The SchifferLine
Timely Real Estate News……………………..15 May 2021
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Sales volume zooms skywardâŠSpring has âsprungâ
Make no mistake about it: Spring finally roared âŠbut in April. No showers, unfortunately, but sales volume for the five communities I monitor and work in went through the roof. Sales volume for the first four months of 2021 were $1.906 billion, compared to $1.043 billion for same period in 2020 â a whopping 82% increase in sales. We havenât seen this jump in sales volume since I started tracking sales data in the SchifferLine over 23 years ago.
Beverly Hills sales were up over $225 million for the month of April 2020; Beverly Hills Post Office was ahead by over $130 million, Bel-Air/Holmby Hills was up $95 million, Westwood/Century City was up $108 million, and topping it off was Brentwood, with sales up over $304 million compared to last year at this time. In Pacific Palisades, another community I cover, sales volume was up $397 million, or 203% for the year over 2021. I get monthly high-end market reports for the entire Westside, which have been strong since January, but these latest sales volume #s for these communities I report on is Make no mistake about it: Spring finally roared âŠbut in April. No showers, unfortunately, but sales volume for the five quite impressive.
There were some big sales in all of these communities â Beverly Hills had sales of $47 million and $23 million; Beverly Hills Post Office recorded sales of $51 million and $28 million; Bel-Air/Holmby Hills had sales of $42 million, $36 million; Westwood/Century saw one of its largest sales in years â $8.9 million; and Brentwood recorded sales of $26 million and $22 million. Pacific Palisades had one sale over $25 million. As always, please remember, I am getting these numbers from the multiple listing service, and do not include any private sales. I include that information in my quarterly report which will be issued the end of June.
The pandemic certainly hasnât stopped the buying frenzy on the Westside â inventory remains in short supply, and the larger homes, which have really not been fluid in the market lately, finally emerged from their hibernationâŠand they were snapped up quickly by hungry buyers. Multiple offers were the norm. (More on this laterâŠ)
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Median Sales Prices moving aheadâŠ
For the most part, median sales prices kept moving upward, too. As we are now in our fifth month of 2021, and creeping slowly toward relief from the pandemic, home prices continued to be holding their own, moving slightly ahead of last year at this time. Beverly Hills was up 21% for median sales prices at $7.600 million compared to this time last year. BHPO was up 2% at $3.226 million; Bel-Air/Holmby Hills was up 5% at $2.512 million; Brentwood was up 16% at $3.713 million. In the Pacific Palisades, median sales prices were also up 5% at $4.024 million.
It is interesting to note there were some anomalies this April â the SP/OLP (Sales Price vs. Original Listing Price) averages were considerably down in three of the areas I cover â Beverly Hills was down to 88%, BHPO was down to a low of 55%, and Bel-Air/Holmby Hills was down to 77%. What this simply means is homes, especially the larger-priced categories, were overpriced and sellers were forced to drop their prices to put the transaction together. Please remember â to avoid having your home on the market too long â it must be priced competitively from the start. These April statistics clearly demonstrate we have buyers who are willing to spend.
I am in the process of negotiating for a buyer on beautiful condo in West Hollywood. The Seller is stuck on his price from when he had the property on the market last year, however unfortunately he keeps holding on to the fact that while he was in escrow last year it fell apart because that Buyer had a contingency to sell their home, and their buyerâs sale on their home fell apart and could not move forward. An unfortunate domino effect. The property was taken off the market until about a week ago when my client & I saw it. My Buyer is an all-cash buyer, short escrow, and no contingency even though he will be selling his current home if we put this together. At this point, the Seller keeps hanging to last yearâs situation. Hopefully, his agents will be able to get him to deal with the situation today and we can put this sale together. If we can, I will be listing my clientâs beautiful home in Mount Olympus with great city views on the market. Stay tuned!
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OK, I get itâŠprices are going to rise further
As I have been observing since the start of 2021, competition in the housing market is fierce and itâs prompting home prices to rise quickly, but that doesnât appear to be deterring some home buyers as we have since the start of the year.”
A majority of 53% of Americans believe itâs still a good time to buy, according to a new Gallup survey of about 1,000 U.S. adults released this week. Consumers realize theyâre going to pay more for a home.
71 % of Americans believe that home prices are going to increase over the next year in their local market, the highest reading since Gallup began tracking such data. A year earlier, only 40% of consumers believed home prices were going to rise, although that was taken last April shortly after the COVID-19 outbreak ignited across the U.S.
Still, while many Americans believe itâs a good time to buy, they are showing they have a lot of questions over the rapid run-up in the housing market. Depending on where you live, Americans who believe itâs a good time to buy are placing more weight on the long-term value of homeownership.
41% of the survey respondents chose real estate as the best investment, up from 35% a year ago. Stocks were rated as the next best long-term investment, but still at a distant 26% in comparison to housing. The philosophy of in real estate remains strong.
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DYI projects didnât exactly work, did they?
The pandemic did one thing for sure: Inspired a lot of home-bound people to âfixâ things around the house that had been neglected before the Covid virus hit. These Do-It-Yourself projects seemed to be a great idea – you were home, didnât have to commute, and well, guilt gradually took over. But research has shown, many of the projects were doomed to fail.
Homeownerâs report spending an average of $184.13 to fix their failed DIY house projects, according to a new survey from a home warranty company. Certain DIY projects may be more prone to end in mistakes: For example, one in five attempted bathroom DIY projects ended in failure.
A company surveyed more than 1,000 consumers about their recent DIY experiencesâabout 90% had taken on a DIY home project during the pandemic. Millennials are the most likely to be confident in their DIY home expertiseâhowever, theyâre also the highest age group to report the largest number of DIY fails, according to the survey. Millennials reported spending an average of $220.50 to fix their failed DIY projects compared with the $127.10 baby boomers spent on any of their own mishaps.
The most common DIY âfailsâ â bathroom, kitchen, landscaping/yard, bedroom, and living room. The report highly recommended searching on YouTube or Google to learn from expert video tutorials or find a friend or family member who actually knows what theyâre doing!
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Policy changes could affect second-home sales
The second-home market has gotten a pandemic boost as more buyers look to resorts and vacation hot spots, whether to escape the city, for a more leisurely area to work remotely,to generate extra income, or to just simply shelter in.place. However, a few policy changes could threaten to dampen second-home sales over the coming months. Here are three you should be aware of:
- Fannie Me limits financing â Fannie Mae modified existing rules for how it finances and invests in second homes and investment properties. Besides placing a 7% limit on Fannieâs acquisition of single-family mortgage loans secured by second home and investment properties, the rules also restrict the kinds of projects that Fannie will invest in. Fannie Mae is not completely abandoning this market, and the National Association of Realtors are working to change the policy;
- 1031 like-kind exchanges attacked â The Biden administration has recently proposed a $500,000 limit on deferred gains in 1031 like-kind exchanges.
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Expiration of the National Flood Insurance Program â The NFIP is set to expire on September 30. The program provides flood insurance to more than 5 million homeowners in 22,000 communities nationwide. Many of these areas threatened by flooding events are located in second-home or resort areas. The program is billions of dollars in debt and has faced numerous short-term gap measures from lawmakers over the years that have kept it afloat. The NAR is looking to push for long-term extension of the program. New rates are coming October 1, and if youâre impacted by this Program, you may want to opt in earlier to gain a decrease in your premiums.
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âWow!ââŠ.best describes high-end sales on Westside.
We have had an amazing Spring thus far on high-end sales on Los Angelesâ Westside. The number of closed sales of $5 million-plus so far this year are 321 versus 172 at this time last year. That is an amazing 87% increase over last year. Of these, 110 were $10 million-plus this year versus 49 $10 million-plus sales at this time last year, up 125%.
Twenty-four (24) of these were $20 million-plus this year versus 12 closed sales of $20 million-plus at this time last year, or up 100%!
We are slightly up in the $30 million-plus category, with eight (8) closed sales so far this year and seven (7) closed sales at this time last year. Of these sales over $40 million-plus, there have been five (5) so far this year versus four (4) this time last year.
It is amazing how many pending sales we have at the moment. There are 109 pending sales of $5 million-plus and of these, 39 are $10 million-plus with four being over $20 million-plus.
Of the 24 $20 million-plus buyers this year, theyâre mostly American (18), 1 Saudi, 1 Indonesian, 1 Chinese 1 Canadian and 2 unidentified. These are the best numbers since they have been tracked in the past 30 years.
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Itâs tough being a homebuyer these daysâŠ.
Buying a home these days is not a âwalk in the parkâ. Certainly not in California or where the flock is flocking to. The supply of homes for sale is at a record low, homebuilders are slow to step up and prices are rising at the fastest pace in nearly two decades.
According to the Home Purchase Sentiment Index (yes, there is one!), published by Fannie Mae, sentiment among homebuyers fell to the lowest level in the 10-year history of Fannie Maeâs monthly survey.
The percentage of respondents who said it is a good time to buy a home decreased from 53% to 47%, while the percentage who said it is a bad time to buy increased from 40% to 48%.
Respondents cited high prices and tight supply as the chief reasons for their pessimism, according to Doug Duncan, senior vice president and chief economist at Fannie Mae.
âThe decrease in homebuying sentiment likely indicates that some consumers, perhaps boosted in
part by stimulus payments â may be attempting, but failing, to buy a home due to heightened competition for relatively few listed homes,â Duncan said.
Consumers with incomes between $50,000 and $100,000 were particularly pessimistic. This is because the shortage of homes for sale is most acute on the lower end of the market, so affordable housing is increasingly difficult to find. The median household income in the U.S. was nearly $69,000 in 2019. And competition for housing is NOT letting up.
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What will add most value to your homeâŠsome answers
It should come as no surprise that outdoor spaces are more valued than ever. The coronavirus pandemic sent us all home for a year and being cooped up inside made us long for upgraded outdoor spaces.
The home renovation market boomed last year, and continues to flourish now, with outdoor renovations leading the list of the top value-creating projects. Eleven of the 12 leading investments were exterior home improvements, with the exception of a minor kitchen remodel, according to the 2021 Cost vs. Value Report from Zonda Media, a housing market research and analytics firm.
Overall, however, homeowners are getting a 60% return on their renovation investments. Thatâs down from last year and well below the decade-high of 71.2% in 2014, as the costs of renovations have risen sharply, for both materials and labor. Supply-chain disruptions from the pandemic and global trading tariffs have contributed to the cost increases.
Here are just some of the renovations that can improve home value â Exterior facades improve curb appeal, and that translates into real $$ in the value of your home.. Garage door replacement showed a 94% ROI (return on investment), stone veneer came in second at 92%, and adding a back deck showed a 66% ROI. But lumber price increases have reduced that ROI by 3%. Minor kitchen upgrades are valuable, but surprisingly, not major bathroom and kitchen makeovers. Reason? Too individualizedâŠcan turn off buyers.
My recommendation â let me advise you on the latest trends on the Westside. Give me a call at 310-442-1384âŠ.letâs chat before you spend $$.
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Changes in my life
I have two listings coming on the market sometime in the mid to end of June. They are both around 3000 square feet, 2 bedrooms, 2.4 baths and have a den. We have yet to set the prices but will be doing so shortly. I have already started collecting names of potential buyers, so if you would like to be notified as soon as we are ready to market them, please let me know at ceschifer@gmail.com, 310 442-1384 or carole@caroleschiffer.com.
You may recall in my last Schiffer Line I introduced my new assistant. Unfortunately, that relationship was short lived and so I am once again on the look out for an experienced real estate assistant and find myself in the same situation as we hear on the news. A dearth of applicants⊠it appears that some of the potential applicants are deciding to stay home rather than rejoin the work force. Hopefully, someone will surface soon.
They have finished remodeling my Coldwell Banker office in Brentwood and so in the next week or so, I will once again be working there rather at my home office as I have since last August. I am looking forward to being back there and interacting with my colleagues on a regular basis but will miss the convenience of working here at home and the less driving that I have been doing for the last number of months.
I apologize for having missed wishing everyone a Happy Motherâs Day. It was a strange day for as it was my first without my Mom.
Looking for seeing more of you as we all get out into the world, but please donât be a stranger and reach out and get in touch with me so we can just chat and catch up.
310 442-1384 or ceschffer@gmail.com
In the meantime stay safe!
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