Understanding the Interquartile Range in Real Estate Value

There are numerous items that affect future home values, but I find that analyzing the Interquartile Range (IQR) is an immediate snapshot of value fluctuation. Monitoring the monthly Median price and the IQR will help you understand your homes current and future value.  The InterQuartile Range (IQR) shows the price variance between the 25th and 75th percentile of sold homes.  This indicates how spread out the middle 50% of sold homes are in this Area and an indicator of what the future Median value could fluctuate by.  The Average price can be a misleading number in areas where homes fluctuate by millions of dollars as 1 very high home sale would give an Average calculation that is not accurate.
Refer to the Central Brentwood chart below:  Central Brentwood Median Price for YTD 2014 was $2,350,000 and the IQR was $1,320,000.  It would be safe to assume that the Median price could go up or down based on the IQR of $1,320,000.  As you can see at YTD 2015, the median price increased by $1,057,500 to $3,407,500.

Advancing a year now to 2016, the 2015 Median price was $3,407,500 and the IQR being $2,608,750, which could be the range that the Median Price could adjust by.  2016 Median price decreased by $557,500 down to $2,850,000.

By looking at the Median basic statistics, being the Sold Price per square foot, home size and lot size; you can get a starting point to analyze home value - this is how appraisers start their valuations.  Clearly, there are other factors to consider, year home was built or year home was remodeled, upgrades, natural lighting, pool, privacy, garage scenario, floor plan, views, busy street, etc., all these items will increase or decrease value.

In the below chart for Brentwood Glen, the IQR is smaller than the above area of Central Brentwood.  A smaller IQR will usually mean a smaller increase/decrease in the median price.  Year End 2014 median price was $1,460,500 and the IQR was $351,250.  The Year End 2015 median price increased by $314,500 to $1,775,000 which was almost the entire IQR amount.   Year End 2016 median price increased by $197,358 from Year End 2015 to $1,972,358 with the IQR being $539,750.

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Brentwood Condominium 2016 Sold Condos

2016 YTD Brentwoods Condo market: Compare Central Brentwood to South Brentwood. Dividing road is San Vicente Blvd. Direct link to this subpage is: http://www.lehoamiller.com/brentwoo…/brentwood-condominiums/

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South and Central Brentwood Year End Real Estate Home Sale Comparison

Central Brentwoods median price decreased at YTD 12/31/16 compared to YTD 12/31/15 by ($557,500), however, keep in mind that 27 homes sold in 2016 versus only 18 in 2015. 2016 sales include 8 homes that were newer builds from 2013-2016, while 2015 only had 2 new 2015 built homes. 2016 did increase $500K compared to 2014.
Direct link to this subpage:

Compare this to South Brentwoods median price which was $2,262,500 at YTD Dec 2016 and reduced by 23% compared to YTD Dec 2015. However, the median square feet adjusted by 1,284sf. From 3,206sf in 2015 to 1,922sf in 2016 – this had to do with newer, bigger homes built in 2015.
Direct link to this subpage:

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To McMansion or Not? Developer Bash or Not?

On Wednesday, January 18, 2017, the City of Los Angeles will hold a special meeting to discuss "Planning and Land Use" by the Management Committee.

For all of us in Real Estate or who have an interest, these meetings have been ongoing for the past few years.  There were moratoriums put in place a few years ago during an emergency meeting that the City called upon to immediately halt permits to be issued and immediate limitations for home building provisions.

There have been special zones throughout Los Angeles that have different criteria than the rest of the County based upon City Officials deeming too much development had taken place.

There are two sides to this issue and very heated - almost like our last Presidential Race, and very difficult to persuade one side to see the other.

On a homeowners side; there are two positions.  One side doesn't want to see huge homes being built next to their smaller home and dwarfing them - hence the McMansion title came to be.  There are also those who may not own, but concerned about the environment impact with these huge builds and how the neighborhoods become disproportioned. 

The other homeowner side is absolutely furious that they may have spent most of their lives saving to purchase land in Los Angeles and not sure what they want to alter now, however, adamantly do not want the government involved in advising what they can or can not do with their incredibly expensive property.  Some may wish in the future to build on if their family expands or if an elderly relative needs to come reside - all these items which would are being halted by the City.

Then there are the Developers, they specifically purchase a property to rehab and flip for a profit.  It is in their best interest to build as big as possible as the price per square foot is what makes the bottom line look good.  

Now before we all go Developer bashing - which is mainly what has occurred, can we all stop for a moment and think back to the days when California's Real Estate had tanked?  We all know those days, Countrywide was stationed here in Los Angeles County and giving subprime loans to anyone with a high FICO score and a pulse rate and eventually prosecuted by California's Attorney General in 2008.  Many banks followed in this subprime fashion and it was a game of musical chairs awaiting the day that Real Estate stopped doubling each year until the foreclosures would then take place.

We loved the Real Estate Developers back in those years.  They came in with cash, bought up old properties and either rehabbed or basically built new.  They were a big boost to property values and bringing in higher comps thus making our property values rise up.  They brought jobs and revenue for the City which was desperately needed.

Today, however, there is a backlash between individuals and Developers as some neighborhoods are losing their "neighborhood" look with too many huge out of place homes on small lots.  On the flip side, there are some individuals who can not afford to both purchase a home or lot and then be able to rehab it.  Two separate loan items here - one is to purchase the property, then to qualify for a construction loan to rehab and the time it takes.  These individuals looking to buy a new home are very appreciative of the Developers. 

But hold on here, the City approved those big McMansions back then when we needed the revenue.  No developer could build without an approved permit being issued and going through plan check.  This can be easily a 3 month minimum process for heavy remodeling.  Now the same City Officials are limiting the build, which undoubtedly came from Citizen pressure.   

Where we stand today is some individuals are not happy that the City is unilaterally making decisions without a vote being put to the people on one of the biggest Assets some individuals own.   So whether you Agree or Disagree, what is important is to show up at the meeting or voice your opinion to your local Congressmen.



SPECIAL MEETING, PLANNING AND LAND USE MANAGEMENT COMMITTEE

Wednesday, January 18, 2017


The meeting is scheduled to begin at 3:30 p.m. in the John Ferraro Council Chamber (Room 340) of Los Angeles City Hall, 200 N Spring St, Los Angeles, CA 90012.


Negative Declaration and related California Environmental Quality Act (CEQA) findings, report from the City Attorney and draft Ordinance relative to amending Sections 12.03, 12.07, 12.07.01, 12.07.1, 12.08, 12.21, 12.23, and 12.28 of the Los Angeles Municipal Code to establish new regulations for all single-family residential zoned properties including RA, RE, RS and R1 citywide, updating the existing Baseline Mansionization Ordinance and Baseline Hillside Ordinance provisions relating to the size and bulk of new single-family residences and modifying grading provisions for single-family lots in designated Hillside areas.
http://ens.lacity.org/clk/committeeagend/clkcommitteeagend26108827_01182017.html

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Saltair Area in Brentwood, Los Angeles 90049 median price Increased by 60%

December 19, 2016

The Saltair Area is a covenant prime Brentwood location in Los Angeles, California 90049 zip code.  This area just above the Brentwood Village has luxury homes next door to gated Brentwood Circle and Bundy Canyon on the other bordering side.  The majority of the lot sizes in this area are around 15,000 square feet and up.

The Saltair Area median price in Brentwood has Increased by 60% within the last 3 months.  The Interquartile Range (IQR) increased by 50% for the YTD Nov 2016 compared to YTD Aug 2016. The InterQuartile Range (IQR) shows the price variance between the 25th and 75th percentile of sold homes.  This indicates how spread out the middle 50% of sold homes are in this area.

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Are you familiar with the Crestwood Hills community in Brentwood, Los Angeles?

November 18, 2016

Are you familiar with the Crestwood Hills community in Brentwood, Los Angeles?


The history is fascinating, originally a nonprofit called Mutual Housing Association that started with 4 members and turned into more than 500 that banded together to form a cooperative post-World War II Utopian community. Considered to be one of the few recognized postwar cooperative housing projects in the country.


In 1946, four musicians recently discharged from the Army purchased an acre of land and built 4 homes at the four corners and the center was a communal pool and playground. Together, they could afford what they could not individually. The concept went well and The Mutual Housing Association grew to over 500 members which led to the purchase of 800 acres in 1947. All members owned shares but after all the homes were built, Crestwood Hills Association was formed and individuals took title.


Crestwood Hills is located on the ridges to the North and East of Kenter Canyon in the Santa Monica Mountains above Sunset Boulevard and is an architecturally controlled community. It is best known for its mid-century modern architecture and contains several homes designated as architectural landmarks by the State of California designed by A. Quincy Jones and Whitney Smith. The community includes a park and a pre-school.

Crestwood Hills median price in Brentwood has remained pretty much the same over the past three months. The Interquartile Range (IQR) was 70% for the YTD Sept 2016 and 14% at YTD Oct 2016. The InterQuartile Range (IQR) shows the price variance between the 25th and 75th percentile of sold homes.

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