Dear Friends and Neighbors,
What is going on?
Last year, 33 properties on the westside were sold for $20M or more. So far this year, 31 have closed escrow and we have six months to go!
In the $10M and higher properties, 160 closed escrow in all of 2016 and yet there are 86 closed so far this year with 25 in the hopper not yet closed for a total of 111, again with six months to go!
Let’s talk reality here and look at the $5.0M market. Check out this progression for westside properties sold at or above $5.0M
2009 – 144 properties
2010 – 191 properties
2011 – 201 properties
2012 – 362 properties
2013 – 369 properties
2014 – 442 properties
2015 – 485 properties
2016 – 524 properties
2017 – 359 properties closed or in escrow and again, six months to go!
What has my experience been?
We had a 3BD townhouse on Ashton in Westwood, one block from my condo, that we couldn’t sell in 2015 for love or money. Here we are in 2017, listing it at $1,195,000 and we are in escrow and going to close at $1,295,000. Twelve offers received.
We had another 3BD townhouse off the corner of Barrington and Missouri in Westwood, hitting the market at $945,000. Seven offers received and we are in escrow for $1,105,000.
Another homeowner from the same complex and with the same floor plan (but 90 sq ft larger) walked in, asked me to explain what had happened and decided on the spot that he wanted us to list his townhouse. We never put it on the market; in three days with a slug of phone calls under our belt, we were in escrow for $1,200,000.
On the Wilshire Corridor, we just launched a 3BD condo on the 6th floor backside of the Wilshire Manning. Tough deal; a “B-“ building and some restrictions on the view from the 6th floor. Yet we listed it for $1,495,000, and within hours of Tuesday’s broker’s caravan, we received an offer for less money, sent back a counter offer and by the next day we were in escrow for the full listed price. No other condo in that building had ever sold for anything even remotely close to that price in the last seven years (except two penthouses), and here we were setting the new comp (again).
Last Friday we also launched a beautiful (but small) 2BD + den condo at Park Place in Century City for $875,000. Two offers are in, two more expected and counters are going out for over $900,000. It hasn’t even been on the market for five days!
I won’t even tell you what the $2.0M to $5.0M market is like.
And this is only the last two weeks. The volume continues to increase, however impossible with a 14 year low in inventory, and prices continue to skyrocket. Westside real estate continues to march on as the location of choice for the rich and famous as well as sophisticated investors. Accumulated returns endure as a better home for investment dollars than equities and bonds, even with the Trump Bump. Developers are scrambling to find a home for their funds, buyers are frantic over their limited choices and the declining square footage within their budget, and buyer agents are getting wiped out in multiple offer situations where their chances to be paid are running 1 in 10. (The listing agent ALWAYS gets paid).
What’s my point, you ask? If you’ve been reading my blogs, you already have that question answered. The big media markets continue to grow in wealth, outstripping their suburban and outlying neighbors. We’ve all read the stories of the increases in wealth for executives in NYSE and NASDAQ listed companies and we’ve seen what the gigantic growth in tech stocks have done to prices in the San Francisco bay area. Conversely, Middle America is experiencing no such creation of wealth. The country continues to divide itself between the top 5% and the rest of real America. The great wealth divide is exasperating the current political turmoil, and we just keep marching down the road of destruction with twenty trillion dollars of debt to shoulder.
I’m not smart enough to figure all of this out. But if you are and see the future, let me know. I’d love to hear what you have to say.