Timely Real Estate News…………………………15 November 2018
Thoughts & Prayers
My heart breaks for all of the losses, pain and sorrow that our beautiful state has suffered in the last week! With Thanksgiving coming up next week, Hanukkah nine days later and Christmas 22 days after that, I am once again reminded of my gratitude for all of my family, friends and clients and my wish to Thank You for your generosity and support and to re-in force my wish to give back. With the tragic impact of the mass shooting in Thousand Oaks followed the next day by the fires in Northern and Southern California, we can only hope there is no further serious loss of life and property.
Fires overwhelm us…the fight continues
Over the past week, we have been witnessing chaotic fire conditions as fires rage from Thousand Oaks to the sea, destroying thousands of acres, hundreds of structures and causing at least three deaths in the Woolsey Fire. We are seeing friends, family, and literally thousands forced to evacuate as many have lost their homes. I personally have three or four friends as well as a number of colleagues from Coldwell Banker who have suffered the loss of their homes already — in both the Woosley fire as well as the one in Paradise, which has now become the deadliest fire in California history with 56 deaths as of Thursday the 12th, and unfortunately the counting goes on.
Our outstanding fire fighters are stretched thin as are the other emergency resources, shelters and available homes for those who are now homeless to lease. Coldwell Banker has launched massive relief efforts including collecting funds, clothing, and any other items one may be able to donate. We have secured a large yacht which is sailing out of Santa Monica to Santa Barbara loaded with supplies. If you have any items you wish to donate, please let me know and I will be more than happy to come by and collect them. I am proud to share that my fellow board members of the Coldwell Banker Residential Community Foundation have donated $35,000 in the last week to the Ventura County Community Foundation as well as the Greater Fund for the relief for the fire victims in both Los Angeles and Ventura Counties. All of these funds have come from my fellow agents and I making monetary donations.
What is our defense? According the Los Angeles Fire Department, there are many pro-active steps that each homeowner can take right now. The LAPD recognizes that fire season is no longer confined to the dry, fall months — it’s here to stay all year long. Therefore, homeowners, especially those in canyons and mountain areas of LA county, should heed the warnings and advice of the LAFD to protect themselves.
The Los Angeles FD has a simple program to help prepare you — Ready! Set! Go! …. Ready! — get your property in order by clearing brush a minimum of 100 feet from the home…make sure tree limbs are not hanging over your roof, and clean out the gutters. If you can install gutter guards, that will keep the leaves and other debris from gathering in the gutters. Also, there are shields that go on the vents of your home, they will prevent the flying embers from getting into the attic of your house (believe it or not, that is one of the major causes of houses catching on fire) Replace wood shingle roofs with tile or fire-resistant materials. Remove flammable materials from around the house, including patio furniture, fire wood, and any decorations that might catch fire.
Prepare emergency supplies — medicines, device chargers, computers, food for pets, etc.…. plan thoroughly for your exit with clothes and food stuffs. Also, plan on minimum of two exits. All of these steps should be discussed with family members, and immediate action to assemble an evacuation plan is critical to your family’s safety. (Two of the communities with whom I work with closely — Bel Air Crest and Mountaingate — have Emergency Preparedness plans in place, and Bel Air Crest does have an automatic emergency phone contact program as well as its own water truck!)
Get Set! — If a fire threatens, the LAFD recommends back your vehicle into the driveway…roll up the windows, load your vehicle with everything you want to take. Have your evacuation kit and supplies handy for a quick exit. Make sure you have the items you have deemed critical ready for transport. You may only have a few minutes warning, so expediency is paramount. I don’t know about you, but I have been packed up and ready to go since the fires broke out last week.
Go! — Keep heads up on evacuation orders. You should not wait to be told according the LAPD. Go early! Discuss all of this with family members ahead of time and have a plan on where to meet in case of evacuation. Please visit the LAFD video presentation: http://www.mysafela.org/ready-set-go.
I don’t have to tell you to be aware of fire dangers — the fires in our local history have taught us to be vigilant. Fortunately, we have an outstanding Los Angeles City and Los Angeles County Fire Departments that have really been stalwarts in fighting these menacing forces. Heed the warnings and always be — Ready! Set! Go!
Fire insurance policies are not all equal…read fine print
The Los Angeles Times reported this week that not all fire insurance policies are equal and while the vast majority of California homeowners have insurance that covers fire damage, that doesn’t mean you can breathe easy.
Property insurance lawyers say it’s not uncommon for insurers to do everything possible to minimize payouts, especially after catastrophic blazes such as the ones now raging in Northern and Southern California.
“In a mass loss, they’re looking at their overall payments,” said Joshua Haffner, a Los Angeles lawyer specializing in fire-related claims. “They’ll do what they can to keep payments down. And they’re getting very smart about paying less.”
He said many homeowners may not be aware that property insurers have been slipping provisions into people’s policies limiting coverage for damage caused by smoke and ash.
In major fires such as the ones now burning throughout California, hundreds or even thousands of homes may be consumed by flames. But thousands more can be damaged in large and small ways by plumes of smoke and ash traveling for miles beyond the burn zone.
Some policies may require homeowners to report any such damage within 90 days to qualify for coverage. Others may cap coverage at a certain level, frequently $5,000.
Such provisions often are inserted into policies during routine renewals. Although all changes must be disclosed, many homeowners may not pay attention or may not read the fine print. It behooves all homeowners to review their policies in detail before every renewal. Talk with your insurance agent for their input and advice.
Sales volume straining to get even, still no cigar
Sales volume is inching toward getting even with sales for the previous year, but it didn’t happen in October. For the communities I report on regularly in The Schiffer Line (Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood), sales volume through October was $2.977 billion compared to $3.147 billion through nine months of 2018. That’s a 5.3% drop, but improving from the 7% drop in September 2018. Beverly Hills sales volume sank $150 million short of last year’s volume at this time of year, Brentwood was down $87 million, BHPO was short $55 million, Bel-Air/Holmby Hills was off $47 million, and Westwood/Century City was down only $15 million in sales volume. There were no winners so far, however, Pacific Palisades, which I also cover, was up $8 million in sales volume. Please always remember there are some large sales that skew any of these numbers and these stats are only from the multiple listings. The quarterly reports I send out reflect any private sales, but the MLS reports do not.
What does this mean? Inventory is the killer here. Make no mistake, we are down in sales units, and higher prices and interest rates can be blamed, of course, (and we will), but the reality is that the housing market is slowing down as noted by National Association of Realtors’ chief economist Lawrence Yun. As I noted in the last edition of The Schiffer Line (November 1), the housing market is cooling off, which from Yun’s perspective, this is a good thing. We need to slow down the huge pricing increases we’ve been seeing across the local market, and across the nation. As fewer buyers are entering the market today, sellers are facing resistance on higher prices. Homes are sitting longer on the market for those that are priced too high. Affordability is an issue for most regions of course, but on the Westside, we are dealing with above-average income buyers who, for the most part, push through higher mortgage rates and even pricing — low inventory is one hurdle they can’t always overcome. To a lesser degree, traditionally the market slows down as we go into the holiday season (however I can personally tell you I am busier than I have been all year).
Median sales prices — here we go again
It begins to sound like a broken record…median sales prices are rising — again. The latest MLS report reflects a strong price surge on the Westside through the first 10 months of 2018 — with five of the six communities I am covering are up. Beverly Hills is at the top price level, with a median sales price of $6.003 million, a 5% increase over 2017, followed by Palisades at a 14% increase to $3.361 million. Brentwood was next with a 42% increase at $3.100 median sales price. Bel-Air/Holmby Hills came in at $2.685 million, a 13% increase, and Westwood/Century City had a 13% increase to $2.280 million. There are minor changes each month, but the trend lines for price increases have become the new normal. Once in a while, a community’s median sales price will dip, but comes back strong the next. Each neighborhood within each community has an abundance of variables that affect pricing. Again, the year-to-date median sales prices for your community is the best measurement for pricing trends. Please call me at 310-442-1384 if you would like more detailed information.
Million-dollar home is no longer a rare specie
“…Who wants to be a millionaire? I do!” Marilyn Monroe would be happy to learn that there are 400,702 more homeowners whose homes are now valued at $1 million or more. Is this any surprise? Marilyn would have been very pleased, too!
The number of U.S. homes valued at $1 million or more increased by over 400,000 this year, the largest annual rise since the housing price recovery began in 2012. Slightly more than 3 million homes nationally, or 3.6% of the total, are worth at least $1 million, up from 3.1% last year and 1.5% in 2012.
Not surprisingly, many of the freshly minted million-dollar units are in California, which already boasts the most in the country. The San Jose and San Francisco metro areas have the largest shares of $1 million homes and also notched the biggest increases over the past year. Even Burbank showed up on the list at $1,01 million.
Meanwhile, 29 cities and towns joined those with a median home value of $1 million or more this year, bringing the total to 201. Nineteen municipalities joined the million-dollar club last year.
Of the roughly 15,100 larger neighborhoods around the country analyzed by Trulia, 838 have median home values of $1 million or more and about two thirds of those are in California. Nearly 30% of California’s neighborhoods have a median home price of at least $1 million, the most by far of any state. New York, Florida and Washington followed. It must the weather.
Equity-rich properties as never before.
Note this: There are 14.5 million homes in the US are now worth more than twice the cost of their loans, according to data firm Attom Data Solutions. This is an all-time high for the U.S. An equity-rich property is defined as one where the combined estimated amount of loans secured is 50 percent or less of the property’s market worth”.More homeowners have now achieved that milestone than at any point in Attom’s dataset, which goes back to the fourth-quarter of 2013. The 14.5 million equity-rich properties represent 25.7% of all U.S. properties with a mortgage, and they mark an increase of 433,000 properties from the same time last year. According to Attom, as homeowners are staying longer in their homes, their sunk-in equity builds over time, and serves as their retirement catalyst. A predominant share of these equity-rich homes is on the West Coast and in New York — the areas with the highest number of underwater homes is in the rust belt states and Mississippi Valley.
Some General Local West LA News
At a recent Annual Homeowners Association meeting, we got an update from the LAPD Senior Lead Officer on the status of crime on the Westside… it is up somewhat – no surprise, and the “bad guys” are getting smarter and know about our security features including Ring… but the bottom line is as always – be alert to your surroundings, and “if you see something, say something”. Lock your cars, doors, etc. I did get two other bits of info that I want to pass along. If you call 911 from your cell phone, many times that call gets routed to the Highway Patrol rather than 911… so here is the phone number for you to use to get directly to 911 – 213-928-8208. You can also use the app myla311 to report other issues to the city. There was also an update on the Purple Line coming through our neighborhoods. Construction is on target and they are working to make sure it stays as easy as possible for us to navigate while the construction is going on. There will be times when Wilshire is limited to one lane in each direction, and a possibility that at times different utilities are turned off, but we will all be advised in advance before they are turned off.
One word of caution
In some of my recent transactions when we have been having the physical inspections, a number of items have come up that makes me want to make sure I am checking them in my house. The first one is the dreaded word “mold”. First all every home has mold, even if it is as minor as the result of the heat from the dishwasher or washer. However, many times if we have/had a leak in the house and the leak is repaired basically on the surface, the moisture from the leak grows, and then we have mold. The other items that seem to be turning up a lot is the ducting from our HVAC systems. When you have them serviced, I suggest you have the ducting checked as well, because over the years it does tend to fall apart.
Once again, I want to wish you a Happy and Safe Thanksgiving!