Saturday, June 2, 2007

Attempted flipping

"Attempted flipping" sounds appropriately suspicious. This one at 1639 Oak St., 3 bed/2 bath, is by a pro. They closed 3/1/07 for $921K, demolished a structure in the backyard and landscaped, put in new bathrooms and a marble/stainless steel kitchen, refinished the floors, painted, etc., and had it back on the market 5/16, asking $1,328K.

The first open house two weeks ago was well attended. The price is not absurd for a fixed-up house in this part of Sunset Park (see Hill St. comps), although it does back up to the stores next to Bob's Market across the alley. Will the flipper win this round? No escrow so far.

Here are some other new and updated acts of attempted flipping:

New listing at 933 25th, "The work has been started for you - the lot is cleared and fenced! Plans for a wonderful new 6,000 sq. ft. Tuscan home exist and are ready for the Buyer ...", asking $1,799K.

Remember the "Mar Vista Flipper in a hurry"? At 12566 Woodbine for $1,299K, the listing threatened, "Available for lease ... 3 wk. listing or will be rented. Offers due May 4". Guess there weren't any offers on May 4. It's now June and they've dropped the price to $1,250K.

I added a photo of the existing house at 2202 Marine, "Another flip-flop on Marine", still asking $1,495 for "Ready to break ground! Plans and permits ..." The sign says, "Great house for sale".

Almost forgot, Idaho flip (2320 Idaho) reduced its price $100K to $2,295K last week.

24 comments:

latesummer2008 said...

This house is exquisitely remodeled. But, at 1328K, in a declining market, I believe they have missed the boat. Unless, they reduce it quickly. They could always find an emotional buyer, that falls in love with the remodel.

I would hate to see the value of it, in year or two.

Anonymous said...

But look what you can get for $1.4 at 2628 29th Street - 4 beds, 3 baths, 2607sq ft,
lot sz 6003sf 3 fireplaces and family room

At $1.328, Oak seems overpriced when compared to this one.

Craig said...

933 25th is a situation where the guy was literally about to start construction and then the house across the street went up for sale and he bought it (termite tenting went up today so sale must have closed)...I do not think that this is a flipper (but I definitely could be wrong). I think the guy just couldn't be bothered to build...but that could also be because it was looking more and more expensive to build rather than buy something that exists.

So going back to my previous comment...we have seen at least 3 different places that look to be people bailing on construction (for one reason or another). Are construction costs too high in relation to the value of the end product or is the land too highly valued?

My hypothesis is that the builders, architects, etc all saw values going up so they jacked up their costs (i.e. bigger profit margins)...does this have to reverse if all property takes a 25% fall in price (high end stuff included)? My guess is that building costs will be looked at a lot closer in a falling market and that eventually costs are forced down...thoughts?

On a side note, my dad told me that today's real estate section in the LA times is the biggest he has ever seen...I took econ 101...in fact I even took the CFA exam today...I have a good guess as to what will happen to values when inventory gets big...

still waiting for the market to clear

Joey said...

A little off topic but....

Does anyone know the story behind the house on the corner of Ashland and 7th? It is the southeast corner. A couple years ago a small craftsman and turned into a large new craftsman (quite nice actually) but construction was never finished and for the past 2 years or so the house has sat in a state of abandoned mid-construction with zero work activity. I live in the area and am just curious as to what the story is here.

Craig said...

Went to Idaho flip open house...It looks like they really want to sell it now as they have reduced price by $100K (as noted here) and they are also having another open house on Tuesday...young girl working as realtor aid claimed it was "about 2500 square feet" as the 2080 number didn't take into account the second story (which was tiny anyways). She said that she would guess they spent $600-700K in upgrades on the place...

The upgrade was nice but overall, the rooms are tiny, the lot tiny, and the "backhouse" was more of a tool shed than anything else...oh and I almost forgot to mention the yard...maybe because it was so small that it basically didn't exist. I'm going to have to go with latesummer2008 and say that the value is in the land and since this lot is so small, you are looking at something that seems a bit too expensive...

Also, for what its worth, it looks like there is someone actually living in it. So maybe that is why they haven't seemed to be in a big rush to sell (until now?).

Anonymous said...

I drove by it yesterday. Seemed small from the outside and not worth visiting the open house when priced at 1328k.

Anonymous said...

re 1639 Oak, it was open house today. Couldn't contain my smirk when I recognized the furnishings recycled from other staged sales in the area.

Anonymous said...

"But look what you can get for $1.4 at 2628 29th Street - 4 beds, 3 baths, 2607sq ft,
lot sz 6003sf 3 fireplaces and family room"

That sounds like a 40 foot wide lot, which is about the worst feature a property can have (except for a 30 foot wide lot).

Anonymous said...

"I drove by it yesterday. Seemed small from the outside and not worth visiting the open house when priced at 1328k."

You'd think for the amount they're trying to make on this flip, they'd at least have fixed up the steps leading up to the house.

dwr said...

The attempted flippers are both agents for Anthony Hitt, no wonder the agent at the open house was talking about what great work the flippers had done, he was probably talking about himself.

Hmmm, very few closed sales, failed (hopefully) flip, realtors will be destitute in no time.

Anonymous said...

The median income for Mar Vista is approximately $50,000. These sky high prices have to be the result of major flipping. Unless Mar Vista has a huge influx of new buyers with much higher than median income these prices have nowhere to go but down.

Anonymous said...

"The median income for Mar Vista is approximately $50,000."

The problem with those numbers is that it counts everyone, including retired people, people who bought homes 40 years ago, renters, etc. I have looked, but never found, data that shows the median income of recent buyers for a particular area. I'm sure it's a low number relative to median house price, but doubtful it's anywhere near 50K for Mar Vista.

dwr said...

Just got a flyer that 1721 Pier sold. I checked it out, it sold for $1,300,000, the buyers put down 10%. As you will recall it sold almost two years ago for $1,208,000.

Craig said...

I agree with anon 1 and anon 2 regarding Mar Vista...

The whole $50K median income thing doesn't tell the whole story because while Mar Vista is not in the top few places to live in LA, it is definitely much higher up on the list than some place in the valley or east LA...point being is that if you say Mar Vista is in the top 10 percent places to live, then you would ideally like to look at the top 10% of wages in the area and see if those wages are able to support those prices...my guess is that even when doing this exercise, the answer is no.

Also the whole 2 working professionals in a household thing can be at work here...double incomes makes for the ability to afford more. But really, lets be honest...its the 0 down, interest only financing (and option arms) that probably have the biggest effect.

Anonymous said...

So why do SM realtors send out flyers with recent "sales," highlighting a certain property, but then they only report the "listing" price instead of the selling price?

Price Stout said...

Joey - I dunno what the story is with 702 Ashland. Last sale appears to be 1982 for $167,000.

There was definitely an $800,000 construction loan taken out in mid 2004.

Then in 2005 there was a change in ownership on the title... listed as resale, but it clearly wasn't.

Strange indeed.

dwr said...

"So why do SM realtors send out flyers with recent "sales," highlighting a certain property, but then they only report the "listing" price instead of the selling price?"

Well, since all realtors go through "ethics training", there can't be anything nefarious involved. Probably just an oversight.

Anonymous said...

"Also the whole 2 working professionals in a household thing can be at work here"

Most reputable sources cite the median household income to account for this.

Joey said...

Thanks for the info Price....I would love to get the bottom of this one. I walk by it every day with my dog and wonder "if they don't want it just give it to me!"

Westside Bubble said...

So why do SM realtors send out flyers with recent "sales," highlighting a certain property, but then they only report the "listing" price instead of the selling price?

I've assumed (1) it's to maintain the appearance that selling prices are "insider" information you need a Realtor to obtain, and maybe (2) it obscures selling prices below asking. It just seems petty, as selling prices are hardly inside info. A few agents have published them.

speedingpullet said...

Slightly OT - but 'my-lil-teardown' - 1518 11th St 90401 - is Back on Market!

Linky: http://tinyurl.com/2rf6r5

My spreadsheet shows that it orginally went on the MLS on 10/07/05 at the strange price of $1,505,820 - where it sat and sat until they pulled it on 05/05/07.
Et voila - back on the MLS on 05/29/07 for the slightly less outlandish $1,455K

Sadly no previous sales data, but Zillow estimates the 2005 tax for the property at around $74K - with the building being assessed at around $3200.

So- 'teardown, sold as-is', is still being offered at almost $1.5 million.

When will the madness end?

dwr said...

"So why do SM realtors send out flyers with recent "sales," highlighting a certain property, but then they only report the "listing" price instead of the selling price?"

I got another one yesterday for 746 Ashland. I believe it said "listed at $1,079,000" or somewhere around there, it actually sold for $1,027,000. The buyer appears to have put down $650,000 to be located directly across the street from a car wash. Kiss that money good bye.

dwr said...

...not to mention 746 Ashland is about 60 feet from Lincoln Blvd. A "sweet deal"!

Westside Bubble said...

See Numerology on 11th for my take on 1518 11th, SpeedingPullet. It and the construction site to the south appear to have been owned by the same old-timer.

Yeah, what a location, DWR!