Timely Real Estate News………………………………….. 15 July 2019
Behind enemy lines…but we’re overcoming…
It seems we’ve been fighting from behind since early 2018 when we ended last year 9% behind our total sales volume for 2017. It only got worse as we moved into 2019 with sales volumes down by as much as 25% through April for the five communities whose information I share with you.
However, since April, we have made our way back in sales across the board — and as of June, 2019, we’re only 2% behind for the year compared to a year ago at this time. That’s good news. Sales
volume for Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City and Brentwood was $1.726 billion vs. $1.775 billion last year at this time. Beverly Hills was up by $95 million over last year, and Brentwood was up $4 million, but BHPO was down over $100 million in sales volume for June, Bel-Air/Holmby Hills was down $24 million, and Westwood/Century City was down $31 million.
One of the other westside areas I work in is Malibu, which saw sales volume down substantially by over $152 million from $257 million, a 57% drop. No doubt the impact of the Woolsey Fire played a major role in their on-going recovery from this disastrous fire. More than 96,000 acres were consumed in that terrible fire which straddled LA County’s northern border with Ventura County.
Median sales prices sound like a broken record….
The only trend emerging from June statistics — it’s just more of the same…flat, inertia. Our marquee market, Beverly Hills, came in with the almost the same median sales prices as 2018 of $6.235 million, just barely 1% behind. Its neighbor, Beverly Hills Post Office, was 5% ahead of last year, but the other communities were down — Bel-Air/Holmby Hills was down 5%, Westwood/Century was down 10%, and Brentwood was down 2%. Malibu was also down…by 9%.
In looking deeper at the MLS stats for last month, Beverly Hills had five homes over $10 million, the highest on Rodeo Drive at $19.5 million. Bel-Air/Holmby Hills had two over $15 million, with the highest at $31 million. Brentwood had a sale of $22.7 million.
Overall, median sales prices tend to be firming up — which is a good thing, and prices are holding their own for the most part as the range of matching the final sales price to the original listing price is in the mid-90% range, which means, sellers are getting more realistic about pricing their homes more competitively. And why not? We have buyers who have become much more discerning and sophisticated in their home purchases, and through their own research methods combined with a knowledgeable agent, there are transactions being made.
Pending Home sales increased in May
This is good news….as always, pending homes sales is a key indicator of future sales volume and closings in the marketplace. Pending home sales increased in May, a positive variation from the minor sales dip seen the previous month, according to the National Association of Realtors. Three of the four major regions saw growth in contract activity, with the West experiencing a slight sales decline.
The Pending Home Sales Index is based on contract signings, climbed 1.1% to 105.4 in May, up from 104.3 in April. Year-over-year contract signings declined 0.7%, marking the 17th straight month of annual decreases.
Lawrence Yun, National Association of Realtors’ chief economist, said lower-than-usual mortgage rates have led to the increase in pending sales for May. “Rates of 4% and, in some cases even lower, create extremely attractive conditions for consumers. Buyers, for good reason, are anxious to purchase and lock in these rates.
LA Home prices have never been higher
That is good news if you’re a seller, not so much if you’re a buyer. According to real estate tracker CoreLogic, LA’s median sale price climbed to $615,000 in May, tying an all-time high.
Still, the growth of home values has slowed since last year, when price records fell in every month of the summer. May’s median sale price was just 1.7% higher than it was 12 months earlier. At that time—May 2018—prices were more than 8% above where they were the year before.
Across all of Southern California, the median sale price grew just 0.2% in the last year. CoreLogic analyst Andrew LePage suggests the slower rate of price growth may have a lot to do with the fact that home values are entering uncharted territory. “The flattening out of home price growth reflects the erosion of buyer affordability after years of rising home prices and last year’s run-up in mortgage rates,” he writes in a monthly report.
Many buyers according to CoreLogic may be waiting for a drop in prices before purchasing; others may simply be priced out of the market. But it is clear that prices are not receding to the point where the market in West Los Angeles is for the most part willing to accept more first-time buyers with limited budgets. Affordability is the issue, and that is true throughout Southern California, not just in LA County.
In a review with CoreLogic and a panel of experts, home prices may come down slightly, but “don’t expect a steep decline. It won’t happen.” California is feeling the full force of a booming economy with an unemployment rate clocked at a record low of 4.2%.
Supersized mortgages are “in”
Borrowers are not shying away from “supersized” mortgages according to a recent report from the Mortgage Bankers Association. They found it easier to access credit in June, but it was jumbo mortgage credit that saw some of the highest growth. Jumbo loans—mortgages with higher debt—are on the rise and were easier to get in June than any other
month in the past eight years.
Jumbo mortgage credit rose for the sixth straight month, rising to its highest level since 2011, when the MBA’s survey began.
A jumbo loan is a type of financing designed to finance luxury properties and homes that exceeds the limits set by the Federal Housing Finance Agency. The values vary by state. As of 2019, the limit for a jumbo mortgage was set at $484,350 for most of the country, and up to $726,525 in counties with higher home values.
Mortgage rates for jumbo loans have remained low, which may be adding to their appeal.
Fed to cut interest rates?
Chairman Powell thinks so. Federal Reserve Chairman Jerome Powell signaled to Congress last week that the central bank is prepared to cut interest rates as soon as this month despite an improved employment picture and less incendiary trade battle with China.
Testifying before the House Financial Services Committee, Powell noted that in June, Fed policymakers believed the case for lower rates had strengthened amid the trade tensions, a slowing global economy and muted inflation.
“Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook,” Powell said in his prepared testimony.
He later added, “We see the economy as being in a good place, and we’re committed to using our tools to keep it there.”
Earthquake Insurance — a whole lot of shakin’ going on
It’s never dull in Southern California. Yes, Mister Earthquake, we’ve been expecting you…we now have a major statement, albeit 100 miles north of Los Angles. But big, shaken’ statements they were…like 6.4 and 7.1 on the Richter scale. If you were driving, sleeping or even taking a shower, you probably didn’t even feel them. But I did in Coronado. It was very faint, but I felt it none the less. I also felt the one this past Friday morning at home in LA. My sister tells me that they had 3 last week in Vancouver, BC Canada which might have also been part of the one in Seattle.
I’ve been getting a lot of questions about earthquake insurance, and no, your homeowners insurance policy doesn’t cover specific damage caused by an earthquake. I shared with you the keen insights of disaster insurance guru, Robert Feldman, about the challenges of getting the right coverage for fire and smoke damage insurance. Now, it’s time for his views on Earthquake Insurance.
* There is a lot of insurance coverage out there — private companies and the state-issued California Earthquake Authority insurance, which Feldman feels is not as good in terms of price and coverage. Private firms offer more-than-adequate coverage but you have to be careful in comparing coverages and price. It can get complicated.
* Of the four major companies that Feldman represents, only three are still offering earthquake coverage after the latest round of quakes. “One company has put a moratorium on providing this insurance for the whole state. But the other three offer solid coverage and fair prices.”
* Ideally, you should always have what is known as a Combined Single Limit policy that covers all categories. This is the standard for the best coverage, and Feldman says that many homeowners fall into the trap of not accepting the full coverage because they want to save a few bucks.” like $50 to $100 that could drastically affect their total coverage. You have to look at the coverage and not the price!”
Feldman notes that the recent California fires and earthquakes have awakened homeowners and businesses up and down the state that they need to review their coverage for fire and earthquakes because they could strike anywhere, anytime.
If you would like more information, please contact me…Carole Schiffer, 310-442-1384. Or visit my website — www.caroleschiffer.com.
Thank Kate Sessions for the beautiful Jacaranda trees
There is nothing really more inspiring than to drive under a canopy of blooming jacaranda trees, their vibrant purple flowers forming a tunnel of pure beauty that puts a smile on your face. You can’t help but feel pleasure to experience these magnificent creatures of Mother Nature.
Well, we can thank a pioneering horticulturist, Kate Sessions, for making the jacarandas so popular and making over our natural environment in Southern California. Born in 1857, Kate was one of the first females to graduate from the University of California Berkley in 1881. She moved to San Diego where she eventually found a way to feed her passion for plants by leasing 32 acres across from the city of San Diego in 1892, where she focused on planting trees in the adjacent city land, which by now was the genesis of Balboa Park.
She single-handedly transformed much of San Diego with her horticultural work, and as word of San Diego’s transformation into a colorful and lush environment quickly spread up the coast, her popularity and success with exotic plants expanded. She demonstrated that these new plants and trees could flourish here in Southern California. She quickly made such species as the Jacarandas, with their beautiful blossoms in a distinctive purple color, an easy sell. Jacarandas were planted extensively in Los Angeles and Santa Barbara in the 1920s and 1930s.
Sessions died in 1942, and she is the only woman in San Diego that has a statue dedicated to her achievements, now displayed in Balboa Park.
I want to personally thank all of you for helping me be part of the prestigious top 1000 Sales Associates, and the top half of that of all of the
50,000 Coldwell Banker agents nationally. I could not have done it with you!!!!!
We are experiencing a little of the summer doldrums with families on holiday. I am still getting a lot of activity on my lease at 11812 Folkstone Lane, which is listed for $10,000 a month. Unfortunately, we have not been able to reach an agreement with any of the prospective tenants but we will keep trying.
The house on Brookshire is temporarily off the market while the owner is out of the country. I have a new lease listing coming on the market in the next few days. It is a lovely Custom home in Bel Air Crest, approximately 7285, sq. feet, according to the county assessor, 7/7.5 lovely yard & garden with pool & spa. We will be asking $23,500 furnished, and $22,500 unfurnished. Please let me know if are interested in seeing it as I can show it anytime.
If you have the chance, please call my office at 310 442-1384 and introduce yourself to my new assistant, Angela. I know she is looking forward to getting to know all of you.
In the meantime, please stay safe with the fire season and current swath of earthquakes and let me know how I might assist you with any and all of your real estate needs.
Carole Schiffer, Realtor Coldwell-Banker Residential Brokerage/Brentwood Office 310-442-1384 (office) or e-mail me at firstname.lastname@example.org www.caroleschiffer.com
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