Timely Real Estate News……………………15 May 2018
Treading water is better than….what? Sales volume steady.
My usual opening line is…”sales volume is up again.” Come April, after a robust March, sales volume for the five cities I report on didn’t move the needle. For the cities of Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, and Brentwood, sales volume through the first four months of 2018 were statistically even…$1.092 billion through April 2018 vs. $1.093 billion through April 2017. For Santa Monica, one of my key communities also, was down 34% in sales volume to $156 million.
That is OK. Sales volume has continued to rise each month and I expect that trend will continue. We are seeing a strong selling season with open houses attracting large numbers and multiple offers this Spring. On the transaction side, as an aggregate total, we sold three more homes through this April than last year — a total of 234 homes in these five communities.
The real question remains: How are home prices holding up? In looking at median sales prices for these five cities, Beverly Hills fetched a remarkable $6.235 million median sales price, a 4% increase over last year at this time. Bel-Air/Holmby Hills was up 44% to $2.775 million over 2017, and Westwood/Century City was up 8% to$2.285 million. Beverly Hills Post Office was down 15% at $2.391 million, and Brentwood was down 16% $2.995 million. Santa Monica’s median sales prices were up 34% to $3.085 million.
We’re only looking at the first four months of this year, and we have witnessed slow starts before. You can count on these communities’ prices fluctuating from month to month, so the best way to get a handle on your home or your neighborhood is to get reliable comps (online comps can be off as much as 15%, so be careful). I will be more than happy to help you evaluate your home value…just give me a call at 310-442-1384.
April hasn’t always been a great month…
When you step back and look at a strong March and weak April, you realize that over the years, the early months of any year reflect both economic transitions and market conditions. We have seen the market According to Market Watch, Fed notes indicate there could be two more rate increases this year, and the low unemployment rate of 3.9% doesn’t appear to be stoking inflation worries, even if it overshoots its 2% goal. One also needs to be very careful in just looking at the low unemployment numbers. There are a lot of people out there whose benefits have run out as well as some people who are not even trying to find work. These need to be factored into the low unemployment numbers. The good news out of the Fed is that wages are expected to grow, even though we haven’t seen much wage growth since January.
All of this portends steady mortgage rates for the near term, and lenders are anxious to make more loans, too — if only there were more transactions (more housing inventory would help).
In looking at my market, four of the five communities I report on were down in median sales prices for April 2018 when compared to April 2017. Beverly Hills was down 34% in MSP, Beverly Hills Post Office was down 60% compared to April 2017, Westwood/Century City was down 20%, and Brentwood was also down 25%. Only Bel-Air/Holmby Hills was us an impressive 111% when comparing April 2018 to April 2017. Santa Monica’s median sales price for April was 69% higher than last year at this time.
I mention these numbers because it demonstrates the market’s volatility right now. Local trends are embodied in monthly, trending median sales prices, but there is a fallacy here, too. The MLS does not report private sales and as in my March report, 15 of the homes selling for more than $20 million last March were not included in the MLS totals. However, MLS still has the only and best data available to us on a consistent basis.
Is there a solar panel in your future? CA says yes!
In a move to cut greenhouse gas emissions that critics say will end up raising home prices in the already expensive market, California has become the first state in the nation to mandate solar panels for all newly constructed homes. In a unanimous 5-0 vote last week, the California Energy Commission approved the policy. Experts ae saying the inclusion of these solar panels could cause an increase of $10,000 to construction costs for a single-family home. On the flip side, the commission says, the panels could yield much more in energy savings. For residential homeowners, based on a 30-year mortgage, the Energy Commission estimates that the standards will add about $40 to an average monthly payment, but save consumers $80 on monthly heating, cooling, and lighting bills.
California is now 5th largest economy in the world
Do we really want this title? Let’s not look at California from 30,000 ft…let’s be practical: What’s it like on the 405 freeway after 3 p.m.? How long does it take get to UCLA from Santa Monica during rush hour? How much do you have to pay for an apartment, condo or to purchase your own home in Los Angeles? You know the answers…but it’s worse if you are asking these questions in the Bay Area, where soaring housing prices are forcing many to leave the area for even basic needs. And traffic is no better there, trust me.
A blessing has been the state’s strong environmental focus and posture on emissions, development, and human services. But it has all come at a cost, particularly for housing. We need an average of 186,000 new housing units every year to handle our population growth — but we can only build 100,000 units (apartments, condos, homes).
Even so, what this has brought to our state — according to the Center for Continuing Study of the California Economy, is that “we welcome immigrants and diversity, while reducing greenhouse emissions. And in spite of the roadblocks government puts in the path of developers, California is an “attractive state for talent, innovation, and entrepreneurship.” Somehow, you just don’t feel it when stuck on the 405.
How does this all affect housing? Pressure and more pressure. Inventory remains a problem on the Westside and everywhere in California, and even though it’s marginally better, we don’t see an end to this drought.
Three ideas that will make your kitchen happy….
Everybody’s favorite room is…the kitchen. It’s where it’s happening…where people gather at parties…where grazing and stealing are permitted. It brings people together…to have fun and enjoy good food, good spirits.
Developers know first-hand that kitchens are probably the key sales tool for any new home. And at a recent Kitchen and Bath Show, here are the three most popular kitchen trends….
#1 Create a “smart kitchen’. This includes wireless appliances, LCD screens on the refrigerator for ordering food, making lists, calendar reminders…. voice-controlled lighting and increased safety through connectivity apps.
#2 Choose easy-to-maintain finishes. Homeowners are turning away from high-maintenance granite and marble countertops, wood floors and traditional stainless steel. Manufactured quartz is “in” and millennials in particular are looking for low-maintenance ‘everything’ in the kitchen. And…
#3 Bring on the color! Yes…it’s time to spruce up the traditional white or wood-paneled kitchen with colors that fit a more contemporary taste. Dark hues can highlight kitchen appliances and the outside…and neutral colors work perfectly for selling your home — let the buyer imagine what works best. There are so many options now available for the homeowner or seller to work into the ‘best room in the house.’
Millennials’ tail is wagging the dog….
Whether you like it or not, millennials have become the tail wagging our dog. Millennials, in fact, are purchasing more homes than any other generation. They made up 36% of home buyers last year, up from 32% in 2013, according to the National Association of Realtors (NAR).
Homeowners typically stay in starter houses for about five years before trading up, NAR’s Chief Economist Lawrence Yun says. But by waiting to buy until their job status and income grow, millennials have been able to land their dream houses at an earlier age, he says.
During and after the 2007-09 recession, many Millennials had to take lower-paying jobs that didn’t utilize all their skills. But their incomes began noticeably rising two to three years ago, leading to an increase in home purchases, says Sam Khater chief economist of Freddie Mac.
Also, many young adults are moving from high-cost areas like New York City and the Bay Area to relatively inexpensive Southern and Western states, enhancing their ability to buy pricier homes, Khater says.
Meanwhile, there’s a shortage of houses generally across the U.S., but it’s particularly severe for starter homes. The number of starter homes was down 14.2% in the first quarter from a year ago, and prices continue to just go up and up. It’s not easy being a millennial these days.
Guess who’s coming to live with us….?
According to a recent national survey, the rate of Southland millennials that live at home with their parents has gone up by more than 60% in just 10 years.
A recent study found that in 2016, 30.2% of millennials – defined as those aged 24 to 36 – in the Los Angeles-Long Beach-Anaheim metro areas still resided with their parents. That’s up from 18.4% in 2005.
The study found that the median monthly rent in the Los Angeles and Orange County metro areas is currently at $2,753. It was determined that a typical renter in this region spends an average of 47.3% of their gross income on rent.
“Googie” (not Google) is making a comeback
It’s retro. It’s cool. It’s so Hollywood and LA. It’s the architecture of the ‘40s and ‘50s that permeated our city and culture, where the traditions of World War II era clashed with the Jet Age. To prove it, we only have to look at iconic “Googie” examples — the LAX themed restaurant…John Lautner’s famous “Googie’s” restaurant in West Hollywood or the fabulous iconic76 gas station in Beverly Hills. And then there is Norms…still going strong. “Googies” was intended to be derogatory term by an architectural critic…but it didn’t work out that way. One of the best — Bob’s Big Boy in Toluca Lake!
I am happy & busy! After having been out with an injured back for almost 5 months, my longtime assistant, Jacqueline is back at work, YEA!!!
We have reduced my lovely listing at 12547 Promontory in Mountaingate by $90,000 to $2,450,000…and are having a great deal of activity and hope to have it in escrow very soon. My clients are ready to move to their new home. Right after the first of the month, I will be bringing out a great, single story home in the hills in Tarzana. It is 5 bedrooms, good sized yard, and a real swimmers pool. The price will be $1,825,000 and I am in the process of looking for a new home for them. There are also some leases in Bel Air Crest coming up soon.
In addition, my sweet, cute Mother will be turning 96 in a week or two, and my family is in the process of planning a surprise visit to celebrate. My niece Morgan and her fiancé Ben and nephew Connor and his girlfriend and my sister & brother-in law will all be here to join in the fun.
Please check out my web site, CaroleSchiffer.com. I have a new sold reel which presents a number of properties that I have sold through the years. If you would like to have your home featured in it as a property sold by Carole Schiffer, give me a call. 310 310 442-1384.
Carole Schiffer, Realtor Coldwell-Banker Residential Brokerage/Brentwood Office
©©2018 Coldwell Banker Real Estate LLC. Coldwell Banker is a registered trademark licensed to Coldwell Banker Real Estate LLC 234567An Equal Opportunity Company. Equal Housing Opportunity. Owned and Operated by NRT LLC.