Timely Real Estate News………………………………….. 15 December 2019
Sales volume continues upward trend
After months of staying behind last year’s sales performance, we are now seeing our fifth consecutive month of increases in sales volumes in the communities of Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City and Brentwood. Overall sales volume for these five communities is $3.624 billion, 10.1% ahead of where we were last year at this time at $3.290 billion.
Leading the sales push is Beverly Hills, which achieved more than $180 million more in sales through the first 11 months of this year than 2018 for a total of $980 million, and Bel-Air/Holmby Hills, which was $305 million above 2018 numbers, stands at $937 million through November.
There were notable large sales of $11 million and $15 million in Beverly Hills…Beverly Hills Post Office recorded a $22.5 million sale, and Brentwood had a $16 million sale. The average Days on Market was a respectable 67 days in these five communities, with only Beverly Hills Post Office going below 90% of “sales price to listing price” at 82%, which is abnormal for BHPO.
Median sales prices remain a ‘mixed bag’….
Through the first 11 months of 2019, median sales prices continue to fluctuate — two of the communities I work in were up — Beverly Hills was up 4% for the year at $6.212 million and BHPO was up 3% at $2.863 million. Bel-Air/Holmby Hills was down 17% to $2.250 million (The sale of Chartwell (the Beverly Hills Hillbilly Mansion) for close to $150,000,000 will obviously impact the December stats for Bel Air!)., Westwood/Century City was also down — 12% at $2.192 million. Brentwood was flat — even with last year at this time — $3.212 million. Culver City, another market I cover, had 13 sales last month, and the median sales price has risen to $1.360 million. This is one of the most affordable communities on our Westside. Let me help you discover this jewel of a market. The development of this community has been exciting to watch and be a part of.
In comparing where we are in November 2019 vs. 2018, we’re holding our own in terms of prices and volumes. Demand is still high, and inventory remains tepid. We could use more inventory for sure, and frankly, the holidays are a great time to get into the market — less competition for well-priced homes, and sellers are more anxious to deal now rather than waiting for the traditional spring selling season when competition heats up. Interest rates are terrifically low right now…and as you’ll read later, no one is expecting a recession in 2020 per the Federal Reserve. So, it’s a safe bet to enter the market before the end of the year…it’s always been one of my best months.
Fed changes will remain constant for a year
Some good news: After three successive interest rate cuts meant to head off a global economic slowdown and trade worries, the Federal Reserve hit the pause button at its last meeting of the year last week and signaled it was likely to remain on the sidelines next year.
The decision to keep the Fed’s benchmark rate at 1.5% to 1.75% was approved unanimously by all 10 voting members, whereas two or three had dissented in previous meetings. In their new rate projections, 13 of 17 policymakers expect the Fed’s key interest rate to remain unchanged through next year. None see further cuts, while four predicted a single quarter-point rate increase in 2020.
Last week’s decision was widely expected and marked a quiet end to a busy year, but the central bank is looking at a potential minefield during the 2020 presidential election year. Although the U.S. economy remains defiantly buoyant today, particularly the solid job market, there are signs that next year could be different. Among them: the sagging European economy with Britain’s potential exit from the EU, and the pending tariff negotiations with China, which signaled an optimistic note last Friday.
Also, the current good times, which began with recovery from the Great Recession in 2009, are long in the tooth, in the view of some economists. For most, the only questions about a slowdown are when it will come and how severe it will be.
No surprise…inventory dives, demand soars
Let the good times roll…works in music, but not always in real estate. In fact, with continued low-interest rates stimulating buyers to enter the market now, the effect is that there’s an increased influx of buyers causing a shortage of available houses in the market. Blame it on good times.
Inventory levels declined 9.5% year-over-year in November as low mortgage rates push more buyers to the market. Increased buyer demand spurred by low mortgage rates caused inventory levels to plummet 9.5% year-over-year in November, according to realtor.com last week.
The 9. % drop translates into 131,000 fewer listings on the market compared to 2018, with entry-level homes priced below $200,000 experiencing the largest annual decline of any price tier (-16.5%). The number of new homes hitting the market declined 7.7% over the same time period, further exacerbating the shortage
As millennials — the largest collection of buyers in U.S. history — embrace homeownership but are being challenged by the low inventory and lack of affordable homes and many are giving up trying to enter the market because of this. Low mortgage rates combined with increased demand is outstripping supply, causing inventory to vanish.
Making your home sustainable…it’s really the “in” thing.
You can’t escape the latest rage in housing — tiny homes…or living off the grid or both…and all these trendy escapes from civilization press forward with one main theme: Sustainability…regardless of where. Saving the Planet’s resources.
Sustainable features are the latest trend to attract buyers. Houses marketed with electric charging stations, and kitchen countertops made from locally quarried stone are what makes today’s home shoppers swoon.
According to the National Association of Realtors Sustainability Resource Guide, 61% of surveyed members said their clients are interested in sustainability and want more of these features in their homes—and it’s not just millennials requesting them. Almost every age group wants to save money, pare energy, water consumption, and remove toxins from the air they breathe. Reducing utility bills is often the driver, but many also want to do the right thing.
Here a few key tactics in attaining sustainability — Downsizing to what you really need, think smaller house footprint. Embodied energy — the combined use of energy consumed by all the processes associated with the production of a building — look for builders who understand this term and concept. Insulation and heating — this is a must and easiest to achieve. Landscaping and water use — much like what we are already doing now in Southern California’s semi-arid climate. Solar panels are hugely popular for their efficiency in our area, plus you can earn tax credits of 30% in 2019, 26% in 2020, and 22% in 2021, and 10% in 2022.
There are many more sustainable projects one can do to improve your home and its impact on the environment. We’ll be covering these in future editions of The Schiffer Line.
It’s not nice to cancel homeowner’s insurance in fire areas
Responding to several years of unprecedented fires across California, regulators last week imposed a one-year moratorium banning insurers from dropping policies for homeowners in wildfire-ravaged areas of the state. In many cases, these insurers have not only dropped the fire insurance for their clients, but have cancelled all their policies, including auto and umbrella.
The move comes amid an exodus of insurers in communities hard hit by fires, forcing some homeowners to take plans that provide less coverage, always at higher premiums. Some have had to go without insurance altogether. “I have heard the same story again and again. People getting dropped by their insurance carrier after decades of coverage,” California Insurance Commissioner Ricardo Lara said. “To add insult to injury, many struggle to find coverage.”
Though existing law prohibits insurers from dropping policies for homeowners who have suffered a total loss in a wildfire, the moratorium relies on a law that went into effect this year that extends that rule to homeowners who live adjacent to a declared wildfire emergency and did not lose their home.
Lara further stated the moratorium will give both homeowners and insurers time to reassess a path forward for living with wildfires.
Millennials…rent forever? Many think so
What is it with these millennials? Born between 1981 and 1996, a new study provides the first hard evidence that large numbers of millennials who would like to become homeowners are so frustrated that they have changed their minds, at least for now.
Millennials are frustrated. Over the past year, more than a 1 million additional millennials gave up on planning to buy a home and resigned themselves to renting for the foreseeable future, and perhaps the rest of their lives.
The survey, by the Apartment List website, found that 12.3% of millennials plan to rent for the foreseeable future, up from 10.7% just one year ago.
The study defines millennials as those between the ages of 23 to 38. Depending on which age brackets demographers use, the number of millennials in the United States hovers around 80 million.
Celebrating the holidays
How are you celebrating the holidays? The party circuit is in full swing as well as the shopping and gift wrapping which means we are all very busy. With Thanksgiving having been a little late this year, and Chanukah on the 22nd of Dec, Christmas the 25th and Kwanza the 26th, it makes ones’ head spin with all the celebrations.
As some of you may know, I am a mentor in real estate and have been for a number of years. I am very proud to say that a number of the top producers in my office started their careers under my tutelage. Each year I host a party for the mentees, past and present. We had the party this week and there were 17 of us, a lot of fun and laughs including the gift exchange called White Elephant, particularly my gift choice of an “Ugly Christmas Sweater”.
My family is coming here from Vancouver BC & Montreal for the holidays and we are all looking forward to fun celebrations particularly with my 97 year old Mom. I am looking forward to our celebrations including wearing fun, crazy hats and playing the Karaoke machine!
Please don’t forget my Warm Coat Campaign. If you have any warm clothing that you and your family are not using, please let me know and I will be more than happy to come by and collect it and give it a homeless shelter. Just give me call at 310 442-1384.
Have a wonderful Holiday!!!
Carole Schiffer, Realtor Coldwell-Banker Residential Brokerage/Brentwood Office 310-442-1384 (office) or e-mail me at email@example.com www.caroleschiffer.com
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