The Historic Home Reprt 2

The HISTORIC HOME REPORT
2020 REAL ESTATE MARKET INSIGHTS
2020 REAL ESTATE MARKET INSIGHTS • 1


My Start... Historic Estate
I sold in Westport
Historical Society, where I lectured and volunteered
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I Love
HISTORIC HOMES
...and I have spent 20 plus years dedicated to finding, selling and helping conserve these properties. I grew up and currently live in an “Old House” and I love them for many reasons. At a fundamental level, these antiques have a quality of materials, often handmade, as well as craftsmanship rarely found in new construction. From the pegged and grooved floors, to hand-formed red clay tiles and decorated with iconic details such as Batchelder tiles or Judson Studios glass, these homes are unique, one-of-a-kind gems. And their styles range from the high architecture by masters such as Wallace Neff, Paul R. Williams, Frank Lloyd Wright, Greene & Greene, Richard Neutra, etc, to the vernacular, some from kits and many a mix of updates and additions to answer an owner’s taste or needs. They give us a wonderful world of visually interesting streetscapes and the opportunity to live in one-of-a-kind homes. They are also an amazing opportunity to actually live in and be a part of history. I don’t believe in “moth-balling” these homes, but I do believe in working with them to understand
our past, imprint them with today’s culture and conserve them for future generations.
2020 has been unprecedented, to say the least. What was expected Coldwell Banker President and CEO M. Ryan Gorman described in the Global Luxury Report: “The year 2019 was transitional for the high-end property market. U.S. recession fears and concerns about a global economic slowdown eventually gave way to cautious optimism.” Instead, the global pandemic has led to a real estate boom.
I created this Historic Homes LA report to not only share my love of historic homes, but to provide data and perspective about these residences that, as a Realtor, I am in a unique position to have. Does historic preservation hurt a home’s value? For this first time we have a definitive answer. How has COVID-19 impacted historic home values and who is a likely historic home buyer? Meridith Baer, founder of Meridith Baer Home explains how to stage an antique home. And, there’s more....I hope you enjoy it.
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Inside
THE HISTORIC HOME REPORT
8 10 14
PRESERVATION
Pays!
Sold! Millennial’s:
SALES DATA YOUR NEXT BUYER FOR 10 HPOZs
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Meredith Baer
5 TIPS FOR STAGING HISTORIC HOMES
Heritage Meet
Conservation
18 22 28
OPPORTUNITY + ADAPTATION
and the
HILARY STEVENS
JOYCE REY TEAM
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PRESERVATION
Pays!
DO HOMES IN HPOZs HAVE A PRICE ADVANTAGE?
I have been involved with marketing, selling and conserving historic/antique homes throughout my 20-year real estate career. And the multi- million dollar question I am asked, regardless whether I’m in Los Angeles, New York or Connecticut is: does a historic designation and/ or location in a historic district add or diminish the value of a house or neighborhood? I’ve sat through countless presentations at National Trust for Historic Preservation conventions and planning department meetings on this question. The answers always focus on quality of life issues: historic often means more “human” scale, less commute times in urban areas, aesthetic value, craftsmanship, history and culture. While all of these have intrinsic value, they are not the objective dollar-and-cents answer the questioner desires. At least not until NOW!
The Los Angeles Conservancy recently released the Preservation Positive Los Angeles 2020 study. The report found that owning a home in Los Angeles is a desirable asset, even more so if the property is located in a Historic Preservation Overlay Zone (HPOZ). The study analyzed 136,000 single-family home sales from 2000 to 2016. The report found housing in HPOZs outperforms the city average. From 2007 to 2010, the average sold price per square foot in HPOZs was slightly more than 13% higher than the rest of the city.
The price advantage held true during the housing crisis. While neither Los Angeles nor historic homes were immune to 2007-2010’s national real estate crisis, the decline in value from the top to the bottom of the market was slightly less in HPOZs than the rest of city. Notably, the recovery from the crash was stronger and more consistent in these areas too.
The biggest concern behind the valuation question is the fear of city planning department regulations. Many potential buyers and development advocates mistakenly believe that home values are suppressed because of the limitations placed on historic homeowners. Unless a home has a very rare, high level designation such as landmark, the only limitation on HPOZ owners is the design review process through LA’s city planning department intended to conserve the property as seen by the public. If the added layer of regulations lowered property values it would be seen in both lower values and a slower rate of change over time. The LA Conservancy study clearly demonstrates that property values in HPOZs appreciate at a greater rate than the rest of the city.
Owning a historic home may have another economic advantage due to California’s Mills Act. The Mills Act is a 1972 state law allowing cities to
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enter into contracts with homeowners to provide property tax relief and reductions, provided historic structures are restored and maintained following Department of the Interior standards. The savings may be substantial because the appraised valuations for Mills Act properties are based upon an Income Approach rather than standard Market values.
The contract is executed between the property owner and the city for a revolving ten-year term and is transferred to new owners if the property is sold. It is binding to all successive owners. The contract automatically renews each year so the term always remains ten years. In the contract, the
homeowner agrees to a specific plan to maintain, restore and protect the property and to allow inspections by city and county officials. The city may impose penalties if the contract is breached.
A homeowner in Los Angeles must apply for a Mills Act reduction through the city’s Office of Historic Resources. The annual application process begins in January and homeowners must propose a preservation plan in order to be considered and approved for a property tax reduction. Contributing structures in a HPOZ and designated City of Los Angeles Historic-Cultural Monuments are among the buildings eligible for this program.
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Sold!
SALES DATA FOR 10 HPOZs
PRE-COVID
MED SALES PRICE 2019 AVG. $/SF 2019
AVG. DAYS ON THE MARKET IN 2019
DURING COVID
Note:
The Multiple Listings Service suspended the tracking of days on market during late winter and spring 2020.
3.15.2020 - 8.31.2020 MEDIAN SALES PRICE
COVID AVG. $/SF
$1,000,000
$703
34 DAYS
$950,000
$938
CARTHAY CIRCLE
$1,950,000
$770
49 DAYS
$2,040,000
$776
CARTHAY SQUARE
$1,495,000
$783
40 DAYS
$1,550,000*
$823*
HANCOCK PARK
$2,859,000
$907
50 DAYS
$2,200,000
$891
$
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ANGELINO HEIGHTS
M
1
6
N


ELROSE HILL
1,416,000
$529
63 DAYS
O SALES
—
MIRACLE MILE
$1,615,000
$741
43 DAYS
$1,695,000
$2,081
MIRACLE MILE NORTH
$1,795,000
$759
30 DAYS
$1,718,000
$850
SPAULDING SQUARE
$1,800,000
$927
37 DAYS
$1,692,000*
$1,162*
WINDSOR SQUARE
$2,450,000
$885
62 DAYS
$2,020,000
$850
WINDSOR VILLAGE
$1,480,000
$689
43 DAYS
$1,650,000
$680
M
N
*Only 1 sale between 3/15 and 8/31/2020
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Millennials:
YOUR NEXT BUYER
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YOUNG BUYERS APPRECIATE HISTORY TOO!
When you decide to sell your home, a Millennial (adults between ages 24 to 39 in 2020) may well be your buyer. This group accounted for 25% of buyers in 2019, the largest generational pool for the seventh consecutive year. They were also the largest generational pool of sellers (at 19%) according to the National Association of Realtors. Many delayed marriage and parenthood; however, now 67% are married and 61% live in a household with children.
Millennials are very attracted to antique homes. A Los Angeles Conservancy study found that more than half of millennial buyers purchased a home built before 1913; and 44% bought a home built between 1913 and 1961. In fact, Millennials account for 9% of owners in HPOZs vs. 7% outside historic districts. And, LA ranks sixth in places where Millennials want to live per realtor.com.
Millennials crave uniqueness and will trade size for it: 43% according to a Better Homes & Gardens’ survey. They don’t want what they perceive as the “cookie-cutter luxury” home that their parents desired. That same study found a “light” fixer is preferred by 33% of Millennial buyers. Technology is also incredibly important. The survey found 84% said advanced residential technology (such as energy efficient washer/ dryer, smart thermostats and security systems) is
essential. And 56% say a home’s tech capabilities are more important than curb appeal. If you are thinking about selling a home in an HPOZ, think about upgrading the technology as much as possible-- if you haven’t already.
Older homes in established neighborhoods appeal for several reasons. The quality of the neighborhood is very important to 68% of Millennial buyers. Schools are also important: 46% of respondents noted the importance of the quality of the school, while 38% selected the convenience to a school. More urbanized areas also have appeal, as 41% say commuting costs are a consideration. (I expect this to change due to COVID-19; please, see corresponding article on page 22).
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5 tips
FOR STAGING HISTORIC HOMES
#1: DE-CLUTTER!
When prepping to stage any home, the best first step is to de-clutter. For a historic home you want to keep the items that make the home feel historic – antique lighting and fixtures, any elements that provide original character, etc. At the same time, you can remove additional items (newer furniture, family heirlooms and photos, collections from your travels, and so on) that don’t fit the aesthetic. You want the homes historic qualities to speak for themselves – and want to remove any distractions that take away from those qualities.
#2: BRIGHTEN IT UP
Often historic homes can be poorly lit. You can easily brighten up a dark room with a fresh coat of white paint, but be sure not to paint over unique historic features, like beams, molding or decorative tiles. Put in new light bulbs if there are any light fixtures that add to the home’s charm (think vintage chandeliers, sconces, etc.), and consider adding floor and table lamps in areas that could use them. Give the floors a good washing, and consider re-finishing if the floors are unsightly and very noticeably aged/worn out.
by Meridith Baer
Stay true to the home’s character in how you select furniture and accessories. Many historic homes have incredible wood or tile work. Don’t cover up the floor with a rug (unless there’s stained carpet!), clean it from top to bottom and select neutral colors for larger items like sofas, chairs, and beds. For example, if there is unique woodwork in a bedroom, select an understated headboard that matches the woodgrain.
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#3: HIGHLIGHT THE BEST FEATURES


#4: ACCESSORIZE SIMPLY
Don’t go overboard with selecting accessories for the sake of styling. I’ve walked into many homes where the accent pillows just seem to have been collected over the years without any real thought. For the faint of heart, it’s as simple as keeping a monochromatic story - pick a color that’s a few shades deeper than the upholstery, mix in some texture and suddenly your room will feel more cohesive and decorated. Bring attention to the unique details by hanging a piece of artwork, or a vase of flowers near the charming elements of the home. For example, style built-ins with books, flowers and carefully chosen objects.
#5: CONSIDER SCALE + SIZE
Oftentimes historic homes may have irregular shaped rooms- do a trompe l’oeil. Play up the optical illusions at your disposal, a mirror or Lucite pieces like bedside or coffee tables can be your saving grace for giving the suggestion of grandeur. A large mirror mounted on the wall adds architectural interest while also adding light to the space—it works especially well if it reflects a window or large opening into the room to give the illusion of more space.
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Heritage Conservation
OPPORTUNITY + ADAPTATION
BY BUYERS, ADVOCATES AND ORGANIZATIONS
HERE’S THE GOOD NEWS: Conserving our historic residential inventory really depends on buyers and owners desiring these properties and putting the time, effort and dollars in to care for them, to preserve them for future generations and to make them work for today’s lifestyle. The pivot towards working from home has slammed up against the development of Millennial’s becoming a huge buyer pool and that’s been good for antique homes.
Look no further than Instagram to see the popularity of distressed historic properties. Cheap Old Houses (with 1.2 million Instagram followers) presents houses across the U.S. with asking prices capped at $100,000 (renovation budgets not included). Today’s buyers impacted by the pandemic and staying at home now have time for these kinds of rehab projects, while working remotely makes the dependency on getting to the office moot. Locally, vintage homes hold appeal: 50% of millennial buyers bought a house built before 1913 and 44% bought one built between 1913 and 1961.
MORE GOOD NEWS: Statistics and studies confirm that preservation is an important tool for economic revitalization and recovery. Per ADPRO, a report released by Rutgers University and the
National Park Service, demonstrated that in 2018, the Federal Historic Tax Credit generated $7.7 billion in rehabilitation investment—75% of which went to projects in economically distressed communities—and created 129,000 jobs. This tax credit does not apply to individual private residences but is a valuable incentive for developers of large projects, including residential.
Many arts and culture organizations are struggling as their revenue models have been challenged with stay-at-home orders, social distancing and economic hardship. I know how razor-thin budgets for small, local conservation/ preservation organizations can be. In Westport, Conn. where I began my real estate career, I also served on the board of the historical society. We cared for several historic buildings that were open as museums: the Bradley-Wheeler House, built in 1795, which was remodeled in the Italianate style in the 19th Century and is listed on the National Register of Historic Places, the Connecticut Register of Historic Places as well as a Historic Landmark; Cobblestone Barn, built in 1865 and is unique in the state of Connecticut with its eight-sided roof, that was used as a dairy; and Adams Academy, a 19th Century, one-room schoolhouse. Our budget, and ability to conserve these gems, was largely based upon the ability
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to sell tickets to the museums as well as a spring fair, holiday house tour, lecture series and a gala.
Facing uncertainty with in-person activities curtailed, preservation organizations and historic home museums have moved programming online to virtual events. In Los Angeles, the LA Conservancy continues its important work virtually: the non-profit expanded its digital presence and strengthened its legacy-business program devoted to raising awareness of endangered historic and iconic businesses when LA restaurants began closing during the shutdown. Frank Lloyd Wright’s Hollyhock House (closed since March) now offers a virtual visit and participates in
historic Wright site visits on an ongoing basis. The National Trust for Historic Preservation has online tours of historic places and recently featured LA’s own Southwest Museum, Historic Communities of the 710 and the Japanese American experience via Huntington Beach’s Historic Wintersburg tour.
The silver lining may be that these and other online efforts help widen the pool of historic preservation advocates— our best defense against demolition and neglect of historic properties!
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Meet
HILARY STEVENS
Hilary has lectured on historic preservation issues and historic home ownership; she holds a Historic Property Specialist designation from the National Trust For Historic Preservation. A valued member of the award winning Joyce Rey Team, Hilary has a loyal clientele of buyers and sellers due to her dedication to their best interests. With 20 years of real estate experience, she is a skilled negotiator and marketer. Skills that come from 15 years in marketing and advertising for global luxury brands, after earning an MBA in marketing from Columbia University’s Graduate School of Business and a BA in Communications at UC Berkeley.
Hilary is an active member in the Windsor Square- Hancock Park Historical Society, The Ebell Club, the Institute of Classical Art & Architecture and the Costume Council of the Los Angeles County Museum of Art. She supports the National Trust for Historic Preservation as well as the Los Angeles Conservancy. She continues to learn and stay up-to-date on all the zoning and regulatory issues regarding renovating historic homes; she recently completed an intensive course of study at USC School of Architecture’s Heritage Conservation program.
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Meet the
JOYCE REY TEAM
WITH NEARLY $5 BILLION IN SALES, JOYCE REY LEADS AN AWARD WINNING TEAM KNOWN FOR REPRESENTING DISTINGUISHED PROPERTIES WITH THE HIGHEST LEVEL OF PROFESSIONALISM AND CREATIVITY.
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HILARY STEVENS
CA BRE # 0179533
301 N CANON DRIVE | BEVERLY HILLS, CA 90210 CELL 310.776.0688 | OFFICE 310.281.3941 [email protected] WWW.HILARYSTEVENS.COM