Monthly inventory update

9/28 - Westside inventory is up 7.7% for the month. Santa Monica is up 2 and Palisades a huge 21, but Palms-Mar Vista is down 3.

All are close to flat for the week, a little activity after that dead weekend, but DOM still rising. Highlights: 834 Maple reduced its price from $2,100K to $1,975K, and 627 Euclid is in escrow.

9/21 - Santa Monica and Mar Vista are down, Palisades is up. Highlights:

2937 Delaware and 420 7th, SM appear to be in escrow.
813 Pier, SM appears relisted with a $50K reduction to $729K.
718 Marine, SM reduced $20K to $799K.
1621 Ashland, SM (architectural) reduced $40K to $1,610K.
716 Marine, SM after 2 months reduced $10K to $1,629K.
704 15th, SM reduced $305K to $1,990K!
3660 Corinth, MV (could not perform) reduced $20K to $678K
3778 Colonial, MV reduced another $15K to $770K.
3512 Greenwood, MV appears finally in escrow at LP=$849K.
12566 Woodbine, MV (flipper in a hurry) was relisted, LP=$1,199K.

9/14 - Westside inventory is up again this week in all three areas, especially Pacific Palisades <$2M up 5, including 2 back on the market.

9/7 - Westside inventory is up for the week in all three areas.

(I'm starting a new format of these, with new short weekly posts rather than updating the long one each week. See notes and the last monthly update.)

       LA County  Santa Monica  Pacific Palisades  Mar Vista
                <$3M New Tot DOM<$2M New Tot DOM Tot New DOM
       _________ _______________ _______________ ___________

 1/30/06  27,732
 2/28/06  29,420
 3/31/06  31,819
 4/21/06  33,054  35
 5/ 1/06  34,032  38  33
 6/ 2/06  37,847  56  36      38
 6/30/06  42,317  66  40      49
 8/ 4/06  45,315  70  34      50
 9/ 1/06  46,781  71  27      59
10/ 6/06  47,369  83  25  98  71
11/ 3/06  45,780  80  20  91  77
12/ 1/06  43,103  65  18  72  96  39  20
 1/ 5/07  35,646  54   4  60 117  33   6  71  66
 2/ 2/07  36,715  38  15  45 124  29  16  61  71
 3/ 2/07  41,251  42  14  51 114  26  10  68  79  53  25  76
 4/ 6/07  42,857  41  23  49 107  18   8  73 103  52  52  50
 5/ 4/07  45,918  46  28  54  92  19   6  82  79  68  37  52
 6/ 1/07  52,198  50  25  61  78  17  15  87  78  77  39  53
 6/30/07  52,769  42  18  56  81  17  11  92  77  74  33  61
 8/ 3/07  54,166  53  28  68  86  23  12  78  76  84  39  68
 8/31/07  57,432  57  21  72  98  18   7  69  75  90  40  79
 9/ 7/07          62   9  76  90  20   2  74  88  91   3  85
 9/14/07  57,734  63  11  77  96  25   5  89  83  93  10  81
 9/21/07  58,769  59  14  73  94  28   8  96  82  86  14  81
 9/28/07          58  17  74 103  26   9  90  81  87  19  87
10/ 6/07

All Westside

              2/9  3/1  4/6  5/4  6/1 6/30 8/03 8/31 9/28
Bel Air-H.Hls. 86   86   92  100  103   99   86   99  104
Bev.Ctr.-M.M.  64   57   48   53   54   65   64   67   75
Beverly Hills  67   70   56   46   53   49   59   61   62
B.H. P.O.      94   91   92   88   93   95   92   94   90
B'wood Vic.    35   36   31   39   38   41   42   46   50
Brentwood      67   71   73   75   72   68   86   77   89
Chev.-R.Pk.'8' 22   20   19   22   23   22   26   20   28
Culver City    35   25   20   28   33   36   41   48   49
Malibu        178  181  192  199  206  220  224  216  216
Malibu Beach   42   44   51   52   56   58   54   45   43
Marina Del Rey 20   20   20   27   29   28   26   27   26
Pac.Palisades  64   68   73   82   87   92   78   69   90
Palms-M.Vista  62   53   52   68   77   73   84   90   87
Playa Del Rey   7    8   17   20   21   20   21   24   29
Playa Vista     3    2    3    1    3    5    4    9    8
Santa Monica   50   50   49   53   61   57   68   72   74
Sunset-Hwd.H. 155  178  159  166  180  168  187  184  215
Topanga        39   41   36   43   45   54   49   54   55
Venice         64   64   57   68   70   72   69   68   68
W.H'wood Vic.  23   32   25   36   42   41   40   36   49
West L.A.      19   21   25   24   25   34   31   36   40
Westchester    53   46   47   45   53   52   62   72   82
W'wood-C.City  33   44   37   42   33   34   29   37   42
             ____ ____ ____ ____ ____ ____ ____ ____ ____
Total        1282 1308 1274 1377 1457 1483 1522 1551 1671
Month-month incr.   2%  -3%   8%   6%   2%   3%   2%   8%

Notes

LA County inventory via OC Renter. 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 DOM is for <$2M and count omits mobile homes. "New" is for previous month, or month-to-date for current partial month.

Cramer's response

Here's Cramer's great response (click here to play) to Realtors' objections to his "Don't you dare buy a home now. You will lose money." (from Housing Doom)

Biggest price reductions

Here's a list of all the price reductions of at least 15% on the listings I've been tracking. One can argue whether they were just over-priced to begin with, but they show at least some buyers are seriously dropping prices in the hopes of finally selling. Here they are, including when they were first listed (some are recent, some are old), with the biggest drop at the end.

15% - 202 14th, SM, 6 bed/4 bath, $3,858K to $3,288K, 5/24/07
16% - 557 12th, SM, 6/5.5, $4,195K to $3,538K, 6/4/07
16% - 3046 Mountain View, MV, 3/1.75, $1,099K to $925K, before 1/30/07
17% - 4366 Westlawn, MV, 7/4, $1,199K to $999K, 7/26/07
18% - 4021 Marcasel, MV, 3/1, $850K to $699K, 5/9/07
18% - 3740 Wasatch, MV, 4/3, $1,899K to $1,549K, 3/13/07
18% - 11959 Charnock, MV, 3/3, $2,250K to $1,845K, 4/29/07
26% - 813 Pier, SM, 1/1, $979K to $729K, 7/2/06
29% - 461 Puerto del Mar, PP, 3/2, $1,699K to $1,199K, 1/10/07
42% - 1834 16th, SM, 3/1, $1,280K to $745K, 4/4/07 (photo, looking south, showing how it backs up to Woodlawn Cemetery)

Case-Shiller update

Here's the S&P/Case-Shiller monthly index for Los Angeles, and their original ten-city composite, through July.

Los Angeles is now down 4.8% from the peak in September 2006. The national index is down 4.6% from its peak in June 2006. In contrast, Los Angeles fell 27% from the last peak in June 1990 to the low in March 1996.

We're still looking in the rear-view mirror, though; these sales closing in July preceded the mortgage turmoil from August on.

For more and bigger graphs see Paper Economy.

No sales and failed flips

This is historic. No houses sold this weekend in Santa Monica (last occurred on August 28th) ... or <$2M in Pacific Palisades ... or in Palms-Mar Vista. None.

A SM listing at 2019 Delaware appears to have expired after six months. A few prices were reduced. Four new listings in Mar Vista. And any open house on Sunday would have looked gorgeous after the rain!

Second, did you see the Curbed LA PriceSpotter item about the 3 bed / 2 bath house at 256 24th (corner of Georgina), asking $2,995K? Nice fixed-up traditional one-story house in Santa Monica, but $THREE MILLION?! I hope it does get a premium over lot value and doesn't get replaced with yet another mansion.

So what's the photo about (enlarge)? I realized that both 2338 Pier, 3 bed / 2 bath (red arrow, above; the contrast of the runway with its tiny neighboring houses is striking!), and 3224 Pearl, 2 bed / 1 bath, appear to be failed flips. Wonder why these sellers got cold feet, if anyone else will step up, and at what price?

Pier sold 3/9/07 for $860K, and is now asking $928K. "This 1920's courtyard Spanish offers an opportunity to rehab or rebuild new on apx 7,000 sq.ft. flat lot with view potential. Plans for remodel included. ..." WarChestSM picked up its flip neighbor at 2314 Pier last week.

Pearl sold 1/19/07 for $835K, and is now asking $949K. "Bring your builder or developer! Charming two bedroom, one bathroom California Bungalow on 6,000 sq ft lot. Well-maintained, updated, newer windows, refinished chocolate hardwood floors, large grassy yard, covered patio, ..."

'Freeway Close' is back!

One of my first posts back in February was about this 3 bed / 1 bath house at 3735 Globe Ave. in Mar Vista, then asking $725K. Its description included, "... very nice area, freeway close, ... a diamond in the rough." The listing ended in May.

Price reduced to $679K, here's its description now: "This light and bright home sits high on a knoll affording privacy. 3 bedrooms with 1 separated from the other 2, large bath, hardwood floors and inside laundry. The living room looks out to a private courtyard, perfect for entertaining. There is a 2 car detached garage and a fully fenced backyard with mature trees. The 405 expansion/sound wall is almost complete. ... VERY motivated Seller!!..."

REALTOR(R) PR

Just saw this press release on CNNMoney.com (emphasis added).

New Real Estate Blogs Give Consumers Access to Industry Experts

REALTOR.com(R) Features Posts By REALTORS(R) Sharing Expertise and Local Perspectives
September 20, 2007: 06:03 AM EST

LOS ANGELES, Sept. 20 /PRNewswire-FirstCall/ -- Consumers can now get the inside scoop on real estate from REALTORS through a new blog program recently launched by REALTOR.com, Featured Blog and "Let's Talk Real Estate!"

Created to help consumers sift through rhetoric and connect with industry professionals, the 6 million monthly visitors at REALTOR.com can now tap into blog posts that cover local neighborhood information, negotiating strategies, valuations, hot local real estate trends, and more. Consumers can also use the blogs at REALTOR.com as a search and evaluation tool to select an agent that best fits their needs as they read posts from numerous REALTORS versed in different areas of expertise.

"People across the nation are talking about real estate and the housing market," said REALTOR.com President, Errol Samuelson. "There's a tremendous amount of information available that can be confusing or not relevant to someone's specific interests or local area. The blog program on REALTOR.com connects consumers with experts so they can get information on specific industry trends, become familiar with a REALTOR in their area and gain a better understanding of their own local market." ...

An attempt to substitute REALTOR(R) "experts" for bubble blogger - not to mention finally MSM - "rhetoric"?

I just promised no real estate agent bashing, and then they do something like this.

Weekly inventory update

9/21 - Santa Monica and Mar Vista are down, Palisades is up. Highlights:

2937 Delaware and 420 7th, SM appear to be in escrow.
813 Pier, SM appears relisted with a $50K reduction to $729K.
718 Marine, SM reduced $20K to $799K.
1621 Ashland, SM (architectural) reduced $40K to $1,610K.
716 Marine, SM after 2 months reduced $10K to $1,629K.
704 15th, SM reduced $305K to $1,990K!
3660 Corinth, MV (could not perform) reduced $20K to $678K
3778 Colonial, MV reduced another $15K to $770K.
3512 Greenwood, MV appears finally in escrow at LP=$849K.
12566 Woodbine, MV (flipper in a hurry) was relisted, LP=$1,199K.

9/14 - Westside inventory is up again this week in all three areas, especially Pacific Palisades <$2M up 5, including 2 back on the market.

9/7 - Westside inventory is up for the week in all three areas.

(I'm starting a new format of these, with new short weekly posts rather than updating the long one each week. See notes and the last monthly update.)

       LA County  Santa Monica  Pacific Palisades  Mar Vista

                <$3M New Tot DOM<$2M New Tot DOM Tot New DOM

       _________ _______________ _______________ ___________





 1/30/06  27,732

 2/28/06  29,420

 3/31/06  31,819

 4/21/06  33,054  35

 5/ 1/06  34,032  38  33

 6/ 2/06  37,847  56  36      38

 6/30/06  42,317  66  40      49

 8/ 4/06  45,315  70  34      50

 9/ 1/06  46,781  71  27      59

10/ 6/06  47,369  83  25  98  71

11/ 3/06  45,780  80  20  91  77

12/ 1/06  43,103  65  18  72  96  39  20

 1/ 5/07  35,646  54   4  60 117  33   6  71  66

 2/ 2/07  36,715  38  15  45 124  29  16  61  71

 3/ 2/07  41,251  42  14  51 114  26  10  68  79  53  25  76

 4/ 6/07  42,857  41  23  49 107  18   8  73 103  52  52  50

 5/ 4/07  45,918  46  28  54  92  19   6  82  79  68  37  52

 6/ 1/07  52,198  50  25  61  78  17  15  87  78  77  39  53

 6/30/07  52,769  42  18  56  81  17  11  92  77  74  33  61

 8/ 3/07  54,166  53  28  68  86  23  12  78  76  84  39  68

 8/31/07  57,432  57  21  72  98  18   7  69  75  90  40  79

 9/ 7/07          62   9  76  90  20   2  74  88  91   3  85

 9/14/07  57,734  63  11  77  96  25   5  89  83  93  10  81

 9/21/07  58,769  59  14  73  94  28   8  96  82  86  14  81

 9/28/07

Four on Maple St.

There are four recent listings on Maple St., just north-east of Lincoln and Ocean Park Boulevards in Sunset Park (click to enlarge map). By the numbers (map is looking south; houses are all on the south side of the street, above the numbers):

1. 1108 Maple, 3 bed / 1.5 bath, asking $1,299K, listed 9/14/07.

"AN ABSOLUTELY CHARMING & IMMACULATE ... FIREPLACE IN LIVING ROOM, FORMAL DINING ROOM, UPDATED BATHS & A GOURMET KITCHEN WITH GRANITE COUNTERTOPS & STAINLESS STEEL APPLIANCES. ... BACKYARD FEATURES A SPACIOUS DECK, FRUIT TREES, GRASSY YARD AND A STONE PATIO. THIS HOME COULD EASILY BE EXPANDED...."

2. 1032 Maple, 3 bed / 2 bath, $1,149K [corrected], 8/10/07.

"Absolutely charming 2+1 California bungalow on 6,600 +/- sq ft lot. Original wood floors. Big, sunny, kitchen. Good-size rooms. Loads of windows. Small, separate guest house (may or may not be permitted). ... Bring your contractor-Possibilities galore. Main house & guest house are tenant occupied...."

3. 1028 Maple, 3 bed / 1.5 bath, $1,595K, 9/12/07 (previously listed 6/23-12/13/06 for $1,595K-$1,475K)

"Quintessential California living. Extensively remodeled w/ tasteful design & detailing. Sun porch entry leads to an open great room w/ vaulted ceilings & hardwood floors. Awesome kitchen w/ granite counters & commercial stainless appliances. ... French doors open to large entertaining deck & back yard oasis w/ swimmers pool, spa, grassy area & built in BBQ. Easy access to shopping & beach. ..."

4. 834 Maple, 3 bed / 2 bath, $2,100K, 8/24/07

"STUNNING SPANISH SHOWPLACE IN SUNSET PARK THAT HAS IT ALL! EXQUISITELY REMODELED 3BR+2BA HOME W/A GUEST HOUSE,POOL HOUSE & BEAUTY SALON/OFC. ... OPEN KITCHEN HIGHLIGHTS TOP OF THE LINE THERMADOR STAINLESS APPLIANCES. ... LEGAL GUESTHSE HAS A FULL KITCHEN & FULL BATH...."

Comments: All of these back up to the R3 zoning along Ocean Park Blvd., which could have future 3-story, 35 foot tall apartments. In addition, Number 4 is itself zoned R2 and among apartment buildings.

Second, how much is a fixed-up one-story Sunset Park house worth, even if "absolutely charming"? (Same phrase, different agents! And please stop SHOUTING.) There are getting to be a lot of this kind of listings in Not selling in Sunset Park.

Pacific Palisades price cuts

Three under-$2M houses in Pacific Palisades seem to be getting serious about price cuts to move not-selling houses. This could be a good trend for the Westside.

First is this 3 bed / 2 bath house at 461 Puerto del Mar, previously featured in "How Not to Price in Palisades": 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.

Another little step to $1,329K in July didn't do it. Off the market for a month, it's now back with a real price cut to $1,199K. That's a record 29% overall.

Second is 3 bed / 2 bath 16602 Pequeno Place, originally listed for $1,495K way back on 11/10/06, then down in three steps to $1,379K in May, and finally after over 300 days on market now to $1,299K, 13% overall.

Third is 3 bed / 1.75 bath 360 Aderno Way, above the Bel-Air Bay Club (but with no view), originally listed for $1,829K on 7/25/07, cut a second time now to $1,689K, 8% overall.

Santa Monica prices and income

I've been thinking about this since my Sept. 4th Modeling prices and income: could I refine price and income indices specific to Santa Monica? Here are the results so far.

I've written before about "lot value" prices north of Montana. I'm attempting to formalize that, assembling a series of low-end sale prices of standard 50x150 lots on 9th, 10th, 12th, and Euclid, north of Montana. (I omitted 7th, Lincoln, 11th, and 14th for their noisier traffic.) Some I got by looking for old sales for newer houses in eppraisal.com. Others are from agent fliers and (recent years) the County.

I'll post my list as a comment to save space here. If you have more to offer, please do! There's a big hole in the earlier 1990s, and I couldn't find the 1989 peak I though I recalled of over $900K.

The first conclusion is that this Santa Monica index tracks S&P/Case-Shiller for Los Angeles pretty well (scaled by eye), but rose a little higher around 1990 and hasn't turned down yet.Here I've added Los Angeles County and Santa Monica median houshold income from the Census (a different index, but similar slope to the per-capita income I used before). Santa Monica is a little higher, but still well below the housing curve.

So a second conclusion is there's little reason not to expect a similar fall in Santa Monica to the 40% +/- across Los Angeles I estimated before.

Anti-mansionization vs. prices?

I received an email a few days ago asking, "Have you heard about the mansionization ordinance that is being proposed by the city of LA? It could reduce the buildable area on a lot by 2/3! This will certainly reduce prices on tear-downs, and probably on other properties as well." He provided this LA City PDF link.

I replied that Santa Monica's 1999 anti-mansionization standards north of Montana reduced the first floor to 35% of lot area and second floor to 26% (50% for a one-story, and a sliding scale in-between).

In the link's Los Angeles minimum R1 lot example (5,000 SF), a one-story house could be 2,600 SF, and a two-story one could be 3,088 SF. In contrast, on the same lot size in Santa Monica the one-story could be 2,500 SF and two-story 3,050 SF, slightly less.

This 1998 cartoon by Steve Kim from a local paper illustrated that campaign to save charming smaller older houses from proliferating Monster Mansions. Even with the smaller standard new houses are big, though, and small houses have kept being bulldozed.

It certainly didn't stop price appreciation in Santa Monica, which makes me doubt it would affect Los Angeles that much either. Your thoughts?

New low-end north-of-Montana

Three new listings north of Montana were open today:

611 14th St., 3 bed / 1.75 bath, asking $2,198K, listed 8/22/07.
704 15th St., 2 bed / 1 bath, asking $2,295K, listed 9/7/07.
627 Euclid St., 3 bed / 2 bath, asking $2,298K, listed 9/7/07.

They're on the first block north of Montana on adjacent streets. That's good and bad: convenient walking distance but impacted with street parking. All were built 1922-24 on 50 x 150 lots, and should be good indicators of what's happening at the low end of north-of-Montana.

They differ: 704 15th is clearly a tear-down, with sagging floors and no interior fix-up. Comparable recent tear-downs include 507 Euclid, 3 bed / 2.5 bath, closed 6/13/07 for $2,050K, and 342 12th, 2 bed / 1.5 bath, closed 7/25/07 for $2,200K (demo permit posted).

I'd call 627 Euclid the best. The photo shows its back yard, with pool and spa on the left, and garage converted to guest room with bath and tiny kitchen on the right. The house itself is pleasantly fixed up, although its third claimed bedroom appears to have been an enclosed former side porch now a baby's room. Landscaping is lush, and Euclid is quiet.

In the middle is 611 14th. It's livable, fixed up with a lot of wood a few decades ago, but with minimal landscaping and on busy 14th Street.

Added: The neighboring 3 bed / 2 bath house at 703 14th was on the market nearly 8 months last year, finally closing 12/4/06 for $2,150K (5% off its original price). It is a very nicely fixed up and expanded 1-story Spanish.

WarChestSM suggests less demand for high-end houses will impact the low end. That's what happened in the early 1990s. If not developers, how much will potential buyers be impacted by higher rates and tighter qualification for jumbo loans, not to mention if they have to sell another house to buy here? I'll be watching these closely.

Not selling in Ocean Park

To complete the trio, here is the second mid-month list of everything in Ocean Park over 30 days on the market (8/19 previous). One added, two into escrow, a couple of price reductions, and overall a really stuck market here.

718 Marine St. (photo, left), 1 bed/1 bath, $819K LP, 5/25/07 LD (red. 6%)
724 Navy St., 2/1.5, $899K, 5/6/07 (red. 5%)
2614 2nd St., 3/1.75, $1,375K, 8/28/06 (red. 8%)
2613 5th St., 3/2, $1,495K, 6/1/07
213 Pacific #2/3, 3/2, $1,549K, 8/1/07 new
2912 2nd St., 2/1, $1,600K, 12/29/06 (incr. 10%!)
2327 5th St., 2/1, $1,600K, 7/13/07
716 Marine St. (photo, right), 4/2.75, $1,639K, 4/20/07 (red. 7%)
2404 2nd St., 2/2.75, $1,999K, 6/21/07 (red. 11%)
2219 Ocean Ave., 3/3, $3,300K, 9/20/05

Removed listings:
745 Navy St., 1/1, $849K, 5/10/07
2724 6th St., 2/1, $999K, 9/4/06

Not selling north of Montana

Here's the third mid-month everything north of Montana over 30 days on the market (8/16 previous). Two joined the list and four were removed, but a bunch of new listings may be here next month....

242 25th St., 2 bed/1.5 bath, $2,500K LP, 7/7/07 LD
848 25th St., 5/4.5, $3,175K, 7/30/07, (red. 5%) new
202 14th St. (photo), 6/4, $3,288, 5/24/07 (red 15%)
710 23rd St., 4/3, $3,298K, 7/13/07
446 23rd St., 5/4, $3,498K, 6/22/07
557 12th St., 6/5.5, $3,538K, 6/4/07 (red. 16%)
713 22nd St., 6/5.5, $3,750K, 6/7/07 (red. 6%)
239 14th St., 5/5.5, $3,998, 5/29/07 (red. 11%)
333 14th St., 5/6, $4,725K, 6/29/07 (red. 3%)
421 23rd St., 6/6.5, $5,000K, 5/24/07
1020 Palisades Beach Rd., 6/6, $10,550K, 7/9/07 new

Removed listings:
439 22nd St., 3/3, $2,398K, 6/25/07
1020 San Vicente Blvd., 5/3, $2,695K, 7/9/07
230 21st Pl., 6/6.5, $4,380K, 3/22/07
506 Palisades Ave., 4/4, $7,950K, 3/23/07

Weekly inventory update

9/14 - Westside inventory is up again this week in all three areas, especially Pacific Palisades <$2M up 5, including 2 back on the market.

9/7 - Westside inventory is up for the week in all three areas.

(I'm starting a new format of these, with new short weekly posts rather than updating the long one each week. See notes and the last monthly update.)

       LA County  Santa Monica  Pacific Palisades  Mar Vista
                <$3M New Tot DOM<$2M New Tot DOM Tot New DOM
       _________ _______________ _______________ ___________


 1/30/06  27,732 
 2/28/06  29,420 
 3/31/06  31,819
 4/21/06  33,054  35
 5/ 1/06  34,032  38  33
 6/ 2/06  37,847  56  36      38
 6/30/06  42,317  66  40      49
 8/ 4/06  45,315  70  34      50
 9/ 1/06  46,781  71  27      59
10/ 6/06  47,369  83  25  98  71
11/ 3/06  45,780  80  20  91  77
12/ 1/06  43,103  65  18  72  96  39  20
 1/ 5/07  35,646  54   4  60 117  33   6  71  66
 2/ 2/07  36,715  38  15  45 124  29  16  61  71
 3/ 2/07  41,251  42  14  51 114  26  10  68  79  53  25  76
 4/ 6/07  42,857  41  23  49 107  18   8  73 103  52  52  50
 5/ 4/07  45,918  46  28  54  92  19   6  82  79  68  37  52
 6/ 1/07  52,198  50  25  61  78  17  15  87  78  77  39  53
 6/30/07  52,769  42  18  56  81  17  11  92  77  74  33  61
 8/ 3/07  54,166  53  28  68  86  23  12  78  76  84  39  68
 8/31/07  57,432  57  21  72  98  18   7  69  75  90  40  79
 9/ 7/07          62   9  76  90  20   2  74  88  91   3  85
 9/14/07  57,734  63  11  78  96  25   5  89  83  93  10  81
 9/21/07   

LA Times on DataQuick today

It's striking to see the front page, top story in today's LA Times get's it right (enlarge map)! It's also more evidence that awareness will continue spreading from the MSM to the general public's buyers and sellers. Expect that to finally turn the Westside's small price increases down.

Home sales plunge in August

Home prices fell in most Southern California neighborhoods and the number of sales tumbled to a 15-year low for August -- driven down by tougher lending standards, mounting foreclosures and skittish buyers.

Sales for the month plunged 36% from a year earlier. What's more, 71% of the Southland's ZIP Codes showed price declines, according to figures released Wednesday by DataQuick Information Systems. The survey excluded areas with 14 or fewer sales. ...

In recent years, the housing market had been propped up by the widespread use of home loans with low introductory teaser rates -- allowing prices to outpace income growth, he said. But with those easy-credit loans all but gone, values are coming back into balance. ...

Nearly 9% of the homes sold last month were foreclosure properties, DataQuick reported, up from 2.2% a year earlier.

Most communities are seeing price declines, and the downtrend is strongest in outlying suburban areas such as in Riverside County, where affordable homes attracted droves of first-time buyers -- many of whom could not qualify for traditional fixed-rated mortgages.

Today, many of these same buyers who counted on rising home values can't refinance their loans and can't make the escalating payments on their adjustable-rate mortgages, forcing them into foreclosure and putting yet more properties on the market. ...

(emphasis added)

Also see the Times's editorial today on bailout plans: "A proposal to ease the pain of those caught in the sub-prime mess may not help the true victims".

Not selling in Sunset Park

Time for our third mid-month review of everything R-1 in Sunset Park over 30 days on the market (8/15 previous). Well-priced listings have sold within a few weeks; these, conversely, haven't. Eight listings joined the list, while five others are no longer available. Expect more next month.

1032 Maple St., 3 bed/2 bath, $1,149K LP, 8/10/07 LD new
2224 Navy St., 2/1, $1,150K, 6/5/07 (red. 8%)
1615 Marine St., 3/2, $1,150K, 8/13/07 new
2314 Pier Ave., 2/2, $1,195K, 7/9/07 (red. 4%)
2723 11th St., 2/2, $1,299K, 5/2/07 (red. 3%)
816 Wilson Pl., 3/2, $1,299K, 1/18/07 (red. 13%) back on mkt.
2005 Ashland Ave., 3/1.75, $1,399K, 8/2/07 (red. 7%) new
2407 31st St., 3/2.5, $1,425K, 7/9/07 (red. 3%)
1640 Bryn Mawr Ave., 3/2, $1,449K, 7/7/07 (red. 5%)
1101 Cedar St., 3/2, $1,475K, 4/11/07 (red. 7%)
1826 Pearl St., 4/1.75, $1,475K, 7/27/07 (red. 2%)
1327 Pacific St., 3/2, $1,600K, 7/11/07 back on mkt.
1621 Ashland Ave., 2/1.5, $1,650K, 8/13/07 (red. 1%) new
2222 Marine St., 4/4, $1,975K, 5/17/07
2343 29th St. (photo), 4/4.5, $1,975K, 8/2/07 new
2516 Cloverfield Blvd., 4/3, $2,395K, 7/15/07 (red. 8%) back on mkt.

Removed listings:
2416 21st St., 2 bed/1 bath, $1,050K, 7/13/07
2628 29th St., 4/3, $1,399K, 5/21/07
2202 Marine St., (plans for) 5/4, $1,495K, 4/8/07 (demo permit posted)
1732 Bryn Mawr Ave., 4/3, $1,795K, 6/18/07
2223 Marine St., 3/2.5, $1,999K, 5/14/07

Unusual pricing in Mar Vista

This 3 bed / 2 bath house at 3512 Greenwood Ave. in Mar Vista is asking $849K this week. Next week it'll be $10K less. That's what's happened about every week since it was listed July 25th for $919K.

I can appreciate the theory from Econ 101, drop your price in increments until you just reach the demand curve. Unless you've already bored potential buyers by being overpriced with inadequate reductions, not to mention chasing the falling market. We'll see.

For the record, its description includes, "Wonderful location [uh, 3rd house from Palms Blvd.]. 1 sty traditional home with open floor plan. Gourmet custom kitchen w/center island open onto the dining area(with built-in storage), that flows into the main living area. 3 bedrooms + 2 bas. Tile floors thru out main living area, ..." Leftover slate tiles used on the front, below the vinyl siding?

August DataQuick plunge

Here are the August Los Angeles County numbers from DataQuick, to complement our Westside zip codes. I've labeled the previous two Augusts, and shaded the busy-season second quarters.

It has the same effect as the local chart: far below recent Augusts, in the vicinity of February lows. Also see Calculated Risk for excerpts.

Ashland "architectural"

This 2 bed / 1.5 bath house at 1621 Ashland, asking $1,650K, has been on the market about a month.

"REDUCED [a whole $25K]! ARCHITECTURAL RETREAT IN THE HEART OF SUNSET PARK, SANTA MONICA. STUNNING 2-BEDROOM, 1.5 BATHS, WITH INDOOR TO OUTDOOR FLOW [as opposed to the outdoors flowing in?]. UPDATED KITCHEN, YELLOW POLISHED WOOD CABINETS WITH CEMENT COUNTERTOPS, MODERN APPLIANCES AND WOODEN FLOORS THROUGHOUT. LARGE AND EXTREMELY PEACEFUL BACKYARD [between jets taking off]. WALK TO MAIN ST SHOPPING [1.2 miles], MINUTES FROM BEACH AND WITHIN THE SM SCHOOL DISTRICT...."

Note the repetition of architectural forms in this composition, the strong horizontal and vertical elements of the front canopy, the for-sale sign, and the high-voltage power pole and its cross-arms on the back alley. And is this an "architectural" thing, using all caps, or just poor form of a real estate agent "shouting"?

A close comp would be 1721 Pier, 2 bed / 1.25 bath, sold 7/29/05 for $1,208K and again 5/25/07 for $1,300K, only $350K less.

"Buyers could not perform"

"Back on the market, buyer's could not perform [sic]. Great Opportunity to Build new Home. Deep lot, build a 2-story home with views to the ocean. Great School District. Don't miss this great opportunity. House comes with approved plans for a 2 story, 3200 square foot, 5 bedroom home...."

Expect a lot more of these. This happens to be a 3 bed / 1 bath house at 3660 Corinth Ave., Mar Vista, asking $699K. Was it the reality of "views to the ocean" from two blocks west of the 405 or lack of financing that caused this buyer's inability to perform?

August sales plunge

JBR asked, "'The volume of sales in santa monica is up roughly 50% from the year-ago quarter, according to actual real estate/assessor/title and deed reports.' Are they correct, or can this be factually refuted?"

Remember how last month (July numbers) I used Melissa Data numbers for Santa Monica zip codes 90402 and 90405, and Mar Vista 90066, to create a Westside composite of # Sales and Weighted Average Price?

Until DataQuick's numbers come out for August, I've updated these three zip codes of home sales from Melissa Data on the graph above. Total number sold plunged in half, from 67 in August 2006 to 34 this August, led by north-of-Montana 90402, 6 falling to 2.

On the assertion about "the quarter", adding Santa Monica 90402 and 90405 I find 2Q fell from 108 in 2006 to 89 in 2007, and the first two months of 3Q flat at 43. No idea where up 50% came from!

Weekly inventory update

9/7 - Westside inventory is up for the week in all three areas.

For some very sobering context be sure to see Dr. Housing Bubble's History repeating in Florida and Lessons from the Roaring 20s. and Charles Hugh Smith's The Big One Just Hit.

(I'm starting a new format of these, with new short weekly posts rather than updating the long one each week. See notes and the last monthly update.)

       LA County  Santa Monica  Pacific Palisades  Mar Vista
                <$3M New Tot DOM<$2M New Tot DOM Tot New DOM
       _________ _______________ _______________ ___________


 1/30/06  27,732 
 2/28/06  29,420 
 3/31/06  31,819
 4/21/06  33,054  35
 5/ 1/06  34,032  38  33
 6/ 2/06  37,847  56  36      38
 6/30/06  42,317  66  40      49
 8/ 4/06  45,315  70  34      50
 9/ 1/06  46,781  71  27      59
10/ 6/06  47,369  83  25  98  71
11/ 3/06  45,780  80  20  91  77
12/ 1/06  43,103  65  18  72  96  39  20
 1/ 5/07  35,646  54   4  60 117  33   6  71  66
 2/ 2/07  36,715  38  15  45 124  29  16  61  71
 3/ 2/07  41,251  42  14  51 114  26  10  68  79  53  25  76
 4/ 6/07  42,857  41  23  49 107  18   8  73 103  52  52  50
 5/ 4/07  45,918  46  28  54  92  19   6  82  79  68  37  52
 6/ 1/07  52,198  50  25  61  78  17  15  87  78  77  39  53
 6/30/07  52,769  42  18  56  81  17  11  92  77  74  33  61
 8/ 3/07  54,166  53  28  68  86  23  12  78  76  84  39  68
 8/31/07  57,432  57  21  72  98  18   7  69  75  90  40  79
 9/ 7/07          61   9  75  90  20   2  74  88  91   3  85
 9/14/07   

Ancient Palisades

Heading up the coast, how about this 3 bed / 2 bath Pacific Palisades house at 17833 Porto Marina Way, asking $1,795K, first place at 329 days in the Under $2M Division of the Ancient Listings of Pacific Palisades. Originally listed for $1,895K, it was reduced in June, and has fallen out of escrow twice, in June and August.

"With its broad sunset vistas across the Santa Monica Bay, and whitewater view of Will Rogers State Beach directly below, it is easy to understand why the artists in residence lived their lives here. No grand pretense, but rather a daily relationship with nature and the invigorating ocean climate. And who but artists would purchase an adjacent lot just to keep a garden? The lot is a separately deeded parcel, & is included in the price. The entire package is a great value for ocean view property...."

Apparently the "daily relationship with nature" includes going outside up the stairs to the master bedroom. Too arty for current Palisades buyers? Nice view though; I took this photo from a little farther up Porto Marina.

Lowest-priced SM

Back to houses. I've noted that well-priced listings still sell fast, even as others sit and sit. This new 2 bed / 1 bath listing is at 2937 Delaware Ave. (red arrow above; tree-lined Delaware is between the freeway and Verizon). It's asking $720K, the lowest-priced house in a single-family Santa Monica neighborhood, and well-priced compared with its comps:

2961 Delaware, 2/1, sold 6/14/07 for $660K
3208 Urban, 2/1, in escrow 7/07, asked $700K
1912 Warwick, 3/1, sold 6/16/06 for $765K
3008 Delaware, 2/1, sold 4/7/06 for $769K
3345 Virginia, 3/1, sold 7/18/07 for $799K
3344 Virginia, 2/2.5, sold 3/30/07 for $825K
1817 Warwick, 3/1, off-market 6/07, asked $865K
3011 Virginia, 3/1.75, in escrow 8/6, asked $949K

"Charming traditional 2 bedroom, 1 bath on a quiet tree-lined street. Hardwood floors, updated kitchen with gas cooktop & electric oven. Newer roof, copper plumbing, ceiling fans, central heat. Avocado, apricot, plum, fig, persimmon, peach, lemon, and two orange trees. McKinely Elementary School & Lincoln Middle School; Buyers to verify with school district. Fireplace in living room is decorative only. No showings before September 11 caravan...."

Modelling prices and income

I've been thinking about this since my 8/21 post, "Return to historic costs/income", attempting to better measure the idea of house prices returning to their historic relationship with income.

The blue line above is the S&P/Case-Shiller price index for Los Angeles, from 1987 through the first half of 2007. I extended it back to 1975 with the similar OFHEO data for Los Angeles. For income I used the BEA per-capita personal income for Los Angeles (magenta line, numbers in 1,000s). Its linear trend continues into the future.

If the blue line falls at the same rate as it's fallen so far, it would fall over 40% before converging on the income line. Considering its huge rise, that doesn't seem unreasonably more than its 26% fall in the 1990s.But income alone doesn't cover buyers' ability to pay. Next step was to add average mortgage interest rates, above, from the Federal Housing Finance Board. It shows the spike above 15% in the early 1980s. But it doesn't appear to show the teaser rates used to qualify buyers the last few years. I've presumed rates will return to a longer-term 7.9% average, the average of 1975-2007, but omitting the 1979-86 period over 10%.Above I plotted a new income line (orange) adjusted by percent above or below the 7.9% average, to see how it tracked price increases. It's better, but could fit the 1980s better and doesn't fully reflect the last few years' teaser rates.Finally, I tried to add a "wealth effect", to represent the value of building or falling equity, lagged a year (yellow line above).

This is an experiment and work in process, that deserves a bunch of disclaimers and requests for feedback! You may have noted that the price index (left axis) is arbitrarily matched to income (right axis). There may be better data to use for income and interest rates. I presumed future interest rates will not remain below past averages. And will prices fall faster or slower? But the general pattern seems reasonable.

"Bailout? No way"

Excellent op-ed "Bailout? No way"in the LA Times today by LA Land blogger Peter Viles!

Here's what you do with it to make a difference: Send a copy with your comments to your senators (e.g. Dianne Feinstein and Barbara Boxer), congressmember, President Bush, presidential candidates like Hillary Clinton, Barack Obama, John Edwards, Bill Richardson, and Chris Dodd, and other prominent senators on this issue (see "Mortage mess echoes in Congress" in today's LA Times) like Charles Schumer. Hey, how about your favorite talk-radio host while you're at it? Show them a lot of people care. Get noticed!

Here are some highlights of Pete's op-ed (emphasis added):

President Bush announced his intention last week to reach out a hand to the "many Americans" who "may have been misled" in the sub-prime mortgage market. Two days earlier, presidential hopeful Barack Obama called for fining "predatory lenders" to bail out "hoodwinked" families. ... The news media report on families losing homes, disabled owners facing foreclosure and newlyweds being tossed into the street. ...

[But] According to a recent Fox News poll conducted by Opinion Dynamics, there's 70% opposition to a taxpayer sub-prime bailout.

"It is amazing all the sympathy we are seeing from politicians for people who knowingly took out loans they couldn't afford, often lying on their applications to do so," commenter "srl" posted at the LA Land blog I write for the Los Angeles Times. "Usually," added "Brian," "when the facts are examined closely, we find people who ... took a chance that house prices would keep rising, that they could remodel the kitchen, buy the truck and the motorcycle, put it on the credit card and pile that debt into the next refinance..." ...

And yet now, just as the market is starting to cool and possibly provide buying opportunities, many of these folks -- especially those patiently waiting out the bubble -- find themselves crashing a pity party for the very buyers who priced them out of the market. They are furious that the government appears interested in supporting overextended borrowers and high prices, and they cite data to support their position. ... No wonder LA Land commenter "jbunniii" writes: "No bailout is needed -- most of the borrowers in trouble didn't put any money down in the first place, so they will lose nothing by walking away." ...

Politicians, by rushing to the defense of recent home buyers, give the appearance of endorsing price stability at historically high levels. This makes little sense in Los Angeles, which ranks among the least affordable markets in America when housing prices are matched against income levels. Why should government favor today's owners over tomorrow's buyers?

"I make nearly 100K and cannot afford a home in California," "JK" wrote on LA Land. "Using my tax dollars to help irresponsible people keep homes they can't afford, while at the same time keeping me out of the market, will be enough to send me over the edge." ...

1996 north-of-Montana prices

I ran across a list of prices of sold houses north of Montana in the second half of 1996, about the bottom of the last cycle (shown on the Los Angeles S&P/Case-Shiller graph, above, from Paper Economy).

"Lot value" for a typical 50x150 lot was a little over $600K. Jump into the time machine, here they are:

2222 San Vicente, $550K, 11/96, fixer traditional
241 Adelaide, $585K, 8/96, lot value ocean and canyon views
525 11th, $605K, 12/96, 3 bed 1750 SF, orig. cond. fixer
333 12th, $610K, 9/96, 3 bed 1500 SF orig. cond. traditional
440 17th, $638K, 10/96, 3 bed 1550 SF orig. cond. Spanish
404 12th, $640K, 10/96, 2 bed 1450 SF traditional
344 Euclid, $650K, 9/96, 3 bed 1873 SF remodelled Spanish
239 25th, $650K, 10/96, trad. fixer
558 10th, $655K, 8/96, 2 bed 1879 SF orig. cond. traditional
707 16th, $675K, 11/96, 3 bed 2500 SF traditional
1428 San Vicente, $679K, 8/96, 3 bed remodelled Spanish
513 Euclid, $697K, 11/96, 3 bed 1800 SF Tudor
514 25th, $700K, 8/96, 3 bed 2300 SF remodelled traditional
528 25th, $712K, 9/96, 4 bed 2300 SF traditional
326 9th, $715K, 11/96, 3 bed 1656 SF Spanish, rem. kitchen
214 15th, $740K, 12/96, 3 bed 2000 SF orig. cond. Spanish
418 24th, $822K, 10/96, 2 bed 1992 SF remodelled Spanish
334 14th, $850K, 10/96, 4 bed 2260 SF 2-story Tudor
514 Alta, $855K, 10/96, 3 bed 1800 SF 2-story trad. 60x175 lot
715 17th, $890K, 11/96, 3 bed 2155 SF remodelled Spanish
1030 San Vicente, $926K, 8/96, 5 bed 5380 SF 2-story Medit.
528 10th, $950K, 10/96, 4 bed 3000 SF new architectural
326 25th, $975K, 10/96, 8 bed 2-story remodelled Spanish
1021 Georgina, $1,010K, 11/96, renovated 2-story 60x173 lot
318 24th, $1,050K, 9/96, 4 bed 2884 SF 2-story remodelled trad.
477 21st Pl., $1,058K, 11/96, 4 bed 4200 SF remodelled Spanish
709 17th, $1,138K, 9/96, 3 bed remodelled 2-story Spanish
322 19th, $1,185K, 4 bed 4000 SF 2-story restored Spanish
2201 Alta, $1,195K, 8/96, 5 bed 2-story updated Cape Cod
409 Lincoln, $1,215K, 11/96, 5 bed 3600 SF 2-story architectural
1525 Georgina, $1,250K, 8/96, 5 bed 2-story traditional
422 22nd, $1,275K, 9/96, 5 bed 4682 SF new 2-story architectural
1321 Brentwood Terr., $1,295K, 9/96, 4 bed recent 2-story Medit.
1133 Georgina, $1,325K, 9/96, 14,620 SF lot fixer 2-story Spanish
244 16th, $1,395K, 10/96, 3 bed 2-story restored Spanish
217 20th, $1,450K, 12/96, 4 bed 4268 2-story Mediterranean
704 Palisades Bch. Rd., $1,450K, 9/96, 5 bed 3400 SF updated
201 Marguerita, $1,485K, 8/96, 4 bed 4665 SF 2-story '80s trad.
502 12th, $1,505K, 8/96, 5 bed new Spanish (Ramirez' first)
2159 La Mesa, $2,263K, 10/96, 4 bed 5107 SF house, 29,600 SF lot overlooking Riviera golf course
707 Palisades Bch. Rd., $3,000K, 9/96, 6 bed 8177 SF John Byers on beach

Bush details

The LA Times' "For some, a chance to refinance despite default" by Kathy M. Kristof today gives useful detail and supports the idea that Bush's proposal wouldn't have much effect after all the qualifications, especially here in California.

Who qualifies for these loans? ...

* Even if you're in default today, you must have had a history of on-time payments until your so-called teaser rate expired and the interest on your adjustable-rate mortgage reset.

* The interest rate must have been scheduled to reset between June 2005 and December 2009.

* You must have 3% cash or equity in your home.

* You have to show a history of sustained employment.

* You have to prove you will have sufficient income to make the FHA Secure loan payment.

What's the maximum loan amount under the program?

FHA limits vary by county. In most major California cities, the maximum FHA loan for a single-family home is $362,790.

What if my mortgage is more than that?

An FHA proposal would hike the loan limit to $417,000. The proposal had been stalled in Congress but appears to be gaining steam and may be at the top of the priority list when lawmakers return from recess.

What about the interest rate?

An FHA loan is only modestly more costly than an ordinary loan, said Jeff Lazerson, a Laguna Niguel mortgage broker. Current rates for a traditional, so-called conforming loan averaged 6.09% on Friday, according to BankRate.com.

If you have a small down payment, lenders charge more -- closer to 6.5%.

The FHA also charges a 1.5% upfront insurance premium, plus 0.5% a year, which could bring the total annual loan rate to 7% or higher. On a $350,000 loan, that would mean a $2,329 monthly payment.

That's not cheap, to be sure, but many sub-prime borrowers are paying 10% or more, Lazerson said. At 10%, the monthly payment on a $350,000 mortgage would be $3,071.

"Big bailout might be inevitable" by Tom Petruno is more disturbing.