Case-Shiller update

May is now out in the S&P/Case-Shiller monthly index for Los Angeles. Continuing to fall but not as steeply, it seems consistent with activity this spring. From the feel of this summer, it likely will resume a steeper slide.

11/06 262.56
12/06 264.77
01/06 265.92
02/06 267.75
03/06 268.23
04/06 270.44
05/06 272.12
06/06 273.22
07/06 273.85
08/06 273.80
09/06 273.94 - peak
10/06 273.66
11/06 273.05
12/06 270.03
01/07 268.68
02/07 266.63
03/07 264.58
04/07 263.36
05/07 263.19 - down 3.9% from peak

The graph above is from Paper Money, which I used to plot the original Case-Shiller 10-city Composite (tan line) and Los Angeles (dark blue line) since 1987. See my last post on Case-Shiller for more.

Bangkok's Ghostly Skyline

(Link if the player doesn't work)
See this amazing wsj.com video about "ghost towers" in Bangkok, abandoned unfinished after Thailand's economy collapsed in 1997. An example for parts of the U.S.?

Predatory lending

We talk about predatory lending in subprime mortgages, but how about in credit cards? What a difference a FICO score makes: On one end are offers for 0% APR balance transfers through December 2007 (with 3% transaction fee, maximum $199).

Then there are offers like this one I happened upon, from a bank that shall remain nameless. Showing through the envelope window it announced:

Contratulations, XXX! You qualify for a Visa^(R) Credit Card!"

A fake handwritten insert is the image above. The offer letter begins:

Dear XXX,

You have been pre-selected* for a Visa^(R) Credit Card with an initial $500* credit limit! ...

*You have passed the initial screening. You will receive a Visa Credit Card if you continue to meet our selection criteria and meet our income requirement. ...

The disclosure sheet (not even in tiny print) includes:

• APR - 23.99% (29.99% Late Payer APR)
  
• Account Origination Fee (one-time fee) - $50.00
  
• Monthly Maintenance Fee - $10.95

They also encourage you to add "Optional Card Benefits" of Express Delivery Service ($20), Advantage membership ($39.95), and credit insurance (72.9 cents per $100 balance per month in CA).

[Begin outrage] That's $50, plus $11 a month, plus options, for a whole $500 credit limit Visa^(R) card, APR 24% (or 30%)! The recipient of this letter is supposed to be so excited at actually qualifying for a Visa^(R) card that they'd accept this horrible deal, not knowing there are better possibilities?! Like too many stories of sub-prime borrowers.

Gold Coast

At the high end of Santa Monica is this 6 bed / 6 bath house on an 8,415 sq.ft. lot at 1020 Palisades Beach Rd. (PCH), asking $10.55M (reduced from $11.75M). The only other house in the last two years close to this price was 2407 La Mesa, overlooking the Riviera Country Club, sold 12/12/06 for $10.5M (was asking $12.9M, then reduced to $10.9M).

The listing shows its beach-facing yard and pool, with the this description: "Romantic beachfront Jon Byers Mediterranean with ocean views from his/hers separate master suites each with fireplace. Lovely inner courtyard with beautiful spanish tile & balcony. Tile in entry, tiled stairs, high ceilings, dining room with wood-burning fireplace & butler’s pantry. This house was built for Norma Talmadge in true Old Hollywood stlye. Completely renovated by Tim Corrigan. Stunning!!! Short term lease also available for $25,000/mo. Price negotiable."

It's a grand old house facing the beach. And next to PCH and a parking lot. Wonder how it'll do. (Hey, that's a cheap lease. Divide by ten: $2,500/mo for a $1.05M house would be a good deal for the renter, right? Better than $3,600/mo for 2416 21st St.!)

Tiny in Sunset Park

This 2 bed / 1 bath house at 2416 21st St., asking $1,099K (reduced within a couple of weeks from $1,200K), is TINY. It's described as, "Charming 2 bedroom 1 bath home on a beautiful tree lined street in Santa Monica. Best value in Santa Monica! Completely redone! Stainless Steel appliances, dining area, living room & detached office. Unlimited potential to expand. Huge grassy backyard, inside laundry & off street parking. Just minutes to the beach, shopping and freeway. SM school district!!..."

According to Zillow, the house is all of 772 sq.ft., on a 6,750 sq.ft. lot, and it looks it. It also includes a similarly-tiny one-car garage, with french doors and windows. The aerial photo above shows how small against the red lot outline. It could even fit another driveway on the north side. Below is the front view.

But if it's really about lot value, why redo it with the stainless steel, etc.? It doesn't appear to be a flip; I don't see a recent sale. "Best value"? That's a whopping $1,424 per sq.ft.! Yes, it's time for more rational prices to return.

Bad news keeps on coming

The Dow was down as much as 390 as I wrote this. I think we've been seeing lower-priced Westside sales already slow from tightening credit, and a falling stock market will finally rein in higher-priced sales. (The clouds are for variety to Wile E.)

The LA Times today covered two main issues (familier to us but good to see vividly in the MSM). Also see Market Ticker for vivid commentary, Calculated Risk for their usual insight, and Paper Money for detail on the new and existing home sales reports.

"[Housing] Industry's foundations get shakier"

For the housing industry, the bad news just keeps on coming.

Three major home builders reported quarterly losses Wednesday, and a real estate trade group said that nationwide sales of existing homes fell to their lowest level in nearly five years. ...

... some analysts ... expect inventories to rise again as adjustable loans reset to higher rates and many homeowners find themselves unable to make the payments.

"We expect inventory levels to increase based on the credit issues with the increasing level of mortgage resets in the coming months through spring '08," building analyst Daniel Oppenheim of Banc of America Securities wrote in a note to clients.

"We think inventory is the best indicator of future pricing trends — excess inventory equals lower prices ahead," he added. ...

Meanwhile, the supply of unsold homes nationwide was at 8.8 months in June, the same as May, but that was up 40% from a year ago, the Realtors said.

"These higher prices did not allow the market to absorb the excessively high inventories, which stand at levels not seen since 1991," said Carl Reichardt, an analyst with Wachovia Securities who said affordability is one of the most significant roadblocks facing the industry as it struggles to recover.

Southern California has a 12.6-month supply of unsold existing homes, about double the inventory from a year ago, according to a sampling of for-sale listings taken by the California Assn. of Realtors. ...

"Another possible phenomenon that we cannot get our hands around is whether these are financially troubled home sellers leaving the [multiple-listing service] environment because they are being foreclosed on," Veling added. "Some of these homes are not in the MLS now but will come back as bank-owned." ...

During the worst of the Southland's last housing downturn in the mid-1990s, inventory maxed out at 19 months of supply, with foreclosures accounting for about a third of the homes, Veling's statistics show. Today, the proportion of foreclosures or bank-owned properties on the market is less than 10%. ...

"Chrysler sale financing is reworked"

Chrysler Group's sale to Cerberus Capital Management will be completed after banks agreed to keep $10 billion of loans that investors refused to buy....

Cerberus and DaimlerChrysler, the German parent of Chrysler, agreed to assume an additional $2 billion of loans, the investors said. In the event of a bankruptcy, the private equity firm and the automaker will be repaid on those loans before the banks get their money back. ...

Cerberus ... couldn't find buyers for the Chrysler loans even after twice raising interest rates.

Auburn Hills, Mich.-based Chrysler joined almost 40 companies that have reworked or abandoned debt offerings in the last three weeks. ...

Pushing the market?

I received the following interesting email:

Has anyone looked into how much of the buying has been done by only a few people, such as the Casey Serins of the world? I think it would be an interesting study, similar to how much of our taxes are paid by the top 1%, etc.

I have heard from information I believe to be reliable (though no actual knowledge) that the following houses on the same block were bought by one person in zip code 90025.

• 1945 Stoner Ave (corner house on Stoner and La Grange). [3 bed / 1 bath; isn't on the County Assessor's website, which only shows the last two years. Zestimate is $917K]
  
  
• 1940 Granville (second to the corner of Granville and La Grange - this house is on the other side of the block as the Stoner house, and one house from the corner). [photo above; 2/1, sold for $885K on 9/9/05. Zestimate is $973K.]
  
  
• 1938 Granville (next to 1940). [3/1; sold for $922K on 10/19/05. Zestimate is $1,064K.]

I have heard that the buyer is a R.E. agent, who had been unable to flip those homes (that was her intention, from what I gather). She bought the 1945 Stoner house a couple years or so earlier than the Granville houses, but it seems like she drove the market up singlehandedly or maybe she was the market.

I don't know how many other houses she may have bought.

She is supposedly renting those 3 houses for about 3000 a month.

I'm curious as to why those 3 houses are showing up on Zillow at much higher Zestimates than the neighboring houses. The La Grange end of that block is undesirable due to the noise from the adjacent city maintenance depot. [city trash truck facility a block south, below] The better houses there are in the middle of the block. Is the Zestimate a number that is manipulable by an RE agent?

I also believe that 1925 Stoner and 1929 Stoner on the same block may be owned by one individual as well.

A few buyers (and a lot of easy credit) can push prices up a lot. This RE bubble did not require participation by the masses.

I agree, Zillow's estimates here don't make sense. Maybe they're skewed by recent sales? Others' comments on a few buyers pushing prices up? Monthly rent of $3K on a $900K house doesn't sound like a very sustainable cap rate.

Slumps

This foreclosure graph via OC Renter gives a good frame for Bearmaster's great three-part series, "The Last Great Southern California Housing Slump" summary from the Los Angeles Times archives, 1988-96.

I remember those articles, how banks' prices on foreclosures set a ceiling over other sellers until they were finally sold off.

I'd add the earthquake of early 1994, that took the already-fallen market in Santa Monica one final step down. I recall, for example, north-of-Montana lot value peaked over $900K in 1989, fell to $600K in 1993, then $550K in 1994 after some houses fell off their foundations. Here's another example.

Striking to me on the graph is that our local market doesn't feel much past 1990 of the last slump, yet California foreclosures have already passed the peak reached only at its end in 1996. Imagine what the next few quarters will look like.

Ancient on 6th

The Dow melted down 226 points today (see MarketWatch for multiple articles). Mar Vista sales seem to be slowing down, with more failed escrows and price reductions (financing problems?). But that didn't stop a couple of $1.5m+ Sunset Park listings from going into escrow today.

Then there's this 2 bed / 1 bath 720-square-foot tear-down at 2724 6th St. in Ocean Park, the newest member of the Ancient Listings of Santa Monica. Third place after 813 Pier and 2614 2nd, if you discount 2219 Ocean's over two years.

It has quite a history. Sold 6/20/06 for $1,089K, it was back on the market 9/06, asking $1,190K, reduced 10/06 to $1,095K, and off the market 11/06. Relisted 2/19/07 for $1,125K, it was reduced 4/07 to $1,075K, and finally 7/07 to $999K. For that you basically get 4,000 square feet of dirt. Just slightly less per foot than north-of-Montana dirt.

Wall Street's "mortgage monster"

You should read Tom Petruno's column in Sunday's LA Times, "Wall Street can't cage its mortgage monster". It's both a vivid description of what's blowing up (familiar to most of us), and significant that the Times's usually-bullish main business commentator is this bearish. Here are some highlights:

When the rocket scientists on Wall Street outsmart even themselves, very bad things can happen.
...

Today's version of Frankenstein turning on its creator is the mortgage loan mess. Wall Street in recent years has taken a simple concept — bundling mortgages and selling them to investors as interest-paying bonds — and concocted an alphabet soup of securities so incredibly complex they defy understanding by all but a handful of PhDs.

That complexity now is coming back to haunt the buyers of those securities, who for the most part are hedge funds and other big investors, not individuals. If you aren't sure what it is you own, you can't be confident about the thing's value. And in financial markets, if confidence dies, little else matters.
...

What's more, the line went, the trouble would be "contained".... Those assertions were all but blown away last week, after brokerage Bear Stearns Cos. on Tuesday disclosed that investors in two of its hedge funds that owned mortgage-backed securities had lost virtually all of their money.

It wasn't that the bonds became completely worthless overnight. Rather, the funds were victims of their heavy use of borrowed money to boost their bond bets.
...

Investors are losing faith in mortgage bonds up and down the quality chain because the major credit-rating firms — Standard & Poor's, Moody's Investors Service and Fitch Ratings — this month have begun to warn that loan delinquencies may be worse than what the firms had anticipated.
...

Certainly, most Americans will make their mortgage payments, as they always have. But the $1.5 trillion in sub-prime mortgage bonds sold from 2003 through 2006 tells you that a huge number of high-risk borrowers were financed in that period. Some of those loans already have failed; more assuredly will fail.

What's more, in the sub-prime loan market it's now clear that fraud played a big role in the ease with which loans were granted as the housing boom peaked in 2006.
...

As confusing as things are for mortgage bonds, it's worse for Wall Street engineers' crowning achievement in fee-generating securitization: collateralized debt obligations, or CDOs.

A CDO is, in effect, a bond backed by other bonds. And in a wondrous bit of alchemy, a CDO creator can take a pool of bonds backed by mostly sub-prime mortgages and turn it into securities that have AAA credit ratings.

It's all in the slicing and dicing of the underlying portfolio. In theory, the holder of a AAA-rated CDO slice owns a security that has almost no chance of losing principal.

But what, exactly, is backing that CDO slice?
...

That is likely to be the unfolding story of the rest of this year and the first half of 2008.

The fire sale in mortgage securities has yet to begin. But it's coming. The implications for the rest of financial markets aren't clear, but when confidence is shaken in one market there usually is collateral damage.

Once again, Wall Street's rocket scientists have created a monster they can no longer control.

I'd also suggest Niall Ferguson's July 16 column, "Owning on borrowed time".

Hostile tenant short sale

This 3 bed / 2 bath house at 4250 Beethoven St. (south of Washington, east of the Marina), asking $839K, tells quite a story in its description: "Soon to be in Foreclosure! This price is based on short sale approval. The house was built new from the foundation up in 2005. Travertine flooring throughout living room and kitchen. Mahogany hardwood floors in the bedrooms. Excellent opportunity. Hostile tenant, DO NOT DISTURB. SHOWINGS WITH ACCEPTED OFFER ONLY."

Short sales are hitting the MLS, eh? I doubt it's "built new from the foundation up"; maybe gutted, but that can't be new framing. Love the "hostile tenant", not to mention the rusted car in the driveway (in front of the covered one). Got any loan info on it, War Chest?

Cheap creekside Brentwood

This 3 bed / 2 bath "developers dream" probate is at 11938 Currituck Dr., the end of a cul-de-sac west of Westgate Ave., north of San Vicente, asking $995K.

The street ends at a creek (dry now) surrounded by eucalyptus trees, although officially called Tenneb Dr. on the City of LA zoning map. The house looks closed-in, surrounded by a shared driveway on the east, neighboring house on the south, creek on the west, and street on the north.

More fascinating is to look it up on Zillow (as 197 people have this month). The white rectangular roof at the bottom of the aerial photo (looking west) is this house. Most everything above the row of trees is a single 2.35-acre parcel at 406 S Saltair Ave., the street at the top. Zillow values this at $1.2 million. Yeah, right.

You've got to be kidding!

The most expensive listings in Palms-Mar Vista are just over $2 million, on Mar Vista Hill. This 4 bed / 4 bath house at 3653 Mountain View, however, is asking $3,295K. Lot size is 10,349 sf, according to Zillow, nice but not huge, not even on the top of the hill.

The original 1930 house has been upgraded to, "Newly completed English Country Estate on Mar Vista Hill's best street. Reminiscent of Hancock Park Mansions. Impeccable fusion of vintage detailing and new millennium features. Great original room with fireplace, vaulted ceilings and oak beams. ..."Next up is the 4 bed / 3 bath house at 2516 Cloverfield in Sunset Park. The highest asking price in Sunset Park is just under $2 million. This, however, is asking $2,595K, on a standard lot on busy Cloverfield.

Their blurb begins, "Fantastic Custom Home.Enter through lush landscape into Great Room, then Cook in Custom Kitchen with top of line equipment. ..."

I'm not holding my breath on these.

Not selling north of Montana

As a sequel to Not selling in Sunset Park, (also picked up in the LA Times blog), here is everything north of Montana over 30 days on the market:

202 14th St. (photo), 6 bed/4 bath, $3,529K LP, 5/24/07 LD
416 18th St., 5/5.5, $3,895K, 5/11/07
557 12th St., 6/5.5, $3,995K, 6/4/07
713 22nd St., 6/5.5, $3,995K, 6/7/07
239 14th St., 5/5.5, $4,495K, 5/29/07
421 23rd St., 6/6.5, $5,000K, 5/24/07
1221 Georgina Ave., 5/6.5, $5,895K, 6/6/07
506 Palisades Ave., 4/4, $7,950K, 3/23/07

On their heels are a these newer, mostly lower-priced, listings:

439 22nd St., 3/3, $2,398K, 6/25/07
242 25th St., 2/1.5, $2,500K, 7/7/07
438 Euclid St., 3/2, $2,595K, 7/6/07
501 Lincoln Blvd., 4/3, $2,849K, 7/10/07
1020 San Vicente Blvd., 5/3, $2,979K, 7/9/07
470 20th St., 4/3.5, $2,998K, 7/6/07
456 25th St., 6/5.5, $3,295K, 7/3/07
710 23rd St., 4/3, $3,298K, 7/13/07
446 23rd St., 5/4, $3,498K, 6/22/07
333 14th St., 5/6, $4,888K, 6/29/07

Is this a trend, that high-end sales are slowing, at least at these prices? If the new specs don't sell, expect less interest in tear-downs too.

"Best Places to Live"

AOL is displaying Money Magazine's new "Best Places to Live" in America. They also provide a survey tool to find your own. So I filled it out (image above). Good weather is very important to most of us on the Westside. Add Good health care access as we get older, and a Low crime rate. We want a reasonably Short commute time and Plentiful cultural options. Job growth seems a given. For this we'll concede anything like the rest of the country would consider Affordable housing.

So what are the top picks? Drum roll, please.... The top twelve are:

Find your best place: Results

Rank State City
1 CA Anaheim
2 CA El Monte
3 CA Carson
4 KS Overland Park
5 CA East Los Angeles
6 AZ Chandler
7 KS Olathe
8 CA Tustin
9 CA Santa Ana
10 KS Shawnee
11 CA Inglewood
12 CA South Gate

HUH?! Anaheim, El Monte, Carson, East Los Angeles, Santa Ana, Inglewood, and South Gate?! Not to mention the great climate in Kansas?

Not selling in Sunset Park

I'm seeing a growing glut of houses in Sunset Park, especially pricey fixed-up ones. Well-priced houses sell fast. These haven't, and are stale in competing with the surge of new listings. Here's everything in Sunset Park over 30 days on the market:

2224 Navy St., 2 bed/1 bath, $1,250K LP, 6/5/07 LD
2128 Navy St., 3/1, $1,259K, 6/4/07
2723 11th St., 2/2, $1,345K, 5/2/07
816 Wilson Pl., 3/2, $1,349K, 1/18/07, 10% reduction
2628 29th St., 4/3, $1,399K, 5/21/07
2202 Marine St. (photo), (plans for) 5/4, $1,495K, 4/8/07
1101 Cedar St., 3/2, $1,499K, 5%
711 Pine St., 3/2, $1,579K, 4/11/07, 7%
2415 33rd St., 4/3.5, $1,695K, 5/14/07, 6%
1732 Bryn Mawr Ave., 4/3, $1,895K, 6/18/07
2222 Marine St., 4/4, $1,975K, 5/17/07
1352 Cedar St., 4/3.5, $1,999K, 4/27/07, 5%
2223 Marine St., 3/2.5, $1,999K, 5/14/07

Arcadia Terrace

This new listing can really claim to be unique. It's at 26 Arcadia Terrace, the gated walk street north of the Loews Hotel, 5 bed / 6 bath (including guest house, I presume) for $6 million. "Renovated from ground up/w head-on unobstructed ocean views from every room. Plus guest house. Offered together w/ adjoining vacant lot at 24 Arcadia for combined price of 10 million."

The photo above is at the top of the Arcadia Terrace steps down to Appian Way and the beach. The photo below is looking up Pacific Terrace from Appian Way, showing the rear guest house over garage and the side of the main house. It's old Santa Monica history with an incredible view. Only $6 million. Or $10 million to get the lot on the beach side too (the red retaining wall).

Price history

This chart from War Chest shows the price history for his parents' house that he described here, overlaid with other indexes (click to enlarge).

The dark blue line (left axis, in $1,000s) is the estimated house value, from $350K in 1986 to $1,700K in 2007. It's net of a 6% commission, and includes a $100K remodel around 1995.

The magenta interest rate line (right axis, in %) is for a variable-rate mortage based on the 11th district rate.

He also compared the house price to gold as a measure of inflation: "The metric I am most interested in is measuring home prices in terms of gold. I think there has been a lot of inflation over the past 5 years or so and I think that a lot of home price appreciation is simply due to inflation. Anyways, I normalized the house/gold metric [light blue line] so that it starts at the same place as nominal home prices. I also included a 5% constant appreciation line as a reference point. It is so bizarre how the house/gold metric seems to just bounce off of this line on the two occasions it has hit it."

I'd note that from the mid-1980s to now inflation has more-or-less doubled and interest rates cut in half. Those two alone would justify a 4x price increase. In his case, $350K x 4 = $1.4M. Which is about 20% below $1.7M, suggesting how much it could fall?

The price jump in the last year is a question, but supported by their unsolicited offer and the recent vacant lot sale (although that included plans and permits).

Good work, War Chest!

Expo Line meeting tomorrow

More on the Expo Line light rail vs. Westside gridlock:

Friends 4 Expo Transit's annual General Meeting is at 7:00 p.m., Thursday, July 12, 2007, in the Hamilton High School library, 2955 South Robertson Blvd., just north of the Santa Monica Freeway (map).

They've invited speakers from the Expo Construction Authority to present their design work on the Expo Line, to its long-time supporters and the larger public.

* Phase 1 design update — Roland Genick

* Grade crossing safety and CPUC application status — Eric Olson

* Phase 2 planning update — Steve Polechronis

See their website at friends4expo.org for more info.

The latest news

Marketwatch's stories yesterday and today show it* vividly:

• "Home builders drowning in losses, subprime fallout"
  
  
• "S&P finally says subprime is mostly junk"
  
  
• "Retailers at the mercy of wary consumers"
  
  
• "Will subprime woes spill over to stocks?"
  
  
• "Gas prices rise amid refinery outages" (MSNBC)

*You all know the Roadrunner cartoons where Wile E. Coyote runs off the cliff, but only falls when he looks down and realizes there's nothing holding him up? That seems the case for the housing and stock markets now. The Dow rebounded some today; Wile is treading air a little longer.

See extended coverage by Calculated Risk.

Meanwhile, Santa Monica inventory is up another 5 just since Saturday, after lagging the last couple of months.

Geoquiz

This photo reminded me of Dr. Housing Bubble's "Real Homes of Genius". So how about making it a Geoquiz? It's in the geography we talk about. What is its address and listing price?

The first comment with the right answer gets the prize of ... being the first with the right answer! (Hey, we're low-budget around here.) If you like this we can do more.

We have a winner! The answer is in the comments.

"Easy Freeway access" on Urban

Sometimes a photo just presents itself! The house on the far right is 3208 Urban Ave., 2 bed / 1 bath, asking $699,900. Across the street is the Santa Monica Freeway.

It's described as, "Fantastic Santa Monica starter home. Big 6500 sf lot. Easy Freeway access, huge backyard with fruit trees. Bring a little imagination and discover Santa Monica's treasure...." Notice how they always call for imagination in cases like this? While they left out the short walk to Trader Joe's, a block south on Pico.

It's not a bad price, actually, for freeway-adjacent, less than the 3/1, in-escrow 3345 Virginia asking $789K, and last year's 2/1 3008 Delaware, sold 4/7/06 for $769K.

How Not to Price in Palisades

Well-priced houses have sold pretty fast in Pacific Palisades this spring. This 3 bed / 2 bath house at 461 Puerto del Mar, however, is an entertaining lesson in How Not to Price. There's more to this house than the photo shows, two stories on the back, looking out on the canyon.

Originally listed 1/10/07 for $1,699K, it's slowly nibbled the price down every couple of weeks, to $1,649K and $1,599.5K in February; $1,525K, $1,499K, and $1,449K in March; $1,429K and $1,399K in April; $1,379K in May; and now $1,359K at the end of June.

It's now third oldest of the Ancient Listings of Pacific Palisades (<$2M). Stay tuned for the top two.

Fast food ruin

Something different for the Fourth of July: Rome has its millenia-old ruins like the Coliseum. West L.A. has its decades-old Burger King ruin, on the north side of Santa Monica Blvd., east of Bundy. Wonder what was intended here, and why nothing has happened?

"Grate Location" on Ocean Park

Two adjacent houses are for sale at 1100 Ocean Park Blvd. (right), 3 bed / 2 bath, asking $1,149K (just reduced from $1,200K), and 1108 Ocean Park Blvd. (left), 2 bed / 1 bath + 1 / 1 second unit, asking $1,199K (just reduced from $1,250K).

The description for 1100 says it all: "GRATE LOCATION CORNER LOT CLOSE TO BEACH,GOOD SIZE BACK YARD,1108 NEXT DOOR ALSO FOR SALE ,GOOD FOR LARGE FAMILIES OR INVESTMENT,ZONE R3...."

For this they get paid big bucks?! "Close to beach", only about a mile. "Good for large families" because you won't hear them over the traffic noise? I wouldn't suggest they play in the street. "Good size back yard" on this 4,998 sq.ft. lot (Zillow)?

"Good for investment"? According to the County, 1100 sold 4/22/05 for $905K and 1108 sold 2/1/06 for $1,075K. After commissions, carrying costs, and more price reductions will this seller (presuming it's the same for both) get out whole?

Sitting on Second

Three listings have been sitting unsold a long time on the west side of 2nd Street in Ocean Park. Wonder why?

First is 2614 2nd (above), 3 bed / 1.75 bath, asking $1,375K, described as, "Impeccably restored Ocean Park Craftsman. ... Amazing location in the heart of west sides coolest neighborhood. Close to Main Street & South Santa Monica beaches." No lie it's close to Main Street, a half block west. But how "amazing" is being on the corner of Ocean Park Blvd., just feet from traffic roaring by your 2,448 square foot lot? It was listed August-November last year, and again since 3/1/07, qualifying for third place in the Ancient Listings of Santa Monica.Second is 2820 2nd (above), 2 bed / 2.75 bath, asking $1,449K, on a 3,746 square foot lot, listed 10/1/06, fourth place in the Ancient Listings of Santa Monica. It's a cute Craftsman from the front on 2nd, but more telling from the back, seen here across the Main Street parking lot south of Wildflour Pizza. Its description includes "a large private backyard." Huh? Where?

Third is 2912 2nd, 2 bed / 1 bath, asking $1,600K. It was on the market 12/06-2/07, asking $1,449K. It was listed again 6/22/07, now for $1,600K, but neither Zillow nor the County record a sale earlier this year. No photo is needed; it's a stucco box on a 4,996 square foot lot (lot sizes from Zillow).