THE 2023 BURBANK REAL ESTATE MARKET – MIDWAY!

As we conclude the first half of 2023, I thought it might be helpful to give you an update on the current count of “active” Single Family Residences (SFRs) and Condominiums that are currently for sale in Burbank. Compared to the paltry amount available at the beginning of 2023, we really haven’t seen a meaningful increase, in fact, we’ve seen a bit of a decline in inventory and certainly not enough to meet the current demand! We began the year with 44 SFRs and 18 Condos listed for sale. As of this writing, we’re down to 34 SFRs and only 10 Condos on the market!

So what gives? With inflation slowly coming down and qualified Buyers that have the cash and the means to buy in a higher interest rate environment still wanting to buy, why aren’t more Burbank Sellers exploiting a market, that relatively speaking, is still posting some pretty incredible prices? Consider the following: The “median” price of a Burbank SFR is an eye-popping $1.23 million, down only 6% from the low interest rate inflated market that peaked in March of 2022. Another incredulous fact: the least expensive home currently on the market is an absolute disaster fixer listed for a ridiculous $950,000! I can assure you, any halfway decent Burbank home listed today at an appropriate price is still getting plenty of attention! In fact, today’s average market time remains very short – a mere 18 days!

Bottom line, as I’ve often said, the “supply and demand” economic dynamic is still overcoming higher rates and misplaced market pessimism! If you’re considering a move, please contact me, as the Burbank market is still very solid!

EMERGING NEW MARKET…. SAME TRIED & TRUE RULES FOR SELLING SUCCESS!

It’s no secret that the real estate market has slowed, yes, including Burbank’s. But nonetheless, life goes on – people die; families grow or contract; people get job transfers and/promotions; renters want to buy and start building wealth; etc. Point is, when life happens, you can’t¬† always wait to do what you need to do with your real estate holding(s) in the most favorable market conditions, you have to act now, in today’s market – whatever that market may be. Obviously, higher interest rates for home loans have been the fundamental catalyst for the current slower market. That, along with a continuation of extremely low inventory levels has made for an even more challenging market, more so for Buyers. However, for Sellers, things aren’t as pessimistic. After a historic “low interest rate/Pandemic run up” in property values of approximately 25%, the current market reflects only about a 5% reduction, thus far, from those inflated highs! Again, due to very low inventory levels and Buyers coming to grips with the new normal of higher rates, Burbank Sellers still have the upper hand! BUT, the days of multiple offers written with aggressive terms just to be able to compete, along with the corresponding ever-rising prices are now gone! So, if you’re contemplating selling, FIRST CALL ME ūüôā and keep the following in mind:

First) PRICING¬† Good, bad or transitioning market, appropriate pricing is always the primary key to success in selling a home! With the rise in rates and consequently the Buyer pool becoming smaller, those remaining Buyers are serious and savvy. And due to those higher rates, their monthly costs are hundreds of dollars more, so they’re even more unlikely to get caught up in bidding wars and overpay unless it’s a trophy property with intense interest and they perceive the original list price was appropriate for the current market. SECOND) CURRENT MARKET TIME¬† Today, I tell my Sellers that if you’re still on the market after 30 days with no viable offers and slow showing traffic, it’s a safe bet that you need to make a price adjustment. When the market was flying, that time frame was two weeks! THREE) REPAIRS & CONCESSIONS Again, another remnant of the red-hot market we’ve exited was a sentiment like this: “Sold as is – No concessions, repairs or credits; and if you don’t agree, fine! There are multiple “runner up Buyers” just waiting for you to walk away!” Not so easy to take that attitude these days! We’re back to reasonable repair requests, NOT a wholesale renegotiation of the sale price!

Just a few things to consider. If you’re thinking about selling in THIS NEW MARKET, let me and my 36 years of experience guide you with a more in-depth discussion tailored to your individual situation and property.

 

WHERE HAVE ALL THE FLIPPERS GONE?

With interest rates and the “cost of money” continuing to rise, several things are beginning to change markedly in the real estate market. One noticeable change that recently has become very palpable to me begs the question: “Where have all the those flippers gone?” Well, with higher borrowing costs, a reduced Buyer pool and still a very limited supply of inventory (as of this writing, only 33 Active SFR listings in Burbank) the “flipper ranks” have been thinned considerably! This became very apparent to me when I recently brought out a new listing in Burbank, that 6 to 12 months ago would have had me deluged with inquires and offers from them. Although the property is in the flight path of the Hollywood-Burbank Airport, it’s a relatively large 4BD, 3BA home, approx. 1,700 sq. ft. with most of the infrastructure/main operating systems updated or replaced. However, the home is admittedly dated and in need of cosmetic updating. It’s listed for $1,045,000 – one of the lowest priced listings and lowest priced per sq. ft. ($616) homes currently on the market. Again, a few months ago I would have had a ton of interest and offers from the flipper crowd! Now, I’ve still got flipper interest, but the ridiculous, borderline desperate variety!

With prices moderating, material costs and carrying times increasing, these guys can’t attain the profit margins when they resell their shiny new products that they used to. Sooo, they have to be able to acquire properties at lower prices to hit their profit targets. I’ve seen the result of this dynamic with two ridiculously low offers within the first days of my listing hitting the market. One offer was $175,000 below the list price and the other $65,000 below. Neither one of these so-called agents personally saw or showed the property to their LLC entity Buyers, nor bothered to call me before submitting their “low balls” to explain their rationale. Nope, just throw nonsensical offers out there and hope something will stick with an uninformed agent and/or desperate Seller. I don’t price homes to appeal to a certain type of Buyer. I work with my Sellers to price a property reasonably and at fair market, as indicated by like for like closed sales reflective of the current market, preferably no older than 90 days. By the way, thanks to properly pricing my client’s home, WE ENDED UP GETTING FULL PRICE! Yep, the market and ranks of flippers are both experiencing reduced inventories – and that might just be a good thing, at least when it comes to flippers! What do you think? I’d love to hear from you!

HOW WE START 2023!

HAPPY 2023! As in past years, I like to report out where the real estate inventory levels are at in Burbank as we begin a new year. Suffice it to say, what a difference an activist Federal Reserve and an interest rate raising campaign make as we begin 2023! Recalling last year’s numbers relative to what we begin with this year, paints a pretty clear picture of what a higher cost for money/financing has done to the real estate market! Last year, with rates nearly half of what they currently are (3.50% – 4.25% range vs. today 5.625% – 6.50%), it’s no wonder the market has slowed, NOT CRASHED, with inventory levels increasing markedly!

Last year, we began 2022 with a whole 15 Single Family homes (SFRs) and a mere 8 condos listed for sale. This year, we begin with 44 SFRs and 18 condos/townhomes for sale! Now, relatively speaking, that might seem like quite a jump. But keep in mind, a so called “normal” market has historically contained approximately six months worth of inventory; today’s still only contains a little over one months worth – still not a lot of product to show would be Buyers! And despite the rate increases, Buyers are still out there due to relatively strong demand vs. supply, combined with Burbank’s desirability, convenient location, civic amenities and affluent employment sectors. The biggest difference between last year and today – in my opinion, is the “crazy factor” in the form of multiple offers bidding on almost every active listing that were merely decent, has moderated significantly! That said, so called highly prized property – superior location, tasteful/distinct appearance, quality updates, etc. are still getting plenty of attention. But instead of 10-25 offers, those “trophy properties” are now garnering more modest interest. In terms of pricing, WHICH IS ALWAYS KEY – you’re seeing list prices come down a bit and days on market increasing. And instead of seeing 20+% appreciation, this year, you can expect a flat to five, perhaps 8 percent appreciation rate, at most. We’ll see….

HONEST SERVICE – WHAT A SENIOR, ORIGINAL BURBANK OWNER/SELLER DESERVES!

One aspect of my 35-year career selling real estate here in Burbank has been a focus on representing “Senior” clients. Perhaps because I’m among the senior ranks now myself, but I’ve always enjoyed working with “Senior Sellers” especially! I find their long term homeownership stories fascinating, especially those who are original¬†owners – who recount what Burbank was like back when they bought or built their homes; the cost(s), relative to today; tales of raising their families; Burbank people, places and things that have come and gone; etc. I’m honored to say I’ve represented 7 ORIGINAL Senior Sellers over my career! But the aspect I value most in representing these folks is the TRUST they and their families place in me when it’s time to finally leave their memory-filled homes and move on to a new space and next chapter in their lives. It’s a very emotional and difficult time for many of them, and as a certified Senior Real Estate Specialist, I have received training and have resources available to help make the transition just a bit easier! A recent case study – my sale of the home of Don & Joan Nissen.

I had met Joan previously, but when she called this time, it was to tell me that after 64 years in her beloved home at 217 S. Reese Place, Burbank, a home she and her husband Don built back in 1955, it was now finally time to leave the home and “downsize.” However, during my first meeting with the Nissens it became very apparent that they had no idea where their next home was going to be! Whether to rent or buy; what were smaller one bedrooms rentals going for and what was available; should they stay in Burbank (their preference) or move closer to their grown children; etc. And given the fact that both were in their 90s and had been coping with a years earlier dementia diagnosis for Don, whether an assisted living facility made sense and could they afford the expensive care costs. One reason they called me was the fact that I’ve represented upwards of 50 homes in their “Rancho Adjacent” neighborhood and that their beautiful home would no doubt add to that count! However, given the circumstances, I suggested we slow things down a bit and bring their three children into the discussion and figure out a “next step” FIRST!

My approach was quite different from another Realtor who had heard they were considering selling and paid them an uninvited visit. His approach: Priority one, since Joan had mentioned that she had spoken to me, ¬†was to get a signature on a listing contract ASAP at a price “to be determined;” charge a higher commission rate than the going market rate; didn’t investigate or know whether Don had the ability to sign or ultimately legally convey title per the terms of their Living Trust; had little or no discussion about preparing the home for sale; and whether, given Don’s condition, ¬†it made sense to move first before putting the home on the market. To these and other issues, his attitude was basically, “we’ll figure it out as we go, but hurry and sign here” ¬†Simply put, to treat two ninety year-olds, one incapacitated, who hadn’t bought or ever sold a home in 64 years, in such a terrible and unprofessional manner, was¬†OUTRAGEOUS! Fortunately, the oldest son, Greg Nissen, whom I had already spoken to, and the rest of the family were not on board with the other agent’s approach and happily signed with me! I enlisted the help of a Senior organizing/packing/moving vendor I use, who along with myself and the family, cleared and prepped the house for sale and arranged the moving process to get Joan & Don into their new Burbank apartment¬†home! BTW, the Nissen’s home generated 11 offers and sold for $71,000 over the list price in just over a week, allowing them to be settled in their new home just in time for Thanksgiving!

If you or someone you know are a “Senior Seller” and want to be treated professionally and with the respect that you deserve, PLEASE CALL ME!

BUYING A CONDO? YOU’RE BUYING THE HOA TOO!

In this post, I want to share a “cautionary tale” and just a couple of the issues that should be top of mind when buying a condominium; specifically, the all important Homeowner’s Association (HOAs) that are such an important aspect of owning a condo. Recently I was working with my past and current client, Paul Stanwyck, in selling his Burbank townhome that I sold to him way back in 1991. We prepped the unit for sale, and it turned out beautifully, resulting in a great offer that we recently closed. However, before we got started marketing the property, I had to do some homework to find a suitable lender willing to lend on the unit and complex, and that’s where the plot thickens…

The complex is a very simple, self-managed 8-unit building, with no amenities (i.e. pool, tennis courts, fitness center, etc.) and consequently a very low HOA fee of only $200. A situation like this can be great and very cost effective if all owners are willing to do their fair share in assuming roles in governing the HOA and being proactive in terms of “keeping the books,” ¬†maintenance, insurance, legal, financial and other issues which all go into running a viable HOA. In our case, the challenge was back when the building was built in 1980, an engineer that worked on constructing the building, I guess liked his work so much that he and his wife bought 3 units for themselves and held them all these years as investment rentals. Well, most conventional lenders have a threshold as to how many units can be owned by one entity/party and have a maximum allowable number of rentals vs. owner occupied units in any given building. In our case, three units were one too many! The engineer husband had died several years ago and his elderly wife was still content keeping the three units as rentals. Fortunately, before we went on the market, I had found a lender that could do the loan as long as the Buyer had more that 20% down. Coincidentally, the Buyer, who put 70% down, was using the same lender… so it all worked out. But going forward, this current dynamic of one owner owning three units and the majority of the building being occupied by renters could prove to be problematic for the other owners that may want to eventually sell. The HOA should address this issue and perhaps change the CC&Rs (covenants, conditions and restrictions) to make the collective building more lendable, hence more valuable for everyone! This story is just one example of why if you own or are considering a condominium purchase, you must be involved with the governing HOA – it’s a HUGE part of what gives value and continued appreciation to a condo unit OR diminishes it!

 

 

BURBANK REAL ESTATE MARKET – MIDWAY, 2019

At the halfway point in 2019, it’s a good time to revisit Burbank real estate market inventory levels, price appreciation (both up and down) and how interest rates are playing a vital role in affecting both! First, let’s talk what’s available in Burbank: Currently, there are a whole 62 single family homes (SFRs) listed! The lease expensive, a 2BD, 1BA in 900 sq. ft. located on busy victory Blvd. going for $595,000. The most expensive, a 6BD, 5BA in 3,474 sq. ft. going for $1,650,000 (way over priced). More importantly, of those 62 homes listed, just under half (29) start at $1 million! Now let’s talk Burbank condos: Current active inventory is 33 units, with the least expensive being a 1BD, 1BA in a whole 760 sq. ft. listed at $400,000. Most expensive: a 3BD, 3BA unit with only 1,493 sq. ft. listed for $895,000 (again, in my opinion, way high). But like the SFR market, there’s very little “affordable” condo inventory, with more than half the inventory (20) priced above $600,000! Essentially, these very low inventory levels have persisted for the last five years; SFRs ranging from 60-90 homes and condo inventory fluctuating between 25-45 units for sale. Meager supplies spurring high demand competition and sale prices!

And to be clear, the only way Burbank real estate Buyers are able to afford a median home price of $885,000 and a condo median of $560,000 is by utilizing historic low interest rates! This point is clearly illustrated when you look at sales numbers and prices from earlier in the year when rates were at or below 4%. We hit a median high SFR price of $965,000 and $597,000 for condos, then when rates rose, the Buyer pool shrunk, market times increased and the median numbers came down. Same pattern with rates recently going down again – more Buyers could squeeze into qualifying and competition and prices have again risen. Currently, the Federal Reserve Bank is in quite a dilemma: Do the remain independent, data-driven and refrain from or consider raising rates in an effort to keep inflation at bay and maintain a strong yet slowing economy? Or do they bow to pressure from Wall Street and a president that wants rate cuts to keep an historic prolonged “Bull Market” going entering an election year? Time will tell. But suffice it to say, given these historic high prices, seemingly small swings in interest rates can have a big impact on how high prices remain here in Burbank!

What are your thoughts? Please don’t hesitate to contact me to discuss any of the aspects discussed above!

“LET’S DO THE NUMBERS!”

Even though I’ve been a Realtor for more than 32 years, it’s always been interesting to me how Buyers of real estate react when going through a loan pre-qualifying/pre-approval process and are informed what their monthly mortgage payments will be. Given where current real estate values are in Burbank, I thought it might be interesting for readers to get an idea what a hypothetical “monthly nut” would be based upon the current median price for a Burbank home. I’m sure like many of you, I remember when my family bought our first home, I thought the figure was astronomical and wondered “what are we getting ourselves into?” Of course, with the passage of time, growth in equity and perhaps a refinance or two later, that payment looked like a bargain and the myriad of benefits of owning real estate became every more apparent! However, play along with me here and take a look at what a lender colleague of mine came up with for me to illustrate what a Burbank homebuyer faces in today’s market:

Purchase Price: $870,000 (Burbank’s current median price)

Downpayment: (20% or $174,000) Loan Amount: $696,000

Interest rate: 4.25% 30-year Fixed rate

Monthly Payment: $3,424 (Principal & Interest only)

Property Taxes: $906 (per month; $10,972 annually)

Homeowners’ Insurance: $90 (per month; $1,080 annually’ no Earthquake coverage)

TOTAL MONTHLY HOUSING EXPENSE: $4,420

Annual Household Income Needed to Qualify: Approximately $138,000 (incl. approx. $500                                                                                                                                                         other monthly debt)

Not exactly easy numbers for a young couple/first-time Buyer to buy into the “American Dream!” That said, obviously property is selling, with still not enough inventory to meet current demand. My advice for young, aspiring homeowners: start saving/investing early and aggressively AND be extra nice to your parents, who, if your lucky, may pass some of their hard-earned equity on to you to aid in your purchase!

 

 

 

 

 

 

CAN’T AFFORD BURBANK? TRY NO HO OR SUN VALLEY!

Probably like you, I LOVE BURBANK! And I’ve loved selling real estate here for more than 32 years! But during my career, given the prices ¬†Burbank real estate can command, especially in up or frenzied market cycles, Burbank can be extremely challenging for first time Buyers to crack! I was reminded of this again as I am about to list the home of past clients, Andy & Ellen Smith, who reside in North Hollywood. You see, back in 2010, even though we were still in the aftermath of the financial crash and Great Recession of 2008, the Smith’s still could not afford to buy in Burbank. A single family home was out of the question, and condos, while more affordable, were still just out of their reach. So…. as with several other first-timers I’ve worked with over the years, I suggested broadening their search to “better parts” of the Burbank adjacent areas of North Hollywood and Sun Valley.

Now compared to Burbank, you might be thinking, “Dan, there aren’t any better parts of No Hollywood ¬†or Sun Valley!” Oh, contraire! Regarding No Ho, generally speaking, as long as you stay South or just North of Victory Blvd., you can find some decent product on nice tree-lined streets in safe neighborhoods! In Sun Valley, again, as long as you stay further South, and in the hillside area of Sun Valley (above Glenoaks Blvd.), which includes “Glencrest Hills,” you’ll find your RE dollar goes further when compared to Burbank! For example, right now in Burbank, there are only five listings priced under $700,000, with the least expensive going for $585,000! Compare that to North Hollywood, where there are 24 listings in the $600s or less, with the least expensive priced at $529k! Similar story in Sun Valley – 14 homes in the $600s or less, with the low starting at $495k!

Now don’t get me wrong, the Smith’s would have preferred to have bought in Burbank and enjoyed greater and faster property appreciation, ¬†along with all of the civic amenities a independent city like Burbank can offer. But, approximately 9 years later, their North Hollywood on Cleon Ave., just above Victory Blvd., that they bought for $360,000, will be coming on the market for $600,000! Rather than continuing to pay rent, they bought and started to build wealth utilizing real estate! Do you know anyone who I can help to the same? If so, please contact me!

WHAT TO EXPECT FROM THE BURBANK MARKET IN 2019!

HAPPY NEW YEAR! And if you’re a Burbank homeowner, the real estate market continued to treat you well in 2018! How well? I pulled up lat year’s “Market Update” to you and here’s how the beginning of the last year compares to the beginning of 2019: Last year begain with the median Burbank single family home value being $778,000! Today, that value has continued to rise to $865,000! Same scenario with condominiums – last year, $516,000, this year we begin 2019 with a median value of $597,000!

In terms of inventory, that’s where the story is changing a bit from last year. We began 2018 with the lowest number of actively listed properties I’ve ever seen as a 32-year Burbank Realtor: 2018 begain with a mere 25 SFRs and only 9 condos offered for sale! We start this year with 63 SFRs and 21 condos listed. The reason behind the increase include rising interest rates – 30 year fixed rate loans have finally cracked 5%. And because of rising rates and the price points where we’re at, the Buyer pool has shrunk, consequently longer market times and larger inventories (still very low by historic standards!) Also, all of the year-end gyrations in the stock market and press coverage of a “slowing real estate market” in general, has pushed some would-be Buyers to the “wait & see” sidelines. Will prices start to finally decline in 2019? NO, at least not in my opinion! Burbank still remains a very sought-after market! However, the number of people who can afford our market is getting smaller and as a result I think our rate of appreciation will slow to a more modest 2-3%. What are your thoughts?

You can reach me through this site or please feel free to call me at (818) 437-0859