Michael Greenwald's Real Estate News: September/October

The early fall months are the second busiest time for the Westside real estate market (the first being springtime). With vacations over and schools back in session, summer buyers and sellers have both settled into a post-Labor Day routine. But for those planning on listing or buying in order to move by the first of the new year, now is the time to do it.

At present, the inventory of homes for sale on the Westside has increased, due to continued low interest rates, as well as the new capital gains tax, which has spurred many "wait-and-see" sellers to finally enter the market. Consequently, there will probably be an influx of homes on the market that have been owned for many years by sellers who have not necessarily updated these homes much. For speculative builders and buyers comfortable with remodeling a home, this could prove a bonanza.

The economy still remains very strong, with optimistic articles from The L.A Times to The Wall St. Journal addressing reemergence and growth almost daily. One of the main bellwethers for the Westside economy has traditionally been the City of Beverly Hills retail community--when Beverly Hills is strong and everything is leased on Rodeo Drive the entire economy seems to follow. At present, major new department stores, boutiques and other high end, highly visible retail stores are returning to Rodeo Drive, which should set a trend for the rest of the Westside.

And finally...another sure sign of strength in the market is our most recent purchase of The Prudential Jon Douglas Company by the parent group of Coldwell Banker. Our new name will be The Coldwell Banker Jon Douglas Company. I will be highlighting this recent purchase in my next newsletter.

The Westside Market September/October Overview

Westwood: In its prime, Westwood Village (attached to UCLA) had more theaters per square foot than any place on the planet. Work is currently underway to turn Westwood Village into a walking promenade and return it to its glory days of the 1960's and 70's. This is a project which will certainly affect the Westwood home owner in a positive way.

Bel Air: With properties almost 100% residential, Bel Air is a unique community in the Westside of L.A. It is an incredibly valuable area with prices broadly ranging from the low 500's up to 10 million. We are currently seeing a trend for the more affordable homes here to rise rapidly in market value.

Pacific Palisades: As a beach community, Pacific Palisades continues to blossom during the fall months. Prices in the Palisades, along with Brentwood, lead the Westside in terms of value. This was a neighborhood less affected by our economic slump than other Westside areas; consequently, it hasn't had to climb its way back up in value as others have.

Santa Monica: School has started and, once again, the reputation of the Santa Monica school system has proven to be an extremely positive asset to this community and its property values. A good indicator of the strength of the Santa Monica market is the present lack of available single family house leases in the most desirable areas of Santa Monica. Very little is currently on the market and when a property is listed, it is usually leased within hours.

Going for the best deal

Anyone buying a home wants to make a good investment. For most buyers, this means buying a home in a neighborhood where property values are stable, or better yet, one where home prices are moving up. How can you tell which direction prices are moving, or if they're moving at all?

Often increases and decreases in home prices are measured in terms of changes in the median price. The median price is the price that is half way between the highest price and the lowest price reported for the period. When the median price increases, this indicates that more buyers bought higher priced homes during this reporting period than they did during the last reporting period. A decline in the median price means that more homebuyers bought less expensive homes during this period than they did during the last period.

Increases and decreases in the median price can indicate a rise or fall in the absolute value of homes. But, this is not necessarily the case. A drop in the median price could indicate an increase in the number of first-time buyers in the market. A rise in the median price might be due to an increase in the number of trade-up buyers in the market.

Determining changes in the absolute value of homes would be easy to calculate if homes resold every year or two without significant changes being made to them, other than for routine maintenance.

But most homes don't resell on a regular basis. Furthermore, some are remodeled, others neglected. This makes measuring the absolute change in home prices over time more difficult to evaluate.

FIRST-TIME TIP: One way to determine which way prices are moving is to look at what similar homes were selling for several months ago. Your real estate agent, or an appraiser, can provide you with this information.

You might want to look at comparable home sale prices at several points of time -- perhaps 3 months ago, 6 months ago and a year ago. This should tell you if home prices are holding steady or if they're moving upwards or downwards.

Ideally, the comparable properties you look at should be from the immediate neighborhood you're considering. Rates of appreciation and depreciation in home prices can vary considerably from one micro-market to the next even within the same city.

Also, find properties that are as similar as possible to the one you're interested in buying. Not all homes in one area will change value at the same rate.

Real estate markets can change quickly. Comparables from several months or a year ago might not give you a true picture of the current market. Find out how long it's taking to sell homes in the area. Multiple Listing Services track this information. If a year ago, the average selling time was 4 months and now it's 2 months, this indicates a shift in the market. Either there are more buyers in the market, or fewer new listings, or both. When this situation occurs, price increases usually follow. Also look at how close the selling price is to the list price. In soft markets, there is usually a larger gap between the two than there is in a rising market. Find out if homes in the area are selling with multiple offers. This usually means that demand is outstripping the supply of available homes for sale.

This situation can drive prices higher.

THE CLOSING: To keep from losing money, don't buy when prices are declining unless you plan to stay put for awhile.

Sharing the American Dream

WASHINGTON -- Naturalized citizens are as likely as native-born citizens to own their own homes, a report released today by the U.S. Commerce Department's Census Bureau has found.

The report found that in 1996 just under 67 percent of foreign-born citizens owned homes, while slightly more than 67 percent of native-born citizens owned homes. Given the margin of error, the rate of home ownership among naturalized and native citizens is virtually the same, says Robert Callis, author of the five-page report "Moving to America -- Moving to Homeownership."

"Because owning a home is part of the 'American dream,' you might expect that the home ownership rate for foreign-born would be significantly lower than for native-born citizens," Callis says. But, he adds, "the report clearly shows that immigrants who come here and choose to stay have as good a chance as natives to achieve home ownership."

The report also shows that 33 percent of non-citizens owned their own homes in 1996.

The report lends credence to a prediction made last spring by David Berson, chief economist at Fannie Mae, at a National Association of Home Builder's conference that immigrants would constitute a major portion of the future's home buyers.

The findings also are significant because the number of foreign-born who move to America this decade is likely to be greater than the number in any other 10-year period since the turn of the century.

The study is based on data from the bureau's Current Population Survey and is its first-ever to focus on home ownership by country of origin and citizenship.

Other highlights of the study include:

• Foreign-born citizens were more likely than native-born citizens to own their own homes in the Midwest and the West. However, in the Northeast, native-born citizens were more likely than foreign-born citizens to own their own homes. In the South, there was no significant difference between the two groups. Being married improves the chances of home ownership regardless of citizenship status. In 1996, the home ownership rate for married-couple families was 83 percent for native-born citizens, 78 percent for foreign-born citizens, and 42 percent for non-citizens. The home ownership rate for native-born and foreign-born citizens was highest among 55- to 64-year-olds (82 percent and 79 percent) and lowest for the age group of 35 and under (41 percent and 39 percent). Foreign-born citizens of Hispanic origin are more likely than native-born citizens of Hispanic origin to own a home (57 percent vs. 48 percent). The longer immigrants remain in this country the more likely they are to own a home. Foreign-born citizens who entered this country before 1970 had a higher rate of home ownership (77 percent) than those who entered in 1970 or later (57 percent).
• Among non-citizens, those who entered this country before 1970 also had a higher rate of home ownership (61 percent) than non-citizens who entered 1970 or later (29 percent).

The full report can be found on the Census Bureau's web site.

Internet Update

Making Moving a Little Easier

Whether you're moving across the country or just across town, let Virtual Relocation be your online moving and relocation guide. There is no single more comprehensive site anywhere for planning your move and researching prospective destinations. Also featured are specific city guides, providing links to major employers, neighborhood information, schools, financial resources, and everything else you could possibly need when considering a move.
Web: http://www.virtualrelocation.com

Across America - Vermont, Colorado, Arkansas, Mississippi

All of southern Vermont is covered by the first site, which provides details of newspapers and travel information for the region. Evergreen Colorado, a mountain community just west of Denver, is online at the second listed address. The Mountain Home, Arkansas, Area Chamber of Commerce home page features vacation and relocation information, as well as a full business membership directory. An online edition of the Madison County Journal, a weekly newspaper covering Madison County, Mississippi, is available.
World Wide Web: http://www.sover.net/~dvalnews
World Wide Web: http://www.mtnhomechamber.com/

Web Cams Index

This page points to Web Cams, video cameras with live links to the World Wide Web, in major cities around the world from New York to Tokyo and Paris to Los Angeles. When we accessed, that is all it did, point. None of the cameras seemed to be available although that could have changed by now.
World Wide Web: http://www.onworld.com/CAM

Yahoo Covers Dallas-Fort Worth

The Dallas-Fort Worth area now has a Yahoo! index of its very own. The News category features local news headlines and features from KTVT Channel 11 News, as well as regional and national news from Reuters and UPI. It joins the current city specific Yahoo services that cover San Francisco Bay Area, Los Angeles, New York, Chicago, Washington DC, Austin, Boston, and Seattle.
World Wide Web: http://dfw.yahoo.com

Past Newsletters Second Half 2001 First Half 2001 Second Half 2000 First Half 2000 November/December, 1999 July/August, 1999 January/February, 1999 October/November, 1998 August/September, 1998 June/July, 1998 April/May, 1998 January/February, 1998 November/December, 1997 September/October, 1997 July/August, 1997