Experts Say Home Values to Rise Through 2018

043013_homeprices_600A recent survey of over 100 real estate experts and investment and market strategists asked panelists to predict the path of home values through 2018. Even the pessimists expect home prices to rise for the next five years. The idea that homes are a good stable investment has largely been debunked, in particular by Yale economist Robert Shiller. As usual, he is  reluctant to declare that home prices had bottomed. With that said, home prices are impressively up 23% from their March 2012 lows.

On average, panelists say they expected nationwide home value appreciation of 4.5 percent this year, with a steady slowdown in appreciation rates each year through 2018. But it’s worth noting that the most pessimistic quartile of those surveyed also see prices going up. It’s a modest amount, but they see prices going up a cumulative 10.9% through 2018. That’s a 2.1% rate annualized. Based on current expectations for home value appreciation during the next five years, panelists predicted that overall U.S. home values could exceed their April 2007 peak by the first quarter of 2018

Should we be worried that almost no one sees prices falling? The good news is that all of these home price bulls don’t see prices accelerating to bubble-era rates. Throughout the recovery, large-scale investors have purchased thousands of homes nationwide, particularly lower-priced vacant and foreclosed homes, fixing them up and keeping them in their portfolios as rental properties. This investor activity helped put a floor under sales volumes during the depth of the housing recession, but also created competition for many would-be buyers and contributed to rapid price spikes in some areas.

Panelists were also asked when the Federal Reserve should end its ongoing stimulus efforts, known as “quantitative easing.” Since September 2012, the Fed has been purchasing tens of billions of dollars worth of Treasury bonds and mortgage securities each month, which has helped keep mortgage interest rates low and stimulate demand. The program is now being wound down. More than 70 percent of the experts want to see the monetary stimulus reduced to zero before the end of this year, and the current pace of tapering will get us there.

The Rich Like Real Estate in 2014

elite10opThe rich aren’t just buying penthouses for the luxury. The real estate market is rebounding and U.S. millionaires say real estate is the top alternative asset to own this year according to Morgan Stanley. Morgan Stanley Wealth Management surveyed 1,004 U.S. investors ages 25 to 75. The investment bank released a survey on Friday showing that 77 percent of investors with at least $1 million in assets owned real estate, according to Bloomberg. Direct ownership of real estate was the number one alternative choice for 2014 and real estate investment trusts was the second most popular, according to the survey. The third most sought after alternative investment this year are collectibles.

Wealthy investors see stocks getting expensive and interest rates staying stable or even declining over the next couple of years, that’s why they are looking more closely at alternatives including real estate for returns and income. According to a separate study released, high net worth individuals who have at least $10 million in investable assets, increased their average allocation to real estate last year to 21 percent as of the fourth quarter from 19 percent in the first three months of 2013

There is also some sense of urgency to get into the real estate game, this year may be the tail-end of attractive investments in property before interest rates rise. Wealthy foreigners are also buying up high-rise properties in New York City. The interest in pricey U.S. properties stems from their safety because they’re denominated in dollars, the world’s reserve currency. This helps domestic millionaires maintain the value of their property investments.

Hybrid ARMs Dominate Mortgage Offerings

hybrid mortgagesHybrid ARMs continued to be the most popular loan product offered by lenders and chosen by ARM borrowers according to Freddie Mac’s 30th Annual Adjustable-Rate Mortgage (ARM) Survey of prime loan offerings, which was conducted January 6 to January 10,

Homebuyers have preferred fixed-rate mortgages the past few years because of the low interest rates and the certainty of the monthly principal and interest payment. As longer-term rates rise, ARMs with their lower initial interest rates will become more appealing to loan applicants. Hybrid ARMs are particularly attractive because they have an initial extended fixed-rate period of 3 to 10 years — and then adjust annually thereafter. Nearly all of the ARM lenders participating in the survey offered a hybrid. The 5/1 hybrid (a five-year fixed-rate initial period before the rate resets annually) was by far the most common, followed by the 3/1, 7/1 and 10/1. Far less common were ARMs where the re-pricing frequency was fixed for the life of loan, such as a one-year adjustable, a 3/3 ARM (which adjusts once every three years), or a 5/5 ARM (which adjusts every fifth year).

Banks are definitely doing more ARMs because they’re selling the consumer what they’re asking for, which is a lower monthly payment. In early January 2014, the interest rate savings for the 5/1 hybrid ARM with a 30-year term — the most common ARM offered in today’s market — compared to the 30-year fixed-rate mortgage amounted to about 1.36 percentage points. For a $250,000 loan, the monthly principal and interest payment on a 5/1 hybrid would be about $194 less than on the 30-year fixed-rate loan over the first five years of the loan.

Many borrowers with adjustable-rate mortgages were among the first to default during the downturn. When their rates adjusted after an initial teaser period, they were unable to refinance and got stuck owing sharply higher payments. This time around will be different, lenders say, because underwriting standards are tougher for hybrid ARMs, so borrowers will be less likely to get squeezed when interest rates reset. Moreover, regulators have all but banned the interest-only and balloon payment features that made ARMs ticking time bombs during the financial crisis.

For many, it makes a lot of sense to take a shorter-term mortgage, If the borrower is in a situation where they’re not going to be in that home for more than seven years, it would be incorrect for them to take the fixed rate when the ARM is giving them a benefit of lower monthly payments.

‘Luxury’ is a Much Abused Word in Real Estate

luxury real estateProperty ads urge us to “indulge in opulence” and promise to “pamper you in comfort”. While the glossy brochures and virtual tours may impress you, you often find that the features offered don’t justify the exorbitant price tag of a luxury home.

Luxury is by far the most abused word by residential real estate. As the term is freely used, it becomes important to know the essential features that define luxury.

Living space
Generous living space is a primary requirement of any well-designed home. Luxury homes must offer spacious living rooms,  large gourmet kitchens, well equipped media room and oversized closets  with elaborate systems to organize wardrobes, ample dressing areas and space to pack suitcases.

Attention to detail
In every aspect — from the wood work, to the wall coverings, the hardware, the electric switches, the kind of lighting. Technology is a significant detail with amenities like  home automation systems and electronic surveillance. — A luxury home remains pristine if well maintained.

Exclusivity
While these amenities may be widely available, one key must-have in a luxury home is exclusivity; it must be shared by a small number of people.

Your style
All said, you should see if what you are getting is ‘your’ style. After all, it may turn out that the designer features do not match your personality and definition of lifestyle.

Custom-built
Ideally you may wish to have every aspect — floor plan, materials, features, amenities — designed exclusively for you. Short of full custom, you will definitely want your luxury home to be customized with a high end renovation offering a move-in ready home

Low Inventories Threaten Home Selling Season

housing crystal ballRecord low inventories last January set the stage for a selling season featuring soaring prices, bidding wars and the outbreak of price bubbles in several California markets. The improved conditions for sellers prompted many to list their homes, but not enough to measurable improve the inventory picture as real estate markets go into hibernation to prepare for the 2014 season. November listings were only 0.18 percent above levels of November 2012, when inventories in the Realtor.com database had already begun the dramatic decline that culminated in the spring, 2013 shortages. With inventory levels enter the winter at virtually the same level last year, should sellers remain leery of the market, inventories may not restock sufficiently to meet buyer demand next spring, setting the stage for a repeat of last year’s wild spring and summer conditions. Despite the remarkable price gains in 2013-exceeding 13 percent through the third quarter in the latest Case-Shiller numbers and the freeing of millions of owners from negative equity sellers seem to be pulling back. Recent consumer surveys have tracked a significant decline in consumer confidence in home price expectations.  In addition, the share of those who expect mortgage rates to climb in the next 12 months remained at an elevated level since it spiked in June.

Luxury Housing Trend is Move-In-Ready Homes

ScreenHunter_569 Jan. 02 21.42Ultra-luxury homes are coming on the market complete with designer furnishings, art, knickknacks, linen and even electric toothbrushes.

When Elton John sold his  West Hollywood condominiums last year, the buyer got more than four walls. The units came with the singer’s designer furnishings, knickknacks and tableware — even his snake-skin-covered bed frame. Now, one of the condos is back on the market at $3.995 million, along with all the contents.

Some buyers are drawn by the luster that comes from owning a celebrity’s onetime belongings. They are buying an instant lifestyle.  Others, such as time-stretched executives and those shopping for second homes from a distance, want places they can use right away, without having to sweat the small stuff. Some are so smitten with a seller’s taste or custom furnishings that they want the whole package. For sellers, offering a fully outfitted home is a chance to leave behind decor suited to a particular home and start fresh on the next house.

Once the stuff of vacation rentals or corporate housing, fully appointed homes are the latest fad in the ultra-luxury market. There is a segment of the market that wants to have a fully furnished residence they appreciate the convenience of not having to shop or furnish them. High end buyers are purchasing places whose sellers have left them in meticulous move-in condition, down to stocked linen closets, full liquor cabinets and tissues on the dresser.

Although the trend is popping up in other wealthy pockets nationwide, it’s gaining traction in Los Angeles circles in which style and convenience trump expense. This all inclusive tactic also is being tried at newly built luxury condo developments. At the Carlyle Residences on Wilshire Boulevard, buyers of two-bedroom units can opt for “turnkey” packages starting at $150,000. For three-bedroom units the add-ons start at $250,000. The well-stocked condominiums combine contemporary furniture with vintage pieces, high-end appliances.LED televisions, Villeroy & Boch dinnerware, exotic indoor plants are included. The buyer doesn’t even need to bring a toothbrush. A pair of $170 rechargeable Philips Sonicares are standing by in the master bathroom.

You don’t have to do anything, it’s all done.

Home Owners Will Regain More Equity in 2014

home-equityMore home owners will be are edging above water with their mortgages 2014. The number of underwater homes continues to shrink , regaining equity during the third quarter. A house is said to have negative equity or be underwater when more is owed on the mortgage than the market value of the property. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both. Currently, about 13 percent of homes with a mortgage remain in negative equity compared to 14.7 percent the end of the second quarter. An estimated 42.6 million homes in the U.S. have positive equity. About 20 percent of those homes, however, have less than 20 percent of equity or what is considered “under-equitied”. This according to CoreLogic’s latest negative equity analysis reports. The majority of the homes that have positive equity are in the high-end housing market. Rising home prices continued to help homeowners regain their lost equity in the third quarter of 2013. “We should see a further rebound in consumer confidence and economic growth in 2014 as more homeowners escape the negative equity trap,” said Anand Nallathambi, president and CEO of CoreLogic.

Home Buyers Planning Moves This Winter

Buying-a-HomeHome buyers unable to find a home earlier this year due to limited inventories and competition from all-cash offers are looking to retry their luck in the winter, according to realtor.com®’s Winter Home Buyer Report. “This summer and spring, home-buying season was particularly challenging for buyers, especially first-time home buyers trying to compete with all-cash offers and bidding wars because of reduced inventory,” says Alison Schwartz, vice president of corporate communications at realtor.com®. Consumers looking to buy a home during the winter months told realtor.com that lingering conditions from the past home-buying season, including inventory challenges and all-cash offers, continue to set the tone for them as they enter the winter season. But winter home buyers know they’ll face some challenges. Forty-five percent of those surveyed say they believe they will be up against inventory challenges again, with few homes for sale within the price range they desire. Twenty-nine percent also say that winter weather makes house-hunting unpleasant. While the majority of winter home buyers describe themselves as relocation buyers, downsizers are also a large portion of those looking to buy a house in the next four months, according to the report. There are advantages to looking for a home in the winter, Motivated sellers, better prices and less competition between buyers are some of the top reasons winter home buyers are interested in purchasing a home. Of those looking to buy this winter, 23 percent are planning to make a down payment of 10 to 20 percent, according to the realtor.com® survey. Twenty-two percent are planning to put down 21 to 99 percent in cash; 19 percent plan to put down 100 percent cash; and 13 percent are planning to make a down payment of 3.5 percent to qualify for a Federal Housing Administration loan.

What’s Driving the Luxury Housing Market

9305-Nightingale-Dr28The biggest drivers behind the continued expansion of luxury home sales: Low mortgage rates, rising consumer confidence, cash buyers, and international buyers. International buyers are fueling some purchases, with an estimate of up to 20% of buyers in L.A. being from overseas. Many of them are paying full cash, speeding up closings and eliminating the need for appraisals. This year we are on pace to exceed the the all time high of 697 home sales over $5 million in California set last year in 2012, many of which were all-cash deals. However, with low mortgage rates, some luxury home buyers are financing their home purchases. Jumbo loans are traditionally associated with higher interest  rates– about 0.25 percentage points more — than they do for conforming loans, according to the Mortgage Bankers Association. But over the past couple of months, the tables have turned. “Never in my memory have jumbos been such a bargain,” said Peter Grabel, a loan officer at Luxury Mortgage Corp. For example, some buyers who traditionally would pay cash are instead securing sub 3 percent interest rates and 10-year loan terms. One big reason jumbo rates are so low is because lenders want to attract wealthy clients and hang on to them, said Malcolm Hollensteiner, head of consumer lending for TD Bank. Once clients sign up for a mortgage, the bank can “cross sell them other products, like brokerage services,” he said. As for pricing,  it won’t be long before the U.S. sees a $200 million listing — the record now is believed to be $190 million for a property in Greenwich, Conn. — but that many of these ultra-high-end properties are priced that way merely as a suggestion, or to invite only a certain caliber of buyers to the table. Most ultra-high-priced homes end up selling for 50% to 60% of the original list price.  We are also seeing an increase in pocket listings, or listings that aren’t publicly put into the multiple-listing service, both as a way to keep a seller’s name confidential and to up the exclusivity factor.

Home Price Increases Are Slowing

Home-Prices-UpHome price increases will end up at 6.7 percent year-over-year before slowing to roughly 4.3 percent next year, on average, and eventually falling to 3.4 percent by 2018, a panel of more than 100 forecasters concluded. The Home Price Expectations Survey was conducted from Oct. 21, 2013 through Oct. 31, 2013 by Pulsenomics LLC on behalf of Zillow, Inc. The survey of 108 economists, real estate experts and investment and market strategists said appreciation is expected to remain strong through the remainder of this year, but the pace of home value growth is predicted to slow considerably. Based on current expectations for home value appreciation over the next five years, panelists predicted that overall U.S. home values could exceed their May 2007 peak by the first quarter of 2018. “Rising mortgage rates, diminished investor demand and slowly rising inventory are all contributing to a modest cooling off of the housing market, which is both expected and welcome after months of unsustainable, breakneck appreciation,” said Zillow Chief Economist Dr. Stan Humphries. By comparison, the CoreLogic Case-Shiller Indexes, though they reached 10.1 percent year-over-year in the second quarter over 2012, are expected slow to an average of 5.4 percent across all U.S. markets by the end of this year. CoreLogic Case-Shiller projected that price appreciation will decelerate through the second half of 2013 and into the beginning of 2014.

Investors Are Leading the Way in Real Estate Market

Though most real estate market observers have been predicting that rising home prices would drive investors out of the market for single family homes, that fact is that investors have purchased more homes than they did in all of 2012 or 2011. Investors have purchased more than 370,000 properties so far in 2013, which is already more than in either of the previous two full years according to a new investor insight report released today by RealtyTrac. The Real Estate Investor Purchase and Finance Patterns: 2011 to 2013, looks at a number of investor habits relating to real estate purchases since 2011, including the volume of properties purchased, breakdown of cash versus financed purchases, property situation (distressed, non-distressed, underwater etc.), investor purchases by property value, and number of investor-purchased properties that have since resold. A couple of interesting findings 1) Investors have purchased more than $1 trillion in US real estate since 2011. Fifty-four percent were all-cash; 2) Among all investor purchases during the time period, 57 percent have subsequently been re-sold. The smart money still sees the real estate market as a solid long term investment.

Beverly Hills Celebrates Centennial

The City of Beverly Hills will turn 100 on January 28, 2014! It is the 31st oldest of Los Angeles County’s 88 cities. The entire community is invited to an exciting year-long celebration comprised of tourism initiatives, regional events and community activities that will pay tribute to Beverly Hills’ past, present and future and promote the city’s brand on a global scale. As Beverly Hills preps to celebrate its 100th birthday, there are some unique promotions in store to kick off the countdown to the city’s centennial. One special event is call Suite 100, the city is working a hospitality promotion with five of its luxury hotel partners to offer specialty themed suites, each of which hearkens to a different era of the city, from the 1940s to the present day. The theme at the Montage Beverly Hills is “Film Noir” from the 1940s. At the Beverly Hills Hotel & Bungalows it’s “The Golden Age Inspired by Marilyn Monroe.” Monroe was a frequent hotel guest in the 1950s. The Beverly Hilton will put on a “Stylish, Sophisticated Sixties: A Re-Imagined Revolution” in its suite. L’Ermitage Beverly Hills is going for “The Era of Studio 54 – Fashion & Art Collide,” a mid-1970s disco, Warhol and Halston look. The Peninsula Beverly Hills’ theme is “The Birth of Modern Glamour,” designed with the looks of recent decades. Guests who stay or groups that reserve the specialty suites will be treated to a comprehensive experience that may include accompanying vintage automobiles for use around the city; vintage periodicals and other special touches in each suite; and personal concierge service that parallels each respective decade. Check out more with pictures: http://goo.gl/bTRkGD

Real Estate Investments vs. Stocks

As the economic recovery continues, Americans are again able to invest. Although there are many investment options available, real estate offers several advantages over most of them. First. is the ability to finance a portion of the purchase and leverage the initial investment. The benefit is that you now control an asset valued much higher – unlike stocks, bonds and CDs. Especially now with the historically low interest rates available, a small increase in the value of a leveraged property investment delivers a greater return than an unleveraged investment — approximately 12 percent gross. Investing in real estate also offers very valuable tax benefits, not so with earnings from investments in CDs, bonds and stocks are taxed. The numerous deductions from the profit on mortgage interest, property repairs and depreciation are very advantageous. In addition real estate investors are writing off depreciation of an asset that is typically appreciating providing yearly benefits to a long-term investment. Most importantly, ownership of rental property is an asset generates consistent cash flow. Subsidizing the investment with consistent rental income puts money in the investor’s pocket, covering the mortgage, repairs and additional expenses.

Bulldozing Beverly Hills Landmark Real Estate

Beverly Hills offers so many distinctive homes designed by noted architects, many tied to Hollywood’s Golden Age. But architectural and cultural heritage has proven no match for the nouveaux riches of Beverly Hills. Some of the older homes lack the style and amenities today’s luxury buyers want — great rooms, entertainment centers, restaurant-quality kitchens and vast bedroom suites. Rooms in even the most opulent older Beverly Hills homes can feel cramped by modern high-end standards. For today’s luxury buyer, remodeling is unappealing. They want to maximize home size, often reducing outdoor space in favor of more bedrooms and more expansive living areas. The tear-down phenomenon is hardly new. Beverly Hills residents have for decades razed houses that earlier generations considered grand to make way for more lavish residences. Many structures associated with celebrities or designed by noted architects were among those toppled by bulldozers, including John Lautner’s Shusett House. The recent demolition of a North Roxbury Drive residence where Gershwin lived, wrote and entertained Hollywood royalty. And aftern the near miss of a modernist Richard Neutra, Beverly Hills finally got serious about preserving its architectural legacy, the city enacted an ordinance early last year, and quickly enacted tax breaks to foster neighborhood preservation. The city is also conducting a citywide survey to identify potentially significant houses.

Luxury Market Coming of Age With Younger Buyers

There is an emerging trend in the luxury real estate market place, it is a kind of coming of age, as in the age is coming down.  A new survey by  the Luxury Institute finds that wealthy younger buyers are driving the luxury real estate market, and are paving the way in a changing market place. And the bonus for luxury home sellers, they are willing to pay more than similar wealthy buyers age 55 and older. According to the survey of Americans age 21 or older with a minimum gross annual household income of $250,000, 43 percent of younger wealthy consumers are considering the purchase of residential property in the next 12 months, compared to 21 percent of those age 55 and older. On average these younger wealthy consumers spent more than $2.1 million on their most recent purchase of residential property, approximately twice the average amount spent by older and similarly wealthy luxury buyers, which was $1.1 million. These younger luxury buyers are leading a change in desired home amenities,  whether they have young families or are single without children, they are looking for homes that fit their active and unique lifestyle. Younger buyers are significantly more likely to want homes with amenities such as a pool, outdoor kitchen, home gym, home theater, wine cellar and four or more garages. Less importance is placed on staff quarters, tennis/sports courts and separate catering kitchens. For majority of luxury buyers, location is the most important factor when considering the purchase of residential property. However, nearly one in four have the freedom to choose a property anywhere. The younger luxury buyer have more freedom to choose a residence that truly fits their lifestyle and will not limit their search based on location.

Home Sales Continue Reaching Higher

Existing-home sales increased in August, reaching their highest level in 6 1/2 years. What’s more, the median price shows nine consecutive months of double-digit year-over-year increases, according to the National Association of REALTORS®. Sales are at the highest pace since February 2007, when they hit 5.79 million, and have remained above year-ago levels for the past 26 months. The median time on market for all homes was 43 days in August, little changed from 42 days in July, but is much faster than the 70 days on market in August 2012. Total housing inventory at the end of August increased 0.4 percent to 2.25 million existing homes available for sale, which represents a 4.9-month supply at the current sales pace, down from a 5.0-month supply in July. Unsold inventory is 6.3 percent below a year ago, when there was a 6-month supply. Limited inventory in some areas means multiple bidding remains a factor; 17 percent of all homes sold above the asking price in August. As the equity position of most homeowners continues to improve, some who have been on the sidelines will list their home for sale. Current home owners—whether move-up, move-down, or move-over buyers—accounted for nearly 45 percent of the market share in home sales. Meanwhile, first-time home buyers are still being held back, with a slight drop in their market share from 36 percent to 35.7 percent month over month. The investor share in home purchases dropped to 19.7 percent from 23.1 percent.

Evolution of Famous Rodeo Drive

Today the famed Beverly Hills landmark, is in the midst of a renaissance. For the first time since the recession, there are almost no vacancies among the roughly 100 storefronts along the three-block retail row. From Dayton Avenue and Wilshire Boulevard to the 400 block, Rodeo Drive today boasts more than 100 world-renowned hotels and boutiques. The Los Angeles Times profiles highlights of Rodeo Drive, widely considered one of the most famous streets in the world. It’s been immortalized in movies, books, song lyrics and on reality TV. Luxury retail real estate brokers say that brands have started to invest in new infrastructure, because luxury stores always have to update their look and keep it fresh. Recent newcomers to the street include Patek Philippe. In October, Dior reopened its 5,000-square-foot store with a design concept borrowed from the brand’s worldwide flagship in Paris. In November, Van Cleef & Arpels reopened its historic boutique. And this spring, Prada redesigned its concept store. Louis Vuitton and Saint Laurent are both embarking on multimillion-dollar renovations of their stores. Coming soon will be Vera Wang and Burberry. Another indicator of the value of a Rodeo Drive address is that luxury brands are starting to buy their stores instead of just leasing them. In May, Chanel bought 408 N. Rodeo in one of the highest per-square-foot sales in Los Angeles County, reportedly paying $117 million for the 13,317-square-foot property. LVMH Moet Hennessy Louis Vuitton bought 319 Rodeo for $85 million, and Hermes bought its building for a reported $75 million.

 

Real Estate App DreamCommerce Adds New E-Postcard Feature

Real Estate App DreamCommerceLuxury real estate agent Gary Gold recently discussed with trade publication Inman News a new feature available on the mobile real estate app he co-founded, DreamCommerce. Dubbed DreamCards, the new tool allows agents to send to their clients “e-postcards,” which are images of a particular home feature accompanied with lines of text.

DreamCards is just the latest innovative product from DreamCommerce to aid in the home shopping process, according to the Inman News report. Gold, who co-founded DreamCommerce with David Ragones, explained the benefits of DreamPro to the publication.

“DreamCards allow agents to send a personalized message with a beautiful listing photo to clients, leads, or their mobile farm in only a few taps on their smartphone or tablet,” Gold said.

This new tool has many intriguing possibilities, but at its core it fosters better and more timely communication between an agent and client. A DreamCard screenshot provided shows an image of a beautiful kitchen with hardwood floors, accompanied with this simple text:“the one?” Now, not only can agents provide pictures to their clients, but also things like analysis and thought-provoking questions.

According to Inman News, a free version of the DreamPro app allows an agent 25 DreamCards a month. The “Social Plus” edition at $15 a month provides agents with a custom referral code to brand the DreamHouse app, as well as 25 DreamCards. For $25 a month, the “Hero” edition provides the branding and 50 DreamCards.

The report also points out there are already thousands of consumers and hundreds of agents that take advantage of the DreamCommerce app.

‘Hipster-Flippers’ Making Mark on Los Angeles Real Estate

(Businessweek photo)

You can call them hipsters or, as the U.S. Census Bureau defines them, the “creative class,” but however you prefer to acknowledge this large segment of the Los Angeles community they are beginning to put their mark on the L.A. housing market.

According to a story in Businessweek, “hipster-flipper” shops with names like Better Shelter and ModOp Design “are bringing an artful take to the renovation game” in Los Angeles. What they are doing is entering formerly run-down segments of Los Angeles and refurbishing the homes there with that hipster flair.

“There’s an inexhaustible supply of hipsters in L.A.,” said real estate developer Steve Jones. “You saw the same thing happen in Brooklyn. The hipsters pushed out until they got to the water.”

Rather than the quick and cheap flips that are pervasive in real estate, L.A.’s creative class is making serious upgrades to homes that match their aesthetic. Jones said that has changed the face of Los Angeles real estate.

“What the market had been offering in terms of renovated homes was bad laminate flooring, granite countertops—the Home Depot school of remodeling,” Jones told Businessweek. “There had to be a buyer who appreciated better design.”

The U.S. Census Bureau defines L.A.’s creative class as people who work in the fields of tech, business, media, entertainment, law and health care. They earn in average of $81,000 a year and make up 34% of the workers in Los Angeles.

What’s really got the real estate world buzzing is these buyers are paying big money for homes “with a suitcase full of money.” One real estate professional told BusinessWeek people are paying over 10% of the asking price—all cash—and with no contingencies.

In fact, almost one-third of home sales in Los Angeles were all cash during the first quarter of the year. The median price of these purchases was $351,000.

With Real Estate in a Sellers Market, Time is of the Essence

sellers marketA similar story is emerging throughout the country: it’s a sellers market in real estate. From New York to Los Angeles, and mostly in between, bidding wars and cash offers are increasingly common enough that the New York Times has weighed-in on the development.

Broker Mickey Conlon expressed this sentiment to the Times after listing a New York home for $1.89 million and riding a bidding war to a cash payment of $2.16 million.

“It’s the kind of insanity you live for in this business,” Conlon said.

Of course, that’s a single instance, but the message is clear: real estate is back. Recent developments make it increasingly enticing to either go house shopping or to list your home on the housing market.

The Times offers its usual plethora of insight on the housing market in this article. Here are just a few takeaways from the piece:

–Always be on top of the latest listing

–Forget about getting a deal

–Don’t delay

–Be thorough

–Raise your down payment

–Set your ultimate price

–Sign your contract quickly

Additionally, even in a sellers market, having the right listing price is critically important. This means sellers should not think the sky’s the limit when putting a price on their home, nor go to low on their asking price.

So Why Hasn’t My Home Sold Yet?

If your home has been on the market and hasn’t sold, there are a few steps that can be taken to pre the reset button and get your home sold.

The most important is to make sure your home is show ready and doesn’t look “tired.” This can be achieved by removing any excess clutter in the home and making sure the furniture looks good. Next, change out the keypads of security systems and the thermostat if neccesary. If they are old and outdated they can really make a house look tired.

Some homes are more difficult to show than others for a variety reasons. When you can’t show a home it can make it very difficult to sell.
If your home is not drawing the interest you would like then you need to take a look at the asking price and how it is being marketed. As good as the marklet it’s the correctly priced homes that are moving and garnering multiple offers, often over asking price.

With regards to marketing, you want to ensure the copy describing your home hits on all the right points and all photography and/ video show the home in its best possible light. Remember, the greatest home in the world with mediocre photography is not going to get attention. It is also a good idea to switch up copy and photographs emphasizing different qualities of your home which ca n appeal to a whole new set of Buyers

You will also want to have your home prominently placed on real estate Websites in order to draw the most attention. In addition, it is critical that all technical aspects of the listing works, i.e. no missing photos or broken links. If this is not done correctly, your home could get overlooked simply based on a technical glitch.

Housing Market Offers Up More Encouraging News

housing marketThe Case-Shiller home price index, a closely-monitored monthly report from Standard & Poor, revealed home prices posted their biggest gains in seven years in April. For three months now, home prices have risen in each of the 20 major U.S. cities monitored in the report.

The New York Times offered up an encouraging view of the housing market in an article last week that cites continued increases in new and existing home sales as well as the number of building permits. As home prices continue to rise, construction companies are responding by ratcheting up building projects and hiring additional workers. Additionally, the Times reports consumer confidence is also on its way up.

The chief economist for RDQ Economics, John Ryding, spoke with the Times about the latest string of encouraging data.

“Five years after the start of the financial crisis in earnest, and four years and a week’s time from the beginning of the economic recovery, we’re finally starting to get more of a pickup,” Ryding told the Times. “It’s been a very drawn-out process, but you have to remember what we’ve been digging our way out of.”

The Case/Shiller home index showed home prices were up on average by 10.9% in April as compared to April 2012. The Times notes there are several factors driving the housing recovery, beginning with a loosening of the labor market. In fact, jobs have increased in each of the last 31 months, which means more people are able to spend on homes.

However, the current supply of available homes is low and with demand increasing, prices are of course going up. If that trend continues, more people are likely to in turn put their homes on the market and the recovery will accelerate even faster.

An economist with JP Morgan Chase told the Times that while home prices are likely to continue to rise in the coming months, it isn’t likely to be at the double-digit rate seen last month.

“You’ve had this dynamic that has been favorable for price increases now, but it’s also favorable for supply to come back on market, so that will mean some moderation in the pace of price increases,” Daniel Silver told the Times.

 

Marina Del Rey Redevelopment Readies for Massive Expansion

Marina Del Rey

Marina Del Rey is undergoing a major facelift.

Marina Del Rey redevelopment is poised to undergo an extensive redevelopment and expansion project that will add more than 1,100 residential units to the seaside community. The development will cater to young professionals, many of whom are being drawn to the area largely through the growing number of technology businesses that are cropping up on the Westside.

The Los Angeles Business Journal reports the Marina Del Rey project had been left on the county’s backburner for more 10 years, largely due to regulatory and economic issues. However, as the housing market and overall economy began to improve—coupled with the Westside’s increase in commercial activity—a flurry of projects have received the green light to commence.

Marina Del Rey was developed in the 1960s and consists of 804 acres. The Business Journal notes that the community housed a much younger demographic during its formative years, which is something it will try and at least partially recapture in the build-out. The thought is many young professionals who are being hired to work in the new tech businesses on the Westside will want to live close to work and may find Santa Monica to be too pricey and/or congested.

Real estate agent Gary Gold is bullish on the Marina Del Rey development.

“I moved here 12 years ago and the upside potential is huge,” Gold said. “I predict Marina Del Rey prices will rival or exceed Santa Monica in the next 10 years. Google has taken a huge position in Venice with offices. The few single family homes in Marina Del Rey west of Lincoln will be highly coveted.”

In addition to the 1,100 residential units, which will begin being completed in the coming months, the project will also entail a refurbishment of Fisherman’s Village retail center and the Marina West Shopping Center. All told, there is expected to be $680 million in construction in Marina Del Rey in the coming years.

“If you go around to the different shopping centers, the demographic is definitely getting younger,” one real estate professional told the Los Angeles Business Journal. “The people I talk to like the fact that they’re young professionals that are single and wanting to go out to eat and do things in the evening. I think that will continue to energize the area.”

Home that Inspired Beatles’ Classic ‘Blue Jay Way’ Sold by Charlize Theron

Blue Jay Way

1567 Blue Jay Way, Los Angeles (Zillow photo)

A home that moved its former owner, George Harrison, to pen the hit song “Blue Jay Way” was recently purchased for $3.8 million by a buyer represented by agent Gary Gold of Hilton & Hyland. Located at 1567 Blue Jay Way in the Hollywood Hills, the property was most recently owned by actress Charlize Theron.

According to the Zillow Blog, the Blue Jay Way property was built in the late 1960s as part of the “Bird Streets” development in the Hollywood Hills that proved an instant hit among musicians and other celebrities. Part of its appeal is the fact the secluded neighborhood is elevated, providing breathtaking views of the city below. Other celebs to live on the “Bird Streets’ include Leonardo DiCaprio, Jennifer Aniston and many other A-listers.

The Zillow Blog notes Harrison wrote “Blue Jay Way” during a brief moment of inspiration while sitting at an organ at the home while waiting for a friend to pick him up. It was later released on the Beatles’ Magical Mystery Tour album in 1967.

The home provides a perfect example of mid-century architecture, according to Zillow’s description. It is U-shaped and has 4,116 square feet of living space. It has three bedrooms an three bathrooms and features glass walls, media screening room, pool and those excellent views.

Theron paid $3.625 million for the home in 2009 and had been testing the market waters off and on during the last year. It was initially listed for $4.599 million, but that price was incrementally lowered during the next 10 months.

Home Prices Grew By 8.1 Percent in January

Home PricesA closely monitored study of sales activity in 20 U.S. cities revealed home prices rose by 8.1 percent in January on a year-over-year basis, which is the biggest such increase in prices since June 2006.

The S&P Case-Shiller index showed home prices rose across all cities monitored by the study in January. Phoenix led the way with a 23 percent increase and several other cities saw prices surge by double-digit percentage points, including Los Angeles. A CNNMoney report on the study noted cities that were particularly hard hit when the previous housing bubble burst are now leading the recovery.

Several factors have helped to spur the growth in home prices. Most notable of these are the current favorable buying conditions, which includes historically-low mortgage rates; a low inventory of available homes; a drop in foreclosures and an improving overall economy.

Analysts remain encouraged by the current direction of the housing market.

“The market still has a long way to go nationally, but the healing process—and a return to a normalized housing market—is definitely underway,” Jim Baird, chief investment officer for Plante Moran Financial Advisors told CNN Money.

To illustrate the point of the market still having a long way to go, CNNMoney noted the S&P Case-Shiller index remains 28.6 percent below its 2006 peak.

In another study released this week, the Commerce Department revealed the sales of new homes slowed slightly in February from the previous month, but was still up a healthy 12 percent from February 2012. Analysts cited bad weather in February as a potential reason for the slowdown. However, they stressed market fundamentals remain strong and home sales are expected to accelerate even faster in the coming months.

 

Surging Prices Beginning to Lead to a Sellers Market in Los Angeles

Luxury Real EstateReports continue to stream out confirming the current strong growth of the Los Angeles real estate market. In fact, home prices in Los Angeles last month were up by more than 20 percent as compared to in February 2012.

The Los Angeles real estate market has been particularly hot at the high-end level, especially on the Westside. Our friends over at the Valerie Fitzgerald Group gushed at the development in this following excerpt from a recent blog post:

“Wow! What an amazing 2012 we experienced in Westside residential sales,” Fitzgerald said. “2012 was the best year ever recorded for high end sales. A ‘buyers market’ turned into a ‘sellers’ market in most Westside neighborhoods in all price ranges.”

Helping to spur the rise in prices and the increase in sales activity has largely been an improving economy, favorable buying conditions and a supply shortage that has changed the real estate dynamics. Economist Lawrence Yun elaborated on the current state of the L.A. real estate market, noting pending home sales have been up each of the past 21 months on a year-over-year basis.

“Favorable affordability conditions and job growth have unleashed a pent-up demand,” Yun said. “Most areas are drawing down housing inventory which has shifted the supply/demand balance to sellers in much of the country. It’s also why we are experiencing the strongest price growth in more than seven years.”

According to statistics provided by the Valerie Fitzgerald Group, the average listing price for a home in Los Angeles for the week ending Feb 27 was $1,22,899, which was up 0.4 percent from the previous week.

From December 2012 thru February 2013, the median sales price of a home was $376,000. That marks a 27.6 percent increase from the previous year’s corresponding period.

 

Optimism Abounds in L.A. Real Estate Following Positive Reports

A trio of much-anticipated reports on the housing market showed the nationwide recovery continues with no signs of disruption on the horizon and the Los Angeles area is doing particularly well.

According to an analysis of the reports by the Daily News, home prices in the Los Angeles metro area were up 10.2 percent in December from the year prior. That was much better than the average gain of 6.8 percent for the country’s 20 largest metro areas measured by the S&P Case Schiller Home Price Index.

Analysts quoted in the Daily News story were understandably bullish after learning of the results. The continuing rise in home prices, which is partly the result of fewer distressed properties being on the market, isn’t likely to slow anytime soon.

“It was clear in the data that there was not going to be another (price)let down,” Craig Lazzara, senior director at S&P Dow Jones Indices told the Daily News. “And data on housing starts and permits confirm that the housing market is in pretty good shape.”

Local homebuilders told the paper that there have been waiting lists for new housing units under construction since last year when the steady climb in home prices began in earnest. In January, the sales of new homes was up 16 percent from the previous year.

There is also plenty of demand in the resale market, which is also partly the result of a lack of supply. Supply is down in part because of the number of homeowners that are still underwater on their mortgages. Most are waiting for prices to rise even more before offering their homes for sale.

That could be sooner than many think the way things are going. The data, general consensus and anecdotal evidence says its all—the L.A. housing market is firmly back on its feet.

Real Estate a Seller’s Market, Wall Street Journal Reports

With home prices back on the rise, it’s becoming abundantly clear that we’re in the midst of a seller’s market. The Wall Street Journal made the proclamation last week following an analysis of the the latest report from the National Association of Realtors.

Several factors have led to a continuous increase in home prices throughout the nation, not the least of which is a severe shortage supply. According to the N.A.R, the number of properties for sale fell by 4.9 percent in January on a month-by-month basis to 1.74 million. The total housing supply in the U.S. hasn’t reached such depths since December 2009. To give you a further idea on how supply has fallen, the Wall Street Journal points out there were 2.91 million homes on the market in January 2011.

As a result, this lack of supply—coupled with a growing number of buyers that includes a surge in investors—has helped to put home prices on a steady trajectory.

California has been among the states hit particularly hard by the supply shortage, the Wall Street Journal points out. Most experts believe the housing market could be growing even faster if there was an adequate supply. However, many homeowners in California remain underwater on their mortgages and are reluctant to sell until prices increase even further.

Many analysts are optimistic that nationwide home sales could reach 5.2 million units this year, which would represent a 12 percent increase from 2012. However, other concede that mark could prove elusive if supply doesn’t loosen and potential buyers are forced to hold on to their money.

2012 Saw Huge Jump in Sales of Million-Dollar Homes

While overall home sales in California increased by a solid 8.2 percent in 2012, it was the high-end of the real estate market that particularly surged. According to the Los Angeles Times, sales of million-dollar homes in the Golden State last year reached heights not seen since prior to the housing crash.

There was a 26.9 percent spike in the number of homes that sold for more than a $1 million in California last year. The 26,933 homes that sold past that threshold in 2012 was the most since 2007, but still far from the all-time mark of 54,773 million-dollar homes that were sold in 2005. Particularly pushing the increase was the sale of multi-million dollar homes, according to the Times’ analysis of a recently-released DataQuicks report.

To illustrate that point, the story notes the number of homes that sold for more than $5 million in California, 697, was a 42 percent jump from 2011.

Among the top 10 locales for million-dollar home sales in 2012 were Beverly Hills and the Brentwood section of Los Angeles. Silicon Valley was the site of the most homes that changed hands for a million dollars or more last year. That includes the highest-priced home sold in the state. A home in the Woodside section of Silicon Valley featuring 8,930-square-feet of living space and nine acres of land sold for $117.5 million.

DataQuick officials noted safe-haven investing and return on investments available given the current low interest rates played a key role in the surge of million-dollar home sales last year.

One final note–it was revealed that 7,791 high-end buyers paid cash for their homes, which is the highest number ever recorded and a big leap from 2011 when 5,082 million-dollar homebuyers paid cash.

 

Want to Buy a Home? Here’s a Step-by-Step Look at How It’s Done

Owning your own home has been part of the American Dream ever since the ‘shot heard round the world’ set off the American Revolution. To help make that dream a reality in 2013, Realtor.com has provided 10 resolutions to help in a successful quest.

  • Decide What You Want—Given the commitment of buying a home, the first step is to decide on EXACTLY what you are looking for in terms of location, price, and what kind of home you need.
  • Get Your Financial House in Order—This means to figure how much you will have available for a down payment and what your monthly budget would allow for a mortgage payment.
  • Get Your Pre-Approval Before House Hunting—Meet with a loan officer and get a pre-approval letter that states your financial records have been reviewed and you can readily qualify for a given loan amount.
  • Find Your Realtor—Given the complexity of purchasing a home, it is highly-recommended a real estate professional is hired to help guide you through the buying process.
  • Find Your New Home—You can go through online listing of homes for sale that match your exact specifications, and/or you can use a realtor to provide a list of suggested homes that match your criteria
  • Understand Your Mortgage Options—Buyers should learn as much as they can about the various mortgage options available, which will determine the ultimate cost of a home
  • Make An Offer—You have three options at this step, according to Realtor.com. They are accepting the listed price and drawing up a contract; make a counter-offer with different terms; or reject it and not make an offer
  • Protect Yourself with Insurance—Title insurance, which protects you in case it is later found the title of a property is actually invalid; and homeowners insurance, which protects against fire, theft and other liability
  • Close on your New Home—With advances in technology, this has become a more streamlined process, according to Realtor.com. In this step, you get one final chance to walk through the home to make sure there have been no changes in its condition since the sales agreement was signed
  • Tie Up Loose Ends—This step includes determining all of the utilities you will need to run the home. Additionally, be sure and hold on to all the paperwork of the sale as these can be used for tax purposes.

We hope this helps in your house search and that 2013 is the year you purchase your own home. Happy hunting.

As Confidence Grows, Number of New Households Continues to Surge

The housing meltdown of a few years back resulted in a myriad of consequences, not the least of which were many Americans were forced to delay entry into the housing market. That trend has now been flipped. Growing confidence of the U.S. housing market among Americans has resulted in a surge of new homes rising up across the country.

According to Reuters, the number of new homes came in at nearly 1.2 million in 2012, which was about 100,000 more than the previous year and a far cry from the output of 2008 thru 2010 when there was average of just 500,000 new homes being started. As a result, new home building is at its highest level in more than four years, which has turned housing “from the economy’s sorest spot to its brightest,” Reuters reports.

The increase in home building still hasn’t been able to keep pace with the increase in household formation. This has led to the much-chronicled supply shortage currently being felt, notes an economist for Stamford, Ct.-based RBS.

“The rise in household formation bodes well for the economy,” Guy Berger told Reuters. “Instead of having too many houses, we are turning to a situation where there aren’t enough.”

To illustrate this point, Reuters notes how many students that graduated during the depths of the recession were forced to move back in with their parents. Now, they are starting to set out to form their own households because of greater confidence in the greater U.S. economy.

The housing market is showing such marked improvement that analysts are predicting it will take over from manufacturing as a key driver of the U.S. economy. In fact, one economist for JP Morgan forecasts residential investment will increase 22 percent in 2013, which would be the biggest increase since the early 1980s.

 

New Income Tax Rates Likely to Impact Luxury Real Estate Market

2012 was a very good year for the luxury real estate market, but the question now is will that trend continue given the increase in taxes high-end buyers will face in 2013 as a result of the “fiscal cliff” deal reached in Washington D.C. earlier this month.

According to an examination of the situation by Forbes, sales of luxury homes reached a four-year high last year and the final quarter of 2012 was particularly active. That was largely the result of sellers desperate to close transactions prior to the tax rate increase. The “fiscal cliff” deal hammered out by Congress and President Obama increases the income tax on households earning more than $450,000 to 39.5 percent from 35 percent. Most observers quoted in the story believe the tax increase, along with the high-volume of activity in the final quarter of 2012, will likely lead to a slight slowdown during the opening months of 2013.

To give you an idea of how brisk activity in the luxury real estate market was at the end of 2012, Forbes notes sales in Manhattan in New York City were up 29 percent in the last quarter as compared to 2011. In Greenwich, Conn. the surge was even more pronounced. In December, sales were up a whopping 89 percent from December 2011.

Despite a potential slow down in activity during the short term, expert don’t believe it will subdue home prices. That’s because given the heavy action to close the year, supply has been squeezed which means prices should in fact still continue to increase.

A Los Angeles-based real estate professional echoed the sentiments, noting that, especially in Southern California, there is an influx of foreign buyers still looking to join L.A.’s well-heeled communities like Beverly Hills and Malibu.

 

Sales of High-End Homes Rose Dramatically in Los Angeles in 2012

 

The highest-price home sold in Los Angeles last year. (LA Times photo)

Helping to spur an improved housing market in Los Angeles in 2012 was a dramatic rise in sales of homes at the top of the market. According to the Los Angeles Times, the number of homes that sold for more than $5 million last year in L.A. reached a level that has not been seen since 2007.

Records from DataQuicks show that in the first 11 months of 2012, there were 296 homes that sold for more than $5 million in Los Angeles. Topping those purchases was the $36.944 million paid by Oracle Corp. CEO Larry Ellison for a home in Malibu that was previously owned by Yahoo Inc. head Terry Semel.  The number of high-end homes sold last year was exactly double that of 2009 when the housing market collapsed, and nearly 100 more than in 2011.

The Times noted that several “A-list” celebrities landed luxury homes in Los Angeles last year, including Ryan Seacrest, Ellen DeGeneres and Jennifer Anniston among others. In fact, Seacrest paid the second highest-amount for a home in Los Angeles last year when going to $36.5 million for a Beverly Hills compound that was previously owned by DeGeneres. In turn, DeGeneres spent $17.4 million on an 8,500-square-foot home in Beverly Hills.

There was one other Los Angeles home that sold for more than $30 million in 2012. According to the Times, a 36,000 square-foot French Palladian-style mansion in Beverly Hills was bought for $34.5 million by C. Frederick Wehba, a founder of real estate investment firm Bentley Forbes.

As you would guess by the big jump in high-end home sales, plenty of others in the L.A. celebrity set are getting in on the real estate action in 2012. Among those are Leonardo DiCaprio, who is asking $23 million for his three-home compound in Malibu; and Jennifer Anniston, who paid $20.97 million for an 8,500 square-foot home that sits on three acres in Bel Air.

Opportunity Abounds in Housing Market for Both Buyers and Sellers

With home prices back on the rise, this is a perfect time for both buyers and sellers to get off the sidelines and back in on the action. That’s according to CNN, which this week offered an “action plan” outlining how to best take advantage of this long-awaited market upswing.

According to CNN, home prices are expected to rise by one percent across the nation in 2013—though Western locales such as Los Angeles are likely to see an even bigger increase. While that’s certainly a modest gain, it does suggest home prices have hit bottom and there are good deals to be had whether you are a buyer or seller.

To give you an idea on the expected increase in home-sale activity moving forward, the Mortgage Bankers Association projects new home loans are expected to jump by 55 percent (based in dollars) in 2013. That means there are plenty of people expected to jump back into the housing market.

If you are looking to take advantage of this increasing demand, CNN suggests two key elements for sellers to focus on. These include properly pricing your home and focusing on the appraisal.

As an example of properly pricing your home, CNN point out in San Francisco, one of the nation’s hottest seller’s markets, only properly priced homes are receiving multiple offers. That’s because buyers aren’t necessarily getting into bidding wars. The average home in San Francisco is selling for 103 percent of listing price, not the 120 percent level that was previously seen.

CNN suggests when having your home appraised that you always have your agent on hand. Appraisers should also be given an information package prepared by your agent that includes any upgrades or renovations to the home.

The main thing pointed out for buyers in the article was to be ready to make an offer if you’re looking for a home. One agent told CNN your first offer should be very close  to your best offer. The only change in that would be if the house has been on the market for at least three months. Then you could be a little more aggressive with your offer.

 

‘Tis The Season For Great Real Estate Deals

Good deals are often available during the Holiday season.

You may not have known it, but we are smack in the middle of the best two-week period of the year to make an offer on a house. That’s right, each year from Dec. 3 thru Dec. 14 bargains in the housing market are to be had thanks to a variety of reasons, according to the blog at The Deeper Pockets.

The online real estate magazine provided several tips to take advantage of year-end home-buying, one of which was to only make cash offers this time of year. First, though, let’s take a look at why this is such a good time to make an offer on a home.

As the story notes, by getting a bid in by December 14th you should have time to take all the steps necessary to get the deal closed by Dec. 31st. Why is this important? Largely because banks typically want to move excess supply prior to the new year. This means they will often accept drastically reduced offers.

One other interesting point The Bigger Pockets makes is that during this time of year, people are often enmeshed in the holiday season and other year-end projects. So,that widens the opportunity for those willing to put in the time.

In addition to only making cash offers, The Bigger Pockets also suggests that you keep the inspection period short and that you go back and make a re-offer on bids from earlier in the year that were denied.

Time is running short to take advantage of this early holiday gift, so let’s get going.

Is This Flippin’ Easy? Luxury Re-Sales Turning Big Profits in L.A.

High-end home flippers are currently making 20 percent and higher on their investment.

In case you need any more signs the housing market is getting back on track, the Los Angeles Times reported this week an increasing number of high-end homes are being “flipped” for lucrative profits.

The numbers in the article are staggering. For example, a mansion in Beverly Crest owned by Rihanna was purchased for $4.5 million last year and, following a modest upgrade, is back on the market with a price tag nearly double—$9.95 million.

Flipping homes—which is defined as a home being bought and resold within six monthsis up 25 percent from a year ago across the nation, according to the Times. It’s been particularly trending in the luxury market. The reason is simple. Flippers in the luxury real estate market are currently seeing returns on investment of more than 20 percent, one real estate analyst told the Times.

Leading the spike in profits is a shrinking supply of high-end homes and purchase terms that are agreeable even on a historic level.

“There’s a sentiment now that you don’t really want to miss the boat,” UCLA professor Paul Habibi told the Times.

Those looking to get in on the action probably need to act fast. To give you an idea of the supply shortage, the Times pointed out there are generally enough unsold homes to fill up to seven months of transactions. Right now there is only a 5.7 month supply of homes selling for a million dollars and up, a sharp downturn from last year when there was a 10.7 month supply.

Locales drawing attention from high-end flippers include Hollywood Hills, particularly the Birds Street area; West Hollywood, Beverly Hills and Venice.

Report: Home Prices in Los Angeles Will Continue to Rise in 2013

A study reveals home prices in California will increase in 2013.

Home prices in the Los Angeles metro area have been on a steady climb since earlier this year and that trend is expected to continue throughout 2013, according to a report from Zillow.com.

In the next calendar year, home prices in the Los Angeles area are expected to increase another 3.5 percent. Home prices currently average $397,000 in Los Angeles and Orange counties. That is an increase of 2.7 percent from this time last year, Zillow reports.

Home prices in the L.A. area have been rising since the first quarter of 2012, according to the Times report. A look at the entire U.S. housing market shows home prices in Los Angeles are increasing faster than the national rate and will continue to do so next year. According to Zillow, home prices nationally increased by 1.3 percent from the second quarter to the third quarter of 2012. The Los Angeles Times reports that is the biggest quarterly gain in the national housing market since March 2006.

As for 2013, the real estate web site expects home prices nationally to increase by another 1.7 percent. The current median price for a home in the United States is $153,800.

Celebrities Go to Great Lengths to Keep Real Estate Deals Quiet

Given today’s celebrity-obsessed culture, many stars of the entertainment and sports worlds are now going to great lengths to keep things quiet when putting their high-end homes up for sale. According to the Los Angeles Times, such tactics as “pocket listing” and selling under the name of a trust are being employed to keep the hard-charging celebrity media and others at bay.

Real estate agents that work with high-end properties told the Times celebrities more than ever are using “word-of-mouth marketing”, or pocket listing, instead of using online marketplaces like Realtor.com, Multiple Listing Service, or others.

One example given is the home of Madonna located in Beverly Hills. It is well-known among the deep-pocketed that the pop singer’s 16,500 square-foot mansion is currently for sale with an asking price of $28 million. However, you won’t find it listed on anything that is accessible to the general public.

This has led some high-end real estate professionals to focus their businesses almost entirely on the emerging trend of pocket listings. Their selling points to celebrity clients are pocket listings will maintain privacy and also put them in the loop when the best homes are quietly place on the market.

Another tactic celebrities employ to protect their privacy is by buying properties under the name of a trust. It can be named anything, but it’s usually a good idea to give the trust a generic title, said one professional in the luxury real estate market. The Times offered Britney Spears as an example supporting that premise. The singer apparently bought and sold homes under Love Shack Trust, but that was eventually traced back to Spears because of its association with the pop star.

One professional suggested generic names are really ideal because a Google search would result in millions of hits.

 

Sale of U.S. Real Estate To Foreign Buyers Up 24 Percent In Last Year

Foreign buyers are coming to America. (NBC photo)

More evidence of the strength of foreign buyers in the U.S. housing market revealed itself in a report by NBC News this week. The network was the latest to bring to light how in recent months well-off home-buyers from around the globe are snatching up real estate in the United States, often because it is considered a safe place to put their money.

According to NBC, buyers from Canada, Mexico and China are at the forefront of the foreign invasion. As one broker said in the report, “Their money is safe here. Even if they only break even on a property they know they can get their money out.”

Foreign buyers are scouring all levels of the United States real estate market, but particularly in the “luxury” sector. As pointed out in the story, the National Association of Realtors reported purchases of U.S. homes by foreign buyers reached $82.5 billion between March 2011 and March 2012, a 24 percent increase from the previous year .

Areas that have seen a major influx of foreign money includes several cities in Florida, which tend to be favored by South American buyers; Texas, which typically attracts buyers from Mexico; and California, particularly San Francisco and Los Angeles, which have seen an influx of Chinese buyers.

The numbers break-down like this: Canadians led all international buyers with nearly 24 percent of all foreign sales, which equates to about $16 billion; China was next with 11 percent of all foreign sales totaling $9 billion; and Mexico is third with about $6.5 billion in purchases.

The article goes on to point out most foreign buyers are looking to buy larger homes—or “McMansions,” as they are referred—than the average American. The exception are buyers from Mexico, who buy homes that are actually slightly smaller than the average American buys.

A ‘Global Billionaires’ Club’ Joins New York’s Midtown Skyline at One57

View from One57 Tower in Midtown New York. (MSNBC photo)

The borough of Manhattan in New York City is known for its high-priced residences, but it’s never seen anything like the new 1,004-foot “global billionaires’ club” that is near completion along Central Park in Midtown.

According to the New York Times, One57 will become the tallest building in New York with residential units when it opens. In the meantime, apartments in the building are being snapped up at staggering costs by some of the world’s most well-heeled buyers. According to the Times, since units were put up for sale in November contracts totaling more than $1 billion have been signed. The most expensive unit is an 11,000-square-foot duplex that sold for $95 million, which is a new record for a New York penthouse.

As has been well-chronicled of late, the luxury real-estate market in New York has been booming throughout 2012. The Times’ illustrates that point by noting there have been a string of record-breaking sales this year in Manhattan, topped by the $88 million paid for a penthouse by the daughter of a Russian billionaire in March. That record was shattered by the $95 million duplex at One57.

Some New York real estate professionals have signaled their amazement in the amount of wealth that’s converged on One57. As noted, high-end buyers have flocked to New York real estate this year and One57 has not been an exception.

The president of property appraiser Miller Samuel, Jonathan J. Miller, described the scene to the Times.

“The scale of wealth in this building is just unheard of,” Miller said. “Despite all the problems economically, you are seeing these people invest in real estate unlike any other period that has ever happened.

One57 cost $1.5 billion to build. Its apartments offer 360-degree views of the city with sight-lines to many of New York’s landmarks, beginning with Central Park directly below and the Statue of Liberty in the distance.  According to the Times, “fewer than 40” of the 92 apartments at One57 are still on the market. This includes four full-floor apartments that cost a minimum of $50 million each.

International Buyers Help Lead to Increased Demand For $10 Million Homes

Wehba Mansion

A quartet of California ZIP codes, led by Beverly Hills 90210, saw a flurry of action in the sale of homes for $10 million and up during the 12-month period ending in June 2012.

According to a study by Coldwell Banker Previews International, 21 of 56 homes that were listed for at least $10 million during that one-year period in Beverly Hills were ultimately sold. Other California ZIP codes that saw heavy sales activity at the $10 million and up level included Malibu (90265), Bel Air (90077) and Santa Barbara (93108).

Among the high-end sales made in Beverly Hills were a $37 million compound that comedian Ellen DeGeneres sold to Ryan Seacrest, as well as the Wehba Mansion on Sunset Boulevard that sold for $34.5 million. This is according to a Forbes analysis of the Coldwell report.

In nearby Bel Air, a total of 41 homes were listed for at least $10 million and ten of those were sold. The most notable of the Bel Air real estate deals was the Fleur de Lys mansion, which brought a cool $125 million.

Malibu was well-populated with $10 million homes as well, but sales activity hasn’t been as brisk as in Beverly Hills and Bel Air. Of the 66 listings of $10 million or more in Malibu, ten were sold including the La Villa Contenta for $54 million and Rocky Oaks Estate for $43 million.

Other communities across the United States that provide an ample supply of $10 million homes include Aspen, Colo. , Miami Beach, Fla., and the borough of Manhattan in New York City.

Forbes reported the major catalyst for the increasing activity in this end of the real estate market has been an influx of foreign buyers who want to put their money into hard assets in this country, especially in coastal cities.

“The luxury real estate market is becoming more global and interconnected than ever before,” Coldwell Bankers President Betty Graham told Forbes. The vast majority of international buyers are coming from Asia, Russia and Brazil, Graham added.

Puttin’ On The Ritz—Finally, Buyers Beginning To Fill L.A. Live’s Ritz-Carlton Residence

Ritz-Carlton Los Angeles

photo provided by latimes.com

At long last, it appears the once-booming downtown Los Angeles condominium market is back on the upswing. That’s according to a report by the Los Angeles Times, which cites the fact the presumed crown jewel of downtown’s $2.5-billion L.A. Live re-devlopment project—the Ritz-Carlton Residence—has now sold more than half of its units.

The Ritz-Carlton Residence, which sits on the top 25 floors of L.A. Live’s signature skyscraper, opened in 2011 and houses 224 condominiums. For more than a year the condos remained largely empty. However, a declining supply of available condos in the area and the continued rise in the cost of apartment rentals has caused the sale of downtown condominiums such as the Ritz-Carlton to gather steam.

According to the Los Angeles Times, about one-third of Ritz-Carlton Residence buyers live full-time in the building. However, an even higher percentage of buyers are investors, largely from China and Korea that are buying the condos to serve as homes for their children while they attend colleges and universities in the area, the Times reports. For even further evidence of the rebounding Los Angeles condo market, it seems noteworthy that three investors plunged for a total 63 units in the Ritz-Carlton Residences that they intend to turn into rentals. That may not be such a bad idea when you consider the the average price for a condo in downtown L.A. is currently $619 a square foot, a sharp 18 percent increase from this time last year.

AEG Vice President Kimberly Lucero told the Times thatshe expects at least three-quarters of the Ritz-Carlton Residence units to be sold and off the market by the end of the year. Condos in the Ritz-Carlton Residences begin at $1.3 million with the most expensive unit, a large two-story penthouse on the 52nd floor, on the market for $9.3 million.

Tune Into Gary’s Latest Interview with Zillow

Zillow presents a first look phone interview with Gary Gold. Learn best practices and tips from successful Beverly Hills real estate agent, Gary Gold. Check out the video now.

New Pocket Listing in the Bird Streets of the Sunset Strip

Take a look at this new video I put together for a new pocket listing I have in the Bird Streets of the Sunset Strip!  This house has it all:  Killer Views. Fantastic Layout and Awesome Quality!  This is the quintessential Hollywood Hills home.

STUNNING NEW CONSTRUCTION VIEW ESTATE IN SUNSET STRIP from Gary Gold Luxury Real Estate on Vimeo.

 

Gary’s Great Interview on What Agents Need to be Doing in Today’s Market

Gary Gold, Executive Vice President of Hilton & Hyland and star on HGTV’s hit show, “Selling L.A.” is on track to complete 42 transactions this year.  Watch this great interview he did for Inman – where he’ll be a featured speaker Friday, August 3rd in San Francisco, where he gives some great and honest advice on what agents need to be doing in order to compete and stay relevant in today’s real estate market.

Catch Me At My Speaking Appearance At The Real Estate Marketing Summit In San Diego December 14, 2011

I am looking forward to speaking at the prestigious Real Estate Marketing Summit in San Diego at the Hotel Del Coronado this Wednesday.  Some of the sharpest and most innovative marketing experts will be speaking there. I am honored they asked me to speak on marketing luxury real estate.  Real Estate Brokerage is in the midst of a paradigm shift no less profound than what the Travel and Music Industry have already experienced.  Real Estate Agents that have embraced this shift, have an unfair advantage over the old guard and provide their clients with superior representation.  I am excited to drill down into the details with attendees this Wednesday.

http://realestatemarketingsummit.com/2011/12/02/gary-gold-paves-the-way-to-luxury-real-estate-marketing/

Trulia Shows Some Love For Selling LA

In response to my appearance on HGTV’s hit show Selling LA, real estate website Trulia.com was kind enough to put up this fantastic post on their Trulia Luxe Living Blog and the video I created for the that episode’s featured property – 2300 Kimridge Road in Beverly Hills.  Much thanks to Cristin Zweig over at Trulia’s PR department.  Below is the link to the post as well as a link to the video I created that was featured in that episode.  Take a look!

Trulia Luxe Living:  http://luxe.truliablog.com/2011/12/selling-la-property-beverly-hills/

2300 Kimridge Road Video: http://vimeo.com/user2792633/review/27888109/6ff7cc23e1

 

 

 

 

Watch My Debut On HGTV’s Hit Show Selling LA Tonight At 10PM On HGTV

I will be making my debut on HGTV’s hit show Selling LA tonight at 10PM on HGTV.  Take some time out to watch and let me know what you think!  Below is a link for the video I crafted that was used in tonight’s episode.  Take a look!

http://vimeo.com/user2792633/review/27888109/6ff7cc23e1

 

 

 

How Much Would You Pay To Sleep In Ashton Kutcher’s House

 

 

Ashton Kutcher Bachelor Pad

From a sales listing for a Brooklyn apartment:

…2BR/2BA Duplex Loft Condo W/Parking!

Be a part of “Hollywood History”! Remember the bank in the 1975 Al Pacino classic movie “Dog Day Afternoon”? Well, be the owner of a lovely 2BR/2BA open layout loft in the very same “bank”! 🙂

             Dog Day Afternoon is a about a gay man who robs a bank to pay for his partner’s sex change. It’s dark and gritty. It’s not a “:-)” kind of movie.

But the Realtor who is selling the apartment is highlighting the fact that the movie was filmed in the building, which was turned into condos a few decades back.

Dog Day Afternoon is a about a gay man who robs a bank to pay for his partner’s sex change. It’s dark and gritty. It’s not a “:-)” kind of movie.

But the Realtor who is selling the apartment is highlighting the fact that the movie was filmed in the building, which was turned into condos a few decades back.

Along with routine real-estate photos (fireplace, stairway), the listing includes a picture of cops pointing guns at Al Pacino.

“It’s kind of scary, but it’s Al Pacino,” says Celeste Moses, the Realtor. “It’s an attention getter.”

Does the celebrity connection matter in real estate? For an answer, I called the capital of celebrity real estate — Los Angeles.

“I currently have Ashton Kutcher’s house for sale, and we did get a lot of exposure,” says Gary Gold, who has been selling homes in Southern California for 30 years.

“I probably had at least twice as many showings than I would have normally,” he says. “If you get more exposure and more potential buyers see the property, you have a better opportunity to get more money.”

 

Top Resource for Luxury Real Estate

If you’re looking to purchase or list your home in one of the world’s most desirable neighborhoods, like Beverly Hills, Bel Air or the Sunset Strip, then you have come to the right place at the right time.

We have completely revamped our online resource just for you. Here, you can easily search for the most exclusive properties in Los Angeles or get the best exposure for your home on one of the web’s most sought after websites in www.soldbygold.net.

You are encouraged to browse around our featured listings, use our simple MLS search tools or just get to know more about me, Gary Gold. And should you have any questions then simply call, email or contact me at any time.

My team and I look forward to the opportunity to possibly work with you in the future. In the meantime, enjoy our new site. We are proud of it and we hope it becomes your best and last destination for any and all information you need to complete your next real estate transaction.