The SchifferLine
Timely Real Estate News…………………….15 March 2021
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Sales catching up as Spring season begins
March did not exactly come in like a lion, but home sales are catching up to last year’s, and that’s good news. With nearly a full year of pandemic-selling conditions, the five communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City and Brentwood — recorded over $548 million in sales through the first two months of 2021, off by just 2% over 2020, or $15 million shy of last year at this time.
Sales volume leaders through the first two months were Brentwood, up $46 million over 2020 at $160 minion and Beverly Hills up $6 million at $199 million through February. Beverly Hills Post Office sales was down $46 million, Bel-Air/Holmby Hills off $18 million and Westwood/Century City just shy of $6 million down.
Santa Monica, an area I also cover, was in the plus range, with $98 million sales through the first two months, up from $94 million in 2020.
There were some large sales in these communities — Beverly Hills had five homes selling for over $10 million, and two of the largest on the Westside in 2021 at $27 million and $36 million. Brentwood had two sales of $10 million and $16 million.
We have traditionally started slow out of the gate in previous years, but now that we’re really in an all-year ’selling mode’. The Spring selling season, which starts in March, will surely tell us what we might expect for the rest of the year. As you will read in the stories below, there is positive news coming with the Covid-19 infections and hospitalizations coming down and vaccinations increasing. Also, please always remember these numbers only reflect sales in the multiple listing service (MLS).
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Median sales prices continue upward push
While sales volumes for the first two months of 2021 were behind those of last year, median sales prices were still moving upward in the communities I report on. Beverly Hills median sales price was up 15% at $7.550 million; BPHO was up 13% at $3.200 million; Bel-Air/Holmby Hills was up 14% at $2.225 million, and Brentwood was up 22% at $3.650 million. Westwood/Century City was down 5% at $2.455 million. Santa Monica showed a strong increase of 32% at $3.437 million through February compared to 2020.
There were some notable improvements in comparing February 2021 to February 2020 — Brentwood, which is off to a fast start, the median sales price is up 34% for February, and Santa Monica is up 32% for the same period. But Bel-Air/Holmby Hills was down 42% for last month compared to February 2020. Both Beverly Hills and BHPO were up 3% for February 2021. As always, with the variance of some large sales each month, these numbers reflect those sale amounts.
So, what is this telling us? Lack of inventory is, of course, driving prices up in our market (as it is everywhere in the country), and this will continue for the balance of the year according to economists. Homeowners are going to be coming ‘out’ more now because they will be able to travel and visit areas where they might want to land next.
As the pandemic resides, real estate experts are pointing to a more robust housing market and increased inventory. But the ones hurting most these days are millennials, the largest home-buying generation in the U.S. today, are challenged with the rising home prices, but so long as we stay near the low mortgage rates we’ve enjoyed this past year, this could be a real plus for everyone.
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Near-record growth predicted for 2021 according to UCLA
The first quarterly UCLA Anderson Forecast of 2021 expects robust growth for the U.S. and California as the COVID-19 pandemic abates.
One year ago, the World Health Organization declared the COVID-19 outbreak a pandemic, and subsequent efforts to stop the spread of the virus led to an unprecedented decline of the U.S economy as non-essential in-person activities came to a halt.
For all of 2020, real GDP fell by 3.5%, the worst annual decline in more than 60 years. But the Anderson Forecast’s December 2020 report offered hope of a strong recovery, dependent on mass vaccinations. With vaccines becoming widely available, the March 2021 forecast now anticipates such a recovery, as well as the establishment of a new post-pandemic norm for the economy.
The Forecast noted for the economy, a waning pandemic combined with fiscal relief means a strong year of growth in 2021 — one of the strongest years of growth in the last 60 years — followed by sustained higher growth rates in 2022 and 2023.
Following the 3.5% decline in real GDP in 2020, the national forecast calls for 6.3% growth in 2021, 4.6% growth in 2022 and 2.7% growth in 2023. These rates of growth are considerably higher than the 2.3% rate the country averaged during the recovery from the Great Recession between 2010 and 2019.
The forecast expects real GDP to surpass its 2019 peak by the end of the second quarter of 2021 and to surpass the trend it was on prior to the pandemic in early 2022.
In its review on the California recovery, the leisure and hospitality sector will be the last to recover because of the depth of the decline in this sector and its reliance on international tourism. UCLA’s lead economist expects the recovery to come earlier in the business, scientific and technical services sector and in the information sector, owing to the demand for new technologies that support how we are working and socializing.
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Federal judge rules eviction ban unconstitutional
What could have serious consequences here in California, a federal judge in Texas ruled that the Centers for Disease Control and Prevention’s eviction moratorium is unconstitutional, a decision that could set legal precedent and have a sweeping effect on housing providers across the country. Under the moratorium, which President Joe Biden has extended through March, housing providers cannot evict tenants who can prove financial hardship due to the COVID-19 pandemic.
U.S. District Judge John Campbell Barker sided with a group of property managers and landlords who brought a lawsuit against the CDC, claiming the agency overstepped its authority by issuing the eviction ban.
“The federal government cannot say that it has ever before invoked its power over interstate commerce to impose a residential eviction moratorium,” Baker wrote in his decision. “The federal government has not claimed such a power at any point during our nation’s history until last year. … Although the COVID-19 pandemic persists, so does the Constitution.”
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Marriage or mortgage…we have an app for that!
Well, it isn’t exactly an app, but there is a new Netflix show that explores the pros/cons of getting married vs. buying a home. Is giving up the chance to make a down payment on a home better than having a dream wedding? These are choices for many couples who have contemplated this issue, well, forever.
Long taken up by columnists and financial planners, the “mortgage vs. wedding” question is now the subject of an entire show on Netflix. Marriage or Mortgage, which debut March 10, follows a real estate agent and a wedding planner in their efforts to win over 10 couples in a choice between an extravagant wedding or a new house.
The shows make every effort to not offend anyone — least of all the bride or her parents — and point out there are “options’, but in these days where home prices are soaring, causing down payments to soar as well, there is a strong argument to focus perhaps more on buying a home now versus spending lavish sums on a wedding.
The ladies point out that for hopeless romantics, a wedding instead of a mortgage is the ‘right’ choice, and the two show hosts point out that perhaps you can do both — scaling back on wedding costs and developing a home-buying/mortgage budget that will work for both parties.
What would you choose or recommend?
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New stimulus relief package to propel U.S. economy
The legislation—following trillions of dollars in federal aid last year and arriving amid rising Covid-19 vaccination rates — prompted economists surveyed by The Wall Street Journal in recent days to boost their average forecast for 2021 economic growth to 5.95%, measured from the fourth quarter of last year to the same period this year.
That was up from their 4.87% projection last month would be the U.S. economy’s fastest since a 7.9% burst in 1983. The analysts also lifted their forecasts for inflation and job growth from last month’s survey.
The new poll found they expected consumer prices would rise 2.48% by December from a year earlier and projected that employers will add an average 514,000 jobs a month over the next four quarters.
President Biden’s Covid-19 bill adds to considerable tailwinds that have already produced a faster-than-expected recovery from last year’s collapse in economic activity amid restrictions to contain the coronavirus.
These include roughly $4 trillion in spending that Congress authorized last year to combat the pandemic, easy-money policies by the Federal Reserve and—most important—an expected reopening of businesses and schools as the population is vaccinated against Covid-19.
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Prospective buyers know what they want…but hurdles ahead
The pandemic dramatically impacted how we view our living spaces — with remote work now fully embraced by millions forced from office buildings, we are taking ’stock’ of what works best for us now. Some wish to have more workspace or a gym or expanding living spaces outdoors.
Buyers are particular about the look and feel of their homes. They’re also looking to stretch out. According to Bank of America’s Homebuyer Insights, 86% of prospective homebuyers wish for more indoor space, and 64% want more space outdoors. Additionally, technology is a must-have with high-speed internet and strong cell service (56%) ranked as important features. Buyers also want proximity to essential businesses (51%) and recreational activities (44%).
Half of millennials, who make up a significant portion of today’s homebuyers, shared that they would make an offer on a home they had only viewed virtually. Moreover, 85% of people believe the way we view homes will be vastly different moving forward. Yes, indeed, the way we now perceive our living spaces has changed — for the better? For many yes, and for others, it’s too early to tell. When the pandemic is winding down and we get back to ’normal’, we will no doubt be living in a ’new normal’.
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Snowmads? Zoombirds? New breed of movers
We’re used to “snowbirds” — those ’northern folks’ who travel down to sunny Southern California starting in October and heading north in April. But the pandemic has created new ‘breeds’ of wanderers to our shores. As remote work grows during the pandemic, so has the flexibility to move more freely.
For some remote workers, that has meant taking their laptops and heading to home rentals along the beach. Some are testing out new spots of the country by booking Airbnb or short-term rentals in warmer destinations during the winter.
The short-term rental site Vrbo reports these “snowmads” are often targeting vacation homes in warmer climates like Arizona, California, and Florida—where long-term stays have been stretching 15 days or more.
This pattern of heading to warmer climates in the winter was once reserved mostly for retirees. Now, it is becoming an alluring possibility for the growing remote workforce who are no longer tethered to an office.
Another term catching on to describe these groups is “Zoombirds.” We’re all too familiar with “Zoom” meetings, which allows any worker anywhere to pop into a work conference no matter where they reside. I, for one, can easily tire of having several Zoom meetings in a day. But that is the way it is today…and who knows how this will end? I think Zoom-ing will be with us for a long time.
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Have you noticed?
With more having received their vaccine, (not near enough, but more is on the way), there are more folks out and about. Crowds and lines for folks just waiting for an available gas pump. People are feeling a little more confident about the direction we are headed in. I hope that they/we are all safe, continue to social distance, wear our masks, and keep us out of another wave of more infections.
Celebrations Coming Up!
St. Patricks’ Day is the 17th of March. It has a great deal of historical and religious significance for many with a large shot of fun thrown in for all with parades, green beer, and “the wearing of the green” for all Irish, even just for the day. Hope you celebrate responsibly and carefully.
The 27th of the month brings Passover. Another time of religious and historical significance. Traditionally families get together to enjoy seders which includes the eating of symbolic foods and prayers. For all of you who celebrate may you have delicious seders and again celebrate responsibly and safely
We are all in the middle of Lent, with Easter and the end of Lent coming up the 5th of April. Ramadan is a way off and runs from the 12t of April to the 12th of May
What is my business world like these days?
First of all, I want to thank those of you who expressed interest in the zoom call I had organized on the issue of Homeowners Insurance. I postponed it as it appeared that there were not a many of you who expressed interest in getting more information on this important issue. If you would like to speak with Robert Feldman who is the person I had made the arrangements with to conduct the call, please let me know and he will speak with you individually.
Coming up in future issues of the Schiffer Line, I will be having “Ask the Expert” articles on various aspects of real estate with the topics ranging from explaining different architectural styles, to what is new and “hot” in home decorating trends, economic and loan trends. If you have a specific topic you would like addressed, please let me know.
carole@caroleschiffer.com or ceschiffer@gmail.com or 310 442-1384
I have some interesting clients in that I will be working with that live and work in various places around the world. They are both purchase and lease clients and live in Mexico, and the Middle East. It will be fun getting to know them better and learn more about their respective cultures!
In the meantime, please do not hesitate to reach out to me for any of your real estate needs or questions. I am just a phone call away.
Stay safe and Happy Celebrations – whatever they might be!
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