Fall comes early, only we didn’ know it…….
If you thought you missed Summer, you did. Except for one or two wretched weeks of temperatures way above normal, we have already moved into Fall without officially ending Summer. Where did Summer go? I will always remember going to temple with my ābrand new fall outfitā and dying of the heat. Where is global warming when we need it? While I have always loved Fall as my favorite season, a lot of people feel cheated because of the cooler summer, but I personally loved it. Enjoy the Fall (in a few days).
We are seeing signs of real estate recovery….and that’s always a good sign .
Last year at this time, sales volume and median sales prices were miserably behind the previous years (2008). In every one of the areas I report to you on — Beverly Hills, Beverly Hills Post Office, Bel-Air, and Brentwood — median sales prices were down in 2009 compared to the previous year. And while we haven’t returned to the numbers of 2008 and back, we are seeing an increase in sales volume — always a healthy sign in the real estate world. Sales volume through 2010 is up 31% compared to down 32% in 2009 (vs. 2008), which is more than a 60 point swing in the positive direction. Sales volume for 2010 was $1.146 billion vs. $876 million, which is reflecting a very active, upward-moving market. Real estate volume July 2010 was only 25% ahead of the previous year-to-date #s…..so the strength in sales volume is really showing a 20% improvement over the past month.
Perhaps the best news is the positive trends in three of the four areas: Beverly Hills median sales prices were up 16% for August 2010 over August 2009; Beverly Hills Post Office was up more than 20% for same period; Bel-Air showed an 18% increase; but Brentwood was lagging behind, as it has all year, at 22% off from a year ago.
Performance for August 2010 compared to just a month ago….Beverly Hills was up over 30%; and Bel-Air was up 4%….but Beverly Hills Post Office was down 9% and Brentwood was down 7% for August compared to July 2010.
When you look at the 2009 statistics, all of the areas were showing major negatives in year-to-date median sales prices. Beverly Hills is even Y-T-D for median sales prices at $3.002 million; Beverly Hills Post Office is also even Y-T-D at $1.801 million; Bel-Air has dipped to $1.600 million; and Brentwood has a negative 19% median sales price through August 2010 of $1.720 million.
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Strength in the market is reflected in the homes that are selling over asking price!
In looking at the stats from the MLS, there were a number of homes that sold over asking, so the assumption is that they sold with multiple offers. I am making this assumption without having personally checked out it, but if history is correct, that is what happened. In August 2010, Beverly Hills had two; Bel-Air also had two; and Brentwood had three homes which sold over asking. The numbers of homes selling for over $2 million was also quite impressive: Beverly Hills had 10 homes selling for over $2 million; Beverly Hills Post Office had two; Bel-Air had seven, including one for over $11 million; and Brentwood had three.
The point is this: All of these homes were in escrow a minimum of 45 and 60 days. Loans are taking longer these days….and as I have stated many times before, banks do not want to make loans on residential real estate. Ask anyone who is in the mortgage business — ask buyers, sellers or agents: It is exceptionally difficult to get a loan these days. When we get to the point when our economy really starts to turn around, getting a loan won’t be as difficult, but for now, it is very painful for everyone concerned, even buyers with stellar credit, personal banking relationships and a huge down payment.
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Pardner, saddle up your trusty deed in Sedona….
I cannot tell you how magical this potential listing sounded to me when I was approached to help sell this property in Sedona, Arizona, one of my favorite places on the Planet: Five-acre ranch property in Sedona area with barn, corral and one-story, 3,500 square-foot ranch-style home; four bedrooms and 3.5 baths….property fenced and gated with magnificent views of Sedona’s famous red-rock mountains and rock formations; built in 1998 with its own water well — the perfect home for the gentleman rancher….only $399,000. $399,000??? You’ve got to be kidding me! I could have sold it several times to wannabe horse ranch owners here on the Westside, but clearly, selling this dream ranch (even though it needed some work) seemed like a no brainer, and for such a low, low price. Well, folks, Welcome to Arizona Real Estate. Working with a CB agent in Sedona, we implemented the typical first-rate CB marketing program, and after a couple of stumbles, the house is in escrow, after only 2 months and close to our asking price!. Arizona real estate is under water — as many as 50% of the homes in this state are valued at less than their mortgage. Sellers are desperate — either taking big hits or just walking away from their property. This listing was owned by an older woman who had purchased it for her daughter, who no longer lives there. The new owners who live in the neighborhood are very happy about this ‘new phase in their lives’. Congratulations, Pardner.
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Time to sell or buy?
The market appears to be making headway when the national economy is finally showing some signs of strength. I’m having a lot of conversations with both buyers and sellers these days who are on the fence — should I buy now or wait? Should I sell now or wait? Buyers are hoping that prices continue to drop, but as I have noted above, real estate sales are actually on a strong move upward, meaning there is going to be increased #s of buyers and sellers in the market. Traditionally, the last quarter of the year reflects less inventory because sellers believe there are less buyers — they’re going to wait for Spring.
Therefore, the assumption is that this is not the best time to sell, which means the choicer and better homes are not going to be on the market. But these are challenging times. Many buyers and sellers are more motivated and moved to action because of economic conditions and/or a change in career circumstances. So, we cannot compare what is going on now with what was ‘traditional’ or normal two years ago. A lot of sellers are still in denial — wanting more for their home than it is worth today. Bank-owned homes are driving prices (and equity) down by as much as 30% in some neighborhoods. Comps are showing that buyers are using them as their ‘benchmark’ — not what was the selling price in 2008! Buyers and sellers both are going to have to show a willingness to deal.
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Higher home loan rates on the way? …..According to John Ciolino, my favorite mortgage broker from First Capital in Santa Monica, the answer is Yes.. After the recent 4-month rally in the bond markets, which has led to some of the best home loan rates in history, money has started shifting over to the Stock market. Why has this happened? Some economic reports have been better than expected in the past few weeks… such as the Jobs Report for August and Consumer Confidence. While thatās great news, itās important to remember that good economic news – or as has happened recently, better than expected news – often causes investors to move their money out of the safe haven of Bonds to Stocks in the hopes of taking advantage of any gains. So why does this behavior impact home loan rates? When the economy appears strong or starts to improve, and investors move their money from the safe haven of Bonds to Stocks, a decreased demand for Bonds means that Bond prices move lower. And when bond prices move lower, it means that bond yields – and consequently home loan rates – move higher.
In fact, given the recent better than expected economic news, St. Louis Federal Reserve Bank President James Bullard last week shifted away from previous comments he had made about deflation and said that while he sees a slowdown in the economy for the second half of this year, he predicts a pick up in 2011. He also said that the Unemployment Rate will likely fall next year, and business spending should start to rebound. While continued improvements to our economy are good news, one big impact is that home loan rates will start to increase. And when home loan rates start to increase, they tend to increase quickly. That being said, while home loan rates ended last week about .125-.25 percent worse than where they began, they are still near some of the best levels we have ever seen!
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Whatās the buzz about bees and your food?
I am not a lover or bees, in fact had a huge colony removed from my house a few years ago, but I found this information fascinating.
Imagine if 1 in 3 pigs started dying mysteriously or 1 in 3 cows? That would likely hit the headlines of every news service and additional millions, perhaps billions of dollars would be immediately poured into research to find the cause and cure .Let’s say that major food crops were under a real and imminent threat – likely that would evoke the same response. But it hasn’t.
According to a survey conducted by the Apiary Inspectors of America (AIA) and the Agricultural Research Service (ARS), losses of managed honey bee colonies in the USA totaled 33.8 percent from all causes from October 2009 to April 2010. 28 percent of beekeeping operations that reported some of their colonies perished without dead bees present, which is a sign of Colony Collapse Disorder (CCD), lost 44 percent of their colonies.
The bees are dying at unsustainable rates and have been for a few years now, but this crisis still gets little coverage given the major threat it poses.
So why is it a crisis and what’s the link between bees and food? Bees do so much more than supply honey and beeswax. Bee pollination of crops, something that most farmers heavily rely on, is responsible for as much as 30% of the U.S. food supply. Where bees are not available, they are called in, with apiarists (bee keepers) traveling around the country to provide the services of their hives.
According to the USDA, the number of managed honey bee colonies has dropped from 5 million in the1940s to only 2.5 million today. However, the demand for pollination service has continued to climb and honey bee colonies are being transported farther and more often. Unless the cause and cure for Colony Collapse Disorder is found soon, the supply of many fruits and vegetables could be affected. The flow on effects are mind-boggling. It’s not just fruits and vegetables, but also stock feed and grains. Here’s a *partial* list of crops that require, or at least benefit from, bee pollination:
According to the USDA, the number of managed honey bee colonies has dropped from 5 million in the1940s to only 2.5 million today. However, the demand for pollination service has continued to climb and honey bee colonies are being transported farther and more often. Unless the cause and cure for Colony Collapse Disorder is found soon, the supply of many fruits and vegetables could be affected. The flow on effects are mind-boggling. It’s not just fruits and vegetables, but also stock feed and grains. Here’s a *partial* list of crops that require, or at least benefit from, bee pollination: Forage and Legume Crops: alfalfa ,buckwheat , and clover. Fruit Crops: apple, apricot, avocado, berry, cherry, citrus, kiwi, mango, passion fruit, peach, pear, persimmon, plum, and prunes .Nut Crops: almond, cashew, chestnut, coconut. and macadamia. Oilseed Crops: cotton, flax, rape, safflower, soybeans, and sunflowers. Vegetable seed crops: asparagus, broccoli, brussel sprouts, carrots, cauliflower, celery, Chinese cabbage, collard, cucumber, dill, eggplant, garlic, kale, kohlrabi, leek, lima beans, mustard, onion, parsley, pepper, pumpkin, radish, rutabaga, squash, and turnip. Vegetable Crops: beans, cantaloupe, cucumbers, eggplant, lima beans, muck melon, peppers, pumpkin, squash, and watermelon. (The above list taken from MAAREC, the Mid-Atlantic Apiculture Research and Extension Consortium)
That’s pretty frightening stuff. Other insects play a role in pollinating some of those crops, but even in those cases, to take 30% of the pollinators out of the population will have dramatic effects. exacts on the environment. While the cause of Colony Collapse Disorder hasn’t been pinpointed as yet, it’s thought to be a result of parasites taking advantage of warmer, more humid conditions in some areas, a virus and possibly the effects of pesticides; a mix of poisons that have hit critical mass. What can you do?
Talk to others about the issue; write to government representatives explaining why it’s such a concern; point them to further information.
We can also all do our bit by making our yards attractive to non-commercially kept bees; by planting flowers; or better still, a vegetable garden and most importantly – using less pesticides in our own gardens.
Planting your own veggie garden may also provides additional food security if the worst should come to pass – even without bees, there are ways to manually pollinate; but it is time intensive. Isn’t it amazing how such a small creature plays such an important role in our food production? Learning all this gave me a new respect for the “humble” bee.
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After a quiet week last week with Labor Day and The Jewish New Year, this week is busy again. The phone is ringing and offers are being madeā¦
Happy New Year to all of my Jewish friends and clients!!!!!!
