Earthquake Insurance becoming more affordable
With less than half of California homeowners opting not to get earthquake insurance due to the cost and high deductibles, The California Earthquake Authority (“CEA”) is aiming to change that beginning in January. The CEA will be offering more coverage choices, more deductible options (5% to 25%) and more affordable rates. The average reduction in rates will be about 10% with up to a 20% discount to those that have had a verifiable earthquake retrofit on a home built prior to 1979. For more information check out the CEA web-site.
By John SkinnerPrice reductions are more prominent…close to 50% of active listings in some westside areas
Last month a colleague noted that around 40% of the active single-family residences (“SFR”) in Culver City experienced a price reduction. We decided to see if this was a trend in other Westside locations and ran the numbers for the Palisades, Santa Monica, Westchester and Mar Vista as of November 24th.
We found Culver City is not unique and the reductions over the last month even increased in Culver City to 14 of the 29 SFR active listings being reduced.
Area # of Active Listings # Reduced
Culver City 29 14 (2)
Santa Monica 49 24 (6)
Mar Vista 39 20 (2)
Westchester 32 11 (0)
Pacific Palisades 80 32 (7)
**The # in perenthises are homes the Multiple Listing Service “MLS” mis-categorized as not being reduced. Realtors can come up with tricks to eliminate the reduction label to the public but a check of the listing history of each property can expose this. This practice is more popular in luxury markets.
The percentage of reductions compared to active listings is inflated due to the holiday season with quite a few sellers holding off to list their homes. However, the trend of increasing reductions has been consistent since the middle of the summer. Typically we see about 25% of the active listings showing a reduction and over the past few years that number has dipped to 10-15% due to the strength of the market. The increase in the reductions is a sign the market is settling down a little bit with buyers unwilling to pay the heavy premiums we saw earlier this year.
Though we are seeing this trend, do not be mistaken into thinking the market is headed in a downward spiral. Well priced listings (around the true market value), especially those in premium locations, are still selling in multiple offers with favorable terms for the seller. The market is still strong but just not at the level it was four to six months ago.
