Palos Verdes Source

On the Palos Verdes Peninsula, there are two choices for Fourth of July celebrations during the day. There are also two choices nearby for local fireworks in the evening.

Palos Verdes Estates will be hosting their 47th Old Fashioned Independence Day Celebration at Malaga Cove School beginning at 9:45 a.m. with entries into the Apple Pie Contest followed by the Children’s Bike Parade at 10:00 a.m. Admission is free and you may bring a picnic or purchase food from Boy Scout Troop 257. For additional information, call 310-375-3455 or click on the link above and scroll down to page 3.

Rancho Palos Verdes will be hosting their 33rd Annual Independence Day Country Fair Celebration at Point Vicente Park/Civic Center from 11:00 a.m. to 5:00 p.m. There will be Arts & Crafts Booths, Kiddie Carnival Rides, Petting Zoo, Pie Eating Contest, Hula Hoop Contest and more. Admission is free, on-site parking is $3 per vehicle and free shuttle service is provided along Hawthorne Blvd. For additional information, call 310-349-0743 or click on the link above.

Fireworks can be seen in the evening at the Redondo Beach Pier at 9:30 p.m. (click here for more information on reserved seating) or at Torrance’s Charles Wilson Park beginning at dusk (click here for more information/then choose “Fourth of July Celebration”.

Photo courtesy City of Rancho Palos Verdes

Where exactly is the real estate market going? Owners of Palos Verdes real estate as well homeowners across the country would love to know the answer. In addition to the “in your face” reporting about real estate (which can be pro or con depending on the reporter and which forecast he is looking at) there are other subtle indicators.

Recently Newsweek had an article buried on page 61 entitled “Finance – Cash, on The House” talking about a new take on reverse mortgages. There are several lenders now offering a new loan product where the lender will share future changes in value 50-50 with the borrower. The borrower must not sell the house for at least five years. The example given was a $71,000 loan on a $500,000 home. After five, years when the property is sold if it is worth $600,000, the borrower owes $121,000 (original $71,000 plus $50,000 which is half the appreciation). If the home only sells for $400,000, the borrower pays the lender $21,000 (original $71,000 minus $50,000 which is half the depreciation).

This is not an altruistic gesture on the part of lenders. They are betting the market will be up in five years — not flat, but up. Lenders are looking to make a profit. Historically, real estate has been an excellent long term investment.

I wish I had a crystal ball to tell sellers of real estate in Palos Verdes what price their home will sell for. There are the obvious variables – location, condition, amenities like views, etc. and the “forgotten” variables like the market perception of the buyers. As we have experienced, the media also plays a large part in the buyer’s mood.

As more and more buyers begin their home search on the Internet, they identify quickly a well priced home. Wouldn’t the seller want to be perceived as well priced when they first put their home on the market as statistics show that a home gets the largest audience/views within the first two weeks of being placed on the market. Otherwise, they risk becoming a stale listing, whittling away at their “high” price and losing potential buyers.

In this market, pricing is key and Realtors and sellers both need to “be brave” and price a home the same or less than the last comparable home that sold. The buyers ultimately set the price (not the seller or Realtor). The failsafe for a price that may be too low is that buyers will recognize the low price and multiple offers will result.

Lew Sichelman in a LA Times article, “To sell home, make sure the pricing is right” has several suggestions for sellers including “sellers need to know how fast properties in their specific market segment ae being sold…how much competition…and market statistics such as absorption rates…inventory…and days on market.” If you want your your home sold quickly, put on a buyer’s hat for a bit when pricing your home. Or you could, in effect, be “buying back” your home for yourself.

There were 22 homes on Broker’s Tour yesterday. We currently have 256 active single family homes for sale in Palos Verdes ranging in price from $849,000 in Rancho Palos Verdes ($589,000 in Eastview) to $23,000,000 in Rolling Hills. My favorites today were all in Palos Verdes Estates:

Bobbie Owen’s 2 El Portal, Palos Verdes Estates, (above left) is a 6 bedroom, 4.5 bath, 4391 square foot home for $2,688,000. This spacious Monte Malaga home has 3 bonus rooms and a 23,090 square foot lot with serene gardens on a secluded cul-de-sac. Frank Fountain’s 505 Yarmouth Road, Palos Verdes Estates, (above right) is a 5 bedroom, 5 bath, 3859 square foot home for $3,295,000. This custom-built Tuscan Villa in Lunada Bay has an elegant master suite which opens to a salt water pool and spa.

Kurt Allen’s 4032 Via Largavista, Palos Verdes Estates, (above left) is a 4 bedroom, 3.5 bath, 3423 square foot home for $2,675,000. Located in the Valmonte area, this Spanish Colonial Revival style inspired home has soaring ceilings and a master suite with a “jacuzzi” tub and steam shower. Susan Martz’s 116 Rocky Point, Palos Verdes Estates, (above right) is a 4 bedroom, 3 bath, 3000 square foot home for $2,888,888. This Lunada Bay Craftsman home is steps to the bluffs, has an office/den and a great open kitchen/family room.

Via Largavista photo courtesy of MRMLS

“Palos Verdes Estates City Council recently reviewed completed reports on the slow, yet consistent, land movement at the north end of Bluff Cove, located at Palos Verdes Drive West near Via Montemar” reported the June 12th Peninsula News. I have noticed the red pylons decorating the road for months.

During his presentation at an April Board of Realtors Meeting, Joe Hoefgen, City Manager for Palos Verdes Estates, told us the the earth near Bluff Cove was moving about 6 inches per year. He also acknowledged Palos Verdes Drive West as being a main traffic artery for our community with 17,000 cars a day passing the Bluff Cove area. That is a lot of cars! When you consider Palos Verdes High School and Palos Verdes Intermediate School students travelling back and forth (and parents’ carpools which would travel up and back twice) as well as the residents driving off the Peninsula to their jobs (and back again), that number is plausible.

The Peninsula News stated that the City Council agreed a “soldier pile wall” at the site would prolong the life of the road about 50 years at a cost of at least a half a million dollars. Construction is estimated to begin in about 18 to 24 months.

More information on the Bluff Cove landslide can be accessed by clicking here for the Palos Verdes Estates City Council Agenda and going to page 15.

Statistics for the month of May for Palos Verdes real estate are available and indicate our market is holding. Average price for single family homes sold in the month of May was $1,677,000 vs $1,667,000 in April. Number of homes reported sold (closed escrow) for the month of May was 43 which was the same for April. Number of homes pending for the month of May was 39 vs 40 in April. Inventory of homes for sale was nearly the same – 258 in May and 254 in April. Months of Inventory (how many months it would take to sell existing inventory at the current rate of sale) was virtually the same; 6 months for May vs 5.9 months for April. There are 5 graphs available by clicking here or on the “Statistics” tab at the top of the page.

Currently, there are 244 single family homes for sale on the Palos Verdes Peninsula. 53 homes have pending sales; 21 homes are in escrow accepting backup offers; and 14 homes have sold/closed escrow since June 1st. This is still a buyer’s market. Well-priced homes are selling quickly. Interest rates (30-year fixed) are higher this week — 6.375% conforming and 7.5% jumbo. Overall, 23% of single family homes for sale are in escrow!

Are open houses an efficient sales tool for sellers? I am up front with my clients selling Palos Verdes real estate. I tell them that I will hold occasional public open houses for them; statistics show that only 3% of homes are sold to buyers walking into an open house. Plus there is the security issue. I cannot be in every room at every minute and we receive periodic notices from other Realtors whose clients have had items stolen during open houses.

The Sunday LA Times Real Estate section had an article dealing with the open house issue. The Los Angeles Times reported that some sellers are now questioning the importance of open houses as a selling tool. There is the usual feeling of displacement as the seller has to vacate his home for several hours on the weekend as well as the feeling that his privacy is being invaded. The article infers that public open houses actually benefit the Realtors as it is an opportunity to meet new potential clients and that open houses draw people who “are more likely to be looking for decorating tips”.

A great reason for open houses is the instant feedback from the public regarding the condition and price of the home. And there is always that 3% chance that you could find your buyer. Do I agree with this article? I have mixed feelings about public open houses. I absolutely recommend broker open houses to my clients as 40% of buyers come from Realtor contact.

Friday’s mortgage rates are up slightly compared to our last Morgage Update two weeks ago. At that time a 30 year fixed rate mortgage was 5.75% conforming and 6.75% jumbo. As you can see from the chart above, today a borrower will pay 6.125% conforming and 6.875% jumbo. Friday’s mortgage rates for Palos Verdes homes are provided by Jim Kurata, Peninsula Mortgage/Chase

This is a buyer’s market, right? What happens when a buyer has read and listened to all the media reports about how the buyer is king now? The buyer may feel empowered to offer considerably less than the asking price and considerably less than all recent sold comps. Some sellers are so insulted that they won’t even counter the offer. Here is an idea for those considering Palos Verdes real estate.

A recent New York Times article suggests a spin on the “Dear Seller” letter which was popular when it was a seller’s market. At that time, the buyer wrote a letter to the seller describing their family and how much they loved the house hoping to get an edge in the multiple offer game. The New York Times actually printed a very unemotional sample letter to the seller (from the buyer) explaining why they are submitting such a low offer and includes market statistics.

The article even contains a sample letter for the seller to write back to the buyer explaining why he hopes the buyer will reconsider his low offer otherwise the seller wants to wait for a higher offer. It is all very unemotional and business like. It would be hard for either party to be insulted. It is a very interesting strategy.

Today there were 26 homes on Broker’s Tour. We currently have 253 active single family homes for sale in Palos Verdes ranging in price from $599,000 (in Eastview) to $23,000,000. My favorites today were:

Joan Zirkel’s 6739 Vallon Drive, Rancho Palos Verdes (above left), is a 5 bedroom, 3 bath, 3177 square foot home for $1,650,000. This remodeled home has an ocean view, 3 car garage and backs to Robert Ryan Park. Anna Randall’s 3005 Via Victoria (above right), Palos Verdes Estates, is a 4 bedroom, 4 bath, 3336 square foot home for $2,550,000. This stunning residence has a pool, hot tub, ocean view, and a 15,090 lot.

James Sander’s 3900 Via Nivel, Palos Verdes Esatates (above left), is a 4 bedroom, 2 bath, 2100 square foot home for $1,249,000. This Valmonte home has a pool, separate grassy side yard and a formal dining room. Raju Chhabria’s 12 Via Del Cielo (above right), Rancho Palos Verdes, is a 5 bedroom, 7 bath, 7031 square foot home for $4,790,000. This ocean view home has an elevator, putting green and a 26,223 square foot lot.

Photos courtesy of MRMLS