Timely Real Estate News………………….. 15 March 2018
Happy St. Patrick’s Day….
Everybody is Irish on St. Patrick’s Day. The “Wearing’ of the green” is a must…and there is the traditional corned beef and cabbage….and green beer, although that’s not what the Irish enjoy back home. Founded in Boston in 1737. St. Patrick’s Day could be your lucky day!!
Sales moderate, volume moves up a notch
Real estate sales in the five communities I report on fell by 1% for the month of February, which was a positive sign as we were running nearly 5% behind our sales performance a year ago at the end of January.
Sales volume for Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood was down 1% at $451 million for 2018 vs. $457 million through two months of 2017. What we’re seeing is the impact of the lack of inventory in our market and across Southern California and elsewhere. And while we are almost even with last year, we expect the trend for moderate sales growth to continue for the balance of the year. Spring selling season has already started and there is brisk activity at open houses. Count on multiple offers for homes that are competitively priced.
A mixed bag on prices
Median sales prices are a mixed bag as well. While median sales prices are zooming up across the country, we are encountering mixed results within these five communities — Beverly Hills’s median sales prices through the first two months is up 8% to a robust $7.224 million. Bel-Air/Holmby Hills is up 91% above last year at $3.695 million. and Westwood/Century City was up 20% at $2.315 million. However, Brentwood is down 31% as of end of February at $2.920 million and Beverly Hills Post Office is down 10% at $2.557 million.
One of my favorite communities — Pacific Palisades, had sales of $58 million through February, down 64% from a year ago…and its median sales price was down 4% to $2.970 million.
Median sales prices and how they work….
There is a lot of ups/downs within the market now because of inventory challenges, but I want to share with you what is happening, especially on median sales prices. Median sales prices are not an “average” — it reflects the “middle price” of the number of sales where half the homes are above that price and half are below….it doesn’t take into consideration whether the top home sells for $100 million or the bottom home sells for $500,000…only the middle price is used.
For example, it can get confusing, especially when looking at the median sales price for Beverly Hills in February, which was $2.970 million, down 55% from a year ago. The median price in BH for February 2017 was over $6.700 million. Yet the median sales price through February 2018 is $7.234 million because that was smack in the middle of the homes sold that month. As a reader of the SchifferLine, you’ve seen how prices fluctuate from month to month — but again, the key statistic to watch is “year-to-date” median sales prices…that gives you a clearer picture of the important trend for the year.
February’s job growth takes economy to new levels….
The “blockbuster” gains of 313,000 jobs in February are going to have a strong, positive impact on all sectors of the economy. It’s predicted that unemployment is going to run into the ’threes’ and wage growth is going to accelerate, it is just a matter of time according to Mark Zandi, chief economist at Moody’s Analytics. He indicated that “the labor force increased to 806,000 in February which means that it is now reaching everybody…including people on the fringe.”
Guy Berger, chief economist at LinkedIn, said the fact that these gains took place even with the headwind of retiring Baby Boomers departing the workforce was all the more remarkable. And it was also noted that a greater supply of workers is going to pull down pricing, and that wage growth is now in a more manageable area of 2.6% growth that will stem inflation fears, which would cause higher mortgage rates. All of these numbers augurs well for our housing industry…more employment, more seeking to upgrade their housing situation.
Would driverless cars affect real estate values? Yes.
Imagine that! The mass adoption of driver less cars could shift some of the traditional rules that govern real estate values, particularly those concerning access to mass transit.
Following state approval, fully driverless cars are heading to California’s streets in April, so that change is a lot closer than we might have expected. According to a Forbes report, having a driverless option could make using — and living and working near — mass transit less appealing to those with access to the technology and the means to afford it,
Driverless buses and smaller shuttles could make it easier for people to get to less transit-heavy areas as well, potentially boosting the property values there and encouraging development. And driverless cars that can drop passengers off and head elsewhere could also reduce the need for on-site parking and developers’ requirement and expense to provide it. That means that space can be allotted for more profitable uses, like retail or residential space. Welcome to an accelerated space age (the Jetson’s here we are!).
Pacific Palisades welcomes Rick Caruso, Jeff Bezos….
The “sleepy, sometime neglected town center” in the middle of one of Los Angeles’s wealthiest residential areas, it’s now getting a “make over” by two of America’s most dynamic make over artists named Rick Caruso and Jeff Bezos.
Caruso, who created the Grove and Americana at Brand, envisions a $200-million redevelopment known as Palisades Village as more of a walk able Main Street than a large, shopping center like his other two developments. The 125,000-square-foot complex on Swarthmore Avenue bordering Sunset Boulevard will include a movie theater, community space, grocer and retail shops. There will also be eight apartment units.
While the new development will replace beloved Village Books, a long-standing favorite hangout for book lovers including Tom Hanks, it will feature Amazon Books that is already in New York City and Los Angeles…this is a bit of Deja vu for the movie “You’ve Got Mail” starring Tom Hanks). The good news is that there will seven restaurants and bars in the Village. This will be a true, upgraded and contemporary town center.
Fires took their home…what now? Replace it or…?
After losing more than 6,000 homes in the devastating Tubbs Fire in October of last year, Santa Rosa residents have now to determine whether to stay and rebuild, or move on? The challenge with the former is that while their property remains, the devastation surrounding their community has not been removed…many lots have yet to be cleared, and the prospect of rebuilding in a once lush neighborhood that is now home to blacked trees and landscape is too much for many.
But there are many, too, who have decided they’re not going to abandon their homesite or community — they’re going to rebuild, even facing the continued challenges of getting their insurance straightened out and finding a solution for replacing their homes.
Many have turned to a somewhat simpler method — manufactured housing or pre-fabricated homes. They’re finding that manufactured homes these days are not like the old- fashioned ones — these are attractive, well-designed and engineered ‘real homes. They feature every luxury and amenity a “stick-built” home offers. And they’re well-built in every detail.
“Most of the people we know are going with a pre-fab,” said a homeowner. “It just makes sense.” The selection of homes is broad for every size, budget, and feature. They can be put on their lot in a matter of weeks, not months. The costs are dramatically lower, while still getting the quality they would get in a “stick-built” home. The designs have become so modernized that one can’t tell whether it’s a manufactured home or “stick-built”. Still…the tasks of rebuilding their home — and more importantly, their community in the Santa Rosa area remains daunting. We wish them luck!
Real Estate in my office at Coldwell Banker in Brentwood
Life is very interesting in my office currently. There are some agents in the office that are very busy, and others not so much. For those of us who are very busy, myself included it seems that it is pretty much the same as it has been for a while. I have multiple buyers all basically wanting the same thing and being surprised to find the size of the groups at the open houses they are attending or the sales prices of properties that they are interested in, but feel the price is too high, and /or don’t want to get involved in a multiple offer situation. They appear to be waiting for the “other shoe to drop” and continue to be surprised when it doesn’t. When the property they are interested in sells and then sets “the new bar” for the price of that home, they are sorry they did not enter into the fray. This happens a lot.
Currently I have a lovely home available for lease in Bel Air. We are asking $11,750 for this 5 bedroom/5.5 bath home with a wonderful resort like back yard, large open spaces and is GREAT for entertaining. The tenant is moving out the end of the month, and after a brief cleanup will be ready for the new tenant. I have some other properties coming up soon as well, both sales and leases, so please let me know how I can assist you with any of your real estate needs.
Happy Passover and/or Easter
In a few weeks, we have a double celebration with both Passover and Easter falling on the same weekend this year. I hope however you celebrate being enjoying your Matzo or holiday ham, or perhaps both, you have a wonderful time with your family & friends. Enjoy
Carole Schiffer, Realtor Coldwell-Banker Residential Brokerage/Brentwood Office 310-442-1384 (office) or e-mail me at firstname.lastname@example.org www.caroleschiffer.com
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