Timely Real Estate News………………………I5 September 2017
Honey, will you please turn up the volume? Thanks.
The sales volume is getting louder and louder, don’t you think? Already, through the first eight months of 2017, sales volume is 18.8% ahead of last year, exceeding $2.518 billion vs. $2.118 billion a year ago. Just in: Private sales, which are not reported in the MLS monthly statistics that I use for my reports, is showing an amazing 20 – 30%, depending on the area more sales than what the MLS is showing for last month. That means that both sales volumes and # of homes sold are robust, over the top, for our communities. That is not surprising as private sales have always been there, they’re private). But their existence certainly underscores the vibrancy of our market.
Home sales inch ahead, barely…. last year at this time, according to the MLS, we had sold 543 single-family homes in the five communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood. As of August 2017, we have sold 27 more homes for a total 570, a 6% increase. That’s a bit of surprise, because we have been fighting an inventory draught.
We usually hit our stride at the end of the Spring-Summer selling season, but with demand continuing to resonate through these communities, and with listings at a premium, expect to see our sales volume moving up again through the end of the year. Last year, we ended up with a 4% volume increase over 2015, but seeing our volume increases in the 15% to 20% range during the past several months, the question is: Can we surpass 2016’s performance? Yes! And that means, prices will continue to rise and inventory will inch upward, but not to the levels most would like to see.
On a more somber note, I do want to report that not everywhere is the market booming like here — Houston area real estate is down 25% and Florida is now just feeling the brunt of their devastation from flooding. We will have to wait and see what the long-term outcome is for these areas.
Median sales prices — always the barometer
Prices are not calming down. They weren’t on steroids last month, but strong none the less. Beverly Hills, our leader in the pricing world, was up 3% for 2017 at $5.550 million. Beverly Hills Post Office was up 3% also to $2.492 million…. but Bel-Air/Holmby Hills was down 6%, at $2.109 million…Westwood/Century City was up 10% at $2.010 million, and Brentwood was up 20% at $2.185 million.
In another key area that I report on is Malibu, where sales volume was up to $446 million at 36% over last year at this time. Median sales prices were up 15% to $2.587 million. Malibu continues to be one of the hottest markets on the West Coast.
Recent trends show ups, downs
When comparing this time of year to last year, how are we doing? Good, bad, good. First of all, let’s get Beverly Hills out of the way…. their August median sales prices were down 39% to $3.615 million vs. $6.050 million in 2016, which reflects their normal hot/cold performances over the years. As the area’s strongest, priciest market, they will have huge swings through the year — it’s just the nature of their market.
Brentwood, on the other hand, was up 51% in August at $3.480 million, Malibu was up 38%, Westwood/Century City was up 25%, and Beverly Hills Post Office was up 20%. They’re happy. Bel-Air/Holmby Hills didn’t budge from last year.
As I have stated before, median sales prices are the best gauge we have in the real estate world to analyze trends, and one month doesn’t make a trend. So, year-to-date #s reflects the market’s strength — or weakness.
Is this a good time to sell? Contrary to real estate myths, the fall and winter seasons are really a good time to sell or buy. Why? Because there’s less competition. And that means you will experience less stress in selling or buying. Downsizing or “rightsizing”, which I discuss below, is not a new trend, but it’s happening increasingly as seniors want to simplify their lives. I would really like to discuss this with you…it’s become a daily part of our conversation in real estate. I have buyers who are looking, so please call me…310-442-1384.
Is ‘rightsizing’ for you?
Is it about time for a major change in your life?
Try “rightsizing”. “Rightsizing’ is a popular exploration for many…and it’s a common issue I face with my clients on many occasions. Whether it is retirement you’re facing, or trying to simplify your life or to diversify your portfolio, rightsizing can bring all of your future needs and aspirations into focus — what is the right choice?
Yes, it’s like downsizing but it’s more about re-arranging priorities and making a major shift in your life. For example, anyone who owns a home knows the amount of time, money, and effort it takes to maintain it. Moving to a smaller home requires less of your time, and energy, and will free you up for other often-neglected priorities.
Another big advantage of ‘rightsizing’ is that smaller homes are less expensive to purchase and less expensive to maintain. In this day and age, your options are greatly expanded with the ease of tele-commuting or simply re-ordering your priorities to free up your time, money, and effort to positively change your life.
It is the first of the month, and your rental property has been damaged… what do you do?
In listening to the news about all of the property devastation with Harvey and Irma, it made me think about what are the responsibilities of both the tenant and landlord as pertains to the payment of rent?
First of all, if you are the Lessee, you definitely should have renters’ insurance to protect not only your belongings as well as your Landlord, but you and your Landlord against any damage or injury to a guest in your home. I do not know of many Landlords who do not require a minimum of $1,000,000 coverage as being part of the terms of the lease itself.
I am still doing some research on the obligations of the Lessee with regard to the payment of the rent if your home is destroyed, your Landlord cannot collect the rent, and depending on the renter’s insurance policy you have, there are protections that also pertain to the Lessee’s responsibility for the payment of the rent during the remodeling process.
I will have more information in future issues of the Schiffer Line
Commuting is option for young home buyers
Here’s the deal: The bad news: You can’t afford to purchase your first home in San Clemente where you live in an apartment with your wife. The median sales price is $690,000 in OC, so what do you do? You buy a beautiful, new home in Murrieta for $430,000. And you drive 75 miles to and from work every work day. That’s the bad news.
Sound familiar? For first-time buyers, moving out to the fringes of Los Angeles and Orange County is your only logical choice if you want to own your home and cannot afford the hefty down payments. Driving the 1 1/2 to 2 hours each way is worth it.
Affordability and lack of choice remain the two largest impediments to first-time buyers everywhere. Nationally, first-time home buyers purchased 35% of previously owned houses and condos sold in the 12 months that ended in June 2016 — the latest data available — up from a near-record low of 32% in the previous 12-month period. Still, that rate is well below the historical average of 40% over the last several decades, reflecting continuing obstacles, such as heavy personal debt loads and high home prices, that are preventing more young people from buying homes.
In California, the uptick is slightly more muted, given an affordability crisis that prompted Bankrate.com to label the state the toughest for first-time buyers. In this year’s second quarter, 31.7% of houses and condos in California were purchased by first-time buyers, according to a California Assn. of Realtors survey. That’s up from 29.2% a year earlier.
So, here is some good news. Builders pulled nearly 10,000 new home permits in Riverside and San Bernardino counties in the first seven months of this year. Builders are going where the demand is, and that’s really great news.
Changes coming to real estate, urban life
We all know that “inventory” needs a miracle. The above story is great for those wanting to move to Riverside or San Bernardino — a good option for many, but what about the millions who don’t want to move out there. What is going to happen to us in the long run?
Here are two emerging trends…
1) More would-be buyers are opting out of homeownership. What a recent study by Experian discovered is that many potential buyers, with good credit, simply don’t want to buy a home. Twenty-seven percent of those surveyed said they had no interest in buying a home. And that they are happy their landlord is paying for the upkeep. Eleven percent don’t think owning real estate is a valuable as it used to be. But also, 43% reported that they applied for a mortgage but were rejected.
2) The ominous inventory problem…. slow revival. We all know the problem. What to do about it? Well, there are some bright heads gathering between cities, developers, land owners…let’s build more houses. More apartments. More condos. Toward that end, it is somewhat heartening to know that homebuilders around the country report that acquisition, development, and construction financing continues to loosen.
Debunking myths about real estate and realtors….
I’m not thin-skinned…. after 30 years in the Westside real estate business, you learn quickly that you do have to learn a few things to keep your sanity. Through my years of selling and buying real estate, I’ve learned a thing or two: Myth #1: Agents are paid a salary. We’re only paid a commission if the home sells and escrow closes. Myth #2: Agents keep all the commission. Not true. Invariably, commissions are split amongst another agent or several. The commissions are paid to the broker’s company (Coldwell Banker) and as an agent, we receive a portion of that commission. Myth #3: Seller pays all agents expenses — advertising, entertainment/open houses, direct mail, auto expenses —all expenses are paid by the agent…NOT the seller. We pick up all the costs. Myth #4: Weekends bring out the most serious buyers. No, that’s not true. It’s a popular belief because we have Open Houses on Sundays. Serious buyers come when their schedule works for them. Myth #5: Zillow says it. It must be true. Not true. Zillow admit that their pricing can be off as much as 8%…that’s huge on a $1 million home. And Myth #6: It’s better to price your house high because you can always come down. Homes that are not competitively priced will sit longer on the market and will become “tainted” — something you want to avoid.
Myth #7: When making an offer, always start low. In these competitive times, you may never get a second chance to up your offer…and you may not be taken seriously. Myth #8 All agents are the same. The buying public always seem to lump agents into the same category, but after serving the Westside real estate market and beyond for over 30 years, there are tremendous differences as to experience, expert neighborhood knowledge, negotiating skills, financial and legal expertise. I have sold over $1 billion in real estate since I entered this business, and my record of accomplishment speaks for itself.
These are just a few of the myths that occur in our Real Estate World.
One more thought about Emergency Preparedness
We should plan on having enough food and water for 3 weeks for every person in your household, and there are some interesting new products out there to power our cell phones if and when the power goes out. They are solar powered – some names to look up, Gold Zero, appears to be the most popular.
My view of the West Los Angeles Real Estate Market Today
My great listing at 2254 The Terrace in Mountaingate, has been an interesting lesson and experience. Within the 2 weeks it has been on the market, we have sold it 3 times in multiple offers, and find ourselves once again with multiple offers. Here is what is/has happened. All the offers have been substantially over the asking price, but in every case, we have been dealing with buyers that because of the dearth of inventory, just wanted to “tie the property up”, while they figured out what they want to do with it. We are now qualifying the buyers differently so that now we are dealing with “good solid buyers” who have a clear direction as to what they are doing with the property. Conversely, my other wonderful listing on Ipswich in Bel Air Crest is even more special because of this floor plan, there are only two in the entire Canyon portion of 135 homes in the community. Please contact me at 310 442-1384 for more information on these exciting homes! I also have some other homes coming on the market in the next few months, please ask me about them also.