Timely Real Estate News………………………….15 January 2019
A mixed bag…a recurrent theme for 2018
In looking back at 2018, our real estate market somewhat mirrored what was happening across America — rising home prices, rising inventories, higher mortgage rates which led to fewer sales. However, the last few weeks has been a roller coaster effect with the stock market going up and down in broad sweeps, interest rates going down then coming back up again, and bond rates changing as well. As a result, buyers are more cautious and home sellers are seeing the possibly that the “party of it being a sellers’ market is over” and are coming off of their prices somewhat. We are starting to see an increase in inventory which is most welcome.
Compounding the real estate market condition now is the current continued government shutdown. The vote is out as to what the impact will be on our real estate market. Only 10% of real estate agents surveyed by the National Association of Realtors felt the shutdown affected their business. Basically, what we are seeing, is that those who are self-employed are “safer” from being impacted than salaried employees as it will be more difficult to obtain necessary information from the IRS to process their loan applications. According to Fed Chairman Jerome Powell, the shutdown shouldn’t have a major impact on the economy, but he said “that could change if not ended soon.”
Sales Volume down for 2018
We’ve been running about 5% down in sales volume this past year, but a tepid December pushed sales volume farther down to a year-ending 9.1% deficit compared to 2017’s totals. That’s not surprising as we have homes sitting longer on the market (being overpriced is one reason). The sales volume was $3.443 billion for all of 2018 — down from $3.790 billion for 2017 — for the five communities I cover each moth which include Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood.
The biggest losers in year-end sales volume results were Beverly Hills, down $160 million in total volume for the year…. BHPO was down $94 million, and Bel-Air/Holmby Hills sales volume was down over $220 million for the year.
Westwood/Century City was down $9 million in sales volume but Brentwood increased sales volume by $42 million over 2017. As always, I remind you that these stats are from the multiple listing service, and do not include any private sales.
Median Sales Prices up, again
Median sales prices for the year were up in four of my communities, down only in Beverly Hills Post Office, which was minus 15% at $2.780 million. Beverly Hills stayed 1% ahead of last year at $5.972 million; Bel-Air/Holmby Hills was up 16% for 2018 at $2.730 million. Westwood/Century City was up 11% at $2.215 million. Brentwood was essentially even with last year at $3.170 million median sales price.
Malibu, which I also serve, was up 5% for the year at $2.850 million compared to 2017. However, this community, which suffered disastrous losses as a result of the Woolsey Fire, will be in a recovery mode for some time and we will see how their real estate market is impacted for this year.
So, what does this mean?
It is clear that our home prices are continuing to climb each month. For example, Beverly Hills had a 90% increase in median sales prices for December compared to same period last year. Bel-Air/Holmby Hills was up 14%, Westwood/Century City was up 22%. Malibu, pre-fire, was up 110% over last December 2017, at $4,150 million. BHPO was down 39% and Brentwood was down $12% for December MSP.
Sellers seem convinced that they’re going to march onward to higher prices but what the data is telling us as that in all of my communities, the Selling Price is, on average, 10% below the Original Asking Price. When it gets down to it, sellers’ prices are coming down. As a result, we had 5% less home sales in these communities in 2018 than we did in 2017. My advice: Listen to your agent (hopefully me) who knows the neighborhood. Homes not competitively price will sit. Let me help you on pricing.
Google makes a Westside “splash”
When you say “google it” — it is going to have new meaning to LA’s Westside Pavilion, which will be undergoing a ‘make-over’ by the Silicon Valley behemoth Hudson Pacific Properties, Inc. Last week, the Mountain View, Calif., search giant announced it will lease nearly all of the mall, which had most of their major tenants move to the renovated Westfield Century City Mall and is being made over, as Google further expands its presence in Los Angeles.
Google will occupy 584,000 square feet of the prominent Pico Boulevard center, which owner announced it is renovating into a stylish office complex with street-to-rooftop windows.
The property has been renamed One Westside as part of its radical renovation, which has been budgeted for as much as $360 million before Google starts adding its own improvements. The project is scheduled to be completed within the next three years.
The Westside Pavilion was once one of the city’s premier shopping venues and a cultural touchstone for generations of Angelenos, appearing in movies, television shows and music videos. It played roles in the 1995 film “Clueless” and the video for musician Tom Petty’s 1989 hit “Free Fallin’.”
In recent years the mall, now mostly empty, fell behind flashier competitors such as the Grove and the refurbished Westfield Century City malls. The rise of online shopping also took a toll, and anchor department stores Macy’s and Nordstrom departed. The Landmark movie theatre and restaurant Westside Tavern will remain.
This is just another example of the areas’ attractiveness to high-tech companies who want access to the entertainment content and talent on the Westside, from Malibu south to the South Bay, with Playa Vista, Venice, and Culver City at the apex. The new Google development will surely infuse new investment in housing, retail, and commercial businesses. We’re excited to see them expand their presence in our community.
Graphene makes smart homes smarter
Graphene is a super material, and its impact in our lives will be felt everywhere. We are now in an era where sustainability, energy savings, solar options, innovations, engineering and smart home tech knowledge are all extremely important to consumers, business leaders and employees.
In 2018 alone, the U.S. spent $19.8 billion on smart home technology. It is predicted graphene will revolutionize the smart home industry and become a key factor in smart home technology advancements and innovations.
What is it? Graphene forms a nearly transparent, flexible sheet about one atom thick (which, to put in perspective, is one million times smaller than the diameter of a single human hair). It is 200 times stronger than steel yet six times lighter. It is a conductor of electrical and thermal energy, and it is eco-friendly and sustainable, with unlimited possibilities to create the perfect smart home (and more).
It is already being integrated into smart buildings, smart paint, smart solar, smart light, and smart sound! Sound smart? You’ll be hearing and seeing more of this amazing material.
Home prices outpacing wages. No surprise.
According to a new study from Attom Data Solutions, a real estate research firm , wages are failing to keep pace with rising home prices, Median home prices increased faster than weekly wages in 601 of the 755 counties—80% of the markets that researchers analyzed in the report.
The markets that saw home prices outpace wage growth by some of the highest amounts were: Los Angeles County.; Cook County (Chicago), Ill.; Harris County (Houston), Texas; Maricopa County (Phoenix), Ariz.; San Diego County; Orange County, Calif.; and Miami-Dade County, Fla.
The family median income increased to $76,608 in the third quarter of 2018 in the US, however, housing affordability decreased from a year ago because of higher mortgage rates and higher home prices.
To purchase a single-family home at the national median price, a buyer making a 5% down payment would need an income of $64,480, while a 10% down payment would require an income of $61,086, and $54,299 would be needed for a 20% down payment.
Best smart home appliances from CES
If you’re interested in making your home smarter, you should have attended the Consumer Electronics Show in Las Vegas this month. Smart home technology, or home appliance devices that connect to a person’s phone, is exploding and the housing market was one of the main focuses at the CES show.
One of the big hits was “Ring”, the video door-bell cam system that was, ironically, turned down by the Shark Tank, and is now offering more options such as smart sensors for home lights and their newest product, the Door View Cam, which takes the place of the peephole. KitchenAid is offering up a Smart Oven — their smart oven syncs with the KitchenAid and Yummly apps for those who like to control the cooking process from a phone, be it by setting a timer and temperature or checking the remaining cooking time. All these can be managed on the oven or over a phone app.
Apple is making its entry into smart home technology by announcing several products that connect and sync with its HomeKit. These include ConnectSet power outlets that track each device’s energy consumption. There are new technologies from GE, Wemo and Kwikset’s smart locks. It’s a bit overwhelming, really. There are so many choices today for upgrading your home with smart technology. But I’m sure there’s an app for that. Google it.
Monarchs, our beloved butterfly, is fluttering away
The population of western monarch butterflies in California’s coastal areas is apparently taking a nosedive. Researchers with the environmental group Xerces Society, along with volunteers, take to the state’s coastal areas each year to count the number of overwintering monarchs. The data provides scientists the”best estimate of how well this beloved butterfly is doing,” the group said.
This year, the society announced that early counts show the population “has been reduced to less than 0.5% of its historical size.”
The preliminary count results are comprised of 97 sites, “which includes many of the most important overwintering sites,” the group said. Those same sites accounted for 77% — or 148,000 monarchs — in 2017. The following year, in 2018, the same areas only had 20,456 monarchs. This reveals an 86% decline since 2017, according to the society.
No precise cause was cited but scientists point to late overwintering season and early spring, delayed migration, and long-term threats such as pesticides, herbicides and destruction of their migratory routes. We do hope our beloved Monarchs stay with us forever…they’re so beautiful and friendly, too.
What’s up with me?
Do you know someone who wants to lease a home in Bel Air Crest? If so, please have them contact me. I have two leases coming on the market this week. One is a lovely 3/2.5, plus den home that has been remodeled – asking price, $10,500. The other is a fabulous 4/3.5 den with pool, elevator that is being offered furnished for $15,500. Both could be available for two-year leases. I am working with some potential sellers as well, but have nothing definite to share with you at this point. Coming mid-March will be another home for lease in Westwood Hills. We are working on it currently.
I am looking forward to an exciting and interesting year. Also, Coldwell Banker has an exciting and new marketing program that includes a weekly TV show which will be offered to our sale listings. I look forward to sharing those ideas with you when I list your home for sale. Talk to you soon.
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