Timely Real Estate News………………………………….15 July 2018
What a difference a year makes….
By the end of June 2017, sales volume for the five communities I report on (Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood) were up over 24% to $1.952 billion for the year…a nice number. A year later, however, we’re down nearly 10% from that number at $1.764 billion in total sales, which just underscores the current market in our communities: We have buyers, but we don’t have the broad selection of quality homes we are used to being offered in one of America’s most treasured real estate markets.
What is notable is that sales volume in Beverly Hills for the year is down 24.8% compared to last year at this time. Sales were running behind as well in Beverly Hills Post Office (down 11%), Bel-Air/Holmby Hills (-2%), Westwood/Century City (-12$), while Brentwood was up a modest 4%. Please remember these number are only from the multiple listing service, and do not reflect any private sales, nor do they represent any sales that have yet to be reported to the MLS.
High-end sales also down from 2017
In this market, we have also witnessed a 10.6% decline in high-end sales. At the half-year mark, we are behind last year at this time in sales across the board. There have been 272 closed sales of $5-plus million this year, versus 301 by June 30, 2018, down 10%.
There have been 80 closed sales of $10-plus million this year, versus 94 at this time last year, down15% and we have seen only 24 sales of $20-plus million this year, versus 32 at this time last year, down 25%. Of these, 13 were sales of $30 million this year, versus 15 at this time last year. We are ahead of last year in 40 plus million-dollar sales. Only five last year and seven so far this year.
Of the $20-plus million sales, most of the buyers were American –19 American, and one each from Monaco, Japan, UK, and Canada. The areas of the $20-plus million sales were: 6 Malibu, 4 Beverly Hills, 4 Bel Air and 2 each in Sunset Strip, Holmby Hills, BHPO, Brentwood, and Palisades.
Also, please take note: Understand there are many private sales that are not recorded by the MLS. Generally, I get the information on private sales from the LA County Recorders’ office through the title company, and that information can be as late as 60 days in coming from the County Recorder, (thus the reports on which all of my data analysis shared is used for consistency purposes). There are some months where there may be as many eight to 10 homes selling for over $20 million that are not reflected in monthly MLS sales volume or median sales price numbers. But you can rely on my data as we are always comparing apples to apples in our monthly reports.)
Median Sales Prices continue upward….
While inventories and sales volumes are down, sales prices are continuing upward, Beverly Hills reached $7.500 million median sales price for June, a 70% increase over June 2017. However, Beverly Hills Post Office was down 30% to $2.707 million, Bel-Air/Holmby Hills was also down 25% to $1.803 million. Westwood/Century City was up 11% to $1.441 million, and Brentwood was up 27% to $4.250 for June 2018. Culver City, which I also cover, has been having a great year with a 20% increase in median sales price of $1.482 million for June 2018 vs. June 2017.
Perhaps the most important indicator for your review are Year-to-Date Median Sales Prices. These prices reflect the trend line for these communities for the calendar year…from January 1 onward. Beverly Hills, which had a great June, is now at $6.355 million median sales price through the first six months of 2018. Bel-Air/Holmby Hills is up 10% at $2.382 million, Westwood/Century City is up 11% ate $2.275 million, and Culver City was up an impressive 31% for the first six months of the year at $1.320 million. Brentwood was even for the year at $2.196 million and Beverly Hills Post Office was down 11% at $2.619 million. Also, once again a particularly high or low sale will skew these numbers.
When looking at the stat for “Selling Price vs. Original Listing Price” — there have been only modest movements — most communities have been in the 96-98% range for the year, but Culver City has recorded a 103% number, which would be expected in these days of low inventory and prices zooming skyward in lower-priced markets.
Housing market gets more inventory…but still down
A leading real estate research company reported that the housing market may be starting to benefit from the one thing that can loosen a long-running squeeze that has crimped sales and driven up prices: more homes… Inventory
The nation’s housing inventory increased 12.2% in the second quarter, the biggest gain since early 2015…. but housing supplies were still down 5.3% from a year ago, a dynamic that has continued to push up prices. That is less than the double-digit annual declines that had prevailed since the second quarter of 2017 and the smallest drop since early 2017. Thirty of the nation’s 100 largest metro areas saw their housing supplies increase on an annual basis last quarter. That’s up from just 13 early in the year and represents the largest share of big cities with rising inventories in more than three years.
So, while we are seeing a positive increase, we’re still far behind. As I have pointed out, California is running around an 86,000-annual housing-unit deficit — which includes apartments, homes, and condos. We create, on average, 100,000 new units annually, but California cannot keep up with the demand. We need 186,000.
Tennessee lead the market with a 52% jump in homes compared to a year ago, while inventory increased a meager 2.9% in Los Angeles. The problem is simply — the increases in housing are simply not enough to meet demand.
Times Mirror Square — a historic presence
Now that the venerable Los Angeles Times has moved its entire executive and editorial offices to a modern office building in El Segundo, there remains the equally venerable Times Mirror Square — a group of three, architecturally significant structures that really tell the history of one of the nation’s foremost newspapers…but also of the City of Los Angeles as well.
The first building — the signature edifice dominating the city scape when completed- was designed by Gordon B. Kaufmann and built in 1935 as a new and modern home for The Los Angeles Times, and its distinctive Art Decstyle has been an iconic fixture of the city’s skyline.
The second, designed by Rowland H. Crawford, is an office tower built in 1948 as the home for a new afternoon newspaper, The Mirror. That project failed, partly because the old street cars went away as the city embraced the automobile, but the building endures.
The third was designed by William L. Pereira, a 1973 office building to accommodate the top executives of the Times Mirror Co., the newspaper’s corporate parent. It was built at a time when the paper was growing under the publisher, Otis Chandler, who expanded the paper’s coverage, elevating it into the upper echelon of the country’s great newspapers.
Together, these three buildings form Times Mirror Square There is a new owner of the buildings, and they want to retain the building designed by Gordon Kaufman, but to tear down the remaining two for other purposes. This is now under review by the city’s Cultural Heritage Commission who is having a hearing on the 19th of the month to consider preserving all three buildings. I will keep you posted.
How safe is your building in an earthquake?
Earthquakes are not unique to California, but with our experience — especially with the disastrous 1906 San Francisco earthquake and the 1994 Northridge quake, we have been especially sensitive to monitoring building safety codes. Just last month, I reported the coming study that the diagnostic processes and data used to evaluate the safety of tall buildings was undergoing radical assessment. The news thus far appears to state that the outcome of this report would not be ‘good news.’
There is now a bill in the California Assembly (AB 2681) that would require cities to create inventories of potentially vulnerable buildings. It has passed through seven committees and is now in the Senate Appropriations Committee, where it faces uncertain passage for budgetary reasons. The bill would create extra work — and costs — for local municipal building departments.
If passed, this would make it mandatory that owners of buildings meet new standards for earthquake safety.
Good news in housing market…construction jobs up
While the labor market reflected a minor increase in the total number of unemployed persons, employment is still way ahead of where it was a year ago in June 2017. There are more workers in the labor force now, and there are more people, with high consumer confidence, re-entering the workforce.
The good news is the real estate industry added 3,800 jobs, according to the new data. Approximately 300 jobs were reported lost in the rental and leasing services sector. The best news is that an increase in construction jobs could also foreshadow a positive trend for the real estate industry, according to Mark Fleming, the chief economist of First American.
This month’s increase by nearly 4,000 residential construction jobs compared to May — a 0.5% increase — sends a positive message to homebuyers and the housing market, as it indicates further increases in housing starts are likely and more housing supply may be on the way. The report added that it is hard to have one (housing starts) without the other (residential construction employment).
Lawrence Yun, the chief economist at the National Association of Realtors said that the strong jobs numbers and low unemployment will mean more people looking for homes, but inventory remains a challenge.
“Part of the housing inventory shortage is due to the lack of construction workers,” said Yun. “One encouraging aspect of the latest job report is the boost in the number of people seeking work.”
It’s summer, folks…. home improvement time?
Yes, it seems Spring Cleaning season is over, and now it’s time for home improvement…and that’s why you’re seeing all these ads from various business promoting this theme. Summer and sunshine spawn positive attitudes, especially about your home and ‘your next project.”
Here are some tips to make sure you’re ‘checking every box to assure you are working with a contractor that you can rely on:
#1 -Confirm credentials — Get “real references” …. see a copy of the professional’s trade license to verify it is current and in compliance, and make sure they are insured and bonded; #2 – Do your homework. Get 2-3 bids, always, and read their ratings and reviews on “Home Advisor”, to see what other homeowners have had to say…trust me, there is a lot of sand-bagging going on, both positive and negative…so my advice — actually talk to a reference. I would even take it a step further and go see the project they worked on. #3 – Do a “gut” check. Yes, face-to-face meetings are important — look them in the eye, scan their appearance and their “on-time” performance. Do they return your phone calls, keep appointments? #4 – Pay with a Paper Trail. Never pay cash. Have legitimate, understandable invoices. If you pay for supplies, make sure you store them in your home. Do not make upfront payments but pay your bills on time. and #5 — Keep Written Records of Everything. Get it in writing. Make copies of licenses and insurance/bonds. Keep your estimates and any change orders…make sure they give you a change order in writing, too.
Do this — and you’ll save yourself a lot of stress, money, and time.
My Real Estate News First of all, lock your cars! In a meeting this week, I learned of 6 cars that had either been broken into or stolen recently and all of them had one thing in common. NONE OF THEM WERE LOCKED!
Lately I have had a number of calls from clients that are getting ready to put their house on the market, perhaps as far off as next year. I love hearing from all of you and look forward to working with you so that when the time comes we are ready to “rock & roll”. Please keep those calls and thoughts coming. Currently we are still marketing my lovely home in Mountaingate at 12547 Promontory for $2,450,000. I will be there for the next two Sundays and look forward to seeing any of you who decide to stop by and say hello. I have a few homes coming up for sale and lease, so please watch for them on my web site. Caroleschiffer.com
As we all know, Los Angeles was hit with a record setting heat wave the week of the 4th of July, which caused a good amount of plant damage. They are predicting that we may experience two more heat waves this summer, so we all need to be prepared. Dead head (or remove) any and all totally brown leaves or buds from your plants and keep them well watered. Leaf drop is said to be healthy as the trees are shedding their dead growth to make room for new growth.
I look forward to hearing from you Please visit my web site: www.caroleschiffer.com, my Facebook page http://www.facebook.com/CaroleSchifferRealtor, my Lindekin page http://www.linkedin.com/in/caroleschiffer and @caroleschifferrealtor on Instagram.
Carole Schiffer, Realtor Coldwell-Banker Residential Brokerage/Brentwood Office 310-442-1384 (office) or e-mail me at firstname.lastname@example.org
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