Timely Real Estate……………………………………………15 February, 2020
2020 Starts off with a ‘bang’…. January sales surge
Starting last Spring, real estate sales has been steadily surpassing previous year-to-year volumes on the Westside, but in January, sales leaped off the charts, showing a 32% increase in total sales volume for the five communities
I regularly report each month in The Schiffer Line — Beverly Hills, Beverly Hills Post Office, Bel-Air Holmby Hills, Westwood/Century City and Brentwood.
Total sales volume through January 31, 2020, for these five was $284 million vs. $214 million for January 2019, thus the 32% surge. That’s amazing considering there were no large transactions as we had in December except the $150 million Bel-Air sale. The leader in sales volume was Beverly Hi
lls Post Office with a plus of $58 million over January sales in 2019…. Westwood/Century City was up $17 million in sales volume, and Brentwood was up $36 million. Beverly Hills and Bel-Air/Holmby Hills were down slightly from a year ago. Venice, one of the communities I regularly cover as well, was down 35% from the previous year, with $31 million sales in January 2019 vs. $19 million in January 2020.
The major transactions include one in Beverly Hills –$15 million sale, BHPO— $37 million, Bel-Air/Holmby Hills –$24 million and Brentwood –$20 million. What January’s performance is telling us that we have entered our “new normal” — not exactly the same in the pre-recession period (as we’re still behind in 2007 dollars because of inflation), but overall, our communities are showing strength across the board. That’s good news.
Median sales prices continue their ups, downs
One month does not a year make, and although we had a strong sales surge in January in these five communities, we are still going through the same ups and downs as we did in 2019 — median sales prices are just bouncing around from month to month. But this is normal, too.
There is no trend for this year at this early date, but based on sales in January, the “ups” include Beverly Hills Post Office median sales prices grew 21% to $2.298 million compared to a year ago. Westwood/Century City was up 39% to $2.593 million…and Brentwood was up 66% to $4.150 million, one the highest in recent years, but again, this is probably an anomaly, we will have to wait and see.
On the negative side, Beverly Hills was down 55% to $5.300 million (BH had a phenomenal January in 2019), Bel-Air/Holmby Hills was off 30% to $1.631 million (which is very low for this area), and Venice was down 1% to $1.980 million.
With the projection that we should not experience a recession in 2020 based on current comments from the Federal Reserve, I expect that our sales performance… communities and areas I work in, will continue an upward climb in sales prices and in sales transactions as well. Open houses were strong at the end of 2019…and continued that way in January. I’m seeing a lot of action now that the weather has warmed up (yes, we need more rain). 2020 is starting out to be a great year…let’s keep it rolling.
Here’s the scoop on fire insurance….
Since the Woolsey and Getty fires, our western Los Angeles County has been challenged with rebuilding and post-fire insurance issues. There were initially mass evacuations of insurance companies leaving the state, and leaving homeowners without coverage as well.
But Governor Gavin Newsom stepped in… here is a recap of the current policy of California Insurance Commission office:
“Recent insurer actions created considerable disruption for California’s residents; particularly those who live in or near regions of the state potentially threatened by wildfires. in many communities across the state, finding affordable comprehensive fire insurance has become difficult. So difficult that real estate transactions have stalled or been cancelled due to the Governor Gavin Newsom’s October 27, 2019 declaration, “…no admitted or non-admitted insurer shall cancel or non-renew for one-year policies of residential property insurance due to wildfire risk in the following ZIP Codes:
Getty Fire — 90049, 90025, 90024, 90272, 90403, 91403, 91436, 90402, 90077, 90095.
If you reside within these ZIP codes, you will be protected by the latest edict from the Insurance Commission.
In addition, all admitted and non-admitted insurers writing residential property insurance in the state of California must offer to rescind any notices of cancellation or non-renewal issued since the Governor’s October 11, 25, or 27, 2019 Declarations, respectively, and offer to reinstate or renew the policies in place at the time of Declaration, if any such notices of cancellation or nonrenewal were issued on or after the date of the Declaration, were due to wildfire risk, and the properties are located in ZIP Codes identified by this bulletin.
I just had a conversation with my insurance agent, Karl Susman of Susman Insurance to evaluate both my fire and earthquake insurance coverage and amounts, and he was sharing with me his frustration of dealing with the different insurance companies and the rules such as the ones above as they seem to change from day to day.
Please take heed…and if you have any questions about this, please contact me…. Carole Schiffer, 310-442-1384.
Federal Reserve rates to remain for rest of 2020
Testimony by Federal Reserve Chairman Jerome Powell indicates that there are no plans to raise rates this year, although there are some warning signs on the horizon connected to the corona virus epidemic that is putting the brakes on in China, which is disrupting supply chains for US manufacturers.
In his previous statements in January, Powell indicated that with the growing economy and with consumer confidence up, he saw no threat of a recession for 2020, however, in his appearance this past week in Congress, Powell said that their concerns were now focused on a less desirable inflation rate of 2%, which has been the target of the Fed for this year.
The Fed formally adopted a 2% inflation target eight years ago because officials saw that level as consistent with a healthy economy. But inflation has mostly undershot that goal, and interest rates around the world have remained at much lower levels than before the 2008 financial crisis.
“The news in general continues to be good for the consumer sector,” according to Philadelphia Fed chair, Patrick Harker. “Thanks to the lowest unemployment rate in 50 years and growth in wages, consumers are upbeat about the economy. Consumer confidence is high, and the optimism should support household spending this year.”
Nationwide…home prices increased 4%
According to CoreLogic, one of the nation’s foremost real estate trackers, home prices nationwide, including distressed sales, increased year over year by 4% in December 2019 compared with December 2018. Prices also increased month over month by 0.3% in December 2019 compared with November 2019 (revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates newly released public data to provide updated results)
The CoreLogic forecast indicates home prices will increase by 5.2% on a year-over-year basis from December 2019 to December 2020. On a month-over-month basis, home prices are expected to increase by 0.1% from December 2019 to January 2020.
“On a national level, home prices are on an upswing,” said Frank Martell, president and CEO of CoreLogic. “Price growth is likely to accelerate in 2020. And while demand for homeownership has continued to increase for millennials, particularly those in their 30s, 74% admit they have had to make significant financial sacrifices to afford a home. This could become an even bigger factor as home prices reach new heights during 2020.”
We are seeing median sales price increases on the Westside, but they have steadied over the past 12 months, too. Some areas are up one month, down the next, and as always, I follow the median sales prices on a year-to-date basis…because we see these swings in every area each month. But we are starting off well this year.
Mortgage applications reach highest volume since 2013
The Mortgage Bankers Association (MBA) announced last week that the Market Composite Index, a measure of mortgage loan application volume, reached its highest level last week since May 2013.
The gain in the Market Composite Index for the week ending January 31 was 5% greater on a seasonally adjusted basis than the previous week, which had been adjusted to account for the shortened week due to Martin Luther King, Jr. Day.
Had the results of that week not been adjusted for the holiday, the index last week would have risen 20% compared to the previous week. The Refinance Index also reached a high since June 2013 — the index jumped by 15% and was 183% higher than the same week last year. Some indexes did fall, however.
It’s taking longer to find a home….
Lower mortgage rates are drawing out more prospective buyers to look at properties, but house hunters are taking their time in committing.
In the final quarter of 2019, 60% of actively engaged buyers reported spending at least three months searching for a home. That is up from 58% a year earlier, according to the Housing Trends Reports from the National Association of Home Builders.
This is the fourth consecutive annual gain in the share of active buyers who have spent three months looking for a home to purchase.
“This trend is closely related to persistently low levels of inventory of new and existing homes for-sale,” notes Rose Quint, the NAHB’s assistant vice president of survey research, at its association’s Eye on Housing blog.
While the Internet has allowed the creation of new tools for homebuyers, the frustration comes in the inability to find affordable homes for sale in their most desired locations — close to work or schools. Therefore, homebuyers are forced to extend their searches outside the preferred areas, causing other decisions regarding transportation costs and accessibility. In the end, one can shorten the research time by working with a qualified real estate agent like myself who knows the market.
Many Americans move for “love” …. really?
Of course, they do! How many times have you heard from a friend or work associate when asked….” why did you move to California?” You know the answer. It was a “love” interest that pushed them to decide to come out West.
Consumers are willing to move—even more than 500 miles–in order to be with a significant other. Generally, the move tends to be worth it, according to a survey by Bellhops, a professional moving company. Bellhops analyzed nearly 2 million online conversations in the U.S. from June 2018 to March 2019 to find themes in moving. “Moving for love” was among those themes they found.
Sixty % of the people whose conversations involved moving for love are now married or in a long-term relationship, the study showed. Women are more likely to move for love than men.
One-third of the people who moved for love did so more than once too. Fifty-seven % said they’d do it again, if necessary, too. Americans are willing to move long distances to be with their significant others—44% moved 500 miles or more for love, the study found.
For those who move, the majority rent an apartment. But 25% are so confident in their choice that they skip renting and buy a home in their new location once they move. Indeed, love is on the move!
Speaking of Love
Love is in the air! I hope you had a wonderful Valentine’s Day with the special someone or the someones in your life.
Originating as a Western Christian feast day honoring one or two early saints named Valentinus, Valentine’s Day is recognized as a significant cultural, religious, and commercial celebration of romance and romantic love in many regions around the world.
The day first became associated with romantic love within the circle of Geoffrey Chaucer in the 14th century, when the tradition of courtly love flourished. In 18th-century England, it grew into an occasion in which couples expressed their love for each other by presenting flowers, offering confectionery, and sending greeting cards (known as “valentines”). Valentine’s Day symbols that are used today include the heart-shaped outline, doves, and the figure of the winged Cupid. Since the 19th century, handwritten valentines have given way to mass-produced greeting cards. In Europe, Saint Valentine’s Keys are given to lovers “as a romantic symbol and an invitation to unlock the giver’s heart”, as well as to children to ward off epilepsy (called Saint Valentine’s Malady)
February is Black History Month
Black History Month is an annual observance formed in the United States in the early 20th century and was known as Negro History Week.
Its foundation was Negro History Week in 1926, originated by historian Carter G. Woodson and the Association for the Study of Negro Life and History.
While this effort had some limited success, it wasn’t until 1969 when black educators and the Black United Students at Kent State University proposed Black History Month. Its success was quickly mirrored around the United States — and was endorsed by President Gerald Ford during the country’s Bicentennial celebration in 1976, which brought national recognition to the event.
Events are planned throughout the country each February to recognize the history and achievements of black citizens in all endeavors, not just in education but in all walks of life business, culture, government, arts, sports and entertainment.
News & Gratitude
First of all, THANK YOU TO ALL OF YOU WHO HAVE PARTICIPATED IN MY “ONE WARM COAT” CAMPAIGN. Your generosity to assist others is greatly appreciated! I am still collecting more coats and clothes so if you still have some items in your closets you no longer use, please get in touch with me (310 442-1384 or firstname.lastname@example.org) and I will gladly swing by and pick them up.I take them to the Peoples Concern facility in Santa Monica.
We are also collecting slightly worn and/or shoes as a companywide campaign, and my office has been amazing in the number of shoes we have collected, over 300 pairs! I have cleaned out some from my closet that I have not worn in years. Maybe you have some in that same category also. Just let me know.
Real Estate news. My new listing at 2218 Canyonback is finally coming on the market. Priced at $2,775,000 it is a 5 bedroom, 4.5 bath with great views. We are in the process of staging it now, but it can be shown before it goes into the multiple listing which will be in a week or two I have a few other homes that we are getting ready to market, but that will be a little later in the year, and like all active real estate agents, have buyers who are frustrated in the lack of luck in finding homes to buy. Please let me know if you are considering selling your home, we might be able to sell it before it actually comes on the market.
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