Declining Inventory, New Tax Rules, Discount Real Estate Brokers and My New Job in Rotary
There’s a lot to talk about, but let’s start with real estate. It’s no secret that the last few years have seen a steady decline in real estate parcels put up for sale. This has helped to balance the leverage between buyers and sellers in areas outside of West Los Angeles, but remains a major factor in the seller’s dominance in negotiations here. West Los Angeles remains the most sought after area of real estate in California, and this decline has only exacerbated the problem for buyers and emboldened sellers…to a degree. Buyers understand that in most cases they are going to establish a new “comp” by paying above Fair Market Value, but few of them are willing to be made fools of, and that’s where sellers step over the line. Let’s look at some figures. It’s a little bit of a mixed bag, but when I generate any kind of dataset, they always talk to me. No matter what they are, they just talk to me. And here is what these numbers are saying.
• That median price (where half of the sales price are above and half are below this point) continues to plow forward, even though
• The # of Listings just continues to drop, more so in Beverly Hills than Westwood – Century City, but I don’t have to run the full spectrum of West L.A. to know the results would more resemble Beverly Hills, which
• Allows the sellers to hold to a strict line in the sand over prices if we examine Average Selling Price to Average Listing Price, but don’t forget that
• Total Volume is showing a steady decline even with the 2015 standout for Westwood – Century City, which is not good for agents or brokers, down 30% from 2015 in Bev Hills and 14% from 2016 in West – Century City, because
• Our industry is a full-commission based pay scale and NO ONE suffers through these kinds of volume declines and watches east coast firms enter our market hoping to generate new income streams to replace their declining markets, without the misery of belt tightening and agent layoffs.
The other side of the coin is to dig deeper into the numbers and see where the business is going. Sellers are not foolish, and in an ever increasingly competitive market, they are doing their own due diligence with their research and placing that phone call to industry veterans rather than newbie agents or relatives. Just as in all industry recovery periods, it’s an opportunity for the top dogs to grab market share.
New Tax Rules
I have been waiting for an independent CPA to generate a summary of the new tax rules that I can understand. My CPA, Larry Levit in Westwood has done just that and gave a terrific overview of it to the 240 agents in my office in Beverly Hills. If you would like a copy, just email me at firstname.lastname@example.org and I’ll send a scanned attachment in PDF format.
Discount Real Estate Brokers
Have you been watching those Discount Real Estate Broker commercials and seen their ads, such as Purple Bricks? Makes sense, huh? Same service for a lot less money?
Think again. Don’t trust your single most valuable asset to newbie agents without any experience, online transaction coordinators and novice negotiators. What you need is the attention to detail and personal hands-on service that comes from a full service broker. If you were selling your business would you trust some storefront operation to sell you the forms that you fill out? That’s basically the same thing. I don’t say this because I am a full service agent; I say it because it’s the truth. It’s a stupid financial move that epitomizes the phrase, “Penny wise, pound foolish.”
My New Job in Rotary
My new job; the DFSC reporting to the DRFC who is a PDG and then to the DG District 5280. If you don’t understand Rotary lingo (www.rotary.org and www.rotary5280.org) I just said, “my new job is District Foundation Sub-Chair, reporting to Doug Baker as the District Rotary Foundation Chair and Past District Governor and to Joe Vasquez the new District Governor of District 5280”.
My new job is to review, assist and encourage members of our 62 Rotary Clubs in District 5280 (Santa Clarita to San Pedro) to reach out to their fellow Rotarians overseas and write Global Grant requests for funds to underwrite projects of need. The Rotary Foundation is one of the leading foundations in the world, most recently getting a lot of publicity by working with Bill and Melinda Gates to eradicate polio. But their work goes far beyond that and includes eradication of diseases, education, clean water, and other areas of concern that are so sorely needed in most areas of the Third World. What do I find so interesting? This District is one of the two top Districts every year in the world in Grant requests, Grant approvals and Rotary Foundation giving. I get access to all of the Global Grants in process, as well as those approved and those that are underway. It’s just amazing to read about all of these lives that are being changed by the 2,200 Rotarians in this District. Lives that are no more or less valuable than ours, but by geographics are not living in a part of the world that is at peace or includes abundant clean water or has the resources for food and housing and education. In these times of stress and daily bad news, it reads like a dream come true, because you know it’s true and you know you played a role. I will confess to you and tell you that our annual Rotary Humanitarian Trip to a third world country (Lima Peru coming up in April) is the most grounding experience in my life and takes me to tears when I realize how blessed I am to be living my life. We all are, and we owe it to ourselves and the world around us to be involved, in one way or the other.
More Good News
Lynn and I received a new award from Coldwell Banker that I never heard of before. We are #9 in all of North America for “Rental Income for Team Size 1-3 Team Members”. We also were awarded the President’s Premier status for our production level, which is their second highest level of achievement based on Gross Commission Income. Both are for 2017.
Call Me (Or My Trophy Wife Lynn)
Did you read about the steady decline of inventory in West Los Angeles? That’s the best reason why you need to call me (or my trophy wife Lynn) if you’re looking for a lease or something to purchase. The “listing agents” are the rock stars in the real estate world, because (a) they know about the properties coming to market before they actually do, and (b) they always get paid unlike their counterparts representing the buyers. So call or email me if you’re about to be in the market. We have pocket listings in Westwood, a lease coming up in the Blair House, one condo for lease and one for sale coming up in Beverly Hills, a condo lease in Westwood and a 4-unit income property for sale in Rancho Park.