Timely Real Estate News………………………………….. 15 June 2011
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Happy Father’s Day….to all you Dads step and otherwise, and Granddads
Unreliable sources tell us that there are 66.3 million fathers in America (compared to 85.4 million moms) and that neckties remain the #1 gift for Father’s Day. I don’t know about you, but in California — where casual has become formal — I am not sure that I agree that neckties are #1, but who knows! Hallmark does reveal that over 90 million cards were sent last Father’s Day, making it the #4 holiday gift card. And in this age of Face book and online greeting cards, kids are using ‘everything online’ to send greetings and stay in touch. As I have said before, I wish my Dad were still here to celebrate with, but I try to honor him every day. However you celebrate it, Happy Father’s Day.
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The Closure of the 405
Hopefully you have all seen and heard about the closure of the 405 freeway from t the 110 freeway to the Santa Monica freeway on the weekend of July 15th to the 17th. Access on Sepulveda will be limited to only those residents who can show that they live in the area. This will be gridlock of Massive proportions. They are tearing down one side of the Mulholland Bridge and guess what; they will repeat this exercise in 11 months when they take the second side down! My advice to all of us…. Get out of Dodge.. Access to the majority of West Los Angeles will be severely limited for the entire weekend.
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Yes, there’s good news for Westside real estate….sales above 2010 for first time
I do have some good news for you — total real estate sales for the four communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air, and Brentwood — are up 6% for the year compared to same period in 2010. More than $747 million in sales have been recorded through May 31, 2011, compared to $702 million in 2010. We have been lagging behind in total sales, which is a key arbiter for measuring strength in the market. And this comes at a time when overall home sales (new and resale) for May 2011 fell 17.4% compared to a year ago. This was a three-year low according to Data Quick, the San Diego-based real estate research firm as reported in the Los Angeles Times (June 14, 2011).
Again, I have to point out that the regional and national stories you can’t help but see or hear about in the media on a daily basis are not necessarily indicative of what is happening in your community or neighborhood. And why is that, Carole? It’s because we are like an “island” within the greater Los Angeles market, and are somewhat protected… yes the prices are down, but we are doing better than most. This is because our community and neighborhood assets stand out and consistently remain the primary reason we continue to buck other area’s real estate trends.
Year-to-date median sales prices remain strong…. .
In analyzing the individual communities, we have three out of four communities posting median sales gains for the period — January 1 through May 31. Beverly Hills Post Office posted a 6% gain over 2010; Bel-Air was up a modest 1%; and Brentwood, which suffered for most of 2010, is up 23% for the year. That’s really good news. Beverly Hills, which seems to have a schizophrenic personality when it comes to tracking monthly trends (up, down), was down 5% for the year and, well, I never worry about BH because one or two huge sales will hit the market and throw off their median averages into a dither. (For example, the media is reporting that Aaron Spelling’s 58,000 square foot home which is in Holmby Hills just went into escrow with the buyer being a wealthy British heiress….it was listed 2 years ago for $150 million..and the purported non confirmed sales price is $85,000,000). The escrow is scheduled to close in the next to 60 days). Here are some examples of closed escrows for May 2011 vs. May 2011 for sales over $3,000,000 – Beverly Hills (2010) – 2 sales over $3,000,000 – but no really high numbers as all of the sales were under $4,000,000 – (2011) – 5 over $3,000,000 with 2 under $4,000,000, one at $4,100,000, the 4th one at $7,300,000, the 5th sales price was confidential, but list price was $26,000,000. Beverly Hills Post Office (2010) – again just 3 with none over $4,000,000 – (2011) – 4 sales – two under $4, 000,000, the 3rd was at $9,100,000 and the 4th at $22,950,000. – Bel Air (2010 – 1 sale over $3,000,000 at $16,250,000, and (2011) – 6 at $3,000 or more with only one at $3,000,000 then they were $8,000,000, $12,000,000, $16,600,000 and $21,500,000. – Brentwood (2010) 2 over $3,000,000 with 1 at $4,000,000 and then $11,000,000 – (2011) – 6 over $3,000,000 -$3,350,000, $4,339,000, $4,900,000, $6,167,000, and $6,750,000. All of these high numbers will as you know skew the stats any way you slice them.
There is definitely a chasm in the market today…. And huge gaps of sales prices and activity… what the above numbers are telling us that the high, high end is moving, but the “typical” numbers for West Los Angeles real estate of $1,000,000 – $3,000,000 is still bogged down.
While these #s may not impress you, when you compare this year’s MSP to last year, you will find that each of the four communities have all done much better this year — each succeeding their negative year-to-date performances for median sales prices through May 2010 (although Brentwood did have a 2% increase in MSP through May 2010….but had a 23% increase this year!).
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Monthly Median Sales Prices show strength…..
Median sales prices for the four communities were a bit uneven for May 2011 compared to May 2010 — Beverly Hills was down 12%, BHPO was down 14%, but Bel-Air was up 1% and Brentwood was up significantly by 47% over last May 2010.
When you peel back the real estate onion, you will see that another significant statistic is indicating a deeper strength — Days on Market. When you compared Beverly Hills DOM for May 2011 to May 2010, it went down from 91 days to 54 days, a substantial improvement. BHPO, however, had 137 DOM, compared to 97 for Bel-Air and 78 for Brentwood. And perhaps the one of the more important #s to watch on the monthly MLS stats are comparing the sales price to the original listing price: Beverly Hills was at 91%, BHPO was at 93%; Bel-Air logged in at 84%, and Brentwood was at 90%.
What does this tell us?
We can’t ignore “lingering economic uncertainties that have left the market soft” according to Richard Green, director of USC’s Lusk Center for Real Estate. “People are gloomy,” he admits, “but if you look at our job numbers over the last year, we are not doing badly.” The difficulty, he says, is the difficulty in getting a mortgage — “it’s a big part of the problem.” He points out that “…Hollywood is hiring, Silicon Valley is hiring. I think things are getting better in California….and housing is about as much about the availability of credit as anything else.”
Foreclosures made up 33.4% of the resale market last month in California, down from 33.8% in April and 33.9% last year. Short sales made up 18% of the market in May 2011, up from 17.1% a month earlier.
From my in-the-trench observation, the buyers are out there. They’re looking at properties, but unless they see a substantial savings or discount (in other words, they want ‘blood’), buyers are still concerned about the economic conditions. They want to be justified in making an offer — because they fear that they might get stuck by having made a mistake and “buying too soon”. It doesn’t matter what the seller or real estate agent thinks — it’s what the buyer thinks. They are setting the final price.
Adjusting a home priced too high…..when to do it
This is always a difficult decision – for the seller and the real estate agent. Let me give you a typical example. Let’s assume that we would agree to list a home at $2.3 million. Based on the comps and market conditions, this home was properly priced. But after two to three weeks of no showings and a few phone calls, it was obvious that there was no interest at that price level. When we drop the price to $2.2 or $2.1 million, we expect to see stronger interest. I only drop the price because of these factors: 1) new comparables in the nearby neighborhood indicate that the price is too high; 2) economic conditions have worsened; and 3) taking into consideration, of course, the goal of the seller. Usually, these price adjustments occur when a property is on the market longer than it should be. In some cases, the seller is not in a hurry to sell and under no pressure, so they will tend to keep the price longer in the market than it should be — assuming they really are a seller. Do these price reductions work? Yes, they do, but sometimes we have missed the boat with our timing and the price needs to be adjusted again.. and so does any seller really want to be in the position of “chasing the market”.. I don’t think so.. So the trick is to start out with the right price off the bat… and that is not easy to do..
Every listing has its own challenges — and regardless of the market conditions, one area can be “hot” and another nearby area “cold”. For example…..One of my fellow associates who is a leading sales agent in the Marina said that Venice is hotter than Marina del Rey. He has 18 listings, which is an above-average number for any successful agent — and is not getting calls to show them. However, up the coast, I heard at a meeting of Coldwell Banker agents who specialize in selling high end homes, but could not verify this that Santa Monica properties are selling at 119% of the asking price.
*Buyers Sitting on the Fence?
So, is this a good time to purchase a home? Yes. The cost of money today is at one of its lowest points in recent years, and there are some excellent bargains out there. If you factor in the cost of increased interest rates (they will surely go up) and increased housing prices when the economy turns (and it will), you will see that those increased costs will convince you that this is a good time to buy. To see a sample of buying today vs waiting for the sales price to go down and the interest rate to go up, please click on this link
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West Los Angeles Contest
Congratulations to Debbie Finerman of Bel Air Crest for wining my knowing some of the different spots in West Los Angeles.. Debbie is a faithful supporter of my contests and won this with 100% correct answers.
Thank you Debbie… enjoy your $100 Whole Foods Gift Certificate
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Fun Things to do in Southern California this Summer
Thank you to all of you for the great feedback on my addition of the listing of Fun Things to do in Southern California.
Discovery Science Center | 714-542-2823 |
Disneyland | 714 781-4565 |
Dorothy Chandler Pavilion | 213 9727211 |
Drum Civil War Museum | 213 972-7211 |
Fort MacArthur Military Museum | 310 214-0846 |
Galaxy – Ticket Master | 213 480-3232 |
Geffen Playhouse | 310 208-5454 |
Gene Autry Western Museum | 323 667-2000 |
Go Kart World | 310 834-3800 |
Grauman’s Chinese | 323 464-8111 |
Getty Museums: Villa (Malibu) & Center | 310 440-7300 |
Greek Theatre | 323 665-5857 |
Greystone Mansion & Park | 213 550-4796 |
Griffith Park Horse Rentals | 818 840-8401 |
Click here to see the rest of the Fun Things to do.
Have fun!!!
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Reusing bread bags
I’m not sure if there’s been much advancement in the world of bread bags in terms of making them a little more earth friendly; so this is another area that certainly needs some improvement. Sure, you can go to a bakery and buy full loaves wrapped in paper or make your own bread which will also cut down bag usage, but for most of us this isn’t going to be the case. Many families would wind up with hundreds of bread bags each year. So what to do them all?
We probably can’t keep them out of the waste stream forever, but perhaps they can be used for other purposes that may prevent the use/purchase of another product. Here are some ideas:
– For packing sandwiches, As packing material when shipping goods ,General storage for small items, A replacement for freezer bags, Plastic bag crafts, A cake icing piping bag, Handy bags for picking up dog poop, makeshift gloves, punch holes in the bag and use as a seedling tube, seasoning bag for cooking.
These ideas won’t keep the bread bags out of the waste stream, but they might take the place of something you’d otherwise buy for the tasks .Lowering consumption of anything and everything is something we can all do to reduce our environmental impact. “Repurposing” is one of the 3R’s of going green: “Reduce, Reuse (Repurpose) and Recycle! Sometimes it’s the simple things we often overlook that give us the best opportunity for contributing to a greener planet.
Have ideas for using bread bags or any other Green Tips you’d like to contribute? Please let me know at Carole@caroleschiffer.com
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My listings
Please don’t forget my wonderful listings in Mountaingate, including a great unit in the Ridge with an elevator, and a wonderful home with amazing city and coastline views.