Westside Real Estate Derby has Santa Monica Making a Run

KentuckyDerbyRaceThis headline is inspired by the upcoming Kentucky Derby as the year in luxury real estate is rounding the first quarter turn.  As a new report shows the favorite Beverly Hills in the lead with an long shot making big gains.

Santa Monica saw a drastic upswing in luxury home sales in the first quarter of 2016 compared to the same period last year, a market report released  last month.

While Beverly Hills remains the local leader in the sale of homes for more than $3 million, Santa Monica has joined Pacific Palisades, which saw a reduction in total sales, in a two-way tie for second place, according to Sotheby’s International Realty’s Greater Los Angeles Market Report, released April 13.

The report, which analyzed Q1 2016 against Q1 2015, found that 27 homes were sold in Beverly Hills, a 23 percent increase over the 22 homes sold last year. Santa Monica sold 24 luxury homes, an 85 percent increase over the 13 sold last year. Pacific Palisades, which also sold 24 homes, experienced a 20 percent reduction over the same period last year when it led the region with 30 luxury home sales.

The Santa Monica luxury housing market is booming as more and more buyers are attracted to beachfront locations near the iconic Santa Monica Pier, Third Street Promenade and Santa Monica Place. It has now joined Beverly Hills and the Pacific Palisades as a top destination for luxury buyers.

Billionaire Beach Anyone

Billionaire beach malibu carbon beachWith pristine views along one of Malibu’s most exclusive coastlines, Carbon Beach, also known as “Billionaire’s Beach,” has become home to many high-net-worth celebrities and homeowners. Owners of properties on Carbon Beach, Malibu, include Paul Allen, the co-founder of Microsoft, Larry Ellison, chief executive of the software giant Oracle, and David Geffen, co-founder of the DreamWorks film studios, and other business tycoons. Ellison loves Carbon Beach so much that he owns 10 properties there.

Extending just a mile along the Pacific Coast, the ultra-exclusive community of Carbon Beach houses only 90 residences owned by some of the biggest names in the entertainment industry, alongside neighboring tech titans, attorneys and financiers. Carbon Beach is also home to the Malibu Beach Inn, a boutique hotel with a popular oceanfront restaurant.

What makes Carbon Beach so great — and expensive?

Locals talk about the breadth and dryness of the sand driving up prices to a minimum of $15 million for a small beachfront lot. And unlike Malibu Colony homes, the houses tend to be built right on the sand, with no seawall blocking the view of the beach from the patio. Carbon Beach’s relative exclusivity – in terms of price and public access – is its main selling point.

Carbon Beach residents are surrounded by the stunning natural beauty of the Santa Monica Mountains and the Pacific Ocean and enjoy close proximity to a host of amenities including lifestyle destinations, such as Malibu Colony Plaza, Malibu Country Mart and the historic Malibu Pier. And in just a few minutes drive, you can find yourself dining at some of the most prestigious restaurants such as Mastro’s Ocean Club, Mr. Chow and Nobu Malibu, where internationally acclaimed chef Nobu Matsuhisa’s signature fusion cuisine is served in a chic dining room where every table enjoys ocean views.

Residents of Carbon Beach are surrounded by the best of Southern California’s outdoor living, with hiking, biking, equestrian trails, and even surf spots at Surfrider Beach, Little Dume and Zuma Beach available to its community members. The ultimate California lifestyle of the area beckons both full-time and part-time residents back again and again.

Los Angeles Luxury Real Estate Bidding Wars

los angeles luxury real estate marketFew real estate markets are as exciting or as interesting as the Los Angeles. Not only are many homes filled with rich histories or owned by celebrities, but the luxury homes here can often have some of the most fabulous amenities in the country. And to add to that ‘interesting’ factor, a new trend has shown up – bidding wars and all-cash offers.

In our latest luxury real estate market upswing we’ve already seen firsthand just how much people are willing to fight for the home that they want. The big factor driving things forward is simple – inventory levels for the high end of  the Los Angeles real estate market are lower than ever, and that’s especially true in the case of the luxury home market. This sudden shortage of homes being listed means that people are now ready to pay higher prices for the home that they want.

Recent data suggest that another housing bubble burst isn’t likely to occur any time soon. This is because today’s current price appreciation is not driven by speculation or high-risk loans. Instead, it’s just a simple economic formula of supply and demand. Values have already increased dramatically and it’s expected that they’ll rise by as much as 35% over the next 4 years.

That means two things. The first is that buying a home is trickier than ever, with bidding wars occurring on an almost regular basis and cash offers trying to help persuade sellers to accept an offer quickly.

The second is that this could be a great time to invest in the luxury home market and properties in the area. New developments from the Palladium Residences to Millennium Hollywood are offering chances to purchase homes in the area which could turn into valuable properties later. It’s an exciting time in the LA real estate market, and one that’s well worth taking a look at more closely.

Santa Monica Offers Luxurious Life of Liesure

Pier at NightSanta Monica has long been the image of the Southern California lifestyle, with its picturesque beachfront, bustling pier and iconic Ferris wheel. Local life revolves around the outdoors, evidenced by its boardwalk teeming with visitors, joggers and bikers enjoying the fresh, sea air and ocean vistas. The city offers a blend of laid-back beachy vibe and upscale cosmopolitan chic, with a thriving downtown that offers some of L.A.’s best dining, shopping and healthful amenities. As L.A.’s Westside continues to grow in popularity, Santa Monica has become one of the city’s most sought-after neighborhoods, enticing a diverse population of young families, students, surfers, yogis, entertainment execs and entrepreneurs.

Santa Monica is renowned for its healthy and notoriously active lifestyle, home to not one, but four farmers’ markets overflowing with colorful produce every week, including the ever popular Wednesday morning market on Arizona Avenue.  Numerous fitness offerings include the well-known Equinox and SoulCycle as well as top-rated yoga studios.  Residents jog the beach bluffs, climb the infamous Santa Monica stairs and bike along the beach paths, enjoying the city’s Breeze Bike Share program, a 500-bike system presented by Hulu.

Additionally, Santa Monica will soon offer better accessibility to Downtown Los Angeles when the EXPO Light Rail connection opens on May 20. It will mark the first time in 53 years Santa Monica residents have been able to hop a train for easy access to Downtown and the rest of the city.

With its perfect blend of relaxed seaside style and walkable urban appeal, Santa Monica remains among L.A.’s most in-demand real estate markets while inventory, specifically for new construction product, remains at an all-time low. There are still deals to make, please contact me with any questions.

Luxury Real Estate and the Elections

real-estate-and-elections-300x282With the national elections ramping up, many voters already have voter fatigue (also called voter apathy). That is, we’re already so tired of hearing about the elections that we don’t bother to vote at all. In fact, voter apathy is quite high in the United States: Somewhere between a third to a half of eligible voters do not vote in national elections and even fewer vote in local elections.

But, “the likelihood that a homeowner will vote in a local election is 65%, compared to 54% for renters” and they are 3% more likely to vote in national elections than renters.

Here’s why not voting is a bad idea:

  1. Local elections can affect the marketability of your home

The value of your home is determined by a variety of factors, one of which is the rating of the local schools and another is the infrastructure of the community (the age and condition of the bridges, roads, drainage, street lights and other municipal projects). When a municipal bond issue comes up for vote, the outcome can affect both your bottom line through property and sales taxes, and the community desirability via new roads, better schools and protection from flooding (for example).

  1. National elections can affect home prices

The affect on home sales prices is not because of the specific outcome of the elections, but because consumers become more nervous about the economy during election years. When larger blocks of homeowners vote, they are placing their trust in the economy and the expectation that home values will rise.

  1. Direct effect on property taxes:

Some propositions have direct effect on your property taxes and the sharing or distribution of municipal expenses. For instance, in an upcoming election in Texas, directly changes the amount that a homeowner is able to exempt from property taxes (the homestead exemption) and makes that change a constitutional amendment … meaning that it takes another vote of the State’s entire electorate to change it. You might think that this would raise marketability to non-child families and lower marketability to families with children, but proponents believe that instead, it will increase home values across the board, thereby increasing tax revenue to schools.

One aspect of participating in local elections is that the homeowner gets to know what is important to other people in their community. Being part of a community is one of the benefits of homeownership. Connecting with your neighbors to improve your schools, streets and bridges can bring a sense of civic pride and camaraderie to your neighborhood.

As your local real estate professional we can indicate which areas in your neighborhood adversely affect the market value of your home. If you can help improve those things now, you should, so that when you’re ready to sell, your home’s value is at its highest.

The Upside of Downsizing Your Home

Downsizing your homeMost people think of downsizing as something you do in retirement. It can happen when the kids leave home or retirement looms or your first grandchild is born hundreds of miles away. You start to think about leaving a house that’s now too big for you and downsizing to a smaller house or condo or a retirement community. So, you sell the large family home to moving to a smaller, retirement-style home, free up some cash and have more to spend on leisure.

To many, downsizing is a negative: smaller house, less space, cutting back. But, downsizing can be an important step in “upsizing” your life. You just have to determine what “downsizing” means to you.

Smaller Space, Bigger Life

Moving to a smaller space (as in “fewer square feet”) doesn’t have to mean that you have less living space. Many family homes have large square-footage cut up into little spaces to house multiple family members. When downsizing from a large family home, look for a layout that maximizes the living space so that you don’t feel closed in. That might mean an open floor plan, more windows, adding outdoor living space, foregoing formal spaces or even choosing a wall-less loft.

An important idea to keep in mind is that downsizing shouldn’t mean moving into a smaller version of what you already have. Moving from a four-bedroom/three-bath 5000 square-foot home into a four-bedroom/three-bath 1800 square-foot home just feels cramped and crowded. Moving your living area, home office and master bedroom into an 1800 square-foot two bedroom, open floor plan, however, can seem like a mansion. In fact, some people find that fewer rooms mean more living area to enjoy.

Less space doesn’t necessarily translate into less money. For example, you may long to live downtown, You may find the lifestyle you want in an active-adult community or a continuing-care retirement community

Freed-Up Cash? Or, Freed-Up Life?

Okay, yes, for some people, the purpose of downsizing is to free up cash for other things. If however, freeing up cash isn’t your aim—for example, if you need to reinvest all the money from the sale of your family-sized home as part of your financial plan—downsizing into an upscale high-rise condominium or townhome in your favorite urban area can massively upgrade your lifestyle.

Think of it … spend your evening at the theatre, dining out or entertaining friends at the rooftop pool. Just being able to lock the door and head to the airport for some long-anticipated trip without having to arrange for a house-sitter, lawn-care and yard work, or the myriad other requirements of property frees you to travel on a whim, be spontaneous, grab a good deal on a weekend cruise or visit the kids and grandkids as often as you like.

Even if you can’t afford a luxury place, where you locate your new home can free up your life from the tedious efforts of maintaining a larger property. If having freedom to do other things is important to your new life goals, make certain your real estate professional knows: lifestyle options may exist that you’ve never thought of.

If you’ve thought about downsizing, your real estate professional can help you determine the best options for your lifestyle and goals.

How Accurate is Your Zestimate

zestimateI am often asked about the accuracy of home valuations available online. I generally reply that Zillow and the other sites are a good place to start if you want to get a general estimate of what your home is worth. A “Zestimate” will give you a property value range, based on public records of the property’s:

  • Physical attributes
  • tax assessments
  • Prior transaction data

The drawback? These estimates are generated by a computer, not a knowledgeable real estate professional. Improvements and defects are not taken into consideration. Intangible features like ocean view, curb appeal, high-traffic streets and other factors are not considered. The estimate is really more of a snapshot of the overall market than an accurate estimate of a particular homes value.

If you are serious about selling, you will need more than a general estimate. Your homes unique features will need to be considered in order to reach an accurate estimate of its current value. An accurate comparable market analysis is based on:

  • Property type and size
  • Number of bedrooms and bathrooms
  • Age, condition and style
  • Location and appeal

To gather the data necessary for an accurate analysis it is necessary to research the Multiple Listing Service data, preview comparable properties or view online photos and compare that data to the subject property. Zillow and other home valuation tools are important in today’s market and certainly make interesting reading, but they are not a replacement for a professional opinion.

Are you thinking about selling your home? Call me today for a comparable market analysis. I will do the necessary research to determine an accurate valuation of your property. Of course there is no cost for the service or obligation.

Eco Friendly Home Tech That Really Works – Run Your Home on a Battery

tesla-powerwallThe biggest challenge to solar energy is the inability to both capture it and store it in any meaningful way. In fact, while efficiency in capturing solar power has increased from about 15 percent of most solar panel models to 35 percent efficiency in the higher ends, even when captured the energy grid is unable to store and regulate its flow throughout the day.

Enter the Tesla Powerwall

Elon Musk, CEO of electric carmaker Tesla Motors, announced earlier this year that Tesla’s new Powerwall for the home and Powerpack for commercial use already garnered 38,000 preorders. The Tesla Powerwall offers 92 percent efficiency in DC round-trip power.

Here are the basics: The Powerwall home battery charges via electricity generated by solar panels. As solar energy wanes throughout the evening or on a cloudy day, the battery supplies energy back to your home instead of pushing it into the public power grid. The Powerwall also offers energy during a power outage, so homeowners in storm-prone areas or country homes with unreliable utility service can access emergency power.

The Powerwall utilizes a lithium ion battery with technology similar to that in Tesla automobiles and installs on the wall of your garage, basement or even outdoors. The sleek-looking unit is shipped in a self-contained, space-saving unit that can be mounted up on any wall, even in a closet. One can combine two or more batteries to get even more power. The fact that it is wall-mounted is vital, because it means you don’t have to have a battery room … filled with nasty batteries … It’s designed to work very well with solar systems right out of the box.

For larger homes, or those with higher power consumption requirements, multiple batteries can be installed together with up to 90 kWh total available power. Each battery in its weather resistant enclosure is just 51.2 inches by 33.9 inches and only 7.1 inches deep.  The system uses rooftop solar panels connected to the Powerwall and an inverter that directs current from both the solar panels and the Powerwall battery into your home’s alternating current power system.

For an example of how much energy your home uses in the day, consider that your refrigerator consumption is commonly 4.8 kWh/day (kilowatt hour per day) while your washer and dryer together equal about 5.6 kWh/day. Add to that your lights, laptop, flat screen television or stereo and you’re looking at about 2.5 kWh/day additional consumption. Of course, the first question that comes to mind for a cutting –edge home technology like this is the cost. According to Tesla Motors specifications, the home-sized batteries cost just $3000 for the 7-kWh model and $3500 for the 10-kWh version. Each comes with a 10-year warranty. If you’re looking for an energy efficient home that conforms to the requirements for solar panels, let your real estate professional know. We can optimize your search so that you find the home that is just right f

Are We Nearing Another Real Estate Bubble?

Housing_Bubble_articleThe “bubble” word has reentered the real estate conversation and with it, much worried comparison between current market conditions and those of the mid-2000s housing bubble.

It’s easy to see why the word has been resuscitated: thanks to low inventory levels coupled with burgeoning buyer demand, many markets are indeed becoming frothy. Bidding wars have erupted in the most desirable neighborhoods and some buyers have started adopting pre-2007 tricks to win those face-offs including worrisome non-contingent offers at full asking price or higher.

Last week, the National Association of Realtors (NAR) released their Existing Home Sales Report. The report announced that the median existing-home price in June surpassed the peak median sales price set in July 2006. This revelation created many headlines in the Wall Street Journal and USA Today exclaiming that home prices had hit a “new record”.

Does this mean we have another problem on our hands? Not really… Even after adjusting for inflation, median prices aren’t a great barometer because they can be distorted by the “mix” of what’s selling. In 2009, for example, median prices plunged in part because an unusually large share of homes were selling out of foreclosure. Bank-owned homes tended to cluster at lower price points both because they weren’t as well maintained and mortgage companies were motivated to sell quickly to cut any losses. Prices were already falling, of course, but looking at changes in median prices probably overstated the rate of decline. There may be other reasons to worry abo ut housing affordability by comparing prices with incomes or prices with rents for a given market. But crude comparisons of nominal home prices with their 2006 and 2007 levels shouldn’t be used to make claims about a new bubble.

But before we start worrying about unsustainable home prices and the future bubble they could inflate, let’s take a look at several factors emerging now that will likely make that worrisome run-up in home prices slow down in coming months.

  1. Inventory Levels Won’t Stay Tight – As prices increase more owners become right-sided on their mortgages, a financial factor that enables them to more easily list and sell their homes. Confidence among prospective sellers is rising, with 40% of Americans believing now is a good time to sell, according to a Fannie Mae survey
  2. The Mix Of Homes Is Changing – Both that dwindling supply and the subsequent rise in prices have led to a decrease in distressed sales. Simultaneously, as distressed activity ebbs, luxury sales have surged, also pushing median prices higher.
  3. Mortgage Rates Are Rising – While those rising rates will do little to actually derail housing’s recovery, they will put downward pressure on the dramatic run-up in home prices.

Bottom line, home values are appreciating. However, they are not increasing at a rate that we should have fears of a new housing bubble around the corner.

Home Buyers Interested in Down Payment More Than Rates

lower down payment Changes in down payment requirements have more influence over home buyers’ willingness to buy than changes in mortgage rates, according to a new study published by economists at the New York Federal Reserve.

Federal Reserve Bank of New York’s Survey of Consumer Expectations found evidence that buyers and renters impact of interest rates is highly overrated compared to the impact of even small changes in down payment requirements. The study found that decreasing the required down payment from 20% to 5% increases the willingness to purchase on the average about 15% among all buyers and 40% among renters.  Decreasing interest rate on a 30-year fixed rate mortgage, though it would save the buyer much more than the lower down payment, raised the willingness to purchase a home by only 5% on average.

A key takeaway is that the effect of a change in down payment requirements on housing demand strongly depends on households’ financial situation. For instance, a loosening of down payment requirements will have little effect on the willingness to purchase for a new home of current owners with substantial equity, or of renters with substantial liquid savings.  The results also imply that macroprudential measures such as a loan-to-value (LTV) cap may predominantly affect the lower end of the housing market, and that the effect on house prices will depend on the state of the economy and other asset markets,” said economists Andreas Fuster and Basit Zafar of the New York Federal Reserve.