Timely Real Estate News……………………………….15 February 2019
Beverly Hills achieves record median sales…
Beverly Hills lived up to its reputation as one of the strongest luxury residential markets in the U.S. — and in the world — with its January median sales price of $11.837 million according to the MLS. The reason for these number is because there were 4 very large sales (closed escrows) that look place January ($16,350,000, $16,700,000, $13,275,000 and $10,400),000. These kinds of numbers will obviously skew any stat and have to be taken into consideration when one looks at the median sales. There were six homes sold last month in Beverly Hills.
Beverly Hills has consistently outpaced the rest of Los Angeles’s famous Westside in home prices, but zoomed past what it did a year ago of $7.6 million, a 54% increase. This was accomplished with total sales of $62.5 million for January compared to just $48.4 million in 2018.
However, the rest of the communities I cover each month in The SchifferLine — Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City and Brentwood — did not fare as well. Median sales prices in BHPO were down 18% to $$1.849 million….Bel-Air/Holmby Hills was down 17% to $1.910 million….Westwood/Century City was down 17% to $1.803 million…and Brentwood was also down 18% to $2.500 million. Malibu — also one of the communities I serve in my real estate practice — was up 48% for its median sales prices to $3.900 million for January compared to a year ago. Please remember that most likely all of these sales (not closed escrows) took place the late part of 2018, and in talking to other agents, they all reported their business was soft in both November and December, in part due to the stock market, the partial closing of the federal government and the increase in interest rates.
Sales volume was also down substantially from 2018 — for the five communities I report on, total sales volume was $185 million, down 16% from a year ago. This compares to a year-ending December 2018 of just over 9% negative for all of last year. So, the point here is: We’re trending down in both sales and median sales prices, contrary to other parts of the nation. Beverly Hills appears to be an anomaly, not an unusual position for this high-end market which has always attracted wealthy clients looking for unique, luxury homes. But as we have seen in the 25 years of reporting in The SchifferLine — this can all change on a dime. It usually does.
Sales-to-Listing Price — moving down, too.
Rising home prices, based in part by exuberant sellers who believe the buying frenzy will never end. have gradually moved to lower their prices to achieve the goal of selling their homes, and as you can see by the declining median sales prices in our market — which began early last year — we may not have reached the bottom.
One key statistic I use to measure the “strength of the market” is the Original-Listing-Price to Selling Price that the MLS tracks each month. Overall, the OLP/SP is down to 84%, meaning that homes are selling for 84% of their original asking price. Beverly Hills, for example, while achieving high sales prices compared to the rest of the Westside market, the OLP/SP was 76%, meaning sellers are taking nearly 25% off their original price to move their property. As I have been writing for years, homes that are competitively priced will move quicker than homes that are not. It’s that simple.
Is a homebuyer’s market on horizon?
As noted above, home prices are being reduced after sitting on the market longer, and median sales prices in the communities I cover are seeing prices drop. Is this a harbinger for the future? Perhaps. One of the many things I have learned over my long career in selling real estate, is that there are ebbs and flows in the market and one needs to be able with the flow. Sometimes it is not easy to do, but we need to know and understand that we live in an amazing part of the world and country and are lucky to do so.
Homebuyers may be in for a treat as we move further into 2019. Already, mortgage rates hit their lowest monthly average in nearly a year last month, and 15% of listings saw a price cut in the same period. Top that off with overall job growth — including 9,000 new jobs in the residential construction sector alone —it seems the housing market may finally be shifting in buyers’ favor, at least partially.
January clocked in with an average mortgage rate of 4.46%, a monthly average not seen since early 2018, according to Freddie Mac. Considering many economists predicted rates would climb for much of this year — eventually surpassing 5% — the welcome change has spurred on-the-fence buyers and refinancers into action.
At the start of the year, refinance applications jumped 23%, and the demand for purchase loans is 6% above its long-run average, according to the Mortgage Bankers Association. The National Association of Realtors’ data also showed that price corrections are up by 2%. In total, 39 of the 50 largest metros saw a jump in price corrections during January, with Las Vegas taking the lead.
I’m confident we have a strong market — buyers are coming to my open houses, eager to make that all important purchase. I personally am working with more buyers than I have in a long time. The question is: Will sellers’ price their homes to sell?
Prices up in U.S. but rose at slower pace…
The National Association of Realtors (NAR) reported inventory increased and metro market prices rose at a slower pace in the fourth quarter of 2018. The national median existing single-family home price in the quarter was $257,600, up 4.0% from the fourth quarter of 2017 ($247,800).
Single-family home prices increased in 9% of measured markets last quarter, with 163 out of 178 metropolitan statistical areas showing sales price gains in the fourth quarter compared to a year ago. Fourteen metro areas (8%) experienced double-digit increases, down from 18 in the third quarter.
The five most expensive housing markets in the fourth quarter were the San Jose-Sunnyvale-Santa Clara, California metro area, where the median existing single-family price was $1,250,000; San Francisco-Oakland-Hayward, California, $952,400; Urban Honolulu, $812,900; Anaheim-Santa Ana-Irvine, California, $799,000; and San Diego-Carlsbad, $626,000.
In the West, existing-home sales in the fourth quarter decreased by 6.5% and are 13.9% below a year ago.
(Note: The NAR reports on national trends with regional breakdowns vis a vis the local MLS reports I receive monthly for the communities I cover (Beverly Hills, BHPO, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood. These numbers do not always transcend to your community or neighborhood. My reports drill down to the key cities on the Westside.)
Five common mistakes homeowners make…
What mistakes am I talking about? It’s the little stuff…that can spell trouble down the road…here are just a couple.
1) Forgetting or ignoring simple stuff, such as the toilet that runs constantly, the faucet that has a slow drop. A little crack in the deck — all of these can lead to bigger issues down the road, so it is less expensive and easier to fix now.
2) Not inspecting your home — Many homeowners don’t do ‘walk throughs’ looking for bad stuff, but it’s a good idea to do these inspections on a regular basis — look in the attic, the back of the house or garage…look at all your doors and windows…. easier to fix now. With the constant rains we’re having now…stuff can happen that will spell trouble for you. I have my roof checked on a regular 6-month basis. Another thing, please check your gutter guards and make sure your gutters stay clean of debris. When the gutters get full, it tends to cause roof leaks.
3) Skipping maintenance on appliances — another problem area are often neglected appliances, for example is there any lint in the dryer – big fire danger…also check the hoses connected to the washing and dishwater. Clean your refrigerator coils at least once a year and test your smoke and carbon-monoxide detectors twice/year.
4) Neglecting other systems — Always look after your HVAC system — change your filters every 6 months, and consider cleaning out your ducts, too. You can get service contracts from an HVAC contractor and they will advise you when it is time for these things to happen.
5) Not having a home warranty. This is a simple fix and well worth the investment. Stuff happens and having a home warranty just makes life easier for you. It’s not a part of your homeowners’ insurance…it’s a separate transaction. Generally, sellers supply buyers with one as part of the sale transaction, and I strongly advise you to renew the policy when the time comes. I just had the control panel on my ovens and the price was $75.00 for the service call.
Your home is one of your most important investments — treat it with love and care. I also advise you to put one on any rental properties you own. That should help eliminate those late-night phone calls from your tenant. I have the tenants pay for the service call.
Is this the right neighborhood for you?
It’s a really good question to ask yourselves before you buy. After all, you will be making one of the biggest investments in your life for your new home, so isn’t appropriate to really find out what exactly are you moving in to? Of course, it is.
With online tools, a little bit of forethought, and a willingness to explore, it’s easy to feel confident about your potential new neighborhood. Here’s a good place to start. Ask yourself these five questions when choosing a home base.
1) What do you need to have nearby? You may want a yoga studio or public library or public transportation nearby. You can check all of this online (google does amazing things). Think about your daily routine and what will make your day complete.
2) Is getting around the neighborhood important to you? Are there parks, trails nearby? Are the neighborhoods safe to walk to get around? Are there cafes, restaurants, coffee shops on your close by?
3) Are you going for a quiet or lively environment? That’s an important issue. Some want to crawl into the comfortable cave, shut out the world…others want the world nearby. That’s easy to check online, too.
4) Do you want friends nearby? That’s easy to check before you buy, of course. But many times, you want to encounter and make new friends — are the ages and interests of neighbors similar to your interests…a bit of on-the-ground research can serve you well.
5) After you’ve done your research…is the place for you? Only through careful research — both online and on the ground — will reveal the answers. Don’t just be impressed with the house — check out the neighbors, environs, and amenities your new neighborhood provides. It’s the right thing to do.
Some institutional changes in our “Hood”
I don’t know about you, but in growing up in West Los Angeles I spent a fair amount of my youth at both the Apple Pan & Nate & Al’s. The hamburger hut the Apple Pan, which opened in April of 1947, has new owners. The previous owner has confirmed that the West L.A. restaurant, which has been owned by members of her family for three generations, quietly changed hands.
“It’s hard to hand that over,” says Sherman, granddaughter of founders Ellen and Alan Baker. “You’ve been doing that for so many years. You have your ways of doing things and you have a real interest in something like that and maintaining something that your grandparents started.”
But hand it over she did.
The new owners plan to keep the restaurant as is. That was a crucial selling point for Sherman.
What made these buyers different? They were longtime customers.
“I have certain criteria,” Sherman says. “I wanted people that hopefully were longtime customers, which I found. People that knew how to run a business and were successful at doing that, I found. People that wanted to keep our employees. That I found. People that didn’t have to make this a big business to survive, to get their money back right away. And people who don’t want to change it. And I got all that. All those points I was able to find in one group of people.”
When it comes to preserving aging culinary landmarks, this isn’t the buyers. He’s part of the team working to save Nate ‘n Al, an old school Jewish deli occupying prime Beverly Hills real estate.
Whatever happens, Sherman confirms that the Apple Pan will remain the small, neighborhood diner it has been for more than seven decades. The longtime cooks and waiters, many of whom have been working there for decades, are staying. You’ll still have to hover awkwardly to grab a seat. Once you do, one waiter will work one side of the U-shaped counter while another covers the other side.
According to Sherman, the new owners have vowed not to change the Apple Pan. Even if they wanted to, Sherman still owns the land it sits on. She only sold the contents of the restaurants and its recipes.
How is my business?
I am very busy. I have two lovely leases available in Bel Air Crest, one a 3/2/5 plus den that has been remodeled and is available for $10,900 and the other a fabulous 4/3.5 3 level home furnished with elevator, and pool available for $15,025. You can see the photos on my web site, caroleschiffer.com and both are easy for you to see.
In addition, there is a lovely great condo in Westwood just south of Santa Monica Blvd, that will be coming on the market by the 20th of the month. It is a 2/2.5 first floor corner unit in a secured access building with a pool, gym, etc. The price will be $1,050,000. In addition, I am working with a few sellers/lessors with homes in Mountaingate, Bel Air Crest, and Westwood Hills. We should have these homes available in the next month or so. Please contact me about all of these properties. Carole Schiffer – firstname.lastname@example.org or 310 442-1384.
Curious to know what the house next door is selling for? Do you just want to keep track of what’s going on in your neighborhood? Then my free app is exactly what you need to give you up to the second real estate news