The SchifferLine
Timely Real Estate News………………………19, 2020
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Happy Income Tax Day
I hope those of you who took advantage of the extended income tax day were able to send your taxes to the IRS. I had been able to get mine in on the original date. It will be interesting to see what the deadline or deadlines will be next year!
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Prices up, sales down…the more things change, the more….
During these very challenging times, the world of real estate continues the familiar path it has been on lately — prices are up and total sales volume is down. Not unexpected, this trend continues across America as we are all dealing with the Covid-19 pandemic.
In the five communities I report on each month, sales volume has seen a drop since the March 18 kick-in of the coronavirus lockdown. Total sales volume for these five communities is $1.507 billion through June 30, 2020, compared to $1.740 billion a year ago, a 13% decline. The biggest drop in sales occurred in Brentwood, which has seen sales volume down $175 million compared to last year at this time. Bel-Air/Holmby Hills is down $92 million, and Westwood/Century City is off $85 million since last year.
The big winner in sales through June was Beverly Hills Post Office, which was up $119 million over 2019, and Beverly Hills was up a modest $8 million since June 2019. But as we have witnessed so many times in the past, these numbers reflect only half the story still to be told as we move through another shutdown in Los Angeles County due to Covid-19.
Significantly, total sales volume for these five communities for June 2020 vs. June 2019, sales for last month was up 215% over the previous year, from $115 million to $363 million, a good sign that sales are progressing upward.
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Median sales prices are all up
Frankly, it is rare, but in all of my areas’ median sales prices are up through the first six months of 2020. This is a testament to the appeal and strength of our communities that continue to lead the nation and the world in attracting discriminating home buyers. Beverly Hills Post Office median sales price is up 22% at $3.400 million through 2020…Beverly Hills is up 6% at $6.612 million, Bel-Air/Holmby Hills is up 7% at $2.335 million. Westwood/Century City is up 16% at $2.510 million, and Brentwood is up 8% at $3.300 million.
What was surprising is the large sales jump in BHPO where the median sales price for June 2020 was $11,050 million, a 342% increase over June 2019 — the highest we’ve seen in the Westside for years. Beverly Hills was up 70% at $5.620 million for the month over 2019, and Brentwood was up 41% for June. Mind you as we have seen in 
the past, we have had some very large sales which impact the stats for a particular area.
As far as our real estate world is concerned, the Covid-19 shutdown has had an impact for sure, but houses are being listed and sold. There are buyers out there armed with mortgage rates near historic lows. Houses are selling IF they are positioned properly which includes being competitively priced, staged and well presented. Please remember the old adage about first impressions, with us being in a virtual world today, people are shopping on line and then if interested, setting up an appointment to see the property, and 85% of buyers have made a decision about the property before they even get out of their car!
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Mortgage rates are amazing….
MarketWatch, a publishing arm of Dow Jones & Company, stated “it should no longer come as a surprise that the 
pandemic continues to create never-before-seen circumstances in all corners of society. In the housing and mortgage markets, one of the first major manifestations of the crisis was a quick move to incredibly low rates. With record after record being set in close succession, the mortgage environment has been ridiculously good for most homeowners.”
As we are seeing every day, mortgage rates are moving downward. As MarketWatch said, it’s just been ridiculous. The 15-year fixed conforming hit 2.25% last week. Record low rates make a lot of sense given the economic outlook. In general, economic weakness coincides with lower rates, and there’s been plenty of that to go around. On the other hand, much of the economic weakness is assumed to be temporary.
We do know that smart buyers are getting their financial platforms in order so they can take advantage of these low rates. How long will they last? It is anyone’s guess|
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One-in-five Americans have relocated or know someone who has
The pandemic is having a noticeable effect on housing. According to the Pew Research Center, millions of Americans have relocated this year due to the COVID-19 outbreak. New data released this week shows that 22% of Americans either moved or know of someone who did.
The reasons vary, researchers say, such as college students moving out of dorms as schools closed abruptly, homeowners and renters leaving communities perceived as unsafe, and people moving from housing they could no longer afford. The findings are based on a survey conducted in early June of nearly 10,000 people.
Young adults have been the most likely to move. Thirty-seven %of those ages 18 to 29 said they either moved, someone moved into their home, or they knew someone who moved because of the pandemic. One of the other reasons people are moving is that after having spent the last number of months in their homes people are finding that the make up of their homes no longer works for them. For example, one of the trends we have had the past number of years have been to have open floor plans of one’s home. However, after now having spent most of their time in their home generally with the entire family there, we are finding that people want to go back to the separated areas in the house for privacy, work space, etc.
Overall, 28% of those who have moved during the pandemic say the most important reason was to reduce their risk of contracting the virus. An additional 23% say it was because their college campus closed, 20% said they wanted to be with family, and 18% said it was a financial decision driven by either a job loss or another money-related reason.
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High-end market is picking up….
Here is some really good news: The high-end market has picked up, and we are ahead of last year in sales of $10 million-plus homes, but slightly behind in the $5-to-$10 million-plus homes. There have been 219 sales of $5 million-plus homes so far this year, versus 246 at this time last year, which is down 11%. Of these, 70 were $10 million-plus sales, and there were 67 $10 million-plus sales at this time last year, meaning we were up 4%.
There were 19 $20 million-plus homes sold this year, versus 16 a year ago, up 19%. Nine of these sales were $30 million-plus this year and there were eight at this time last year. Five $40 million-plus this year and there were three at this time last year.
The future? There are 76 pending sales of $5 million plus. And 10 are $10 million plus while three are over $20 million. Of the 19 sales of $20 million plus this year, the buyers are mostly America — 14 are American, (84%). The other three buyers are two Taiwanese and one Chinese. 6 of the 19 sales of $20 million plus were not officially listed when sold.
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What does the Real Estate Market Look Like Toda
After a hiatus of a month or two of not working, I am back at it full time as I mentioned and am finding lots of prospective buyers and sellers to keep me busy. I am still playing catch up with everything, and trying to stay on target with everything also. Most likely I will not be sending out the quarterly update again for the 3rd quarter as I also missed the 2nd quarter update as well. Stay tuned. Some general comments:
- Inventory is low – This is not new, but is particularly low now. With the second phase of closing business in Los Angeles, I am not sure what impact this will have on inventory.
- Given what the interest rates are today, buyers are hoping on the purchase train to take advantage of the low rates. They are somewhat frustrated with the low inventory, but we do seem to be finding properties that will suit their needs and requirements.
- Sellers are somewhat concerned about the safety of showing their property, with good reason. That is why each potential buyer is being encouraged to view the virtual tour of the property before making an appointment to actually physically go to the property. Open houses are pretty much only being done virtually as well. We are not sure as to when these practices will revert back to the way things were done before Covid, but it doesn’t appear it will be any time soon. Once we have an appointment, there is a release form that the buyer must sign and strict guidelines have to be followed with only three (3) people allowed in the property at a time.
- I am finding that home inspectors (physical, mold, fire place, sewer line, termite and geological – I have my buyers do all except the geo on every sale I do) are booked a full week in advance, which is an indication of the strength of the market.
- Are agents working in their real estate offices or at home? For the most part, the majority of the 100 agents in my office are working at home. For now, I am working in the office as I have a new assistant, Antonie and am training him, which basically requires that the two of us be in the office. Sometime in the next few months, my office is being remodeled. When that happens, we will be working out of my house, but for now, the best way to reach me is to call 310 442-1384 or shoot me an email at ceschiffer@gmail.com
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US heading for hottest year on record….
We can all agree, we’ve seen some hot weather lately, and as we approach the “dog days of summer”, will probably have more. U.S. government data shows that so far, 2020 is the second-hottest year on record globally. trailing only 2016.
The National Oceanic and Atmospheric Administration estimates 2020 has a 36% chance of becoming the hottest year on record. NASA scientist Gavin Schmidt thinks the odds are even worse, giving 2020 a three-in-four shot of overtaking 2016.
The Centers for Disease Control and Prevention states more than 600 people in the United States are killed by hot weather each year, but the true death count is almost certainly much higher. Last month, a new study estimated heat contributes to an average of 5,600 deaths in the U.S. each year — and that is just in a few hundred counties making up three-fifths of the country’s population.
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What do you think? Solar or not
I have just started doing the research on installing solar panels on my house. Have you done so, and if so, what differences have you noticed in both your utility bills and the heating/cooling in your home since the installation? I have also been told that upgrading the heating and air conditioning systems I have will in effect accomplish the same thing as having solar panels. Some of the arguments is that it will take a number of years to see the cost benefit of having solar panels, where the cost benefit for the heating/ac system change will cost itself out much sooner.
It is very difficult to find unbiased information as to the benefits of each change so if you have comments and/or opinions and want to share that knowledge, I would greatly appreciate it.
Please give me a call at my office 310 442-1384.
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Thank you
After my own illness in recent weeks and the passing of my mother last month, I am back in the saddle and business is robust. It feels really good and I also want to acknowledge and thank all of you for your messages of condolence about Mom. It really meant a lot. THANK YOU!!!!
I hope you are fairing well with all of the stress, changes and challenges we are facing. As we have said from the beginning, we are all in the together, and will get through it, it seems more difficult at times than others. Communication in my opinion is key to getting through it.
Please be safe, smart and careful.
I CARE!!!!!!
Carole
310 471-2007 – home office land line
310 413-3680 – cell
310 442-1384 – office land line
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