The SchifferLine
Timely Real Estate News…………………….15 February 2021
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Save the Date
On Wed the 10th of March at 7:00 pm I will be hosting a Zoom call forum from an expert in Homeowners Insurance. If you wish to join us and send me your email address so I can send you the link. There are still a great number of people who are being told their insurance is being cancelled. He can help. Please send your information to… ceschiffer@gmail.com.
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2021 starts off with mixed results
As we ended 2020, we were seeing a comeback in sales volume (down to 4% from 2019), and sales prices continued their steady climb upward, with four of the five communities I report on averaging a 4% increase in median sales prices over 2019. But in January — entering our11th month of this global pandemic — we are seeing mixed results in volume and pricing as some areas are strongly up, others down.
Sales volume for January for the five communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood — was $202 million vs. $305 million, down 33%. Each of these communities were down, with BHPO off $43 million in sales volume, Brentwood was off by $26 million, Bel-Air/HH down $20 million, Westwood/CC was down $14 million, and Beverly Hills was only off $8 million in sales volume compared to January 2020. It is a bit surprising as the stock market was zooming upward after the start of the year, but we will no doubt hear more after the first quarter reports.
Malibu, an area I also cover, was up 147% with sales of $47 million vs. $19 million for January 2021.
In January Beverly Hills had three sales over $10 million; BHPO had one sale of $17 million; Brentwood had one sale for $10 million Bel-Air/HH had three sales of $4 million; and Westwood/CC highest sale was $7 million. Please remember the majority of these numbers for sales reflect transactions that have closed escrow thus actually the sale itself took place last year.
Sales volume has started off slow, but as I have seen in so many years in tracking sales on the Westside, sales always get better, and we will see larger volumes as the economy perks up with lifting of economic restrictions due to more of us getting vaccinated. Let’s hope so!
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Median sales prices are scrambled too
We had two winners for January — Beverly Hills Post Office was up 47%, with a new median sales price of $3.397 million, and Bel-Air/Holmby Hills was 20% ahead of last year at this time with a median sales price of $2.100 million, and Malibu was ahead of 2020 with a median sales price of $2.142 million, an increase of 7%.
High-end sales had a record year (homes selling for $5 million-plus) on the Westside, but Beverly Hills was off 7% from its previous high at $5.212 million for January…Brentwood was down 11% at $3.627 million and Westwood/Century City was down 3% at $2.520 million.
For the most part, sales prices are sticking close to the original selling price — in the mid-90%, with only Beverly Hills Post Office considerably off at 79% of the original listing price.
It goes without saying how our communities are valued and respected around the world today. 2021 is projected by our experts and economists to be a solid year for real estate. I share their optimism.
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Sales activity remains strong
If you recall in the last Schiffer Line I talked about a house in the Rancho Park area that had just come on the market and on the first day, they had 19 showings! They ended up with 40 offers, issued counter offers to 9 potential buyers and after 2 weeks of negotiation just opened escrow this past week. The original listing was $1,595,000 and the final price was just under $2,000,000.
I know that sometimes sellers take the philosophy to underprice their listing to generate this kind of activity, which is not a philosophy I generally take, and I can assure that is not what this particular seller had in mind. It simply is just a case of a strong property, positioned well, including being properly prices for the comps in the area and ALOT of buyers out there wanting to take advantage of the market and interest rates.
U.S. home prices accelerating in housing boom
A report from the National Association of Realtors show that we are in the strongest housing boom in more than a decade, boosting home values from major metro areas to small cities and vacation spots.
The median sales price for existing homes in each of more than 180 metro areas tracked by the NAR rose in the fourth quarter from a year earlier.
That is the second consecutive quarter that every metro area tracked by NAR posted an annual price increase, marking the first time this milestone has been achieved in back-to-back quarters.
T
he latest data underscores how the home-price rally, which over the years has played out in distinct pockets such as Idaho or across parts of the Sun Belt, has become much more widespread and continues to gain momentum. In the fourth quarter, 161 metro areas posted double-digit-percentage price increases, up from 115 metro areas with double-digit gains in the third quarter.
Demand for homes has surged in the past year as buyers took advantage of record-low interest rates and the pandemic prompted many households to seek bigger houses that could better accommodate remote work. Home sales in 2020 rose 5.6% to the highest pace since 2006. Simply put, the NAR said this is a “Race for Space”!!
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Federal Reserve will continue to support U.S. economy
Fed Chairman Jerome Powell indicated last week the Federal Reserve will continue supporting the U.S. economy 
through low interest rates and hefty asset purchases, stressing the labor market remains stunted by the pandemic.
Powell reiterated his view that “a patiently accommodative monetary-policy stance” will be an important factor in returning the economy to a healthy state in which workers—particularly low-income ones—can find jobs. That means the Fed is likely to refrain from raising interest rates or reducing the pace of its bond purchases for the foreseeable future.
The Fed chief also repeated his call for more fiscal support for the economy, saying that monetary policy alone won’t be enough to restore the labor market to full strength. “It will require a society-wide commitment, with contributions from across government and the private sector,” Powell stated.
The Fed took extraordinary steps last year to stabilize markets and support the economy by pushing short-term interest rates to near zero, launching an array of emergency lending programs and making large-scale purchases of Treasury securities and mortgage bonds. Since June, it has bought at least $120 billion a month, net of redemptions.
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Spouses take money seriously, especially on dates
Money can be a hot topic for couples. A 2020 poll by Personal Capital revealed that 53% of respondents found talking money with their significant other stressful. The same poll found that 35% of respondents have kept secrets about financial decisions to avoid conflict. The poll also discovered that budgeting for ‘couple events’ — like a date night, can be potentially troublesome — and they recommend developing a budgeting strategy to make each other happy!
Here are some simple ideas you might follow— 1) Make a Date Night First — you need a plan, so pick a date in the future that is ‘free’ where both partners are not frazzled with heavy work day loads.…2) Consider each other’s feelings and experiences — Since money can sometimes be an issue, pick a ‘date’ that isn’t going to create a hassle by causing the other to feel uncomfortable…like a movie and dinner afterward, or a dinner at your spouse’s favorite restaurant. In their opinion it is truly is not how much you spend but how you spend it. 3) You don’t have to it all in one date — You can spread it out. Their best advice is to ’talk’ about dating and find out what ’they want to do’ — perhaps you can plan a weekend program — half on a Saturday, the rest on Sunday…. visiting a museum one day, picnic in the park the other…be creative. 4) Make it a priority — If you bring up the date night concept, be prepared to follow through. Don’t believe the other spouse hasn’t already put this into their memory bank — the worst you can do is not following up. And 5) Take action — be creative with your budgeting — think outside the ‘date box’ and perhaps go back in time when life was simpler, and yes, less expensive. The key experts have concluded that dating in a marriage or long-term relationship is about having fun — for both parties. During these pandemic times, we have less choices and money can be a challenge, too. Talk, work it out, and have fun!
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Millennials changing luxury real estate market
It was bound to happen: Tech-savvy and environmentally conscious, millennials’ preferences are poised to dramatically reshape the high-end housing market. In sharp contrast to the “slacker” stereotype that has defined their generation, millennials aren’t living in parents’ basements. They’re buying multimillion-dollar homes.
At 38%, millennials—adults born from 1981 to 1996—represent the largest share of home buyers in the U.S., according to a survey by the National Association of Realtors. According to the NAR survey, it is not uncommon for millennials, who would normally be focusing on starter homes in lower-priced markets, are now jumping into multi-million homes in high-priced markets.
Millennials are the most educated generation in history, have higher earnings, and are set to inherit more than any prior generation, according to a May 2020 report by the Brookings Institute.
Characterized by their tech savvy and environmentally conscious values, millennial preferences are poised to dramatically shape the market, a dynamic that has been on display during the Covid-19 pandemic.
Beginning almost immediately after the coronavirus hit, for instance, buyers began to flock to areas that offered walkability, nature, and a well-rounded quality of life — think Aspen, Austin, Montecito. I am seeing this on the Westside, especially for those millennials in the entertainment and tech industries who are attracted to what we offer in our communities.
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Home equity is on rise in the West
Housing appreciation has grown over the last few months with the surging real estate market. 30%—nearly one in three—of homes with a mortgage in the U.S. are now considered “equity-rich,” according to a new report from ATTOM Data Solutions, a real estate research firm.
A home being equity-rich means that the combined estimated amount of loans secured by the property is 50% or less of the estimated market value. In short, it means homeowners themselves have accumulated at least half of the equity in their homes. This is one of the primary reasons when buyers say they “are waiting for the market to collapse” are wrong. Because there is so much equity in a number of homes, and this includes condos and townhouses, owners are not likely to walk away from that equity and allow their properties to go into foreclosure. For the most part, they will sell their properties instead.
Leading the percentage of those homes that are in that category is California, which grew 46.1% in the fourth quarter, compared to 39% in the third quarter. Of the top 10 Zip codes in the U.S. that have the most equity-rich homes, seven are located in California — Oxnard, Inglewood (2 zip codes), Glendale, Carpinteria, Bloomington, and Santa Maria.
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Do you know the history of the closet?
Closets have been around since Egyptian times when pharaohs built huge pyramids and buried all their ‘stuff’ to serve
them in the next life. But it wasn’t really until the industrial revolution when homes required storage space or built-in closets, and we soon food and beverages were stored in a separate place — called pantries.
To appeal to wealthy residents, the first closets in the U.S. were introduced at the Dakota apartments in New York in
the late 1800s, which featured closets 2.5 ft deep and 6 ft. wide. But as their utility and benefits became wider known, closets became standard in the housing boom following WW2. Fast becoming entrenched in housing plans, closets took on new meaning — walk-in closets, sectionalized for shoes, apparel, accessories. Companies were formed to create or re-do closets. Architects became more sensitive to ’stuff’.
Armoires, walk-ins, built-ins and storage systems — there are a myriad of ways we store our stuff today. But closets have achieved new status — what sets them apart and how their design and purpose have evolved brings new meaning to storage. Buyers today put more emphasis on closet spaces and how they are designed, because we all are now spending more time at home.
Today, we see built-in storage walls, also called storage “systems’ that can consume an entire bedroom-area space. Entire walls, from floor to ceiling can be outfitted with systems of doors and drawers.
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This & That
First of all, I apologize for my lack of sensitivity in honoring the Lunar New Year. I hope I did not offend anyone by referring to the celebration as Chinese New Year, when in fact it is a holiday that is celebrating universally by all Asian nationalities. ENJOY!
For the past number of years, I have served as the Liaison between the Greater Los Angeles Foundation and our parent company in New Jersey. Effective as of this week, I have the extreme honor of having been asked to be the Liaison for the newly formed Foundation for the entire Southern California Region which encompasses 78 offices and approximately 4000 agents. This will enable me to interface with more the Coldwell Banker agents though out Orange, San Diego, Riverside Counties as well as the Desert Region and be able to further market my listings as well as find properties for my clients that are interested in purchasing or selling property int those areas.
As we discussed, listing inventory is quite low, and properties that are properly presented which means, well priced, shown in good condition and for the most part staged effectively are selling very quickly. I am looking forward to working with you in representing your property to assist you in achieving your goals to move. Please let me know how I 
can assist you in that regard.
I hope you are successful in making those arrangements for your vaccine. I am in my quest to obtain my appointment for my second one.
In the meantime, enjoy our beautiful weather and stay safe and wear those double masks. Hopefully, we are coming down to the home stretch, let’s not blow it and be careless.
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