Timely Real Estate News……………………………………..15 January 2011
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It was a very good year….relatively speaking. 2011 could be even better!
When we left 2009 behind us, we understood what “bottom” felt like and hoped we had seen the last of those real estate doldrums. It was clear by mid-year that we may have seen the worst of this three-year real estate downturn and have witnessed a strengthening in the market — on most fronts. With our year-end 2010 final report in from the Multiple Listing Service as of January 11, 2011 we find that our overall sales volume for last year continued to improve — sales for the four communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air, and Brentwood — were up 16.7 percent to $1.810 billion (over $1.550 billion for 2009. That’s a strong indicator that there are buyers out there who are willing to invest in our communities.
Comparing median sales price performance between 2010 and 2009, we find that Beverly Hills was up 10% over 2009 MSP, up from an year-long average of 6% during the past 11 months; Beverly Hills Post Office was up 8% for the year, again up from 7% through November; and Bel-Air was down a bit to 2% up over 2009 — it had been hovering at 7% over MSP over 2009 for much of last year. Brentwood, although down 16% for the year compared to the previous 2009 period, improved from its year-long figure of being down 19-21% for the all of last year.
There were some strong indicators that both Beverly Hills and Beverly Hills Post Office are showing increased strength in their median sales prices — both had substantial increases over 2009 for December — Beverly Hills was up 34% and Beverly Hills Post Office was up 27%. Contributing to these robust figures were large transactions that closed escrow in December 2010 — Beverly Hills reported a $23 million sale last month; BHPO had a similar sale of $23.5 million in December. Bel-Air had a $14 million and $9.2 million last month; Brentwood had one for $14.2 million. While there were large sales in December of 2009, none of them were over $10,000,000… thus the huge increase in median sales prices.
We’ve become accustomed to large estate sales, because that’s where we live — in communities with large, magnificent homes. And when a community has one or several large sales like I’ve cited above, it can skew the entire month’s median sales price. So, what is encouraging is that we have a consistent median sales price average for the entire 2010, which augurs well for our communities for 2011. Let’s hope so!
On the other hand, there were some sales in December that had prices much lower than any of us would have liked, but as with anything there were and are extenuating circumstances…. but none
the less, when looked at it as an aggregate, they lower the averages and sales prices.
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California and national economy linked…don’t bet on lower housing prices
What is not over is the continued housing price pressure that have kept home values depressed for the past three years. So why am I optimistic about home prices stabilizing or increasing? We’re not the rest of America — we live in a very exclusive enclave called West Los Angeles and as you have seen in my 2011 year-end report on median sales prices, we have been increasing our home prices overall. Three of the four areas I report on — Beverly Hills, Beverly Hills Post Office and Bel-Air are all up over 2009 as reported above; only Brentwood lags behind and that’s because of the large number of large sales made in 2009 that kept their median sales price down by 16%. According to the article in the Los Angeles Times on 13 January, 2011, there was a 14% drop in foreclosures in the state vs. a 2% rise nationally. Obviously there is still cause for concern given a number of factors, including the state’s high unemployment figures and the new adjustable interest rates that will be taking place in the next few months, but hopefully the overall improved consumer confidence will help compensate for some of these issues.
If you’re sitting on the sidelines looking to pick up bargains from 2010 price levels — I would not encourage you to sit too long. Many of the ‘bargains’ have already been scooped up and as the economy improves — and it is improving — I am seeing continued strength in these four communities.
As reported by one of Coldwell Banker’s mortgage consultants, John Ciolino, the
economy looks to have stabilized from the crisis situation of a couple of years ago. Although there are still some global economic concerns in Europe, the U.S. economy appears positioned for continued growth and strengthening – especially in terms of meeting the growing demand for goods in Asian and Latin American countries.
The stock market had a good year in 2010 and saw some strong earnings to help continue the climb out of the financial crisis a couple of years ago. With the strong finish to last year, the stage is set for another good year in stocks. And the positive economic news and corporate earnings in 2010 should also help the labor market strengthen in 2011. Of course, it won’t turnaround over night, but will instead start out slow and build up to more noticeable improvements in the latter part of the year. But don’t mistake those improvements for a complete rebound, since we probably won’t see significant improvement in the overall unemployment rate until after 2011. Still, any positive news for the labor market is good news for the economy – and for families across the country!
What does this all mean in terms of home loans and rates?
John points out that while home loan rates are increasing, that’s a good sign because it shows strength in the market from investors’ points of view. California’s overall economy is slowly on the mend according to the UCLA Anderson Forecast — and being on California’s coast and in the center of the State’s most dynamic economic engine, we have much to be optimistic about.
Speaking of money, here is a fun fact about money…. Why is a dollar called a buck? Before the days of paper money, Americans traded animal skins, including deer and elk bucks, for goods and services. Hence the word “buck” to describe money.
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Well, Carole, how was your 2010? Incredible, that’s all I can say
I want to thank all of you for success I had last year….it was one of the best years I have ever had in the real estate profession. I ended up being named a member of the exclusive Top One Percent in Coldwell Banker nationwide, ranking in the top 400 agents out of 147,000! And I was named the #6 top agent for Coldwell Banker’s Brentwood office — out of 120 agents. What was the reason for my success? Well, I have had great support from my team, my executive assistant Jacqueline Johnson, Coldwell Banker’s top-notched Brentwood office staff and leadership under Ellen Bergeron and a long list of loyal old and new clients. Tenacity, experience, knowledge of dealing with the constant changes in the market, local neighborhood knowledge were the key ingredients — along with a lot of luck! And I’ll always take luck! So, thank you for your business and your support. We are lucky, too, to live in one of the world’s most beautiful areas and community….West Los Angeles. Have a great 2011.
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Green tip
The environmental impact of tea
I don’t know about you.. but with the cold and flu season that we are all experiencing… Tea is the drink of choice….
There are all sorts of teas, but in this article I’ll focus on the world’s most popular flavored beverage made from the dried leaves and buds of the tea bush, Camellia sinensis. While the amount of tea used in the preparation of a single cup may seem tiny, well over 4 million tons of tea is produced annually around the world. As far as beverages go, tea is probably one of the more natural as in its simplest form, it just consists of dried plant material without a great deal of processing. However, like any intensive monocropping, tea farming does have an environmental impact.
To generate the 4+ million tons of dried plant material each year means a great deal of land is utilized for growing the plant. As demand increases, so does the amount of land required. The massive alteration of habitats for farming tea means some plant and animal species native to that area suffer. Additionally, pesticides and artificial fertilizers are often used in tea plantations to restore nutrients used by the tea bush and to fend off parasites. The resulting soil degradation is a major issue, one usually addressed by using even more fertilizer and chemicals that further compounds the soil degradation problem. Chemical runoff into waterways can also be a problem.
Unlike some other food crops though, the tea bush isn’t ripped out of the ground during harvest – only the top 1-2 inches of the mature plant are picked; so in that aspect, it’s quite a sustainable crop. An individual tea bush can be commercially viable for up to a century. When we see images of tea plantations, the bushes are only around waist height; but tea plants can actually grow to an incredible 50 feet high if left unharvested. After the tea is picked, it’s fermented for a period depending on the type of flavor to be achieved. This fermenting is called “withering” and as the name suggests, it just consists of the leaf drying for a period naturally. After the withering, the leaves are rolled through machinery and then they need to be fully dried. This is not carried out by air-drying – the leaves are heated using fuels such as wood or gas. According to information from WWF, in Sri Lanka it takes between 1.5 and 2.5 kilograms of wood to produce 1 kilogram of tea. While the wood required for drying is increasingly grown in plantations, in some cases it is still taken from local forests.
Some of the above sounds a little un-green, but compare it to other beverages and tea seems quite environmentally friendly; until we come to the packaging involved with some tea products.
Loose leaf tea usually just comes in a box with a liner – so nothing terribly environmentally evil there (comparatively speaking). Where packaging does have a particular impact is in relation to tea bags made of nylon. Traditionally, tea bags have been made from special paper derived from Abacá (a type of banana tree) , but a few years back there appeared to be a major push by tea companies to use nylon. Probably the only other major environmental issue is that of food miles – as tea plantations are predominantly in Africa, Asia and India, it can be very a long way from farm to cup.
As I was perusing various tea company sites while researching for this article, it was encouraging to see many of them featuring an environmental section where they detail their efforts and plans to further minimize the impact of their operations. Some are switching to organically grown tea leaves, aiming for Rainforest Alliance Certification, using biodegradable boxes and pouches and importantly – implementing fair trade concepts; so looking after people as well as the planet.
If you have a favorite brand of tea, visit their company web site to find out what environmental efforts they are making.
Tip: I’m told the tea in tea bags is generally rather low quality stuff – tea “dust”. By switching to loose leaf tea, you’ll not only cut down on packaging but you’ll get a better tasting cuppa.
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Do you know someone who wants to live on the beach in Malibu? I have a beautiful new listing on one of the “dry beaches” in Malibu…. It is a gorgeous 4/4.5 contemporary home with approx 40 ft. of frontage that is being offered completely furnished for $8,95,000. Photos are available on my web site….. Caroleschiffer.com.
