Saturday, March 31, 2007

Pier resale


Now back to Santa Monica (requests noted!). This fixed-up 2 bed 1 bath house on Pier could be a market indicator. It sold under two years ago (7/29/05) for $1,208K, the house and yard already fixed up. It's now asking $1,395K.

To me the peak of the Santa Monica market was early fall 2005, and it's been flat to a little down since then. This house is cute, fixed up, and on a good-sized lot. But it's under the airport take-off, only two bedrooms, and I don't think changed by the current owner. Let's see if it finally sells for more or less than $1.2M.

Update (4/2): Reduced already to $1,360K(3%).
Update (4/3): Reduced again (!) to $1,348K. What's happening here?

19 comments:

Craig said...

Only 2 bedrooms and people are expected to pay over $1 million for something like this??!! That is obscene. You could pay a bit more and get a 3/2 tear down north of Wilshire...

Johnathan said...

Actual Cash Value $230,000 after the housing depression of 2008

Anonymous said...

This isn't only obscene, it is insane!!! I would like to know what the debt is on this property.

sylvie said...

That is so laughable.. Who are the morons who price this stuff.This would rent in Brentwood for $1200-1350 tops. I can't wait til they pull away the punchbowl from this market.

latesummer2008 said...

Pier Avenue is practically on the runway, if it is the 2300 block. This flipper has obviously flipped his lid, or is one FB. A teardown at 1408 Hill sold recently for 896K. Same size lot I'm sure, but a more desirable location. They're definitely upside down and probably can't stomach a loss. They should price at $1099K, in hopes of selling. But they probably won't. Foreclosure city, I'm afraid.

http://westsideremeltdown.blogspot.com

Westside Bubble said...

Not quite the runway (you can see its "1721" address on the fence), but still lots of airplanes. Stranger, what's going on with these daily price reductions?

latesummer2008 said...

Motivated seller?? Perhaps, he is trying to break even on his purchase. But, price drops every day send a bad signal to the market. However, it will eventually sell AT THE RIGHT PRICE. That is the only reason a house doesn't sell. The question is: What is THAT PRICE. This will be a fun house to watch, as we can see what the market dictates. If, he can hold on that long. Will he take a loss? Or, pull it off the market until summer. Regardless of what happens, we can see what's happening in Sunset Park right now.

Anonymous said...

"That is so laughable.. Who are the morons who price this stuff.This would rent in Brentwood for $1200-1350 tops."

Houses in Sunset Park rent for $3000 pretty easily. Your numbers are ridiculous

Anonymous said...

"Actual Cash Value $230,000 after the housing depression of 2008"

If things drop that far half of the people posting here won't have jobs.

Anonymous said...

"Only 2 bedrooms and people are expected to pay over $1 million for something like this??!! That is obscene. You could pay a bit more and get a 3/2 tear down north of Wilshire..."

By "a bit more" you mean $600-700K more? And if you're buying a "tear down", does it really matter how many bedrooms the place has?

Craig said...

Anon,

Yes, the bedrooms matter even if it is a "tear down"...Obviously if you have tons of cash to build your dream home with or want to leverage up and build/remodel in hopes of making a profit then the bedrooms don't matter (you only care about lot size and location).

HOWEVER, I think bed/bath numbers matter a lot if you are just trying to get into a neighborhood first. A tear down does not mean a shack...you can still live in it, and this can be done for many years while building further savings and improving your economic position. Assuming all goes well, you will have built up more cash, increased your earning power, and maybe even gained some value in land appreciation. THEN you can forget about the bedrooms and remodel/build new...so in response to your question, YES it can matter how many bedrooms a tear down has...but it all depends on your situation. However, this is not meant to be an endorsement to buy something anytime soon. I think "land values" will be subject to noticible price declines over the next few years.

Also, if they are asking $1.4, I think you could find a 3/2 tear down for around $1.7-$1.8 north of Wilshire. Also, 2415 Washington (90403) is a 2/1 on a small lot and it sold on 11/21/06 for $1.347 million per Zillow...so draw your own conclusions from there...

Anonymous said...

"Also, if they are asking $1.4, I think you could find a 3/2 tear down for around $1.7-$1.8 north of Wilshire."

You THINK you could? Weren't you the one commenting on all of the "tear downs" north of Wishire on I believe 25th Street selling for $2.1-2.2?

latesummer2008 said...

Even if that house would rent for $3000 per month, fundamentally what is it worth ? Let say at 200xs monthly rent, it is worth 600K. Property is still way overpriced. Who in their right mind would buy such a thing, having to put $250K down, negative cash flow and knowing the chances of it appreciating, are next to none?

Craig said...

Anon,

I said "I think". However, here are some sales and listings that show my $1.7-$1.8 is not unreasonable:

Current listing:
1006 Berkeley Street, 90403
$1,685,000
3 br 2 ba
Single-Family Home

SALE per Zillow:
914 24th St, Santa Monica, CA 90403 3 beds, 2.0 baths, 1,808 sq ft
Sale History
06/08/2006: $1,735,000

So here we have two examples of 3/2 homes in Santa Monica north of Wilshire selling or currently for sale between $1.7-$1.8 million. Also note that one is east of 26th and one is west of 26th. Lot prices are around $2.0 million (definate tear down condition) north of Montana so obviously this area is out of our boundry. Also, I saw several 2/1 homes north of Wilshire which have sold in the past 9 months or so for between $1.2 and 1.6 million.

I understand that you may be a bit fed up with sensationalized statements and wild speculation (as to how bad things could get), so hopefully I have explained my reasoning and backed it up with relavent data. I think things across the westside will be very interesting for several years to come.

Craig said...

Anon,

You are correct in that I have been talking about "tear downs" selling for $2.1 (843 25th) and the whole reason I mentioned this happening is because I was absolutely AMAZED that someone would buy a "tear down" for that much given that they could buy a "tear down" (albeit in slightly worse condition) north of Montana for that amount. And I KNOW that fact for sure because just the other weekend I went to an open house north of Montana and it was listed at $2.0 and was an old house where the previous owners had obviously been elderly and not made any improvements in a long time.

Anonymous said...

"Even if that house would rent for $3000 per month, fundamentally what is it worth ? Let say at 200xs monthly rent, it is worth 600K."

I agree 100% with your statement, prices should be about where they were in 2001. But the ones talking about $1200 rental value and $230K price are talking out of their a$$es.

Anonymous said...

"I understand that you may be a bit fed up with sensationalized statements and wild speculation (as to how bad things could get)"

I've been posting on housing blogs for 3 years and have been a believer in a housing bubble since 2003; I bought my home in 2001 and I am fairly confident I'll lose most (if not all) of my paper gains over the next 2-3 years. But some of the comments on this thread are laughable.

latesummer2008 said...

Uh, Oh! 2338 Pier, 3+2, 1333 sq ft, 7000 sq ft lot, Spanish style, just sold for $860K on 3/7/07. Granted, 1700 block is better location, but that much ?? I have come up with a new way to value and price houses called HPM (House Price Multiplier) I have done it for this house (2338 Pier) and came up with the LAND being worth 650K and the house about 210K. You can see the formula at:

http://westsideremeltdown.blogspot.com

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