Timely Real Estate News…………………………15 June 2019
Volume down, but it’s getting better…
“Getting better” may simply mean — we are slowly climbing back to where we were last year, when the numbers were down 9% for the year.
This is what we do know: Lower sales volumes aren’t unique to our area or market, as it is happening across the country. With regards to our sales volume since March 2019, when we were down nearly 25% in the five markets I single out to report on each month — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood, we’re seeing a turnaround. It has produced sales for the first five months of 2019 of $1.365 billion, down 8.9%, which bested April’s negative of 13.5%. So relatively speaking, we’re trending in the right direction. That’s good news.
Sales were up in Beverly Hills by $45 million compared to last year at this time which is exactly the price of a closed escrow in May of this year, but BHPO was down $72 million from May 2018 (once again we need to look at the specific numbers, in 2018 there were 8 sales between the prices of $3,000,000 and $15,000,000 where as in ’19 there were 6 sales with the highest sale coming in at $6,730,000) , and Bel-Air/Holmby Hills was down $95 million (again specifically in ’18 there were 7 sales from $3,200,000 – $68,822,450 and in ’19 5 sales between $5,200,00 and $45,000,000, but in addition to the $68,000,00 sale in ’18 there was a another sale for $56,000,000) , Brentwood was down $2 million ( in ’18 there were 12 sales between $3,000,000 and $12,050, and in ’19 16 sales between $3,076,000 and $16,780,000) , and Westwood/Century City was down $9.6 million (Again in ’18 there were 5 sales between $3,775,000 and $5,100,000 and in ’19 6 sales between $3,050,000 and $3,925,000). All of these numbers explain the skew in percentages that we are seeing with the ups and downs in the various communities. As I work all over the entire city of Los Angeles, you have probably noticed that in every Schiffer Line issue when I discuss the stats, I point out another area, and this month it is Marina del Rey. MDR was down 21.5% in total sales (in ’18 there was only 1 sale at $3,000,00 or more – $3,850,000 vs. ’19 of none over $2.3). As you can see sales volumes aren’t just a reflection of total sales because there can be some unique sales that push up volumes one month and not the next.
For example, there were two homes in our market that sold for $45 million each — one in Beverly Hills on Loma Vista, and one in Bel Air on Bentley Circle. It is also good to see that the final Sales Prices (SP) are still relatively close to the Original Listing Price (OLP). Westwood/Century City was averaging over 101% of SP/OLP. These numbers are truly a reflection of Seller’s being realistic about the value of their homes and listening to their agents and the market, and Buyers understanding value when they see it. I might also point out that in a presentation in my office the other day, our lender Great Rate Advisors reported that in the last few weeks, he is seeing approximately 25% of the appraisals coming in lower than the accepted/contracted sales price which means that some adjustments need to be made in order for the property to appraise and the transaction to move forward and close escrow.
Median Sales Prices — another mixed bag
This has truly been a roller-coaster year for our market. Median sales prices through the first five months of 2019, are the best bellwether for judging our performance in pricing homes. Unfortunately, there is absolutely no consistency as we near the first half of the year — Beverly Hills is 5% ahead of last year at a Median Sales Prices (MSP) of $6.534 million, one of the highest in the U.S. Beverly Hills Post Office is 12% head of 2018 at $2.900 million, and Brentwood is 5% positive through May at $3.150 million. Marina del Rey is 11% negative for the first five months at $1.377 million.
You might feel that the numbers become a bit blurred — they do for me, too — but it’s important to understand that as far as we know, you’re not getting this kind of detailed information on your community in the LA Times or other places…that’s why The Schiffer Line is widely read in these markets, because at the end of the day, we’re talking about the status of one of your largest investments, your home. Understanding market trends has been a pledge of mine since I entered the real estate industry over 30 years ago. Please call on me to assist you in learning with the value of your home.
Seven pervasive myths about buying a home
There is a lot of speculation around about the real estate industry — always has been, and over the years, we continue to educate the public about our industry…I want to share with you some “myths” that are still popping up in my world:
Myth #1 — Down-payment is 20% of the cost. Many transactions are actually at lower down payment figures — in fact there are some loan programs out there with a “0” down feature. The key to purchasing a home is to get “pre-qualified”. Consult your agent about the protocols for home buying today before you start looking. Nothing is more heart breaking than for someone to fall in love with a house only to find out that they will not qualify for the loan to purchase the home. Let’s work together to find a program that works for you!
Myth #2 — Your credit score must be perfect to buy a home — not always. When dealing with multi-million $$ properties, the higher the FICO score the better loan terms. Working with an experienced realtor such as myself and with my contacts, I can assist you in getting a loan that works for you, even if you don’t have credit in this country.
Myth #3 — Now is a bad time to buy. I’ve always recommended that “now” is the best time — one can never predict the future market conditions, and mortgage rates remain consistently low….
Myth #4 — It’s cheaper to buy a ‘fixer-upper’. Not necessarily. Unless you’re a skilled craftsperson or know one or two, and have been through this before, you need to figure out what you really are looking at. I have purchased some fixers in the past, and until you are in the middle of it, I don’t think we all really understand what it involves. Don’t get me wrong, I love the creativity of making a home really yours, but we all need to understand that in addition to the financial cost, there is also the emotional and practical cost of working on fixers. The challenge of finding good contractors, workers and handy men can add to the stress. But I must admit at the end of the day looking to see what you have created, does makes it all worthwhile.
Myth #5 — You don’t need a real estate agent. Wrong. It is not just me talking. Survey after survey has proven that having a skilled, experienced negotiator and one who truly knows your market, the investment in a real estate agent pays for itself in spades. We can save you time, money, and tons of grief and stress.
How to make the most out of a “powder room”
A powder room isn’t just a half bathroom — it’s where you show off your personality. According to one interior designer — “The powder room is the hummingbird of the home: a room so small you may wonder whether it’s a room at all.”
No matter how diminutive, though, it’s a space that can be used to create an outsized design statement. “A powder room is a perfect opportunity to get a bit crazy,” said Paris Forino, an interior designer in New York. “We look at the powder room as a little jewel box, a little wow factor, and somewhere you can impress your guests. You can be bold, because it’s not a space where you have to worry about getting sick of something.”
Designers point to three key areas — Focus your efforts: You need to make a focused statement that retains your overall vision at the outset. Do not make a ‘mish-mash’ of conflicting elements — have a sense of cohesion and symmetry.
Dress the walls —this is your “canvas” — where you can take advantage of a high, intimate space where bold statements can be made — in art or in wall paper. Image — Pick a theme that relates to your own passions, your experience, and your personality. One client loved Mexico and therefore, the designer brought together elements of bright colors and bold designs that reflected the rich Mexican culture. Powder rooms — are “up to you”. Let them be fun, a remembrance of the visit to your home that says more about you than what you might find in an expansive living room or great room
Robocalls — the bane of our privacy
We all get them. I’m sure you remember when your phone # was somewhat private —almost no one had it accept those you shared it with…well, no more. Let me cite some #s for you — last year, “we” received more than 48 billion robocalls in the U.S., 17 billion the year before. In May 2019 we received approximately 4.1 billion robocalls, and it’s getting nastier and nastier.
It’s important to know that all calls with prerecorded telemarketing sales messages are illegal unless you agreed to be called. Some non-marketing robocalls (such as political and charitable calls to land line telephones) are authorized by law in most states, even if they are unwanted. Only 1 in 5 serve a useful purpose, such as a reminder of a doctor’s appointment. Each telecom company has specific, simple instructions to rid yourself of these irritating calls on your phone, and for good measure, Congress is working on legislation that with the telephone company will hopefully makes these pesky calls more difficult to get put through. I hope so!
The “war” on plastic — those hotel shampoo and conditioner bottles
We’ve all done it: We sweep the unused hotel-provided shampoo and conditioner bottles into our personal kit.
If the California legislature passes the bill now circulating the halls in Sacramento, it would take effect in 2023 for hotels with more than 50 rooms and a year later for all other hotels and rental homes. Hotels could still provide the small bottles of shampoo and other personal care products to guests upon request.
The trade group representing manufacturers and distributors of the small shampoos, conditioners and soaps, the Personal Care Products Council, opposed the bill, saying it would hurt businesses that sell to hotels. They estimate a total of over 500,000 bottles are placed in hotel rooms each year. I personally take these items and package them for kits to be given to shelters for the homeless.
Vegan burgers expanding…Impossible Burgers are here.
The latest rage is…. Impossible Burgers. Already available in 5,000 restaurants in the U.S., these vegan burgers to the hungry eye look and taste like the “real thing”. The obvious advantage of Impossible Burgers — or any vegan meat — of course, is they are lower in fat and calories while still satisfying the burger fetish. Have you tried one yet? I have. They are quite yummy!
McDonald’s has a McVegan burger permanently on the menu.
The day has come that my long-time assistant, Jacqueline is retired. For the past 3 weeks, she has been working with my new assistant, Roxana to train her in all of the aspects of the job of working with me. Good bye Jacqueline, thank you for 12 years, I will miss working with you every day and Good Speed, and Hello Roxana, I am looking forward to working with you and all of the new ideas and perspective you bring to the table. Please give Roxana a call and say Hello.
We are still in the midst of a very interesting market with multiple offers. One of my former mentees is in China for the next few weeks, and I have taken over for her in her absence and we are in the process of multiple offers on a lovely home in the Century City area (we are one of 6 offers!). We expect the counter offer in the next day or so but I have been told the price will be over asking!
What are your summer plans? I would love to hear what you are doing. As for me, I am looking forward to spending a few days at my home in Coronado. We have a pet there, a one-footed seagull named “Peg Leg” who knows to come to the ledge of our kitchen window for food. It is quite cute and he is very careful to scare off any other birds who try to pooch on his territory. We are not sure how he knows when we get there, but the minute the shade goes up in the kitchen, there he is waiting for a hand out.