Falling

Do you get the feeling that markets lately are like you-know-who to the left, that only when they finally look down and realize there's nothing solid below, the inevitable occurs?

Charles Hugh Smith had a remarkably-timed post Monday (2/26) titled, "This week's theme is 'I wonder'--as in, I wonder if the stock market is about to roll over into a sharp descent." Sure got that right!

Nouriel Roubini's latest "Is the Sub-Prime 'Garbage' 6% or Rather 50% of the Mortgage Market? And the Worst Housing Recession in Decades..." on the size of the impact from the ongoing story of the subprime lending meltdown.

It took everything pushing flat-out - low interest rates, very easy loan standards, speculative fever, booming economy, and momentum - to push house prices up this high. Then for the last year Westside prices have teetered, with well-priced houses selling quickly and the rest stuck in stalemate. Now the props are falling away.

Freeway Close 2

On the heels of the last post, a new 2 bedroom, 1 bath listing for $799K is described as "Great home, peacful [sic], nice back yard, zin atmosphere."

Not sure what a "zin atmosphere" is, but they continue the theme with, "You will not need to travel to get the peaceful setting, you're [sic] have it right at home, fireplace, wall to wall carpeting, built-ins, could be up-dated. Must see to appreciate...."

Yeah, you really must see to appreciate (with no photo posted) ... that it's just across the freeway from the house on Globe! Must be that zin, that it even costs more for a bedroom and half bath less.

(I'll tell you, these posts write themselves)

Freeway Close

Looking beyond Santa Monica, in the truth in advertising category:

"... very nice area, freeway close, ... a diamond in the rough."

Got the part about freeway close right! This 3 bedroom, 1.5 bath house on Globe Ave. in Mar Vista, asking $720,000, is at the red pushpin. You won't find a better view of the 405's traffic and current widening constuction (click image to enlarge). (Aerial 3D (c) Microsoft maps.live.com.)

Staged on 17th

Continuing a story from Bubbletracking about a listing on 17th Street in Santa Monica:

It was originally listed 7/06 for $1,899K, then reduced 8/06 to $1,849K. Nothing happened.

Then they made what was described as a "rediculous reduction" 12/06 to $1,649K. That's "rediculous" as in still overpriced.

On 1/25/07 a new description began, "Some Of Us Look Better Dressed!We staged it...." And they raised the price $46K to $1,695K.

Hmmm ... it wouldn't sell, and now the buyer is expected to pay more for furniture they're not even getting?

It's on a corner of busy 17th Street, on the hill in Sunset Park. Nice view from the upstairs balcony, but you hear the airplanes climbing from Santa Monica airport.

Still no action for this vacant and staged house, now sitting 7 months.
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There's more ... it's now listed for $1,595K. Do they finally have the price right? We'll see.... (Thanks, dwr!)
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Update: It appears to finally be in escrow as of 3/1. We'll see if it stays, and what the final price is.

Counties' Prices and Sales

I plotted the number sold (left axis) and median price (right axis) from the DataQuick monthly stats for the 4 southern California coastal counties (click to enlarge).

Generally the rise appears in the first half of a year, with more of a plateau the second half.

You see San Diego prices peaked first, in late 2005. Ventura was next in mid-2006. Orange perhaps had a double-peak in latter 2006. Los Angeles' overall median is still rising, but the Westside has been pretty flat since 2005. Sales volume in all 4 counties have been falling since 2005.

Do San Diego, Ventura, and Orange County prices appear poised for a bigger fall?

Malibu Lautner

At the other extreme, here is the priciest house in Malibu, designed by the late modernist architect John Lautner, asking $33.5 million. Priced for Larry Ellison (CEO of Oracle who's been buying trophy Malibu properties), perhaps?

According to the LA Times, it was bought six years ago from the original owners by sellers Courteney Cox Arquette and David Arquette "for close to $10.2 million".

The MLS listing says, "Pre-qualified clients only." Guess it won't have open houses for lookie-loos. Darn.

Every Picture Tells a Story

Mish's new Every Picture Tells a Story is a detailed commentary on the state of the housing market beginning:

In the past few months we have seen repeated bottom calls by David Lereah at the NAR. We have also heard Robert Toll proclaim to be "dancing above the bottom", and just this past week Greenspan himself said "The housing slump was all but over."

Following is a a graphical presentation to see if we can determine just how likely those statements are to be true. The pictures speak for themselves. ...

My observation of Santa Monica is that well-priced houses have sold within a couple of weeks of listing this year, while the overpriced stuff just sits ... and sits ... and sits.

Although inventory is down by half from the peak last October, days on market of what remains has nearly doubled, a sign of stalemate, not health.

The current economic environment and availability of "suicide loans" have only managed to keep median house prices relatively flat the last two years in coastal L.A.

Now we'll see the effects of Option-ARM resets, drying up of subprime credit, and a flattening economy.
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See also Calculated Risk's "Subprime: The impact on Existing Home Sales in 2007" on this today (2/17/07).

History of Weekly Inventory

History of Weekly Inventory Statistics, previously posted as comments under "Tracking Los Angeles" at Bubble Markets Inventory Tracking.

Active SFR Inventory

          Santa Monica       Pacific       Mar
                           Palisades     Vista
         <$3M Tot  DOM  <$2M Tot DOM  Tot  DOM
 4/21/06   35
 5/ 1/06   38
 5/ 9/06   44
 5/18/06   49
 5/24/06   54
 6/ 2/06   56       38
 6/ 8/06   64
 6/16/06   64
 6/23/06   67
 6/30/06   66       49
 7/ 1/06   69       50
 7/ 8/06   67
 7/15/06   68
 7/22/06   65
 7/28/06   71
 8/ 4/06   71       50
 8/12/06   73
 8/19/06   76
 8/25/06   76
 9/ 1/06   71       59
 9/ 8/06   75       60
 9/15/06   74       66
 9/22/06   80       67
 9/29/06   84  99   71
10/ 6/06   83  98   71
10/13/06   83  96   73
10/20/06   82  97   75
10/27/06   74  87   73
11/ 3/06   80  91   77
11/10/06   75  87   79
11/17/06   68  79   88
11/24/06   64  72   91
12/ 1/06   65  72   96    39
12/ 8/06   60  65   99    37
12/15/06   56  61  114    36
12/22/06   51  55  124    32
12/29/06   53  57  123    27  65
 1/ 5/07   54  60  117    33  71
 1/12/07   60  68  111    36  74
 1/19/07   58  67  115    32  71
 1/26/07   49  57  120    32  70
 2/ 2/07   38  45  124    29  61
 2/ 9/07   40  50  130    28  64  74    62
 2/16/07   37  48  126    29  70  72    67
 2/23/07   43  51  133    24  67  79    63
 3/ 2/07   42  51  114    26  68  79    53  76
 3/10/07   45  53  110    22  70  86    53  72
 3/17/07   40  45  113    23  69  86    51  71
 3/23/07   37  44  112    22  73  93    56  46

Notes

Santa Monica Days on Market (DOM) is for <$3M, and omits Santa Monica Canyon (in City of Los Angeles but S.M. Post Office). Pacific Palisades omits mobile homes.

Beginning

I've been posting available inventory in Santa Monica and Pacific Palisades since April 2006 in comments under "Tracking Los Angeles County" at Bubble Markets Inventory Tracking. Thanks to encouragement from its blogger OCRenter, and Bearmaster at South Bay Beach Cities Real Estate Bubble urging others to cover geography beyond the South Bay, here begins the Westside Bubble blog.

I'll be covering available inventory of the larger Westside with weekly updates, spotlighting highlight/lowlight properties that deserve attention, and have comments about the larger economy and housing bubble.

I've posted a number of links I find useful in the sidebar. My favorites worth reading daily include Calculated Risk and Charles Hugh Smith.