North of Montana stuff has been selling fast, from the low-end 342 12th (2 bed/1.5 bath, asking $2,239K, above) to the high-end 333 20th, 5 bed/6.5 bath, asking $5,095K. Here's what appears to have entered escrow just since the beginning of May (all listing prices):
517 Euclid, 5 bed/2 bath, listed 5/11/07, $2,175
307 Euclid, 3/2.5, 4/18/07, $2,195
342 12th, 2/1.5, 5/7/07, $2,239
433 12th, 3/2, 4/26/07, $2,240
211 20th, 2/1.75, 3/6/07, $2,295
515 12th, 2/1, 4/26/07, $2,299
363 21st Pl., 4/3.75, 4/19/07, $2,398
615 20th, 3/2, 4/25/07, $2,698
720 Georgina, 5/3.5, 5/18/07, $3,095
934 25th, 5/5, 4/11/07, $3,188
703 25th, 5/5.5, 2/12/07, $3,295
363 18th, 3/3.5, 4/20/07, $3,295
714 16th, 5/4, 2/28/07, $3,795
1107 Carlyle, 7/7, 4/30/07, $4,688
1228 San Vicente, 5/5.5, 4/25/07, $4,989
333 20th, 5/6.5, 5/18/07, $5,095
25 comments:
North of Montana (NOM) is pretty funny because it has become so obscene that you just have to laugh. As the old people die off/move away, the shacks they were living in get sold for $2 million+ to developers/speculators/realtors...
Then a 5 or 6K square foot two story monster is built. Most of these are spanish style but are usually too yellow in color and in my dad's terms, "uglier than sin". Went to one of these recently when it had an open house...had a damn bell tower in it!! wtf?! Anyways, its always funny to go to open houses where it still smells like paint and some of the smaller details aren't done yet...
So when looking at NOM, the real question is how long the prices can hold up for these "finished products". It used to be that when you could easily get 3.5-4 million then you would have made a nice little profit...however, building costs have gone up and tear downs aren't selling for $2 million...now it seems to be $2.2-2.3 million.
The large selling prices of "finished product" dragged up the land prices...so now one needs to be able to sell for closer to 4 or 5 million to make the same profit. As soon as those beasts sit on the market for longer, people will start to get more fearful of doing these projects. That knocks down prices of the tear downs and may but a bit of pressure on those bloated margins that the builders have.
There is a large lead time when going into one of these "investments"...I would argue it takes at least a year to buy a tear down and get a new finished product on the market...think of those carrying costs. Then think of how nervous you would be when you are trying to sell for $5 million but its not moving...every week it sits would literally be 10's of thousands of dollars bleeding...
I know of a group currently finishing up building a large spec house NOM...they are already getting VERY nervous.
All of this should have a ripple effect south of Montana as well...so that when jokers build large spec houses on Yale and try to get $3.8-3.9 million they will burn (I believe the Yale house is still on the market).
I was just checking out some of those homes on Zillow and looked what popped up (someone obviously entered the wrong sales price on this place and Zillow Zestimates that the home is worth more than what they supposedly paid, in an area of $4 million homes tops. Zillow is such a joke in many ways):
437 12th St, Santa Monica, CA 90402 4 beds, 4.0 baths, 3,322 sq ft
ZESTIMATE™: $9,080,410 What's this?
SOLD 11/28/2006: $8,839,090
Value Range: $8,172,369 - $10,442,471
30-day change: $70,824 Last updated: 05/23/2007
These prices are beyond belief. Just like Mar Vista the median income for Santa Monica is approximately $50,000. I think Santa Monica and Mar Vista turned into flipper hell.
Good analysis, Craig. I'd be terrified of chasing the market down while under construction, and saw it happen c. 1990. They may relax for the moment with the $5.1M house on 20th apparently in escrow. But Yale is still available.
That would be really crazy, dwr! I have 437 12th St. listed in September 2006 for $2,995K, in escrow in October. The county agrees on the sale date, but puts the price at $3,241K. It previously sold 8/16/05 for $2,800K.
Ironically, Anon, the highest-priced big new house on Mar Vista Hill is cheaper than a tear-down north of Montana. Is north of Montana that great?
Westside,
re: high price Mar Vista < tear down north of Montana
It is interesting to see how much of a premium people will put on being in a certain neighborhood. I grew up a bit south of Montana and it has always been funny to see how much prices jump once you get over that border line...its the same school district, lot sizes, city, etc...For the amount of money that the price jumps simply because you are now "north" of Montana, one could do a complete remodel on a home in a great neighborhood just south of Montana. (think near Franklin school...yes I am a product of said school).
Opportunity costs are huge for us normal folks. Most people reading this blog do not have $5 million they could go spend on a NOM home...so for us who work to make a living, paying an extra $500K to be a block or two further north in the same city doesn't make sense.
I know Santa Monica has always been sort of a wealthy area, but things have gone to a whole new level now. I am young now and often think about what a great quality of life you could have if you amassed a lot of savings while working in LA and then went to another state...
The difference between 90403 and 90402 (for the exact same lot size and house) would be enough to buy you a mansion in most areas. I guess keeping up with the Jonses is a bit more expensive in big bad LA...
I don't know what algorithm Zillow uses, but it is almost entirely based on what you paid for your house and when you bought it. I bought my house in 2001 and Zillow estimates it to be worth considerably more than my next door neighbor's house, and his house has much more square footage, it's Spanish style, with a slightly larger lot.
dwr,
what area do you live in?
Santa Monica
Specific area or street?...just curious
"what a great quality of life you could have if you amassed a lot of savings while working in LA and then went to another state..."
Yeah... these prices are insane. Here's a link to what 2.4 mill gets you about 10 min from downtown Boston. SM is the ghetto compared to this, and it's not exactly a cheap area. :-)
http://tinyurl.com/32x6kj
Or this..
http://tinyurl.com/36jmam
for 2.6 in Hancock Park. Is NOM *really* that nice? I think there's less homeless people in the HP hood this house is in... :-)
I will admit it...yes, NOM is really really nice. That being said, the streets are so narrow that you often have to pull over to let someone get by you...think too many SUVs driving too fast with very narrow streets.
Also, the lots aren't that big (and this is ignoring relative valuation). Just in an absolute sense, the lots are small compared to how large a lot of the houses are on them.
Now add in the idea of valuation and it becomes a whole new ballgame...
And when I reference taking money out of state and going somewhere else, I am definitely not talking about going to another place near a large urban center (will be infected by bubble). I am thinking areas of North Carolina or Colorado that aren't super far away from some cities but are far enough out that local income will be the metric that drives prices (i.e. things are "cheap" compared to LA)
For you longtimer Santa Monica residents: What exactly is Gillette's Regents Square? What streets bound it? What is the history of the term?
Thanks.
"I am definitely not talking about going to another place near a large urban center (will be infected by bubble)"
I hear ya... my point with that Boston house above, is that Boston *is* a bubbleicious area, yet for the price of a 3/2 postwar ranch on a 6k lot, you can get a real mansion with a real yard in a location with a similar job/salary base. Crazy huh?
How do you see what homes in an area entered escrow? is there a site?
Thanks.
342 12th is BOM effective today.
Slightly OT question, but can someone explain to me the LA County Assessor Parcel Viewer website details of recent sales prices (see http://assessormap.co.la.ca.us/mapping/viewer.asp). The site says that it "only displays unverified sales. If unverified sale information is available, the information will be displayed. The Assessor is prohibited from displaying verified sale information when that information is obtained from a confidential document such as a "Preliminary Change of Ownership Report" or a "Change of Ownership Statement"." What does this mean in non-RE jargon?
And if a recent sale isn't showing on the Parcel Viewer site, is there a good way to find out what the property did sell for (as opposed to the last listing price)?
Thanks!
I'm fuzzy on the exact boundaries of Gillette's Regents Square. I'm thinking it's between 17th and 20th, north of Montana, named after its developer, built later than the streets farther west. It includes 18th for sure. Others?
Chris, I've been tracking individual listings in Santa Monica and adjacent Mar Vista and Pacific Palisades. When its MLS status changes to "Looking for Backup" or it disappears it likely has entered escrow. Without an agent's access to the full MLS I can't confirm until it's recorded as sold....
Anon, Zillow tends to post sales earlier than the County, but not always, so I check both. I'm not positive, but "preliminary" sounds like escrow documents, as opposed to the final recording of a sale.
Thanks, DWR, so my featured house fell out of escrow. The market may not be as crazy as it seemed.
See LA Land's new comments on 333 20th selling.
The "gillettes regent sqaure" thing is actually new to me...and I grew up here (a few blocks south of Montana). I think that there is attention being drawn to it now because it is a way of differentiating property located NOM. In reality, there isn't anything special about this area (except that streets closer to the water have the commercial aspects of Montana to deal with). Growing up and hanging out at friends houses NOM, nobody ever talked about "gillettes" but I guess now it is extra special or something...riiiight. I would call it desperation to stand out. If everyone NOM has a $5 million dollar home, then yours better be special so that you can outdo someone else. I think that even if I had the money, I would buy somewhere other than NOM, just so I could avoid all the crap that goes on up there...not that it is much better in other areas, but still...
Gillette's Regent Square
This tract was developed by none other than the world-renowned razor blade king, King C. Gillette. In 1910, Gillette decided to leave his company and invest all of his money into real estate. Originally, the Regent Square ran from 15th Street to 21st Place; but now the area is bounded by 17th street, 21st Place, and the five blocks between San Vicente and Montana. Gillette Square is different from the rest of Santa Monica in that its lot sizes are typically much larger than other areas. The lot sizes average 9,000 square feet (roughly 60 ft. wide by 150 ft. deep).
Ok, maybe I will have to take back some of my previous comments...bigger lots deserve a premium, there is no doubt about it. However, if you hear some of the realtors and people talk about this area, they make it sound like the streets are lined with gold or something. And the lots still look/feel small when you put a bloated 6,000 sqaure foot house on it.
In 1920, lots in the nearby Upper Palisades were selling for between $1,200 and $2,750. Like many
subdivisions of the era, developers offered a 5% discount for cash and an additional 5% building
discount if a structure was built on the site within a specified period of time (usually one year). Billed as
“good investments as well as rare homesites,” the area was developed during the 1920s and 1930s for the
burgeoning middle class of Santa Monica. Most of the homes were built on lots which measured 50 by
150 feet. Residences on the corner lots were often larger than those in the interior lots. Transportation
was provided by the Westgate and Santa Monica street car lines, which ran on San Vicente Boulevard,
the neighborhood’s northern border. A third line ran along Montana Avenue.
I would be interested in who bought 333 20th St in Santa Monica. I would be very surprised if it was a family.
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