The SchifferLine
Timely Real Estate News………………………..15 February 2022
*************************************************************
Sales volumes rocket upward to start 2022
Make no mistake, there is a buying frenzy going on as we start advance into the New Year as we see sales volumes all across the board including the five communities I report on. In these communities the comparison of sales volume has climbed 139% compared to last year at this time. Sales volume for January was $483 million for 2022 vs. $202 million in 2021. That is the highest annual increase I have seen in my 30-plus years selling real estate on the Westside, and there doesn’t seem to be many roadblocks to increasing sales volumes in the future, unless, of course, inventory becomes a more critical issue. At the moment, the recission rate is 14 days which in the past has been 3 – 6 months. This means that the minute a property comes on the market and if it is positioned properly, the sellers can expect to have an offer within the first week!
Starting out of the box for 2022, Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, and Brentwood, all saw strong sales volume increases. Leading sales volume increases for January was Beverly Hills Post Office which saw a $145 million increase over last January’s performance. Beverly Hills, always the leader, was $63 million ahead of January 2021, Bel-Air/Holmby Hills was up $50 million, and Brentwood was up $34 million compared to last year. Only Westwood/Century City showed a decline in sales volume compared to a year ago of 2%. I also cover Malibu, which saw a sales volume increase 18% from $49 million to $58 million over January 2021.
Notably, Beverly Hills had five homes over $10 million, highest selling for $22 million. BHPO had six homes over $10 million, with $15 million being tops. Bel-Air/Holmby Hills had two over $10 million, with the highest at $14 million, Brentwood had four over with $17 million the highest. Sales on Los Angeles’s Westside appear stronger than ever, even as the pandemic continues to simmer throughout California. I expect to see continued sales volumes but, perhaps, more moderate as rates go up. As we continue to fight the inventory battle, sales prices are just going to keep moving up. That is what we are living with today.
*************************************************************
Median sales prices take a big jump, too!
Along with continued robust sales comes robust increases in median sales prices. Compared to early 2021, when median sales prices were in the 4-5%/month increases, we see for January 2022, median sales prices have taken on new strength. For example, Bel-Air/Holmby Hills saw a 112% increase in median sales prices to a new high of $4.450 million, followed by Beverly Hills Post Office which experienced a 77% increase in MSP to $6.024 million.
Beverly Hills started out 2022 with a median sales price of $6.997 million, an increase of 34% over last year. Westwood/Century City had a modest increase of 6% in median sales price at $2.680 million, and Brentwood was off 20% from a year ago at $2.900 million. Malibu had a big jump in median sales price of 83%, growing to $2.581 million.
There is no question that this is a seller’s market. With inventory still behind pre-pandemic levels, buyers are faced with a shrinking market and choices, and multiple offers have become the norm. For many, it’s a stressful experience — waiting in line, even with a bonafide cash offer — doesn’t seem to be enough…you are just one of many swarming over your dream home. And what is interesting is that there are still sellers out there who are over-pricing their homes — and will have to eventually reduce their original listing price so it will sell. My advice — get solid, professional real estate advice before you even enter the market. I can help you avoid a lot of the mistakes many buyers and sellers are making in this tough market.
*************************************************************
How does the increases in mortgage rates factor into the equation?
First of all, we all need to remember that should interest rates increase to the mid to high 5%s, they are still quite low. I remember a few years ago when they were in the 6% range. We have been somewhat spoiled with how low they have been for the last year years.
The increase in interest rates will definitely close some buyers out of the market, conversely it will also act as anincentive for some buyers to take advantage of the current rates and add more pressure on the inventory.
Some of you may recall a situation with an offer I was involved with in early December where there were 25 offers. That escrow just closed escrow, hold on to your hats… for $1,000,000,000 than the asking price. With that same buyer this week, we were involved in another multiple offer for a house in Santa Monica. In this case, there 15 offers. Unfortunately, my client was not the prevailing buyer. We don’t know what the final price will be, but our offer was almost $300,000 over asking!
Look at how many jobs have been created recently. Another factor in the crazy prices we are seeing is the increased cost in land itself (hard to find here), materials, etc. Builders are passing these costs on to buyers and the buyers are paying them.
*************************************************************
Bubble? What bubble? Experts say “No!”
Sorry to burst your bubble, but we’re not in one, housing experts say. Today’s rising home prices and a persistent seller’s market differ from the 2007 housing bubble in a few keyways, economists told Inman. In short, don’t expect bubbles bursting anytime soon.
Historically low inventory leads buyers to make rushed decisions. Bidding wars help push up record high housing prices. Many in the nation’s largest homebuying generation are being priced out of markets nationwide. Are these the signs of a housing bubble?
It is hard not to look at the unpresented territory of the U.S. post- COVID housing market with a twinge of fear that the country is returning to conditions that existed before the collapse around the Great Recession (2007-2009).
As common as the question is these days, economists say today’s market boils down to the simple economic principles of supply and demand. “I was thinking, “What is really a bubble? “Said Selma Hepp, chief economist of Core Logic. “There is no firm definition of a bubble”.
“To some people, high appreciation is going to be a bubble. To others it’s high speculation,” Hepp said. “Generally, among economists we think when there is an increase in speculation, when people are buying based on expectation of appreciation as opposed to that need for housing, that’s when we could be in a bubble.”
Yet there are many more signs that point to a healthy market that was sped up due to unique conditions brought on by the coronavirus pandemic. And in a way, the pandemic may have led buyers who ordinarily might have purchased a first or second home in a few years to do so much sooner.
“One question we don’t know for sure is how many people moved forward to buy a house because of the stimulus and low interest rates that they would have bought this year or next year,” said Doug Duncan, chief economist at Fannie Mae.
*************************************************************
Westside high-end home sales continue upward.
It comes as no surprise but 2022 is starting out with a ‘bang’ for high-end home sales for January. It is interesting to see how the year is beginning after finishing the best year ever in high- end sales. We are almost already even with last year.
There were 66 closed sales of $5 million-plus in January, versus 63 at this time last year. 20 of those were $10 million-plus, versus 23 in January. We are ahead in the sales of $20 million-plus, there were 2 at this time last year and there were 6 in January, 3 of these were over $40 million.
A good start to the year with 101 pending listings of $5 million-plus and 34 of these are $10 million-plus. And it becomes clear, that the record-setting home price trends set in 2021 are continuing as we move into the first quarter for this year. Time will tell, of course, but the continued upward pace of home prices clearly demonstrates the unique values and attractiveness our Westside communities possess.
*************************************************************
Pending home sales decline in December
According to the National Association of Realtors, pending home sales fell in December, denoting two straight months of declines. All four major U.S. regions posted both month-over-month and year-over-year drops in contract activity.
The Pending Home Sales Index, a forward-looking indicator, created by the NAR, of home sales based on contract signings, fell 3.8% to 117.7 in December. Year-over-year, transactions decreased 6.9%. An index of 100 is equal to the level of contract activity in 2001.
“Pending home sales faded toward the end of 2021, as a diminished housing supply offered consumers very few options,” said Lawrence Yun, NAR’s chief economist. “Mortgage rates have climbed steadily the last several weeks, which unfortunately will ultimately push aside marginal buyers.” Even with December’s slowdown in transactions, Yun says last year was an overall great period for housing in terms of sales and price appreciation.
“The market will likely endure a minor reduction in sales as mortgage rates continue to edge higher,” he added. Yun forecasts the 30-year fixed mortgage rate to jump to 3.9% by the fourth quarter and existing-home sales to dip by 2.8% to 5.95 million units. The index in the West decreased 10.0% in December to 95.0, down 16.2% from a year prior.
*************************************************************
What did we leave behind? Home prices also increased in the U.S.
The fourth quarter of 2021, much like the third quarter, saw home prices continue to increase, although at a slower pace. Fewer markets in the last quarter experienced double-digit price gains.
According to the latest quarterly report from the NAR, out of 183 measured markets, 67% of the metros markets reached double-digit price appreciation compared to 78% in the prior quarter. Nationally, the median single-family existing-home price rose at a slower rate of 14.6% year-over-year to $361,700 compared to the year-over-year pace in the previous quarter (15.9%).
While the third quarter of 2021 witnessed all regions achieve double-digit price gains, the fourth quarter saw only the South experience double-digit price appreciation (17.9%), and single-digit price gains in the Northeast (6.8%), Midwest (8.6%), and the West (7.7%).
“Homebuyers in the last quarter saw little relief as home prices continued to climb, albeit not as fast as earlier in the year,” said Lawrence Yun, NAR chief economist. “The increasing prices are indicative of a seller’s market, with an abundance of eager buyers and very limited supply.”
You can bet those sellers in Nevada, Arizona, Texas, Oregon, Idaho, and even Florida — are waiting for Californians to make their move.
*************************************************************
Moraga Drive — a private enclave away ‘from everything’
There is something so special about Moraga Drive — close to everything, but so far away. This small neighborhood tucked away in the recesses of Sepulveda Pass, you’d never find it by just driving around…it is truly off ’the beaten track’, and that is why it is so special.
Moraga Drive, 90049, is steps away from Getty Museum, freeway close, comprised of 49 one- and two-story homes built since the mid-1950s, many of which have been rebuilt or remodeled.
This is a remarkable, lovely street with a wonderful feeling of “country in the city. Every time I drive down the street, I am reminded of the “allees” in France with all of the tall lovely trees and their branches joining together. No sidewalks, tall trees, and manicured lawns. Moraga Drive is also home to the Westside’s only producing vineyard – world-famous Moraga Vineyards, 17 acres of cabernet, merlot, and chardonnay grapes. And yes, the Vineyards give the area this unique, out-in-the-country feeling that is also expressed in the luxurious homes in this hideaway — an elegant hideaway where your neighbor is one of California’s prestigious wineries. Please contact me if you are thinking of =buying or selling on this very special street… 310 442-1384 or ceschiffer1@gmail.com
*************************************************************
Award
I am very grateful and proud to share with you that I am among the top 7% worldwide of all of the Coldwell Banker agents! Thank you to all of my wonderful clients for their business in “getting me” here! My goal for 2022 is to be in the top 2%. Looking forward to all of you with us working together to get there.
In order to reach my goal, I need your assistance. I have a number of buyers for properties in Bel Air Crest, Mountaingate, Brentwood Circle, Bel Air Park and Brentwood proper. We have seen everything on the market. Please if you are thinking of selling, please get in touch with me. We might be able to get your home sold without putting it on the open market.
HAPPY VALENTINES DAY!. Today is the day to share with your loved ones how much you love and care for them. I hope you all have a wonderful day filled with love, celebration and perhaps some chocolate
You must be logged in to post a comment.