The SchifferLine
Timely Real Estate News……………………..15 June 2021
***********************************************************
Sales volume explodes…. up 78%
Perhaps we can credit the pandemic, but I don’t think so. We have seen the greatest year-to-date sales volume increase — over 78% — compared to same time last year, reaching a total of $1.997 billion, compared to $1.159 billion at the end of May, 2020. Sales volumes were dramatically up in all of the five communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City and Brentwood. It has been a remarkable year in two primary categories since January — sales volumes are up markedly, as median sales prices continue to be ahead of last year at this time in all of these areas.
More than $838 million in additional sales volume can be attributed to moderately priced sales occurring in these communities, but more significantly, volume increases occurred in all major pricing categories. There were no significant number of large sales recorded by the MLS, but Bel-Air posted a sale for $61 million. All of the communities had sales in the $10 million-plus range except for Westwood/Century City.
Brentwood was up $274 million for the year, and Beverly Hills was just behind at a $261 million increase. In third position was Beverly Hills Post Office which was ahead by $116 million …and Westwood/Century enjoyed a $96 billion increase over 2020, Bel-Air/Holmby Hills was up 91 million. Marina del Rey, one of the areas I also cover, was up $31 million in sales volume.
It has been a crazy year so far…my business is booming as we enter the sizzling summer months. Let’s keep the energy flowing!
***********************************************************
Median sales price move up slightly, but steady
In comparing median sales prices from 2020 to 2021, there have been some rather striking increases in each of these communities.
For example, comparing May 2020 to May 2021, the percentage increases for MSP were really quite astounding. BHPO was up 171% to $7.187 million for May 2021; Bel-Air/Holmby Hills was up 120% to $2.026 million; Brentwood was up 118% to $7.140 million; Beverly Hills was up nearly 100% at $10.150 million; and Westwood/Century City was up 33% over May 2020 at $2.640 million. Marina del Rey was up a whopping 158% for May at $2.880 million MSP compared to May 2020.
But the true trend test is Median Sales Prices for the accumulated five months through 2021. This is a more realistic picture of how our sales prices are holding up in the market. The MSPs increases for all five the communities I regularly cover were fairly modest — Beverly Hills and Brentwood were up a 15% for the year, BHPO was up 5%, Bel-Air/Holmby Hills was up 7%, and Westwood/Century was actually down 2% through May 2021. Marina del Rey has been showing steady increases all year — up 44% in MSP compared to 2020.
One of the interesting stats many sellers query me about — how long do you think it will take to sell our home? The straight answer is: If you home is competitively priced, it will move quickly. However, if your home is overpriced, it won’t.
One stat I look at carefully is comparing Original Listing Price to Selling Price (OLP/SP) …. remarkably Bel-Air/Holmby Hills stats average 115%, meaning prices were 15% higher than asking price. Not unusual in these days of a buying frenzy during a period of multiple offers and reduced inventory. Most homes on the Westside range in the 90-95% OLP/SP, meaning most homes are priced right at the outset.
A home recently came on the market in Bel Air, a fixer just north of Sunset. The listing price was $1,800,000. They received 70 offers, and responded to 10 of them! They are still negotiating with those remaining 10 but have been told the final price will most likely be north of $2,300,000. As I understand it, the profile of the 70 potential buyers, approximately 90+% of them are users, not flippers. Think about that for a minute. There are a lot of potential buyers out there waiting and wanting to buy your home. Are you interested into getting into the game? If so, call me at 310 -442-1384.
***********************************************************
U.S. home prices push to record highs…. but sales slow
There is good news and not-so-good news. Cost for existing properties was up 19% in April from a year earlier but the supply of homes has limited America’s home-buying frenzy, which is cooling off for the first time since it heated up last year. Potential buyers turn around because of rising prices and lack of choice.
Existing-home sales fell 2.7% in April from March to a seasonally adjusted annual rate of 5.85 million according to the National Association of Realtors. April marked the third straight monthly decline, the longest downward stretch since last spring, when Covid-19-related lockdowns eased and have boomed over the past year.
The forces driving home sales haven’t gone away. Low mortgage rates and the rise of remote work, which sent buyers scrambling to find large living spaces, are still spurring demand. It is ironic because this year started off strong, after 2020 experienced the fastest pace of home sales in 14 years.
But a deficit of homes for sale relative to intense demand and rapid-rising housing prices have started easing the pace of sales. Nationally, the median existing home price rose to $341,600 in April, the highest on record, NAR said. The annual price appreciation of more than 19% was the strongest in data going back to 1999. This all goes back to the previous article about the house in Bel Air. The perceived value and the location, made all of those buyers want to purchase that house. They are out there and looking to buy their new home!
***********************************************************
What are prospects for future home sales…. may not be pretty
According the National Realtors Association, existing-home sales waned in April, marking three straight months of declines, according to the National Association of Realtors. All but one of the four major U.S. regions witnessed month-over-month drops in home sales, but each registered double-digit, year-over-year gains for April transactions that include single-family homes, townhomes, condominiums and co-ops, slipped 2.7% from March to a seasonally-adjusted annual rate of 5.85 million in April. Sales overall jumped year-over-year, up 33.9% from a year ago (4.37 million in April 2020).
“Home sales were down again in April from the prior month, as housing supply continues to fall short of demand,” said Lawrence Yun, NAR’s chief economist. “We’ll see more inventory come to the market later this year as further COVID-19 vaccinations are administered and potential home sellers become more comfortable listing and showing their homes. The falling number of homeowners in mortgage forbearance will also bring about more inventory.
“Despite the decline, housing demand is still strong compared to one year ago, evidenced by home sales from this January to April, which are up 20% compared to 2020,” Yun continued. “The additional supply projected for the market should cool down the torrid pace of price appreciation later in the year.”
Total housing inventory at the end of April amounted to 1.16 million units, up 10.5% from March’s inventory and down 20.5% from one year ago (1.46 million). Unsold inventory sits at a 2.4-month supply at the current sales pace, slightly up from March’s 2.1-month supply and down from the 4.0-month supply recorded in April 2020. These numbers continue to represent near-record lows. NAR first began tracking the single-family home supply in 1982.
Nationwide, properties typically remained on the market for 17 days in April, down from 18 days in March and from 27 days in April 2020. Eighty-eight % of the homes sold in April 2021 were on the market for less than a month. And it was just reported by the NAR, that their Pending Home Index indicator fell 4.4% in April, another harbinger for real estate in the future. All I can say at this point is that we are making sales in my communities — but as I have said so many times, we live in a unique, wonderful part of Planet Earth. Yes, we need more inventory.
***********************************************************
Exodus from big cities leveling off….
The scramble to leave the cities for the ‘burbs’ is apparently leveling off. Big cities are starting to look attractive again. More than a year into the pandemic, moves from dense urban cities, like New York, San Francisco, and Boston have started to slow.
These cities lost record numbers of residents in 2020 due to density concerns, closure of entertainment and lifestyle amenities, and high costs of living, according to a new study from Updater, a technology company for the relocation industry. Updater’s report reflects an analysis of 300,000 moves over the past year.
“It’s been fascinating to watch migration patterns shift away from cities and to warmer weather climates during the pandemic,” says David Greenberg, founder and CEO of Updater. “With vaccinations underway, restrictions lifting in some of our hardest-hit cities, and companies rolling out permanent hybrid working solutions, the report notes that we can anticipate a summer moving season unlike any other with a series of new atypical patterns in population movements.
The moving companies are VERY busy. One of my clients told me he called his favorite moving company to book a time for himself, and was told they are booked until August!”
According to the report, California ranks #31 among states with outbound vs. inbound. The Golden State shows a 52% outflow vs. a 48% inflow. So, the big question remains, of course: What will happen to all the remote workers who have become accustomed to working from home?
The new trend is “hybrid work schedules” — work days split between home and office. And what will happen to all those tall office buildings when a high percentage of workers will not return? I have recently returned to working primarily out of my Coldwell Banker Brentwood office, and I love being back here. It was good working at home, but being back in the office and seeing those faces that I have not seen in nine or more months is really great.
***********************************************************
Homeowners $2 trillion richer since January
If you own or buying your home, you are part of a class nationwide that is getting more and more wealthy as prices keep soaring – and the numbers are staggering. Those with mortgages — about 62% of all properties — saw their equity jump by 20% in the first quarter from a year earlier, according to CoreLogic. This represents a collective cash gain of close to $2 trillion. Per borrower, the average gain was $33,400.
The massive gain is thanks to soaring home prices, which CoreLogic said were up over 11% in March, the end of the quarter, from a year earlier. That’s the sharpest gain since 2006. Prices rose an even stronger 13% in April.
High demand for homes spurred by the coronavirus pandemic amid an already low supply caused bidding wars in markets across the nation. Record-low mortgage rates for much of last year only added to the buying frenzy and helped fuel the price gains.
“Homeowner equity has more than doubled over the past decade and become a crucial buffer for many weathering the challenges of the pandemic,” said Frank Martell, president and CEO of CoreLogic. “These gains have become an important financial tool and boosted consumer confidence in the U.S. housing market, especially for older homeowners and baby boomers who’ve experienced years of price appreciation
***********************************************************
New American status symbol — fancy outdoor living space
It is no surprise. Americans, for the most part, were a bit frustrated and lost with this new-found work ethic: Working remote. After being forced out of their office back to their home, all of a sudden, families were re-evaluating the entire purpose of their homes. It was no longer a “place to be” between Friday night and Monday morning — eyes and hearts turned inward.
For a high percentage of us, working remotely was a godsend — it was perfect. More time with the family, but what was missing — the utilization of unused space: The backyard.
The solution was to do a makeover of the outdoors. As a result, there have been dramatic increases in the creation of outdoor living spaces, outdoor kitchens, new landscaping, and a fresh new look at how families spend their time at home.
Creating full-sized kitchen, complete with expensive BBQ grills, smokers, pizza ovens is more the norm today. Complete bars and accessories in addition to new patio furniture, awnings, and lounge areas around fire pits and fireplaces. New decks, new landscaped gardens and even a new swimming pool are very popular.
We are seeing this backyard explosion on the Westside, and I can attest to the value of having a wonderful outdoor living space — it defiantly makes your home more attractive when selling More importantly, your “new backyard” makes your time at home that much more enjoyable!
***********************************************************
Happy Father’s Day — Sunday June 20
This coming Sunday will be Father’s Day, which started in 1909 to complement Mother’s Day, which was first celebrated a year earlier. Most popular gifts for fathers used to be ties, but not anymore. Fitbit, stainless steel coffee mugs, pruning shears, portable chairs, T-shirts with ‘clever’ saying, golf or tennis balls, and anything for the BBQ. Also, this is the first day of Summer 2021! Enjoy your day with dad, family and friends.
I wish I still had my dad around to celebrate with. If you are so lucky to be able to do that.;.
Enjoy!
Speaking of that, it is hard to believe, but today, the 15th of June will mark the 1st anniversary of my mom’s death. I cannot believe the time has gone by so quickly. I think of her every day
***********************************************************
Now about my business
Please check out my beautiful new listing at 7950 Electra Drive in Mount Olympus in the Hollywood Hills. At $4,195,000 is it very well priced for the area and is truly beautiful with an amazing city view.
I also have a listing of a townhouse in Mountaingate coming up in the next week or so. It is 2 bedrooms, 2.5 baths with a den, has a lovely view and a very large side yard. The tenant is moving out this week, and after the house is painted, etc. we will be listing it. Not yet sure of the price, but if you want to see it before it is formally listed, please let me know as I have the key. I have another house in Bel Air Crest that will be coming on the market soon — it is 4 bedroom, 3.5 baths with an exceptional view and again can be easily shown. We are still working on that price also.”
One more bit of information to share: We are still dealing with a number of homeowners losing their homeowners insurance, so in Bel Air Crest, we have formed an insurance committee where we are working with some of the top insurance agents to see how forces can be marshalled to help everything in dealing with this situation.”
Please be fire safe. As we enter the long, HOT summer, they are saying with the drought we are experiencing, we are in an extremely dangerous fire situation. Please do your part…. trim back that brush around your house, install those guards to prevent the embers from going intoyour attic, and watch those smokers who smoke where they aren’tsupposed to and toss their still lit cigarettes out the window.
Take care and have a great Summer!!!
You must be logged in to post a comment.