Timely Real Estate News………………………………….15 November 2011
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We have much to be thankful for on our 389th Thanksgiving Holiday
According to the ‘most accepted’ official first Thanksgiving –
at Plymouth, MA, in 1621 — we Americans delightfully relish this annual harvest festival, as it was originally named. It’s a wonderful time to gather friends and family for our traditional turkey (w/stuffing) dinner, although duck, ham and lamb are also growing in popularity. But as the traditional start of the Holiday season, when shoppers begin their feeding frenzy at local malls, it’s also a time for reflection on what we surely should remember — what do we really have to be thankful for? We sometimes forget to remember just what a great country we live in, despite our challenging economic times — it could always be worse. When I was growing up, it was always a fun game we played at the Thanksgiving table to say what we were thankful for that year and going around the table we always had to “play a little of “can you top this”.
At the top of my “Thankful” list would be my wonderful family, although spread out between Los Angeles, Vancouver BC, and Montreal, and staying connected on Thanksgiving Day is always a treat. And of course, our good friends who also give us their love and support are never far away or forgotten. I am also very thankful for my health and that of my family. I am also very thankful for my clients and their business and for a recent compliment I received on this publication where the gentleman said” I love your newsletter and I can tell that it is not about the money with you”. How lovely that he “got me” like he did.
Our lives are, indeed, quite different from what the earliest settlers in Plymouth 389 years ago had to endure. Imagine they had no electricity, air conditioning, computers, cell phones, and how they survived without the Internet or email is beyond me. Life must have been wonderful, ya’think?
I have often imagined what those first settlers would think of us if they had to fast forward to 2011 and see our world as we live it. “No, Martha,” John would say. “I think we should stay right where we are. Traffic is horrible. They have this cloud that hangs over their cities. And they have this celebration they call ‘Carmageddon’ when they close all the trails for the weekend. Whatever for?”
Happy Thanksgiving!
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Real estate #s we can be thankful for…..sales volume climbs upward – slowly
Several months ago I pointed out that sales volume was up for the year, but it was attributable for some out-of-the-ordinary sales in Bel-Air for the previous period (August, 2011). We have had — as you know — large sales that have exceeded the $20-million-plus mark which have skewed the median sales prices and volumes. I am happy to report that we are now back to a more normal progression of seeing sales volumes grow throughout the four communities I report on including Bel-Air, Brentwood, Beverly Hills and Beverly Hills Post Office.
Sales volumes for these four communities have grown from $1.475 billion (year to date, through October 2010) to $1.713 billion for same period for 2011, a 16.6% increase, and these increases are spread across all four communities. That’s a positive trend. In Beverly Hills there were 7 sales over $3,000,000 in October of this year vs. 10 in October ’10. For BHPO there were 4 this year, vs. only 1 last year, but it was for $19,500,000. In Bel- Air we had 3 this year and none last year, and in Brentwood there were 3 this year vs. only 1 last year.
Also, when you compare sales price to original listing price in 2011, the sales price compared to OLP in October 2010 was 60.57% vs. 85.09% today. Of course, those #s from last year reflected large discounts of luxury homes that were overpriced in the first place. The market has certainly righted itself as sellers become more realistic about how to price their homes when they come on the market. Having the right price remains the key to moving from “for sale” to “sold”!
Also, we are seeing a steady improvement in Median Sales Prices in three of the four communities — Beverly Hills Post Office is up 15% for 2011 year-to-date vs. 2010; Bel-Air is up 5%; and Brentwood is up 6% for the year. But the monthly comparison between October 2010 vs. October 2011, we are seeing that Beverly Hills median sales prices continue to be down — 22% from previous year; Beverly Hills Post Office is down 9%; Brentwood is also down — 14%; but Bel-Air is up 27%. The 3 sales over $3,000,000 in Bel-Air were all healthy numbers, $6,750,000, $7,700,000 and $8,400,000.
For the month of September 2011 to October 2011, however there was some slight improvement. , showed improvement — Beverly Hills was up 9%; BHPO was down 24%; Bel-Air was up 7%; and Brentwood was up 3%. I must caution you that these stats are for all of these communities, not just segregated portions such as Bel Air Crest, Mountaingate, etc. The stats for those areas can be somewhat different and must be looked at with that understanding in mind.
Again, as I have cautioned my readers: It’s the long-view on median sales prices that portend the true market conditions — not the monthly anomalies.
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The murky world of foreclosure — it’s Tabloid Time
Stop the presses. Hold the front page. Here’s the headline: “Foreclosures are going to be our doom”! Or something like that. Yes, there are as many as 4 million homes in the foreclosure pipeline in the United Sates, and I’m not going to put my proverbial head in the sand and tell you that foreclosures are not impacting us. They are. But to a much lesser degree than what you see in the screaming headlines that greet you in the morning papers or on TV. We are not Nevada, Arizona, Florida, or the Inland Empire. California is being hit hard by foreclosures up/down I-5, from Sacramento to Riverside.
Mortgage lenders — having gotten through the legal morass they, themselves created — are now becoming more aggressive in pursuing foreclosures. They have to….but to a point. The banks are not totally stupid — they realize they have to moderate the influx of bank-owned homes into the marketplace to preserve as much of whatever equity they have left to avoid a total collapse of the price/value balance in every community across the land. They prefer higher prices to just dumping homes on the market. And they’re trying to be smart about the release of these homes into the neighborhoods, where you have seen in some California communities home values drop by 50%.
I have researched our communities, and what I have found is that there are a fair number of properties (both single family homes and condos) in the “foreclosure pipeline”. The “foreclosure pipeline” includes four stages: 1) Pre-foreclosure where homeowners are late on at least three payments or have some other type of lien filled against it (i.e. mechanics, etc.); 2) Notice of foreclosure; 3) Indebtedness is not cleared and now becomes ‘bank-owned’ and 4) Auction.
According to the Combined Los Angeles Multiple Listing — we have the following properties in this pipeline in these zip codes: 82 in 90077; 131 in 90049; 148 in 90210; 62 in 90211; and 67 in 90212. These include condos as well as single family residences.
Comment: What’s happening in our backyard? Shadow inventory (homes the bank has taken back or is in the process of foreclosure; but not on the market — on their books). They would be included in these numbers.
According to a front-page cover story in USA Today last week, 28.6% of US homes are underwater, meaning they owe more than the home is worth. However, you do have to take some of this information with a grain of salt, and do your research: For example, we had a home in Bel Air Crest that was reported to be in foreclosure when, in fact, the house did not have a mortgage. How could it be in foreclosure? Of course, it can’t be! And another incident was a house that was to have been auctioned in April, but the auction never took place. Go figure! And when you consider that 11% of the homes in the US are abandoned, you get the feeling the problems being faced elsewhere are not going to be resolved soon
I don’t want to make ‘light’ of the foreclosure challenges many homeowners have today — there are many people are genuinely hurting. And yes, we are blessed with unique assets that, in many ways, protect our communities from being devalued like we have seen in other parts of the United States, including California. Just be careful about what you read and don’t jump to conclusions.
If you’re confused about all of this, please contact me my office: Carole Schiffer, 310-442-1384.
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7 BILLION PEOPLE TODAY, 9.2 BILLION TOMORROW
The United Nations estimates that just recently was the day that planet Earth reached 7 billion people. (The US Census Bureau’s population clock, which runs a little slower, put the current number at 6,972,015,442.) And we think the traffic is bad now…. I cannot imagine what it will be like then!
It’s hard to know just what to make of 7 billion humans. Pro-natalists and optimists say that the world can support many more people than 7 billion. Malthusians raise the specter of famine, war and deprivation. Reality falls somewhere in between. There’s really not much that individuals can do about demographics, but there is something that businesses can do: Plan for the future.
East Asia and most of Europe are aging quickly. China, where every business wants to be today, will find itself with too many elderly and not enough workers within four decades. Japan is practically already there, with Western Europe not far behind. On the flip side, Latin America, Southeast Asia, the Middle East and Africa will still be relatively young in 2050.
Future workers and consumers will reside in those emerging regions. They will benefit from a Goldilocks demographic dividend (a just-right ratio of economically active adults compared to dependent children and elderly) around 2050, when the world will be supporting 9.2 billion people.
It’ll take a while to catch up, but the Middle East and Africa are pulling up from behind. If these regions can keep population at or slightly above replacement and educate all their children (including girls), then they, too, may be having their golden moment on the global economic stage in just another four decades.
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Green recommendations
A growing number of less-toxic commercial cleaning products are now available in stores and online. However, because manufacturers are not required to list all of their ingredients, unless they are active disinfectants or known to be potentially hazardous, it can be a challenge to find the least-toxic formulations.
Your best defense is to carefully read and understand the label warnings on cleaning products, which can be challenging. All household cleaners that contain known hazardous chemicals must carry a warning label that spells out potential risks, along with precautionary steps and first-aid instructions. In general, the more serious the safety warning on a product, the more likely that it poses risks to your health and the environment. Products labeled “Poison” or “Danger” are more toxic than those labeled “Warning” or “Caution.”
Danger – refers to products that are corrosive, extremely flammable, highly toxic, or poisonous. Commercial toilet-bowl, oven, and drain cleaners often bear this label.
Caution or Warning are catchall terms for many other hazards, so scan for specifics, such as Vapor harmful, Causes burns, or “May be fatal or cause blindness if swallowed.
Irritants refer to substances that cause injury or inflammation on contact.
Corrosives refer to chemicals that destroy tissue.
Sensitizers are ingredients that can cause allergic reactions and chronic adverse health effects that become evident only after continuing exposures.
Chronic Health Hazards may include effects ranging from sterility and birth defects to cancer.
In the next issue I will list the various types of products and their possible substitutions.
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What is happening in my personal real estate world? First of all I can easily assure you that while I will take some time off for the holidays, I am working and quite hard at that! I have 5 listings, some of which are more active than others unfortunately. I also have approximately 3 more listings coming up in the very near future. I am also working with 3 real buyers. I know that however busy I am now, will give me a good running start for the New Year and I like to give myself that breathing room.
Have a wonderful Thanksgiving Holiday and ENJOY!!!!
