The SchifferLine
Timely Real Estate News……………………………15 March 2022
*************************************************************
Median sales prices continue to show strong increases
The Multiple Listing Service (MLS) has recently upgraded their data collection and reporting formats, and from now The Schiffer Line will be presenting this data on the five major communities I report on regularly — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Brentwood and Westwood/Century City. The new format combines both Beverly Hills and the Post Office, so that information will be reflection of both communities. I am and will ty to separate the stats for the two communities, particularly as I am some difficulty understanding how the stats account for their numbers. The reformatting has expanded some of the reporting areas, which means our data will reflect
only the current configuration which offers a broader view of what is happening in these communities. Each month, I will continue to cover other communities where I also work, and this month I will be reporting on Venice.
The good news is we continue to see median sales prices continue to be strong in all of these areas for January-February 2022. The Beverly Hills report now includes and has seen a 78% risein median sales prices from $2.714 million to $4.950 million compared to the two first months2021. Bel-Air/Holmby Hills showed an 81% increase in median sales prices from $2.725 million to $4.140 million. Brentwood had a 3% increase from $2.141 million to $2.220 million, and Westwood/Century City had a 17% increase — $1.045 million to $1.223 million. For Venice, median sales prices went from $1.790 million to $2.100 million, a 17% increase. As always, we have seen some extraordinary numbers for sales, for example, there were 10 sales over $7 million with the most expensive one coming in at $24,137,392. The Post Office had 6 over $7 million again with the topper at $58,000,000! Bel Air coming in with its highest sale at $37,000,000 of the 4 sales over $7 million (and let’s not forget the auction of the house – The One which sold at $125,000,000 , against an asking price of $250,000,000 which will most likely be in the MLS report for March). Brentwood had 4 sales over $7 million starting at $15,305.547, and Westwood/Century City 1 sale over $7 million at $9 million. The Venice, Playa del Rey, and Playa Vista areas did not have any sales over $7 million with the highest one in Venice coming in at $5.900,000.
In comparing February 2022 median sales prices to 2021, Beverly Hills was up 24%, Bel-Air/Holmby Hills was also up 24%, Westwood/Century was up 25% and only Brentwood was down 9%. Venice’s MSP were down 6% compared to same time last year. I have not separated Beverly Hills Post Office median prices from the Beverly Hills prices.
Average Days on Market were down substantially — Beverly Hills was down to 53 days; Bel-Air/Holmby Hills was down to 51 DOM; Brentwood was down to 38 days; and Westwood/Century was down to 44 DOM and Venice to 75 Days on Market. All areas are coming down for DOM because of the intense competition for reduced inventory. This condition will most likely not change for some time.
*************************************************************
Sales robust in all areas….
Without question, the sales volume increased substantially, and The Schiffer Line is starting with a new baseline for the above communities, and we will be comparing total sales vs. the new reformatted sales data as of February’s 2022 report. Total sales for the five communities I regularly report on for the first two months of 2022 were $1.284 billion — with Beverly Hills leading the way with $611 million, followed by Westwood/Century with $250 million, Brentwood with $206 million and Bel-Air/Holmby Hills at $142 million. Venice had $117 million through February 2022.
*************************************************************
High-end Westside sales move up, but more slowly
During the past 12 months, we have seen dramatic increases in high-end sales (those above $5 million) on LA’s Westside. However, as the impact of various global events including the war in Ukraine and rising inflation, we are seeing a marked slowdown in high-end sales.
But we are still ahead of last year at this time. There have been 155 closed sales of $5 million-plus so far this year, versus 137 at this time last year — up 13%. Sixty (60) were $10 million-plus this year, and there were 40 at this time last year, up 50%. Of these, 14 were $20 plus million and there were seven (7) at this time last year, up 100%.
Six of these sales were $40 million-plus and there was only one at this time last year. There are 108 pending sales of $5 million-plus at the moment and 26 of these are $10 million-plus, and one is $40 million-plus.
The 14 $20 million-plus sales so far this year were: 5 in BHPO, 4 in Beverly Hills, 3 in Malibu and 1 each in Hancock Park and Bel Air. Most of the buyers for the $20 million-plus sales were American.
*************************************************************
Preventing fires relies on communities pulling together
Last month, I shared with you six recommendations you can implement to protect your home in case of wildfires sweeping over your area. But individually, homeowners can’t prevent fires by themselves if neighbors are not also well prepared: There are community action programs you can implement. For example, a homeowner’s safety upgrades can be undermined by neighbors who ignore the hazards on their own properties. So, community-wide efforts are crucial.
The framework lays out the following “mitigation elements” for communities to adopt:
• Clearly defining the community’s boundary, then obtaining an assessment of the community’s fire risk from the local fire district or the state fire agency.
• Identifying an evacuation route that is kept clear of overgrown vegetation, along with a contingency plan.
• Finding the financial resources to support the upgrades needed to meet “clear risk reduction goals.” Cal Fire offers fire prevention grants that can pay for clearing firebreaks and removing combustible material, but the dollars are available only to governmental agencies, tribal groups and nonprofits.
• Developing plans with measurable annual goals for reducing the community’s wildfire risks, as well as steps to increase the awareness and education of community members regarding those risks. Currently, 10 insurers are offering community-based discounts to homeowners, although they aren’t all using the same criteria. The new framework puts forward a standard that all insurers could use to judge a community’s mitigation efforts.
A good place to start is with your local fire safe council, which you can locate on the California Fire Safe Council website. These groups draw up wildfire plans, educate local homeowners about prevention and tackle larger projects to protect their communities, such as clearing brush and creating firebreaks.
I recently learned that some of the bigger insurance carriers will once again be dropping and/or not renewing their current policies as they are no longer insuring homes in California. If you need some assistance, please contact me as there are still a few carriers that are issuing policies, and I might be able to refer you to them. ceschiffer@gmail.com or 310 442-1384 which is my office land line.
*************************************************************
Mortgage rates and a word or two from the Director of Forecasting, NAR Research
Nadia Evangelou, Senior Economist and Director of Forecasting, NAR Research said in her recent Facebook post what I have been saying. “Mortgage rates rose this past week as inflation jumped to its highest level since January 1982. The 30-year fixed rate increased to 3.85% from 3.76% the previous week. While its too soon to know how the war in Ukraine will affect the US economy, it seems that it will continue to put upward pressure on inflation. Most likely the Fed will likely raise short term rates at the meeting next week. This strategy will also push rates up”.
“However, we all need to bear in mind that mortgage rates are still near historic lows. For instance, in 1982 when inflation was rising roughly at the same pace as now, mortgage rates were on the average 16%,
Meanwhile, the economy added nearly 12 million new jobs in the first couple of months of the year despite the spread of the virus. By comparison, about 400,000 new jobs are typically added to the market during the same period pre pandemic”
I am not at all advocating hiding our heads in the sand, not at all, I am simply saying that we all should try to keep the rising mortgage rates in perspective. We have more people returning to the work force and home ownership is still the American dream that we all reach for.
The war-induced drop-in U.S. mortgage rates was short-lived. Rates popped up again last week to the highest level in nearly two years. This may just be the beginning as the war in Ukraine drags on.
“Last week’s data indicates that homebuying competition is picking up as we move closer to the market’s busiest season. National listing prices, which hit a new all-time high in February, continued to accelerate at a double-digit annual pace,” said Danielle Hale, chief economist at Realtor.com.
There is some good news. The inventory of actively listed homes, which is near a record low, saw its fifth straight week of improvement last week.
*************************************************************
However, mortgage delinquencies drop to record low
While mortgage rates were inching upward, the percentage of homes with mortgages that have late payments or are in foreclosure has dropped to the lowest seen on record in more than two decades, according to CoreLogic’s data dating back to 1999.
The nation’s overall delinquency dropped to 3.4% at the end of 2021, with the majority of states posting a year-over-year decrease in delinquencies, according to CoreLogic’s newly released Loan Performance Insights report.
Declining unemployment rates and higher home prices are helping more homeowners stay afloat. “National home prices increased by 18.5% year-over-year, helping more owners regain equity,” Molly Boesel, principal and economist at CoreLogic, writes: “The combination of these dynamics pushed the overall mortgage delinquency and foreclosure rates to the lowest levels that CoreLogic has recorded in more than two decades.”
The data also reflects a time when pandemic-related forbearance aid was put in place to help financially struggling homeowners, although for many owners it had expired by the end of the year. U.S. employment has been robust and home equity levels have been on the rise, both of which have helped keep homeowners from going under. Lenders also reportedly have been stricter when issuing loans during the pandemic, ensuring it was to borrowers who were unaffected by hardships.
*************************************************************
Homeownership is leading source of net worth gains
Homeownership is widely recognized as the leading source of net worth among families. Housing wealth itself is primarily achieved by price appreciation gains, and the nation has seen home prices accelerate at a record pace during the course of the last decade.
A new study from the National Association of Realtors examines the distribution of housing wealth between 2010 and 2020 across income groups and in 917 metropolitan or micropolitan areas. NAR found that during those 10 years, nearly 980,000 middle-income households became homeowners. Within that timeframe, total housing wealth for this income group surged by $2.1 trillion.
“Owning a home continues to be a proven method for building long-term wealth,” said Lawrence Yun, NAR chief economist. “Home values generally grow over time, so homeowners begin the wealth-building process as soon as they make a down payment and move to pay down their mortgage.”
From 2010 through 2020, 529 of 917, or 58%, of metropolitan and micropolitan areas gained middle-income homeowners. NAR identifies these locations as rising middle-income class housing markets, i.e., markets that saw the largest increase in middle-class owner-occupied housing units in 2020 compared to 2010.
*************************************************************
Real estate market slowing down? Isn’t happening
If you’re a home buyer, you may have hoped that the real estate market might freeze up a bit in early January to allow breathing room in a less competitive market. Unfortunately, that doesn’t appear to be happening.
While it is early in 2022, the National Realtors Association monthly housing report shows that the real estate market is starting off just as competitive as 2021′s.
The typical home sold in 61 days in January, which is 10 days less than in January 2021 and nearly a month (29 days) faster than the typical pace of sales in January between 2017 and 2020, according to realtor.com. In some of the hottest markets, such as Nashville, San Diego, San Jose, Denver and Raleigh, homes sold in 36 days or less in January.
While buyers were active in the market in January, the number of homes for sale continued to lag well behind demand. The number of active listings on the market — which includes any home listed for sale, not just those that are recently listed — was down 28.4% in January 2022 compared to January 2021. It decreased 60.4% compared to the number of active listings in January 2020.
New listings, which are those first placed on the market during the month, were also down by 9.1% compared to January 2021 and by 17.9% compared to January 2020.
That imbalance between demand and supply contributes to the rapid increase in prices. The median listing price was up 10.3% in January 2022 compared to January 2021 to $375,000, which represents a 25% jump over the median listing price in January 2020.
In my office, we have been experiencing multiple offers on homes and income properties all across the board in all price points
*************************************************************
What is the hottest new gadget for your home? EV charger
High prices at the pump are inspiring car owners to get an electric-powered automobile (EV), but you will need more than the car to use it. Having a home charger will be on your shopping list, too.
Besides understanding what it will cost to power an EV, it’s also important to know the cost of a key piece of at-home technology: the electric vehicle supply equipment (EVSE), along with the cost of its installation.
Plug-in vehicles today typically come with the ability to charge at home on standard household current, 120 volts, which is called
Level 1 charging. They also can charge on faster 240-volt circuits, called Level 2 charging. If the vehicle has a small
battery, under 10 kWh, you can often make do with the Level 1 charging system that comes with the vehicle. For plug-in cars with larger batteries, Level 2 is your best bet for overnight charging and quick top-ups
Most automakers with plug-in vehicles in their lineups have a preferred charger provider, but there are dozens of companies selling EVSEs. A search online will help you find the features, power output and pricing that best suit your need. Just search for “EVSE” or “EV home chargers.” Prices for quality Level 2 home systems can range from just under $200 to more than $1,000 before installation.
Installation costs for EVSEs vary by region, depending on such factors as local labor rates, materials used, and government permit costs and requirements. The biggest variable is permit costs, which varies from city to city.
Nationally, average costs for a home EVSE installation with short and uncomplicated 10-foot wiring, which runs from the electrical service box to the charging station, range from $800 to $1,300. The costliest region is the Western U.S., where installation can run from $950 to $1,300.
*************************************************************
New listing coming up!
We have some work to do on it before putting it on the market sometime in the next few weeks, but it is a lovely house in Westwood Hills and very convenient to the UCLA campus (available for a short walk particularly helpful what we are paying for gas these days!). Call me & I will let you know when we are ready to show our shiny new face! 310 442-1384 – Carole
Gratitude and acknowledgement of feelings.
Recently I lost a long-time friend and colleague to cancer, and it made me realize once again how grateful I am for all of my family, friends and colleagues and the very strong need to share your feelings with those you love and cherish. It is very important.
You must be logged in to post a comment.