Timely Real Estate News……………………………………….5 December 2007
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The Westside continues to hold its own….isn’t that good news?
Of course, it’s good news. But when I read the Los Angeles Times and other media every week, I look in the mirror and ask myself: Am I going crazy? Is this some reality show that is going to have a bad ending?
It’s been a relief to get a reality check when I review the end-of-the-month stats issued by the Multiple Listing Service (MLS). I focus on four neighborhoods — Beverly Hills, Beverly Hills Post Office, Brentwood and Bel-Air. Every first day of the month, the new numbers come out — some neighborhood median sales prices are up, some down. It has been like this for decades. Sales statistics have always been skewed over the years since many of the larger -priced homes were withheld from monthly numbers when they were reported as hidden sales prices. Keeping a $25 million sale out of the area’s MLS data does make a difference when you compute the median sales prices. Many agents were also withholding the public posting of the sale — at the request of the seller — by not releasing the final sale information to the MLS. When we look at the stats for the market, there are a number of factors that come into play, yes, the prices are holding their own, but where we are seeing the big difference is in the number of sales themselves…. They are down…..Everyone in real estate on the Westside knows that while we have kept our price levels (while surrounding areas and other parts of California and the US have fallen sharply), inventories are up and the number of sales are down. In the four communities in which I work, we have seen a 13.1% drop in number of homes sold year to date between 2006 and 2007 — from a total of 697 homes in 2006 to 605 in 2007. Number of homes sold for the past month (November 2007), we have seen a 50% drop (from 44 in November 2006 to 30 in November 2007).
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So, what gives? Groundhog Day comes to mind.
November figures were released over the weekend — and after you distill all of the numbers from these four communities, you realize that there is a Groundhog Day message here — some areas are up, some down like every other month. Beverly Hills continues to show strength in the median sales price with a 124% increase for November 2007 over November 2006. Beverly Hills’s year-to-date numbers for median sales price are also up 17% over 2006, averaging more than $3.650,000 per sale.
Brentwood was up in its November 2007 numbers as well — 23% over November 2006….but was down a mere 1% for year-to-date for 2007 vs. 2006 YTD. Beverly Hills Post Office was down 24% for median sales prices for November 2007 vs. same month 2006, but up 19.3% for YTD.
And then there is Bel-Air, which has been lagging lately — down again for November 2007 by 36% for median sale price, but it is up 2% over YTD numbers for 2007 vs. 2006.
See? There is a little bit of good news everywhere. It is the nature of our Westside Micro-Climate. The winds of real estate don’t always blow evenly from community to community, and that’s why I always take extra special effort to analyze each property, each neighborhood, and each area on an individual basis.
One of the key statistics to look at is “Days On Market” (DOM), and compared to 2006, we are down from the high 70s and 90s — Beverly Hills’s DOM for November was 75; Beverly Hills Post Office — 52; Brentwood — 50; and Bel-Air, 69 days. Yes, inventories remain higher than they were three years ago — but this is not three years ago. We’re here now — and the advice I have been passing along to each seller is to be careful about pricing your home properly — it is not the time to get greedy. The longer a home sits on the market, the faster its value declines. it’s the nature of the real estate beast.
What conclusions can we draw from all of this?
What is encouraging is that we have seen the strength in our communities reflected in avoiding the steep declines in home prices that many areas are facing today. We have not been greatly impacted by the sub-prime market and foreclosures. As I have discussed in the past, to-date it has been at a minimum on the Westside. This could change…. In the last few days however, I have heard from a number of clients believing that come spring with interest rates being lower, the market will be back and very strong…. My crystal ball is broken so there is no way for me to tell.
In these times, it is critical to have a savvy Realtor who clearly has the experience and expertise to guide sellers and buyers through these challenging times. And it is important to also have a company that is a leader and has a strong brand like we have at Coldwell Banker. Betty Graham, President of Coldwell Banker’s Greater Los Angeles Region, stated that despite the ‘doom and gloom’ headlines….”the strength, size, and longevity of Coldwell Banker enables us to affect public perception regarding the current state-of-the-market. Coldwell Banker is launching a major media campaign to tell consumers and the community “The Real Story” about the state of our industry. It’s strong and it’s good.
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It’s not always what you read about….
Just last week, an article appeared in the Los Angeles Times about a fellow who wanted to trade up — and was waiting for prices to drop on a home that was of particular interest. The house, located in Pacific Palisades, had already gone from $4.6 million to $3.6 million, but he was waiting for it to drop another $400,000. Perhaps the house was over priced, but the article leaves you with the impression that this is typical of real estate on the Westside. I checked the Pacific Palisades MLS numbers — median sales prices have climbed from $2,105,000 in November 2006 to $2,600,000 in November 2007. Year-to-date numbers for median sales price are the same — $2.1 million compared to YTD 2006. Perhaps the seller wanted more than the house was worth, but when you dig deeper, you find that Pacific Palisades, another Westside community, is doing just fine with respect to holding its price.
In conclusion — keep the faith. We’re strong when others are weak. We have so much to be thankful for this Holiday Season.
