Timely Real Estate News……………………………..15 March 2019
The numbers can be painful – but we need to understand them.
Was it too good to last? Sellers managed to elevate themselves to such a level that their high prices — combined with a lack of inventory — had accomplished one thing: Sales are off by 19.7% through the first two months of 2019 compared to a year ago. Total sales volume through February 28 was $737 million vs. $465 million in 2018.
One can’t blame the lack of sales on just sellers’ enthusiasm — other factors like rising mortgage rates and terrible weather contributed to a slow-down in the market. Still, the drop in sales volume by nearly 20% for the first two months of 2019 reflects — perhaps — a shift from a sellers’ to a buyers’ market. Time will tell.
Notable sales drops were seen in Bel-Air/Holmby Hills, where sales through February were down $51 million compared to a year ago. Both Beverly Hills Post Office and Westwood/Century City were each off by $21 million in total sales for the year, and Brentwood was down only $7 million through the first two months. Two other cities I cover include Venice, which was down $10 million in total sales compared to a year ago, and Playa Vista, which was up $4 million.
What is happening when digging deeper into the data from the MLS, many homes are actually selling closer — or at — the asking price, and many are even over. I’m seeing this through the communities I cover each month — and compared to the overall data provided by the MLS, the always-important number to watch is “sales price compared to original listing price”, and it’s rising again, with most areas in the mid-90% range compared to the mid-80% just last month.
Median Sales Prices have ‘hits’, ‘misses’
There is no crystal ball in predicting how median sales prices are going to turn out each month…I’ve learned my lesson. With a ’touchy’ market with rising mortgage rates, tight inventory, and some high prices in most neighborhoods, I’m seeing some wild fluctuations, especially in Beverly Hills which saw a record median sales price for January of $11.837 million, but it, too, has moderated with the MSP now at a realistic $7.400 million compared to $7.224 million a year ago, for a 13% increase. BHPO was up 2% to $2.607 million…Bel-Air/Holmby Hills was down a rather surprising 58% to $1.544 million, but this February figure is, I believe, an anomaly, and it will jump back as we enter Spring. Part of the anomaly is the fact that in Feb 2018 – there were three large sales, $5,050,000, $7,075,000 and $18,000 were as in Feb of 2019 there was only one sale for $3,250,000 in the multiple listing service (I do not use the information from any private sales in these reports).
Brentwood was up 1% to $2.900 million and Westwood/Century City was down 18% to $1.863 million median sales price (in Westwood in2019 there really were no sales of major consequence in terms of price vs. three healthy sales in February 2018). Venice didn’t move the needle in February compared to last year, as it was at $1.999 million, just $100,000 ahead of February 2018, and Playa del Rey was down 3% to $1.645 million.
While I don’t have a crystal ball, my extensive research of individual sales records these past few weeks show a growing strength in our pricing methods: Sales are closing much nearer to the asking price — across the board. Sellers, I feel, are becoming much more realistic and sensitive to the real estate market and trends. Yes, we have a strong economy now, but we all realize that our view of the economy starts in our home and in our workplace. As a responsible agent, I must tell you of the need for both agents and sellers to change their perspective in setting prices. For a very long time, we have been using the sold properties as the comparables for setting our listing prices, today we need to use the prices of the active listings, and take into consideration the length of time the property has been on the market. If a property has been sitting for a while with no price change you do not want to follow that pattern in setting your listing price. The goal is to get the property sold as quickly as possible at a fair and reasonable price that works for everyone involved. One point I am always making to my seller clients is that unless the transaction is all cash, the buyer has a partner in the purchase of the house and that is the bank, and generally they have a larger stake in the property than a buyer has with the buyer owning the 20% down and the bank the remaining 80% , and believe it or not, banks really don’t want to own property. They are going to look very hard at the appraisals for the loans they are making and if it doesn’t appraise then the loan is not made and everyone is back to square one.
We’re dumping good water in the ocean
In February, California received a whopping 18 trillion gallons of rain but much of it went ‘down the drain’ heading for the Pacific Ocean. What has become a source of much concern, however, in a state prone to droughts and water shortages, the vast majority of rainwater in urban areas flows into storm drains and it eventually ends up in the ocean. Bottom-line: We haven’t figured out how to save this water.
According to Mark Gold, associate vice chancellor for environment and sustainability at UCLA, “when you look at the Los Angeles River being between 50% and 70% full during a storm, you realize that more water is running down the river into the ocean than what Los Angeles would use in close to a year. It’s such a waste.”
For Southern California, this is shaping up to be the wettest winter in years — serving as a reminder of how much water is wasted when the skies open up. We have already exceeded our average seasonal rainfall of 14.70 inches — we’re at 23.09 inches through mid-March. That’s 54% ahead of the 2017-2018 season.
Local agencies and the Corps of Engineers are working on capturing more of the runoff, but it’s a complex and expensive task. For sure, “March came in like a lion…” The storms have significantly boosted the snowpack in the Sierra, which is a major source of California’s water. As the snow melts, it’s collected in a series of rivers, dams and reservoirs and sent to farms and cities. Experts are working on putting water back into underground aquifers. But it’s a long, expensive process.
Most homeowners planning renovations for 2019
Notice all the work-a-bees parked on your street lately? Well, they’re part of the “renovation crews” fixing up your neighbors’ homes. More than 73% of homeowners say they plan to renovate this year, up 26% from a year ago, according to a national survey. Homeowners plan to spend more on projects, too—an average of about $9,000. That marks the highest amount since the survey began in 2014, and it’s 32% more than last year.
The most popular remodeling projects include outdoor space (41%), the bathroom (37%), and the kitchen (31%). Survey respondents say that if money wasn’t a factor, they would remodel their kitchen (42%), followed by replacing carpet with other flooring (41%), and then remodeling the bathroom (39%), according to the survey.
Homeowners appear to be more focused on creating a space they love than increasing the value of their home. Twenty-seven % of respondents say that personalization was their number one motivator for investing in a home renovation, followed by increasing the value of their home (14%), improving a home for resale (7%), and preparing for a major life event (4%), such as a new baby or retirement. Caution: Financial stress comes along with the renovation ordeal and can hinder the process. This usually results from improper budgeting and not finding well-qualified contractors whom you can rely on. Check references. Get realistic budgets and plan for contingencies.
New FEMA flood insurance could cost more
Federal officials are struggling with how to reform the federal flood insurance program, which is already deeply in debt. Federal officials are reportedly exploring a new flood insurance reform plan that would rely more heavily on data, potentially offering homeowners more transparency about the risks they face while also driving up rates in some areas.
We have already seen in Los Angeles County mudslides and flooding as a result of the recent Woolsey Fire in Malibu, Topanga Canyon, and Ventura County. Over the years, we’ve seen most parts of Los Angeles County experiencing costly floods and mudslides…so it’s a real issue for homeowners.
The proposed plan would use data, referred to as “commercial catastrophe models,” to more accurately calculate the actual risk that homes face from flooding. That would contrast with the current system, which uses more generalized data and can thus lead to people in very different parts of flood plains paying the same amount for insurance.
Under the proposed new system, however, someone living in a higher risk area would pay more while people in lower risk areas would pay less. FEMA spokesperson David Maurstad said that the agency is transforming its flood insurance program “to better reflect industry best practices and to improve the policyholder experience.”
It’s elementary” — Sellers homes must ’sparkle’
Selling a home can be stressful —escaping while you home is open houses for a few hours, constantly fixing up the outside and inside, and still trying to keep your sanity through the selling experience. There is plenty of advice to go around when putting your home on the market. Here’s mine…. I just want to share with you some very simple, handy hints that will insure your home “sparkles” for those very important prospects….
1) Make sure you dust and floors are swept — Sweep and clean all the hard-surfaced floors, and if needed, use a cleaning towel or sponge to clean up spots. Make sure the baseboards and TV sets are wiped clean. 2) Make sure the countertops sparkle — remove the clutter, wipe clean and store small appliances, knick-knacks and odds/ends; 3) Beds should be made and pillows fluffed — Can you bounce a dime off your bed? Have new, fresh bed spreads and pillows, — so that your bedrooms look inviting. Make sure you remove the trash and pet supplies.
4) Vacuum the carpets — nothing looks better than recently vacuumed carpets…you are ready for them!” 5) Let the sunshine in — open up the window shades and blinds, shutters… and why not put in fresh flowers in the living or dining room? Make sure your windows are clean. And finally, 6) Put all the dirty dishes and pots/pans in the dish washer and no dirty clothes.
Buying a home, as you well know, is an emotional decision. Appeal to the best senses of buyers by showing them what a great home you have. Sparkle!
A ‘growing’ home trend — Garden kitchens
Here is a ‘perky’ idea — put Mother Nature into your kitchen. Living plants are appearing on the back or tops of kitchen islands. They’re also appearing as wall shelving, which include grow lights to keep them thriving even when tucked away onto shelves. In one extreme example of the trend, a dwarf citrus tree was growing in the middle of a kitchen island made by Italy’s Aran Cucine. It included its own irrigation system.
For those who want to keep their plants more contained, they can opt for an under-counter appliance that will grow, light, and water the plants for them. Manufacturers of one such product–the Urban Cultivator—say they’ve been selling most units in coastal markets and high-end communities.
According to Forbes, “plants in the kitchen can provide seasonings for food and fresh ingredients for salads, soups, entrees, and sides, and plants can also create a welcoming atmosphere for residents and guests alike.”
It’s not just the kitchen that is seeing more plants. Plants are entering more master bathrooms to evoke an indoor-outdoor spa and appearing in more living spaces.
The plant movement is gaining attention thanks to studies that increasingly show the benefits of having houseplants, which have been linked to purifying the air, boosting your mood, and even lowering the risk of illness. Homeowners are adding edible plants in the kitchen to use while cooking. That’s a fun idea.
My Real Estate World
Generally, am not one to pat myself on the back, but I must say that I am once again proud and honored to be part of the top 6% of the sales agents for Coldwell Banker country -wide for 2018. I was also recently awarded for my participation in the referrals for our excellent mortgage affiliate, Guaranteed Rate Affinity. I am constantly amazed at the breath and variety of programs they have for all of our clients. So, THANK YOU TO ALL OF MY CLIENTS FOR THE HONOR AND JOY OF REPRESENTING YOU AND I LOOK FORWARD TO MORE OF THE SAME AND KEEP THOSE REFERRALS COMING IN.
I have had the listing for this lovely condo in Westwood for a few weeks. It feels like a home and we have had a very favorable strong reaction to it, so much so that it appears we have it sold with a short 2 week escrow, to a young family that is purchasing it for their in laws to be near their new born grandchild. It has been on the market for just a few weeks, and we actually thought we had it sold last week, but the buyer changed their mind at the 11th hour. I am in the process of listing a warm, gracious home on lower Roscomare in the Bel Air. It sits on a very large lot (33,793 square feet) that currently services as a fruit orchard and garden. The house is almost $3,000 sq. feet and has been remodeled. Please look for the photos, etc. on my web site in the coming week. In the meantime, please remember that I have two leases available in Bel Air Crest, and another one coming up soon in Westwood Hills. I am here to serve and assist you with any and all of your real estate needs. Please let me know how I can be of help.
Happy “Wearing of the Green”
Wearing of the Green on St. Patrick’s Day?
Like many of us, wearing green on St. Patrick’s Day is a long-held tradition. Not wearing green can get you into trouble — which says that if you don’t display green somewhere, you’re likely to get pinched!
There’s plenty of green to go around for this annual March 17th event – Americans spend nearly $5 billion to celebrate St. Patrick’s Day, which is Sunday this year. That may seem like a lot of green, but it doesn’t compare to the green spent on Valentine’s Day (think “red”), which generates over $21 billion for that non-holiday. July 4th, a national holiday, garners only $6.9 billion in spending.
We Americans celebrate St. Patrick’s Day with parades, green beer, and corn beef/cabbage and Shephard’s pie.
All I can say — Wear the Green and enjoy St. Patrick’s Day!