SchifferLine 15 May 2020

The SchifferLine
Timely Real Estate News…………………………15 May 2020
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Prices and sales remain up thru April 2020…but
If there wasn’t a pandemic going on, you’d think the real estate business is doing great: Through April, median sales prices remain high, sales volume is ahead of where we were a year ago, and mortgage rates are near historic lows. That is all true. However, as we know, the April numbers from the MLS reflect only six weeks of the coronavirus market, we do expect changes moving forward. Exactly what these changes will be…we will not know until we get there.
Sales volume for the first four months of 2020, was up by 3% to $1.013 billion for the five communities I report on each month – Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood. Sales through same period in 2019 was $961million. Gaining the most through April was BPHO with a $80 million increase, followed by Bel-Air/Holmby Hills with $66 million over 2019. Beverly Hills was even for the year, Westwood/Century City was down $11 million in sales volume and Brentwood was off $80 million thru April.
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Median sales prices up, down, as always
In these interesting times, we are seeing the normal swings from higher to lower in median sales prices. When looking at Median Sales Prices through April, we are seeing robust numbers in Bel-Air/Holmby Hills with prices at $2.392 million — 40% ahead of 2019. Westwood/Century City was up 35% at $2.601 million, but Beverly Hills was down 12% at $6.050 million, Brentwood was even for the year at $3.200 million and BHPO was up 6% at $3.100 million. Marina del Rey, another one of the communities I represent, median sales price was $1.570 million for a total volume of $3.341 million for the month of April.

As I have said in the past, median sales prices reflect a better understanding of the trends in each market. Because the MLS uses the median sales price tracking method, large sales do not tend to sway these averages, whereas the high prices obviously affect sales volume. In comparing 2019 to 2020 at this time of year, our market performance is almost even – there were 190 sales through April in 2020 compared to 197 in 2019. One of the factors that we have used in the past was days on the market, however since the 15th of March all days on the market are listed as 0. When the market opens up a little more, I am not sure what the policy for the MLS will be as we count Days on Market.

What was interesting to see in the April MLS data was that Bel-Air/Holmby Hills median sales prices for 2020 vs. 2019 were 132% higher, rising to $5.290 million for the month. BHPO was also up more than 102% at $.326 million. Beverly Hills was down 68% to $2.912 million, an anomaly for this city. There were some large sales in Bel Air/Holmby Hills ($35,000,000 & $43,000,000 respectively) which always skew the numbers.

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What does the future hold for real estate?
Hopefully, we are coming out of the corona virus phase, but we don’t know. It is unknown at this point as to how long Los Angeles County will continue its Stay at Home policy. This places a burden on buyers, sellers, and agents for sure. This is reflected in how we as real estate agents have changed how we do business and will continue to do so. We are using powerful and effective virtual tools for home tours to negotiations to signing documents. Indeed, it is a whole new world, and fortunately, Coldwell Banker provides state-of-the-art support for my fellow agents and our clients. Social media has also taken on increased importance.

Given all the time we are spending in our homes, we are seeing people thinking how they want to live in their homes. Nationally, there is a 20% increase in listings, a 40% increase searches for single family residences, but a 7% decrease for condo searches, What is interesting is that there are three-times the searches for homes with a pool, and two-times the searches for outdoor space. We are also seeing a shift from any densely populated area to more suburban space.

Living safely being top on every one’s minds, another trend we are seeing is that people are not wanting to spend money on gym memberships, preferring to invest in a home gym where it is safer, and more convenient for exercising at home.
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What we are seeing in my CB office….
We are experiencing increased activity across the board in my Brentwood office. I want to emphasize that there are buyers out there eager to purchase homes in our communities because we have one of the most attractive markets in the world. Right now, I have a number of highly qualified buyers looking for opportunities. Do not forget, buyers are aware that when this pandemic phase winds down, real estate prices are going to rise….so, this is a good time to buy. One of the things to remember is that while yes there are qualified buyers out there, their numbers are lower today then they will be when the market opens up again, thus adding to the competition, so if you are thinking to making a change, now is the time to take advantage of the market and interest rates. Please know we are not expecting to see an extreme drop in prices.”

Loans are being made today, and depending on the lender, we are seeing 30 day escrows!
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Homes sales predicted to pick up by late summer…NAR
On the national front, Realtor.com, the National Association of Realtors website, predicts a summer rebound, but notes that sales could drop by 15% by the end of the year. The current pandemic-induced slump in home sales could even out by late summer and early fall – even if second waves of the virus could bring another downturn on its heels.

As I have stated earlier, we are seeing a pickup in our market here on the Westside. On a national level, we expect to see some markets dragging behind others, and realtor.com predicts that some areas will be hit harder by the pandemic in their housing recovery.

On a brighter note, affordability is predicted to improve somewhat. Mortgage rates are projected to fall to just below 3% by the end of the year while home prices could flatten and increase by only 1.1%. This will surely stimulate buyers to get into the market while rates are low. With many areas now re-opening, there is a glimmer of hope that housing will rebound significantly in 2021 according to realtor.com.
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Fed Chairman says there is a ‘lot more to do’ to help economy
Federal Reserve Chairman Jerome Powell said Congress and the White House will need to spend more money to make sure policy makers’ quick initial response to the coronavirus-induced economic contraction isn’t wasted amid evidence that recovery will take longer than first thought.

“The scope and speed of this downturn are without modern precedent, significantly worse than any recession since World War II,” Powell revealed some alarm with the path facing the economy and the potential for an insufficient policy response.

Powell warned that the recovery could take more time to gather speed than what appeared possible a few weeks ago. Congress has appropriated nearly $2.9 trillion so far to support households, businesses, health-care providers and state and local governments, or around 14% of national economic output, the “fastest and largest response for any postwar downturn,” Powell stated.

On another key issue, Federal Reserve officials are unlikely to consider using negative interest rates to stimulate economic growth in the current coronavirus-induced downturn after concluding the tool’s clear costs outweigh its uncertain benefits.
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Nearly 4 million in forbearance plans
As a result of the COVID-19 stimulus plan, the Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance increased from 7.54% of servicers’ portfolio volume in the prior week to 7.91% as of May 3, 2020. According to MBA’s estimate, almost 4 million homeowners are now in forbearance plans.

Mortgages backed by Fannie Mae again had the largest overall share of loans in forbearance by investor type (10.96%). The number of loans in forbearance for depository servicers rose to 8.75%, while the number of loans in forbearance for independent mortgage bank (IMB) servicers increased to 7.54%. Requests for forbearance dipped last week, although call volume is up, indicating that more demand for forbearance may be forthcoming. As more information is released how the program will be run, people who initially thought they would apply are changing their minds. The fourth stimulus package proposal now sits in the House, awaiting a more over to the U.S. Senate, which is unlikely to agree on the House’s programs. What, when, and how much (and if) a new stimulus bill makes its way through Congress is still far away.

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Creative ways to be productive at home…a few suggestions
If you have already run through your own list of to-dos to keep everybody in your household happy and healthy, I hope you will find some renewed inspiration in the “project guides”, compliments of Carole Schiffer – Coldwell Banker.

Home Improvement projects
• Attend an online class
• Learn a new cocktail recipe
• Hone your cooking skills
• Start a journal
• Take time to meditate
• Study a new language
• Start a new workout regimen with free workout app

Family Entertainment

• Outdoor fun
• Play “hide and seek”
• Jump rope
• Play hopscotch
• Draw sidewalk chalk art
• Fly a kite
• Take a bike ride
• Go roller skating

Indoor activities

• Play a board game
• Solve a jig-saw puzzle
• Set up a treasure hunt
• Build a fort
• Learn magic tricks
• Have a family movie night
• Enjoy a home spa day, relax
• Teach your dog new tricks

Arts and crafts, baking and cooking
• Color a coloring book or paint by the numbers
• Sketch a scene of your home
• Create a family scrapbook
• Make cookies
• Decorate cupcakes
• Make indoor s’mores
• Create an ice cream bar
• Make your own pizza

There are many ways to entertain and enjoy your home surroundings. It is a time to be creative and think outside the box.
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Living and working at home due to the Corona Virus
I don’t know about you, but my thoughts and feelings after staying and working at home for the past two months has changed, at first it was somewhat of a novel and fun experience to be staying and working at home, and thinking of projects to do. That lasted for a few weeks, then I got really bored with it, and now two months in, I have gotten to the point that I am both bored, but enjoying beinghome more, all at the same time. I am excited to be able to return to my office, hopefully soon.

I am lucky in that I am also responsible for making sure that my Mom stays healthy and supplied with what she and her caregivers need. Speaking of whom, one of her caregivers was exposed to the virus, so for two weeks I covered for her while she was in quarantine. Fortunately, she is fine and is returning to work next week.

It has been a different experience celebrating Mother’s Day with Mom and the rest of the family virtually, and for her 98th birthday next week, we will be sharing her Mariachi concert with everyone via FaceTime. I am the only member of the family here with Mom, everyone else lives in Canada. They all continue to be fine also.

With real estate activity picking up, I find myself not spending as much time as I had initially, on the computer and taking classes, and now am working with clients (buyers & sellers) figuring out how we are going to proceed in taking advantage of the market. Zoom has become an important part of my life as well as learning how to expand my computer skills. I also find myself checking Facebook more than I ever have..

What about you? How are you spending your time? I would love to hear from you. Also, again, since I have not been sending the Schiffer Line via snail mail, only on line, if you know of anyone who would like to getting that or any of my marketing materials on line, please have them contact me at ceschiffer@gmail.com so I can add them to the list.

Stay safe and please think about taking advantage of this interesting real estate market and how I can assist you in that regard.