The SchifferLine
Timely Real Estate News………………………….15Ā MayĀ 2022
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Happy Memorial Day ā Summer beings May 30
Itās not on the calendar that summer actually begins on this annual holiday, but most Americans think soĀ This three-day weekend which gives us all a chance to taste the spoils of the summer season. Although living in Southern California, especially during our drought, we donāt have to put our raincoats away, we seem to dress like itās summer every day. Enjoy your Memorial Day weekend and summerā¦.Carole
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April sales and prices ā a mixed bag
Higher interest rates combined with a slowdown in the stock market, resulted in a mixed bag of results for real estate in the four communities I report on ā Beverly Hills, Bel-Air/Holmby Hills, Brentwood, and Westwood/Century City. With the Federal Reserve upping interest rates by ,50 percent at their May 3-4 meeting, mortgage rates climbed to over 5%, which put a drag on some buyersā ability to purchase a new home. Buyers with cash offers, most often engaged in multiple offers for a scarcity of inventory on the Westside, proved to be the most likely to succeed in getting their dream home. More about this later in this issue.
Median sale prices for 2022 were mixed across the board ā Beverly Hills, an expanded area from previous MILS reporting data, was up 15% in MSP at $3.477 million, compared to $3.025 million a year ago at this time. Bel-Air/Holmby Hills was up 65% to $4.090 million compared to $2.350 million in 2021.
However, Westwood/Century City was down 22%, with an MSP of $980 million through April vs. $1.212 million in 2021, and Brentwood was down 5% to $1.980 million from $2.100 million thru April 2022. Santa Monica, another area I cover, was up 13% in median sales price to $3.868 million from $3.400 million previously in 2021.
What we are seeing is a leveling of prices as interest rates are having an impact on buyersā ability to qualify for mortgages that are now reaching 6% and are expected to go higher and inflation continues to be a factor in our economy.
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Sales volumes also showed a mixed bag
As inventory continues to struggle to meet an intense demand for homes in our area. Multiple offers continue to be the norm today. Beverly Hills led sales with $1.038 billion in sales through April 2022. Bel-Air/Holmby Hills added $377 million, Brentwood had $404 million, and Santa Monica chipped in with $354 million.
Another key indicator of āstrength of marketā is, of course, Days on Market ā how long do
properties āsit’ before escrows open? The median days on market for Beverly Hills was 29 days for April, 35 days for Bel-Air/Holmby Hills, 14 days for Brentwood, 15 days for Westwood/Century City, and 14 days for Santa Monica. The higher-priced homes ā in Beverly Hills and Bel-Air/Holmby Hills ā generally take twice as long to move off the market.
To sum it all up, weāre seeing how the market reacts to inflation and the resulting Fed rate increases ā housing costs are going up, like everything else. Economists expect interest rates to keep moving upward as the war in Ukraine continues, the market drops, and inflation stays at its current height. How high? Some predict 8%, but it is too early to tellā¦.my advice: Buy Now! Interest rates will continue at the current rate and most likely will go higher. If you wait, youāll look back and thinkā¦āI shouldaā¦.ā: Also, while the current interest rates are higher than they have been in recent years, they are still lower than they were a few years ago, and unfortunately, we are not going to see the interest rates in the 2% and 3% range again.
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Sellers hit a ātipping pointā ā dropping prices
The share of home sellers dropping their asking prices has risen to a six-month high. The percentage is still low, but the quicker pace of price drops is notable, researchers say.
For the four weeks ending May 1, 15% of home sellers dropped their asking prices, up from 9% a year earlier. More home buyers may be starting to feel priced out by the rapid rise in mortgage rates, which may be making sellers have to adjust slightly. The 30-year fixed-rate mortgage averaged 5.27% last week, up from 2.96% just one year ago, Freddie Mac reports.
Meanwhile, the median existing-home price in March was $375,300, up 15% from a year ago, according to the National Association of Realtors.
Housing affordability is declining as monthly mortgage payments increased by nearly 10%; the median family income increased by just 1.1% in comparison, according to NARās housing affordability index, reflecting March data.
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High-end sales still ahead of 2021ā¦thatās good news.
We remain ahead of last year at this time in high-end sales, which are those homes selling for $5 million-plus in the West Los Angeles region.
There have been 368 sales of $5 million-plus so far this year, versus 336 at this time last year, up 9%. Of these, 128 were $10 million-plus this year, versus 117 at this time last year, up 8.5%. Thirty-six (36) were $20 million-plus this year, versus 28 at this time last year, up 29%.
Of those, 19 were $30 million-plus this year, versus 10 at this time last year. , up 90%. Ten (10) of these sales were $40 million-plus, and there were only four at this time last year. There are 111 pending sales of $5 million-plus now, and of these, 29 are $10 million-plus, 12 are $20 million-plus and three are $30 million-plus.
Included in this list of the 36 $20 million plus sales are these locations ā eight each in BHPO and Malibu, six in Bel-Air, five in Beverly Hills, four in the Palisades, two in Hancock Park and one each in Sunset Strip, Holmby Hills and Brentwood Yes, we continue our successful marketing of our high-end propertiesā¦and why not? We have the most beautiful place in the world in which to live and thrive!
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More markets reached double-digit gains in 2022 Q1
The first quarter of 2022 saw more markets reach double-digit annual price gains than the previous quarter, according to the National Association of Realtors. Seventy % of 185 measured metros experienced such price gains, up from 66% in the preceding quarter.
These increases come as median single-family existing-home prices rose at a faster rate nationally ā 15.7% ā from one year ago, up to $368,200. In comparison, the year-over-year pace in the prior quarter was 14.3%. Notably, the Southern region of the Country made up 45% of single-family existing-home sales in the first quarter and notched a double-digit price appreciation of 20.1%. Meanwhile, the Northeast saw a climb of 6.7%, the Midwest 8.5%, and the West 5.9%.
“Prices throughout the country have surged for the better part of two years, including in the first quarter of 2022,” said Lawrence Yun, NAR chief economist. “Given the extremely low inventory, we’re unlikely to see price declines, but appreciation should slow in the coming months.ā Yun notes his prediction is based on an expectation of further supply for the upcoming quarter, citing that the beginning of the first quarter registered a record-low amount of inventory. He also anticipates other changes.
“Price gains in many smaller, tertiary cities are now outpacing those in the more expensive primary and secondary markets,” he continued. “This is due to buyers looking for less expensive housing and also a result of more opportunities to work from home, making relocation to smaller markets possible.ā
Half of the nation’s top 10 most expensive markets were in California, including San Jose-Sunnyvale-Sta. Clara, Calif. ($1,875,000; 25%); San Francisco-Oakland-Hayward, Calif. ($1,380,000; 15%); Anaheim-Santa Ana-Irvine, Calif. ($1,260,000; 26%); San Diego-Carlsbad, Calif. ($905,000; 18.5%); and Los Angeles-Long Beach-Glendale, Calif. ($792,500; 13.1%). This is encouragingā¦for homeowners. For buyers? Not so much.
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Inventory supply āreliefā may be on its way.
One of the leanest housing markets in history might be putting on some fat. The supply of homes for sale could increase in the next few weeks, according to new data from Realtor.com.
In April, inventory was 12% lower than in the same month last year, the smallest year-over-year decline since the end of 2019. Another reading for just the last week in April shows inventory down only about 3% from a year ago.
āApril data suggests a positive turn of events is on the horizon for weary buyers: If the trends weāre seeing now hold true, we could potentially see year-over-year inventory growth within the next few weeks,ā said Danielle Hale, chief economist for Realtor.com.
The shift in supply is likely due to a slower sales pace stemming from the recent rapid increase in mortgage rates, which has made expensive homes even pricier. The average rate on the 30-year fixed has jumped more than 2.5 percentage points since the start of the year.
New listings were down 0.9% in April compared with a year ago, and the number of active listings is still down 67% from pre-pandemic levels. The growth in supply is being led by mid-sized family homes, as fewer are going under contract despite it being the spring market, a popular time for families to shop for houses.
Higher mortgage rates, combined with record high home prices, have sidelined much of the competition. Home prices are up about 34% since the start of the pandemic. The monthly mortgage payment on a $400,000 home, with a 20% down payment, is now $467 more than it was in March 2020, according to Realtor.com
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Homeowners are delaying needed home repairs
Make no mistake about it, homeowners are not making the repairs they need to make according to Consumer Affairs. We all know, homes are not perfect, and they are often in need of repairs and maintenance. The average home is in need of about $3,150 worth of repairs that havenāt been made yet, according to a new survey of more than 1,000 homeowners conducted by consumer information website Consumer Affairs.
About one in four homes are in need of serious repairs. Forty-five % of homes are less safe due to those neglected repairs, the study finds. The average homeowner waits more than 10 months to make a critical repair on the home.
Some homeowners inherited needed repairs when they first purchased a house. Forty-three % of homeowners say they hadnāt made repairs that were needed when they purchased the home.
The expense is the leading reason homeowners have delayed fixing issues. More than half of homeowners surveyedsay they donāt have much saved up to pay for home repairs. Only 41% of homeowners say they could afford a $500 repair out of pocket, and that percentage drops to 28% for those who could afford a $1,000 repair.
There have been many times over the years of my career, when I have sold a house where the buyer ācould not stand the color of the carpetā, and or something in the house needed fixing, only to see when called me a few years later to sell the house, that same carpet was on the floor, or the repair had not been made.
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Speaking of repairs
I think most of you know I live in Bel Air Crest, which is a high fire zone and in the last few days, it has proven to be the case. I was working at home the other afternoon, when I heard the water dropping helio copter over head going back & forth. Yes, we had a brush fire just off the 405 and Sepulveda! After about an hour or so, the LAFD got it out, only to have it flare up again a few hours later, and then when I was driving to work the next day, there was smoke again along side Sepulveda and 405! Then coming home from work that evening, there was another fire being attended to by 5 -6 fire trucks. All of this truly scary and daunting.
Because of the drought, winds and heat, we are in for a long hot summer and the fire we had by my house was too small as the news stations were concentrating on the bigger fires including the tragic one in Laguna Nigel. I am not sure if you noticed, but the flames on the houses were coming up from the bottom and as a result, the homes were burning from the inside out.
I cannot stress enough installing Vent Guards on your homes if you have not already done so. They are designed to prevent what was happening with the homes in Laguna Nigel in that they protect the vents for our homes on the ground as well as the vents by the eaves at the roofs of your home. If you do nothing else, please do this for yourselves. Call meā¦ Carole Schiffer, 310 442-1384 and I will give you their contact information
Also, please make sure your home owners insurance is sufficient enough and you have a plan in place if/when you might need it.
We all have to be prepared for these types of emergencies.
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My āHot Listingā in Westwood Hills
About 10 days ago, I listed a sweet little home on Veteran in Westwood Hills. It is charming, close to campus and has a fabulous upstairs family room and lovely back yard. It also has 26 steps which is the ONLY way you can get in the house. The house needed some repairs, so the
seller installed a completely new roof, drain pipes and gutters, refinished the oak floors, painted the interior, did the termite repair work as well as tented it, and cleaned up the landscaping.
The Sellers & I priced it taking into consideration what they had done, but also the fact that there those āstairsā, and it was on somewhat on a busy street. The first two days it was on the market, we had over 70 people through the house, received 10 offers, most of them from owner users. At the end of the day, we sold it in two weeks, well over our asking price to owner users (I will tell you the price when we close escrow in about 30 days). The investors dropped by the way side. Of the offers we got approximately 50% of the buyers all getting loans, not at all bothered by the new interest rates.
What does this tell us???? There are still a lot of buyers out there, wanting to desperately ābuy somethingā.. so, Sellers, please pick up the phone and call me… 310 442-1384. I expect I can do the same magic for you as I was able to do for the Sellers on Veteran.
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Carole Schiffer, Realtor Coldwell-Banker Residential Brokerage/Brentwood Office 310-442-1384 (office) or e-mail me at carole@caroleschiffer.com www.caroleschiffer.comCalBRE 00677619 Ā©2022 Coldwell Banker Real Estate LLC. Coldwell Banker iregistered trademark licensed to Coldwell Banker Real Estate LLC 234567An Equal Opportunity Company. Equal Housing Opportunity. Owned and Operated by NRT LLC
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