The “will they or won’t they” debate is over: Jay-Z and Beyonce have finally bought a home in L.A.
Sources not authorized to publicly comment on the sale have confirmed that the rapper/hip-hop magnate and his superstar wife have closed on a modern mansion in Bel-Air. The purchase price is said to be $90 million, though the sale has not yet been recorded in the public record.
Completed this year, the sprawling showplace comprises six structures with approximately 30,000 square feet of interior space. Expansive patios and terraces create an additional 10,000 square feet of living space outdoors.
Amenities include spa and wellness facilities, a media room and four outdoor swimming pools. Glass-walled common areas open on two sides to enjoy panoramic views. The pocketing glass doors and windows are bulletproof.
Also within the approximately two-acre compound is a full basketball court and separate staff quarters. There is garage space for 15 vehicles as well as a motor court and an area for staff parking.
The home was developed by Dean McKillen, the son of Irish billionaire and property investor Paddy McKillen, who four years ago purchased the property through a corporate entity for $15 million.
The new development was never publicly offered for sale, but carried an asking price of $135 million, according to real estate sources.
The purchase finally puts to bed years of rumor and speculation connecting Jay-Z and Beyonce to other luxury homes across Los Angeles’ Westside. Among the couple’s purported misses was L.A.’s “most extreme home,” which sold to Minecraft creator Markus Persson for $70 million, and a modern Holmby Hills estate that they once paid $200,000 to lease for a month.
Once recorded, the $90-million transaction will be the highest this year in Los Angeles County, besting the $85-million sale of David Geffen’s compound in Malibu. It will also tie last year’s sale of storied Owlwood for the third-most expensive historically in the L.A. area.
The economists like the housing market, but they are known to play it safe.
How about the consumers?
I’d prefer to survey the active home buyers and sellers in our area to get the best reading on our future. But here are the sentiments of 1,079 American adults over the age of 18 who were surveyed last month:
Fifty-eight percent of homeowners say that they expect there will be a “housing bubble and a price correction” in the next two years – up 12 percentage points since April.
Looking across the country, residents in hot housing states are particularly jittery. The top five states where residents believe the market is approaching a “housing bubble” include:
Washington (71 percent)
New York (68 percent)
Florida (63 percent)
California (59 percent)
Texas (58 percent)
While experts have long suggested living in a home for more than seven years could lower a homebuyer’s exposure to market fluctuations, only 37 percent of millennials in the survey plan to live in next home they buy for more than six years, making the so-called “rule of seven” less relevant to the next generation of serial homebuyers.
“Beyond the jitters, I see in our survey an increasingly informed nation of homebuyers, who understand the risk of the market,” said Melendez. “To those concerned about a price correction, or waiting to time the market, I recommend a proactive approach. Have an exit plan, then anytime you find a home you love is a good time to buy.”
Home values continue to climb, passing $200,000 in June for the first time ever. A panel of more than 100 real estate economists and experts expect that trend will continue – while they say, on average, that there’s a 52 percent probability of the next recession starting by the end of 2019.
On average, real estate economists and experts say there’s a 52 percent probability of next recession starting by the end of 2019.
Most experts expect a geopolitical crisis will trigger the next recession, which a majority believe will have only a moderate impact on U.S. housing.
Home values will climb 5.08 percent by the end of 2017, the group said.
The probability jumps to 73 percent for a recession starting by the end of 2020, according to the Q3 2017 Zillow Home Price Expectations Survey (ZHPE), a quarterly survey sponsored by Zillow and conducted by Pulsenomics LLC. The latest survey was conducted in late July and early August.
Most of the panel’s experts (67) think a geopolitical crisis is likely to be a major trigger for the next recession. That would be a rare occurrence. Although the terrorist attacks of Sept. 11, 2001, prolonged a recession, most sustained downturns – including that one – have not started with a geopolitical crisis.
The panel ranked likely triggers as 1, 2 and 3 – and with that weighting, a geopolitical crisis also came out ahead, with a score of 138. It was higher than a score of 111 for monetary policy, 101 for a stock market correction and 55 for political gridlock as other possible recession triggers.
On average, the group expects the next recession to have only a moderate impact on U.S. housing. The group said San Francisco and Miami would be the most affected, followed by Los Angeles, New York, San Diego and Seattle.
What happens in Las Vegas will soon be able to start at San Diego County’s McClellan-Palomar Airport in Carlsbad.
County of San Diego, Elite Airways and Cal Jet Air officials announced Wednesday at McClellan-Palomar that “Cal Jet by Elite Airways” plans to start flying commercial flights twice a day between the airport and Las Vegas starting Sept. 28.
The airline has already started taking reservations for tickets on its website.
County officials said Cal Jet by Elite Airways plans to operate a single Bombardier CRJ700 jet, which has 64 seats, from McClellan-Palomar.
The flights will allow local residents a way to comfortably fly without having to drive downtown to San Diego International Airport, and become the first commercial air service at McClellan-Palomar since 2015.
McClellan-Palomar is one of eight airports operated by the County of San Diego’s Department of Public Works and the only one that offers commercial flights for county residents. Like all other commercial airports, passengers at McClellan-Palomar must check in for flights and be screened by federal Transportation Security Administration agents. However, because McClellan-Palomar is a smaller airport, passengers can escape the traffic, expensive parking and long security lines at other major airports.
The County has made several improvements at McClellan-Palomar in recent years, including a $24 million renovation in 2009 that added a modernized, 18,000- square-foot terminal, parking and a restaurant, “The Landings.”
Parking at McClellan-Palomar is $5 a day.
For more information or to book flights, go to Cal Jet by Elite Airways website.
Breaking up is hard to do. So is cancelling a California real estate purchase contract. Especially if you are the seller. That is why, a little over a year ago, the legal department of the California Association of Realtors (CAR) produced a memorandum titled, “How a Seller May Cancel a Purchase Agreement: Checklist and Q&A”
The need for such an advisory arises out of the fact that a non-performing buyer may still want to buy. Sometimes buyers miss performance deadlines due to nothing more than sheer inefficiency. Sometimes it is because things have not gone as planned (e.g. they don’t yet have the money for the increased deposit that is due). And, sometimes, they stall the closing in an attempt to squeeze the seller for a further concession. In each case, they still want to buy — just not on exactly the terms that had been agreed to.
The CAR memo notes: “Many sellers and agents are impatient. They want the contract canceled yesterday. But rushing the process of cancellation will often lead to a defective or questionable cancellation. What good does it do to cancel a contract if the buyer can come back and possibly claim a right to buy?”
For what reasons may a seller cancel?
In a typical situation, the standard purchase contract (RPA) provides exactly ten reasons. The CAR memo provides the following list: (1) buyer failure to remove an applicable contingency; (2) buyer failure to deposit the earnest money, or an increased deposit; (3) funds for money deposited are not good; (4) buyer fails to deliver prequalification letter; (5) buyer fails to deliver verification of down payment and closing costs; (6) seller has reasonably disapproved of the verification of funds; (7) buyer fails to return the Transfer Disclosure Statement, Natural Hazard Disclosure, lead disclosures or other disclosures (if required); (8) buyer fails to sign a separate liquidated damages form for an increased deposit; (9) buyer fails to deliver notice of FHA or VA costs or terms (if applicable); and, finally, (10) buyer does not close escrow on time.
The ten reasons listed are in a standard transaction. Other possibilities could be added, such as a contingency for short sale approval, or the purchase of another property. Also, there are common law legal reasons such as fraud or duress.
When a buyer has failed to comply with one of the conditions in 1 — 9 above, the seller must, before canceling, first give the buyer a Notice to Buyer to Perform (NBP). In such an instance, it is important that the seller and his agent are careful to calculate correctly what is the buyer’s deadline date for compliance. The NBP can be delivered no earlier than two days before that date.
If the buyer has failed to close escrow on time (condition #10), then the seller should use the Demand to Close Escrow (DCE), not a notice to perform.
It is also important that the seller has fulfilled all of his obligations with respect to the buyer’s contingencies. “The [Purchase Contract] specifies that where the seller has sent out disclosures, reports or other information late, then the buyer will have an additional 5 days after receipt to remove contingencies if those 5 days go beyond the [contractual] contingency period.”
Sellers will often want to retain some or all of a buyer’s earnest money deposit. In cases where an NBP has been used, this is not possible. The purchase contract gives the seller the right to cancel if the buyer has not performed after receiving an NBP, but it also provides that the seller will release the deposit money, less costs incurred. This is not the case, however, when the seller has given the buyer a Demand to Close Escrow (DCE).
If the buyer has not conformed with a Notice to Perform, or has not closed after receiving a Demand to Close Escrow, the seller may then deliver a Cancellation of Contract (CC) to the buyer. This form comes in two parts: one cancels the contract, the other cancels escrow and provides for disposition of the deposit money. It is important to note that the first part, unlike the second, does not require the signatures of both parties. It is relevant again to quote from the CAR memorandum:
“Cancellation is a unilateral act regardless of whether there is an open escrow. The ten reasons for cancellation as outlined confer upon the seller a right to cancel unilaterally. It is irrelevant whether the buyer ‘agrees’ to the cancellation. As long as the seller has properly followed the correct procedure, the seller’s cancellation will be effective.”
It goes on to say, “Escrow may require signatures from both parties to cancel the escrow, but the fact of an escrow being open does not affect the validity of the seller’s cancellation.” And further, “The fact that there is an open escrow does not by itself mean that the initial buyer retains a right to buy. If the contract was properly cancelled, then a seller may sell the property to a subsequent buyer.”
Of course, there are still issues to be discussed. What happens to deposit money if the buyer balks? Can the property be put on the market if escrow isn’t cancelled? What is the prudent thing to do? & etc. But those are all for discussion some other day.
Last week’s comment: “In spite of what seems to be a somewhat bloated end-of-summer inventory, the new pendings have been very solid”:
Week
New Listings
New Pendings
Jul 24
86
61
Jul 31
90
75
Aug 7
99
71
Aug 14
76
65
August 14th: I said ‘somewhat bloated’ because of the higher-end inventory. Today there are 435 houses for sale that are listed over $2,400,000 – but only 249 have sold this year, or about 35 per month. A year’s worth of inventory!
Conversely, there are only 487 houses for sale listed under $2,400,000, and 1,685 have sold this year – which means we have about 2 month’s worth of inventory priced under $2,400,000!
