some caveats.
Though the number of housing starts has doubled since the recession low, tight credit conditions for new-home buyers have made it tougher to secure mortgages. Young adults are facing staggering student loan debt that will force them to put off buying homes until later in life, said senior economist David Shulman. Outstanding student loans have tripled since 2004, according to Federal Reserve Bank figures. In 2012, public and private student loan levels reached $966 billion. “Never before have so many young people been saddled with so much non-mortgage debt, and that burden will keep them out of the home buying market for years to come,” said Shulman.
In California, much of the residential construction has been of multiunit housing, particularly in urban areas as people move away from the suburbs and closer to the city. In Hollywood, for instance, Los Angeles city officials have green-lighted a plan to build high-rise apartments and condominiums. Several projects are currently under construction in the neighborhood. Building contractors, however, are complaining of labor shortages as the lengthy downturn created a dearth of construction workers, said Jerry Nickelsburg, a senior economist who studies the California economy.
Many skilled trade workers switched to different fields to weather the downturn, Nickelsburg said. That means contractors are spending money on training new workers or are likely to invest in labor-saving technologies in the future.
Still, the growth of payroll jobs in construction and other fast-growing industries such as healthcare is expected to generate more income and boost the state’s recovery.
The UCLA forecast projects that California’s unemployment rate will drop to 8.8% by the end of this year and fall to 7.7% by the end of 2014. The pace of job growth is expected to speed up to 2.2% in 2015, further pushing down the jobless rate to 6.8% by the end of that year.
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November continues growth trend for Westside……
You never know how the numbers are going to turn out until you receive them. During the dark days of 2007-2009, we saw prices plummet as much as 30% to 50% in some areas in Southern California. In California alone, we saw housing prices along the I-5 corridor, from Modesto to Riverside, crumble by as much as 75%. It was common to see more than 50% of the homes in many areas in the US under water (and approximately 25% are still there)….and yet, the needle has moved from red to yellow, a cautionary tale that hopefully will restore home prices back to their pre-Great Recession levels. But we’re not there, yet.
What I can positively report is that Sales Volume for the four communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air, and Brentwood, is nearly 10% ahead of 2012, year to date through November 30. Total sales through the first 11 months of this year are $2.491 billion vs. $2.405 billion for 2012, same period.
Median sales prices up in all four areas
The good news is that all four of these communities’ Median Sales Prices are up through these 11 months compared to last year: Beverly Hills is up 17% to $4.700 million; Beverly Hills Post Office is up 4% to $2.015 million; Bel-Air is up 5% to $1.950 million, and Brentwood, the leader this year with 34% ahead of 2012 or $2.332 million median sales price.
It isn’t always this way — as I have told you so many times (but it bears repeating) — that one month doesn’t make a year’s trend. For example, Beverly Hills Median Sales Price for November 2013 was actually 6% lower than October 2012 (@ $4.797 million), even if it is ahead of its year-to-date total. BH’s MSP for October 2013 was a robust $6.000 million so it’s hard to beat this out-of-the-ordinary monthly performance when there are numerous homes selling in the $10 to $20-million range.
BHPO’s Median Sales Price was up 5% for November 2013 over last year….Bel-Air was up 29% for its Median Sales Price for November 2013 compared to November 2012….and Brentwood was up 30% over last year.
October 2013 was a very strong month for Median Sales Prices — and all of November’s MSPs were well below the October 2013 period. But that’s OK….because we’re not living or dying on one month’s performance — as the year-to-date Median Sales Prices and strong sales volume confirm a strong performance overall for these four areas for 2013.
This is good news. As we head into 2014, I believe the momentum earned through these past 11 months is going to carry us well into next year. And even when you read from the UCLA Anderson Forecast that we will have moderate growth in 2014, we are seeing specific examples of strong performance in our core market. And why is that? It is
because we have strong demand, limited inventory (which is not good and not normal), but our prices are edging up
and our sales volume remains steady and strong. As the economy improves — and it will — our inventories will increase, home prices will continue a moderate rise, and we’ll have more buyers in the market, too.
I am in the real estate trenches every day….and I talk with buyers, sellers all the time. Some are hesitant to put their homes on the market right now — but I can tell you ….this is a Great Time to Sell. Your competition is less; you are selling during the slower early season, which means your homes present well; and you have motivated buyers out there who have urgent needs, too. So, don’t be afraid of getting into the market now….the competition and intensity will only increase early 2014. The market is “ripe” for a break-out year.
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Mortgage Rates stay steady… passing mini-budget deal helps
With Congress passing the compromise budget bill, we can all breathe a little easier regarding mortgage rates and avoiding another government shutdown. But overall, it was quiet last week for new data, except for the quarterly beaching of the Fed’s whale, the Z-1 Flow of Funds tracing the movement and landing spot of every dime in the economy.
Long-term rates stayed under control despite expectations of a Fed QE taper as early as this week (12/16), and assumptions of an improving economy next year. Mortgages are just above 4.5 percent, the 10-year T-note holding politely near 2.85 percent.
Why still so low? It’s a big world out there, full of surprises according Lou Barnes, who writes for The Inman News. The Bank of Japan began this year to print an immense volume of yen, a last-ditch effort to end deflation and to get the place growing. The Bank of Japan’s purchases of its government bonds have driven their yields below 0.7 percent, negative versus tentative inflation. So to get some real yield, Japanese investors in the last 90 days bought $98 billion in U.S. Treasuries. That’s right: Ninety-eight-billion-dollars!
On our economic front — November retail sales rose 0.7 percent, and October’s were revised up to a 0.6 percent gain. The retail sales figures are good, but were boosted by giveaway discounts, and by one of two areas in which if you want a loan, you get one: to buy a car (the other, to go to college). Black Friday Weekend — now from Thanksgiving Day through to Cyber Monday — showed strong gains on line (16%) and modest retail gains (under 3%)….so it’s still up in the air as to retail sales for the total holiday period.
Both parties in Congress apparently got the message from voters who are tired of the show and in a mood to throw everybody out. Thus we got two-year mini-deal on the budget. “No progress and quiet” beats “no progress and noise.”
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Southland home buyers are opting for condos…..it’s a growing trend
Southern California home buyers who have been priced out of the single family residence market have pulled back, purchasing fewer single-family homes in October as they struggled to afford houses that have jumped in price this year. They didn’t, however, lose their appetite for condos according to research conducted by Data Quick, the San Diego-based real estate research firm.
According to Data Quick, changing cultural attitudes and skyrocketing home prices have boosted demand for condominiums this year. For many, condos are the only affordable path to homeownership in urban areas near jobs, cafes and boutiques. “People who a year ago could afford houses can’t today,” said Richard Green, director of USC’s Lusk Center for Real Estate. “But they can afford condos.”
In October, sales of previously owned condos and other attached units increased 3.3% over a year earlier, according to
Data Quick. Existing single-family home sales went the other direction, falling 7.2%. In the first 10 months of this year, existing condo sales accounted for 22% of all Southern California home sales, the highest percentage in more than a decade.
Condos have averaged 18% of sales since 1988, when Data Quick starting tracking housing statistics. But there maybe other reasons besides costs, too.
Today’s young adults are embracing a more urban life style than their parents — who moved out of the urban areas to the suburbs to “get away from it all”. Well, what’s happening is the city-centric condo developments have attracted many young adults back to the core where they have easier access to shopping, dining, transportation (like the Metro system), and where they don’t have the long commute their parents endured.
For example, the median-priced condo is much better positioned within a core of “living amenities” such as median-priced home — which can now be 10 to 20 miles outside the core urban area. And it’s not always the price of a home outside the core — it’s the convenience to “everything” important to a younger population.
Although it remains unclear whether young adults will retain their desire for urban living as they age, attached homes are likely to become increasingly familiar to Southern Californians. There’s simply little space left for row upon row of single-family houses — especially in the coastal counties.
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One Warm Coat campaign a huge success…….
Thank you, thank you, and thank you! My campaign to collect coats, jackets and sweaters for the Ocean Park Community Center through One Warm Coat during the month of November resulted in 25 coats being donated — and all of them are going to the homeless, thanks to you. I was so gratified by your generosity — it is truly inspirational and overwhelming that I collected this many warm over coats. We certainly timed it right, didn’t we? This has been one of the coldest periods on record — and as we head into winter officially come December 21, we can appreciate the thoughtful acts of kindness from your neighbors. Thank you again.
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We’re moving….Coldwell Banker offices move December 17….same phone, same email.
Yes, we’re making another move….right down the street Our new location will offer us larger, more comfortable offices for the 120 agents headquartered in our Brentwood office. I will be keeping my same phone #, email address — of course. Our new address is: 11661 San Vicente Bl, 10th floor. It is the penthouse of the Union Bank Building next to where the Cheese Cake Factory was). It will be a state of the art office with advanced systems and the flagship office for all of the Coldwell Banker offices in the Los Angeles area. Please stop by and say hello and we can share a cup of coffee!
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A new and different experience for the holidays!
My sister and brother in law have gutted their house to do a complete remodel, so rather than staying at their home , we will be staying in a hotel in downtown Vancouver as their rental home is too small for everyone. Also my niece Morgan and her boyfriend Ben are moving from Denver to Vancouver and will be at their new apt a few blocks from my sister’s rental. I am looking forward to gaining a new perspective on visiting Vancouver. My nephew Connor is working for my sister’s contractor on their house when he is home from his junior year in college in Montreal. He loves what he is doing!
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After much kicking and screaming, I have joined the Facebook generation. www.caroleschifferrealtor@facebook.com. Please visit my page, and you will see some of the other articles that previously had been in The Schiffer Line… information on fun local areas to visit, green tips and some fun and inspiration quotes. I would love it if you would “like” my Facebook page.
Thank you
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Once again, THANK YOU all for an awesome year.. I could not have done it without you…Looking forward to working with you next year.!!!!!!!
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