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by The KCM Crew
If your house no longer fits your needs and you are planning on buying a luxury home, now is a great time to do so! We recently shared data from Trulia’s Market Mismatch Study which showed that in today’s premium home market, buyers are in control.
The inventory of homes for sale in the luxury market far exceeds those searching to purchase these properties in many areas of the country. This means that homes are often staying on the market longer, or can be found at a discount.
Those who have a starter or trade-up home to sell will find buyers competing, and often entering bidding wars, to be able to call your house their new home.
The sale of your starter or trade-up house will aid in coming up with a larger down payment for your new luxury home. Even a 5% down payment on a million-dollar home is $50,000.
But not all who are buying luxury properties have a home to sell first.
In a recent Washington post article, Daryl Judy, an associate broker with Washington Fine Properties, gave some insight into what many millennials are choosing to do:
“Some high-earning millennials save money until they are in their early 30s to buy a place and just skip over that starter-home phase. They’ll stay in an apartment until they can afford to pay for the place they want.”
The best time to sell anything is when demand is high and supply is low. If you are currently in a starter or trade-up house that no longer fits your needs, and are looking to step into a luxury home… Now’s the time to list your house for sale and make your dreams come true.
by President Jamie Duran, Orange County, San Diego, and Desert Companies
We want to Thank President Jamie Duran of Coldwell Banker Residential Brokerage for this Presidents Message! And we were honored to have been the ones that handled the Sells of these hallmark properties that were features in numerous books and received several architectural awards for its “timeless architecture.” As quoted by us :These are stunning estates with rich history, remarkable design, and incredible vistas. The transactions fell into place beautifully and we were fortunate to be involved with the sales”
346 Tamarisk Rd – Zanuck Estate – Sold /$4.9M
64725 Acanto Drive – Pond Estate – Sold /$7.5M
2212 Southridge Dr – Boat House – Sold /$1.75M
We Cat Moe & John Nelson of Nelson-Moe Properties Coldwell Banker Presidents Premier Properties would also be HONOREDif given the chance to SELL your “Timeless Architecture” Estate as well! Contact us TODAY!
But surprisingly, it’s located in the desert of Palm Springs
Text by Jennifer Tzeses Posted July 8, 2016
The “ship” is situated next to a road and surrounded by palm trees.Photo: Courtesy of Hawaii Life Real Estate Brokers
Part irony, part wishful thinking, this Palm Springs, California, home, aptly named Boat House for its shiplike exterior, happens to be located in the heart of the desert. Built in 1992 by architect Michael P. Johnson for race-car driver Jim Jeffords, the property is located on the side of a hill in the gated community of Southridge. Inside the towering glass walls, the interiors feature 14-foot ceilings. Vistas of the arid landscape and valley take center stage in the living room at the bow of the “ship.” There’s also an open-plan kitchen with sliding privacy screens, a dining area, and three en suite bedrooms, including the master suite, which features a skylight and fireplace and overlooks the living room. Outside, there’s an infinity pool and large sun deck, both with beautiful views. Listed for $2 million, this 3,905-square-foot home has 3 bedrooms and 3 baths. Contact: Coldwell Banker, 760-325-4500; coldwellbankerhomes.com
Walls of glass and wood beams surround the living room.
Photo: Courtesy of Hawaii Life Real Estate Brokers
A skylight crowns the master suite.
Photo: Courtesy of Hawaii Life Real Estate Brokers
The pool area offers amazing views.
Photo: Courtesy of Hawaii Life Real Estate Brokers
Thank you Jennifer Tzeses with Architectural digest for including our “Boat House” listing as one of your recent articles you can also see it here: http://www.architecturaldigest.com/story/ship-home-palm-springs
Famous for appearing in Diamonds are Forever, the concrete masterpiece returns to the market
by Patrick Sisson
A famous modernist home in Palm Springs designed by John Lautner, known by many for its brief appearance in a Bond film, has recently been re-listed, quickly drawing attention and offers. The one-of-a-kind dwelling, which hasn’t been open to the public for years, returns to the market after a lengthy legal battle and is asking $8M, according to The Desert Sun.
Real estate investor Michael Kilroy purchased the Elrod Home, as well as two other properties (the Steve McQueen House and Boat House), for $11 million. Years later, Kilroy fell on hard times and in 2012, UK-based lender Lloyds Bank sued Kilroy, claiming he had stopped payment and owed $1.8 million. In addition, the nearby Southbridge Property Owners Association also sued, claiming Kilroy owed $150,000 in fees.
Last April, Kilroy filed a petition for bankruptcy, and the creditors agreed he had until the end of 2016 to sell. Last week, local broker Nelson Moe Properties listed the home.
Designed for a noted interior designer and considered a key example of Lautner’s exemplary means of blending architecture and nature, the Elrod House is one of the most famous Modernist homes in Palm Springs. Highlights of the home’s layout include a circular concrete canopy framed by glass windows and a projecting pool deck that seems to float above the landscape.
This isn’t the only John Lautner-designed home to be in the news this year. In February, it was announced that his famous, dramatically slanted Sheats-Goldstein Residence, which made a cameo in The Big Lewbowski, was donated to the Los Angeles County Museum of Art (LACMA).
2175 Southridge Drive, Palm Springs, California [Nelson Moe Properties]
Thank you Patirck Sisson with L.A. Curbed http://www.curbed.com/authors/patrick-sisson for including our iconic famous high end real estate home as one of your articles!
Article by Diana Olick
Rampant volatility in the U.S. stock market is showing up in the high-end housing market. But as with all things real estate, the impact depends entirely on location.
2016 started with a severe stock swoon, and that had an outsized impact on homebuyers with a higher net worth. Historically, high-end housing suffers most in a market downturn.
“As you go up the income quintile, into the top 10 percent, 5 percent, 1 percent by income, their stock exposure increases,” said Sam Khater, chief economist at CoreLogic. “For the typical family, the bulk of their equity is tied up in home equity not stock equity. It’s the reverse for high income.”
Source: Sam Khater/CoreLogic
Khater compared the share of million-dollar home sales to the S&P 500 and found a distinct correlation. While the share of $1 million or more homes is very small, just 1.2 percent of all home sales historically, it can move dramatically depending on stock market gains or losses. From the worst of the financial crisis in 2008 to the peak of the equity markets in May 2015, the share of million dollar and more home sales nearly doubled, according to Khater.
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“Since its peak in May 2015, the S&P index declined 10 percent as of mid-February. This decline in the S&P index was matched by a 30 basis point or 15 percent decline in the $1 million or more share,” Khater said.
The correlation, however, is far more acute in certain locations.
In New York City and San Francisco, where the local economies are tied most to financial markets, sales of high-end homes have weakened, and supply is rising. That jump in inventory will likely affect prices down the road, as supply outstrips demand. Nationally there was a 9.3-month supply of homes listed at $1 million or above in December 2014, but that increased to 13 months by December 2015, according to CoreLogic.
“With more than a year’s supply of inventory, prices, for the most part, won’t be increasing,” Khater said.
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In Washington, D.C., however, the stock effect is far more muted. Government, and the high-priced lawyers and lobbyists that surround it, are a steady denominator.
“Demand is higher, even though the stock market has gotten in the way and the snowstorm has gotten in the way, but demand is there, people are feeling very good about the economy,” said Nancy Taylor Bubes, a 30-year veteran of high-end D.C. real estate and currently an agent with Washington Fine Properties.
She was standing in a $5.75 million listing that received a solid offer in just 10 days. Taylor Bubes, who specializes in the area’s high-end neighborhoods, says she has sold six million-dollar-plus listings year to date, three times what she did last year. Her buyers, mostly domestic and local, are not swayed by Wall Street.
“I actually think the stock market is good for my business. I think people are going to really think about divesting a little bit and putting it into something they would really enjoy,” Taylor Bubes said.
In southwest Florida, however, where real estate is primarily driven by wealthy retirees from the Northeast and Midwest, the story is very different. Sales have slowed dramatically.
“The stock market volatility has definitely impacted the luxury homebuyer in Florida, particularly in Naples and Sarasota,” said Kristine Smale, a senior consultant with John Burns Real Estate Consulting who is based in Florida. “Seasonal traffic is still strong, but would-be buyers are slow to commit this year due to the significant hits to their portfolios. Builders are disappointed, and some are increasing incentives to generate sales,”
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The direction of the luxury real estate market now depends entirely on both the trajectory of the stock market and on inventory levels. Supply of less-expensive homes is extremely tight, and homebuilders are leery of building to that market, as it is harder to meet margins at lower price points. Early last year, before the stock market began its fall, the CEO of Pulte Group, Richard Dugas, said the company would focus more on high-end product, because that is where the demand is.
If the stock market settles, the spring housing market could see a resurgence on the high end. If not, supply will surely increase, and prices will chill.
Written by Helen Chong
The California Association of Realtors (C.A.R.) has released its 2016 Market Forecast, and the selling trend is expected to continue to rise. The report shows home sales as projected to increase 6.3% compared to 2015’s forecast figures. This moves the expected number of home units to sell next year from 407,500 to 433,000. 2015 is moving toward an increase of 6.3% in homes sales compared to 2014 as well. This positive forecast is no surprise when you look at some of the latest statistics for California’s Real Estate Market. In a survey completed by the National Association of Realtors, our state is hotter than hot in sales compared to the rest of the country. Of the top 20 hottest markets they identified, more than half of them are in California.
The survey analyzed the number of listing views and how quickly properties sold in October 2015. Overall markets in California are seeing between 1.8 and 3.6 more viewings in a shorter span of time prior to selling, as much as 30 to 47 days faster than other markets. Despite our drought situation, and significantly higher than average home prices, we are continuing to see growth in the market. According to the forecast from C.A.R., this is due primarily to favorable interest rates and strong job growth.
Fixed mortgage rates for a 30 year mortgage are expected to increase on average only a small amount, up to 4.5%. This projected increase and the current average fixed rate of 3.88% are historical lows. Lower interest rates help more families to better afford a home loan, whether they are first time home buyers, refinancing or making a move to a new home. That the average rate will continue to hold at a low level is great news for anyone looking to buy in 2016.
Job growth in California is the other major player in our continued growth for the market. With major projects such as the Apple’s new offices in Cupertino at the south end of the Bay Area, an influx of new jobs and new residents to the area is guaranteed. With the nonfarm job growth forecasted to increase 2.3% in 2016, California’s unemployment rates is expected to decrease 5.5%. C.A.R. has forecasted it will be outlying areas which have less expensive homes, where the strongest sales will occur. This is due to the growth in jobs in logistics, manufacturing, transportation and warehousing. The areas to watch most are the Central Valley, Riverside, San Bernardino and Solano County.
California is definitely one of the hottest states for Real Estate sales. Once you have decided that you are ready to purchase We hope that you will give us Cat Moe & John Nelson of Nelson-Moe Properties the opportunity to help you with those needs.
It’s a late-summer nail-biter: The U.S. Federal Reserve will announce its current policy for short-term rates on Thursday, ending weeks of suspense. If you’ve been worrying that the Fed will raise rates and thus ruin your dream of homeownership, well, you’re not alone.
But higher rates won’t hurt the housing market overall, which should console homeowners watching their equity as well as home buyers concerned about their investment.
The Fed’s target for short-term rates has been zero since December 2008. Since then, the 30-year fixed mortgage rate has averaged between 3.31% and 5.59% on a weekly basis. So when the Fed officially moves away from a zero interest rate policy for short-term rates, whether it happens tomorrow or in a few months, it will mark the beginning of the end of an era: seven years of incredibly low mortgage rates and high affordability.
But interest rates matter less to housing demand than consistently high levels of job creation and household formation. That is, when people are able to get jobs, move out on their own, and create families, they’re likely to want to buy a home. So higher rates—though they may price out some buyers—won’t cause a decline in sales, or a decline in prices.
But that may not help you feel better if you’ve yet to buy and lock in a monthly payment at these historically low rates. If that’s you, have you completely missed out on the party?
No. You will still be able to do well by historical standards.
The affordability index reported by the National Association of Realtors® stood at 151.2 in July. That number basically means that a family earning the median household income could afford to buy 151% of the median-priced homes in the U.S. Yes, the index is down 16% from January when mortgage rates were at their lows for this year. But the index has averaged 125 over the past 44 years. That means you can still get more home for your money than most people have for more than 40 years.
Over that same 44-year period, the average monthly 30-year fixed mortgage rate was over 8%. It was 4.06% on Tuesday.
Does that mean dealing with higher rates will be easy? No, we will have to adjust to the impact. A 50 basis-point increase in rates causes a 6% increase in monthly mortgage payments. (A basis point is 1/100th of a percentage point.) And higher payments cause higher debt-to-income ratios, which typically max out for various mortgage products between 36% and 43%.
How can you still qualify even with higher rates?
Consider a higher down payment. Can you swing it? This could qualify you for a lower rate, but even if it doesn’t, you’d have a lower loan balance, resulting in a lower monthly payment.
Pay a discount point. This would also reduce the applicable rate, and could make economic sense if you intend to stay in the home long enough to recover the cost of that discount point.
Consider hybrid mortgages. These offer lower rates that are fixed for a specified period such as five, seven, or 10 years. Since rates have been so low, most mortgages have been fixed for the duration of the mortgage term. But in periods of higher rates, we usually see more hybrid term mortgages because of the flexibility the lower rates provide.
Consider different mortgage types such as an FHA loan. This offers more flexibility on key ratios for qualified buyers.
Finally, consumers may need to rethink their target prices based on what they can afford with higher rates. That may mean rethinking location, size, or key features. An expert local Realtor® can help you think through trade-offs and home in on what matters most.
Bottom line: This era of low rates was a unique period of economic weakness and poor housing fundamentals. That era is ending, as conditions are much, much better now. Yes, that does mean that affordability will be lower, but we are still in good territory by historical standards, and today looks pretty good compared to the future for locking in prices and rates.
Posted on May 11 2015 – 3:56pm by Suzanne De Vita
With housing on a steady path to recovery, home prices have risen approximately 20 percent in the last three years, according to the Federal Housing Finance Agency (FHFA) and Standard & Poor’s (S&P) Case-Shiller house price indices – and both consumers and industry professionals expect that upward trajectory to continue this year.
The anticipated increase is the result of intersecting economic indicators – macro-level factors painting the big picture that is today’s housing market.
So what’s impacting prices these days?
Wages and Inflation – As much as the economy’s improved, a recent RealtyTrac analysis illustrates disconnect between house price growth and wage growth. Between 2012 and 2014, home prices increased by 17 percent; wages, in contrast, increased 1.3 percent – a 13 to 1 disparity. Furthermore, home prices continue to outpace inflation rates, growing twice as fast in 2014, according to S&P.
But inflation rates as they stand likely affect home prices indirectly, argues renowned economist and Nobel Laureate Robert Shiller. Because pay increases often boost perceptions of buying power, inflation may have a greater impact on consumer confidence, which, in turn, could ignite housing activity.
Interest Rates and Inventory – Inflation rates, however, do tend to influence interest rates. While it’s reasonable to assume rising mortgage interest rates equal falling house prices, in truth, there’s little evidence of a causal relationship between the two. In fact, higher mortgage rates have a tendency to predicate a decrease in purchases, rather than a dip in prices, concludes Mark Palim, Fannie Mae Vice President, Economic & Strategic Research Group.
That said, interest rates do play a role in overall affordability. In many markets, today’s rates have significantly propelled demand.
“The biggest factor in price gains has been the current low interest rates spurring demand,” says Gabe Sanders of BlueWater Real Estate in Stuart, Fla. “And our low inventory, which makes buyers willing to spend more, since they can’t find enough available lower-priced properties.”
In Sanders’ market, prices on the lower end have risen much more than those of mid-range homes, with the largest gains seen under $400,000 in Martin County and under $200,000 to $250,000 in St. Lucie County. This demonstrates what many nationwide are experiencing – escalating prices, due to a shortage of affordable listings, have adversely tipped the scale, especially for first-time homebuyers.
To counter the lack of inventory and rise in prices, new construction gains are essential, says Lawrence Yun, chief economist for the National Association of REALTORS®. Post-crash, single-family construction has been slow to pick up steam, primarily because of construction costs that fail to meet buyer expectations.
Demographics – In addition, generational shifts have historically affected demand and moved prices in the housing market. Currently making waves are baby boomers and millennials, though many of the latter have been priced out due to statistically lower incomes and sluggish wage growth. And like toppling dominos, too few first-timers bodes ill for move-up buyers or those seeking to relocate.
International interest can also drive home prices, particularly in luxury markets. In Beverly Hills, Calif., global demand, coupled with the area’s high-end status and pleasant climate, impacts prices considerably, says Endre Barath, Jr. of Berkshire Hathaway HomeServices California Properties.
“Prices in the 90210 zip code are trending upward and are getting close to an all-time high,” Barath says. “Looking at the current rate of sales versus the current inventory, we are still in a seller’s market, but getting close to a balanced market.”
Oil Prices – Another distinct market trend could also affect home prices in the near future. Following the decline in oil prices, markets with oil economies, such as Texas, Louisiana and Oklahoma, may see home prices drop at the end of this year and into 2016, Trulia reports. Conversely, non-oil-producing markets, particularly in the Northeast and Midwest, may see a boost in prices. These findings mirror oil and home price fluctuations since the 1980s.
While there are many more variables factoring into the equation, house prices remain subject to these predominant large-scale influencers. I put it to our readers – where do you think prices are headed?
We thought this article was a good one and would like your thoughts in where do you think prices are headed? And if you would like our thoughts contact us we would be happy to discuss this with you.
By Brian Honea
On April 8, 2015 @ 7:59 am In Daily Dose,Featured,Market Studies,News
An early look at the realtor.com national monthly housing data, which is based on the first three weeks of March, showed that housing demand is surging and median list prices are rising faster.
The median age of inventory declined by 13 percent month-over-month in March despite a 2 percent increase in inventory for that same period, according to realtor.com. Meanwhile, the median list price for a home rose nationally by 3 percent month-over-month and 11 percent year-over-year up to $220,000 for March.
“It’s still a seller’s market,” said Jonathan Smoke, realtor.com chief economist. “Realtor.com data shows that supply is not keeping pace with surging demand. We expect rising prices to persuade those who may be on the fence about listing their homes to do so in the coming months, leading to closer parity between supply and demand.”
The realtor.com data concurred with Fannie Mae’s March 2015 Housing Survey  , which also showed signs of a seller’s market. The percentage of respondents in Fannie Mae’s survey who said they believe now is a good time to sell reached an all-time survey high of 46 percent while the percentage of people surveyed who said now is a good time to buy declined slightly to 20 percent, possibly indicating a move toward a more balanced housing market.
Smoke determined the 20 hottest housing markets in the nation based on the number of listing views relative to the number of listings when looking at March data and website traffic. Realtor.com said these markets should see plenty of activity in the next few months as homebuying season gets underway. The top 20 markets were: 1. Waco, Texas; 2. New Orleans-Metairie, Louisiana; 3. Ann Arbor, Michigan; 4. Denver-Aurora-Lakewood, Colorado; 5. Santa Rosa, California; 6. Fort Wayne, Indiana; 7. Vallejo-Fairfield, California; 8. San Diego-Carlsbad, California; 9. Columbus, Ohio; 10. Detroit-Warren-Dearborn, Michigan; 11. Manchester-Nashua, New Hampshire; 12. Boston-Cambridge-Newton, Massachusetts-New Hampshire; 13. Austin-Round Rock, Texas; 14. Boulder, Colorado; 15. Springfield, Illinois; 16. Charleston, West Virginia; 17. Pittsburgh, Pennsylvania; 18. Tampa-St. Petersburg-Clearwater, Florida; 19. College Station-Bryan, Texas; and 20. Lansing-East Lansing, Michigan.
Selling in the winter offers at least two positives – less competition and new customers. During the winter, most people have taken their listings off the market, but agents can help buyers who have been forced into sudden moves, like executives with job transfers who are looking to purchase a property quickly.
To take advantage of the season, make sure your home is properly staged for the winter. This can help your property receive a higher offer and get off the market sooner.
Start on the Outside
There is no question that curb appeal is one of the first things that attract a potential buyer, but more often than not, they are forgiving of a snow-covered property during the winter months. Most buyers understand that snow piles up in the yard and trees stay barren during cold weather.
What they will not tolerate however is the inability to get to your open house because of bad weather. If heavy snow threatens before the open house, you may need to provide alternative directions to visitors or move the showing to when the weather is more favorable.
If snow covers the ground, clear a safe path from the street to the front door. Spreading sand or salt on the walkway can improve footing. Do not forget to also clear a pathway to any outdoor areas that you want buyers to visit, such as a storage shed or guest house.
Make it Comfortable
Be sure to ask your client to turn on the heat in all the rooms for a warm walk-through. Before the open house begins, walk through the property and check the warmth level in each room. If any room or area feels chilly, buyers may assume that the home lacks adequate insulation or has heating issues.
If the source of the cold air is a draft from a hole or a poorly sealed window, seal any gaps to eliminate the problem. Poor air circulation may also be an issue. You can remedy this by moving furniture away from vents wherever the room allows.
What buyers see can affect their perception of warmth. Barren areas, solid colors, shine and reflective surfaces reinforce a “cool” aesthetic and are best reserved for summer staging. In the winter, ensure that warm fabrics, rugs, pillows, curtains, bed linens and tablecloths adorn the home for visual warmth. Layer throws and pillows on sofas and beds so visitors can envision cozy days spent on the couch. Use richly textured materials such as furry blankets and wooden accessories.
Bring in the promise of warmer times by putting containers filled with winter-blooming plants in strategic locations. Place a hanging plant near the entry, a winter bouquet on the dining room table or a bunch of small flowers on the side tables flanking the couch.
Staging your winter listings should not take any more time, effort or money than in the summer. Adequate preparation and a bit of attention to detail can make the difference between marketing a cozy home that buyers will bid on and a property that languishes on the market for months because it seems as cold as the weather outside.