Year-end inventory update

Typical for December, Santa Monica inventory <$3M is down 19% for the month, Pacific Palisades <$2M is down 17%, and Palms-Mar Vista is down 18%. Total Westside inventory is down 17% to 1,329.

Year-to-year Santa Santa Monica inventory <$3M is down 22%, and Pacific Palisades <$2M is down 42%. Palms-Mar Vista was up 13%, and total Westside up 4% from early February 2007 when I started tracking those.

A reason for the decreases is fewer new listings. New listings in Santa Monica <$3M Apr-Dec 2006 were 237, but Apr-Dec 2007 were only 176, a 26% drop. Note also how stale the unsold listings have become (DOM column).

Well, that wraps 2007.

       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
 9/28/07  58,973  59  17  74 103  26   9  90  81  87  20  87
11/ 2/07  58,731  62  19  81 120  29   7 106  77  98  35  88
11/30/07  59,108  52  14  67 136  23  11  88  94  96  23  96
12/31/07  53,475  42   5  53 148  19   2  73 119  79  13 116

All Westside

             2/9     4/6     6/1     8/3    9/28   11/30 
                 3/1     5/4    6/30    8/31    11/2   12/31
Bel Air-H.Hls.86  86  92 100 103  99  86  99 104 104  86  64
Bev.Ctr.-M.M. 64  57  48  53  54  65  64  67  75  75  73  59
Beverly Hills 67  70  56  46  53  49  59  61  62  58  65  56
B.H. P.O.     94  91  92  88  93  95  92  94  90  93  85  75
B'wood Vic.   35  36  31  39  38  41  42  46  50  59  57  48
Brentwood     67  71  73  75  72  68  86  77  89  96  90  65
Chev.-R.Pk.'8'22  20  19  22  23  22  26  20  28  23  27  20
Culver City   35  25  20  28  33  36  41  48  49  46  39  32
Malibu       178 181 192 199 206 220 224 216 216 209 209 181
Malibu Beach  42  44  51  52  56  58  54  45  43  45  43  41
Marina Del Rey20  20  20  27  29  28  26  27  26  22  19  23
Pac.Palisades 64  68  73  82  87  92  78  69  90 106  88  73
Palms-M.Vista 62  53  52  68  77  73  84  90  87  98  96  79
Playa Del Rey  7   8  17  20  21  20  21  24  29  27  26  25
Playa Vista    3   2   3   1   3   5   4   9   8  10   7   5
Santa Monica  50  50  49  53  61  57  68  72  74  81  67  53
Sunset-Hwd.H.155 178 159 166 180 168 187 184 215 226 214 183
Topanga       39  41  36  43  45  54  49  54  55  52  49  39
Venice        64  64  57  68  70  72  69  68  68  84  75  54
W.H'wood Vic. 23  32  25  36  42  41  40  36  49  52  49  41
West L.A.     19  21  25  24  25  34  31  36  40  37  30  21
Westchester   53  46  47  45  53  52  62  72  82  78  73  68
W'wood-C.City 33  44  37  42  33  34  29  37  42  50  33  24
            ____ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___
Total       1282    1274    1457    1522    1671    1600
                1308    1377    1483    1551    1731    1329
Month-month incr. 2% -3%  8%  6%  2%  3%  2%  8%  4% -8%-17%

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.

San Diego story

This story is third-hand but I believe reliable, and shows what can happen in a downturn. San Diego now, Los Angeles in 2008?

The subject is a small ~1,000 SF high-ceiling loft condo in a new high-rise building a couple of blocks from the baseball stadium in downtown San Diego. (Photo is for general location only; I doubt it shows this building.)

It originally expected to be priced at $800K, but with the San Diego downturn was asking $550K. The buyer in this story offered a rediculous low-ball $400K - half its target price. The sales person came back with an "ok", and he bought it. But even at that price, after adding a large HOA fee and property taxes, it would not rent at positive cash flow.

Closer to home, today's LA Times featured three housing bubble articles: front page lead "Housing crisis takes bite out of states, cities"; "How a bank fell victim to loan fraud"; and "Seattle clings to housing peak, but some wonder if it can last". And yesterday's Times Real Estate featured Nicholas Cage who took his Bel-Air mansion off the market, no buyers at $35M.

Coming tonight/tomorrow: year-end inventory wrapup, and a look ahead to 2008.

Great links

Today's Market Ticker, "The Year In Review And a Look Ahead for 2008" is a must-read. Long, but says it very well.

On the lighter side, see Burbed.com's "Redwood City house that needs to be tinted due to termite damage" and "SFGate: Bay Area is too Expensive. ...".

The former documents a house listed in July as "BEST VALUE IN RWC!!!! IMMACULATE HOME, RECENTLY REMODELED! CHERRY KITCHEN CAB, HARDWOOD FLR ENTRY, LAUNDRY IN BACK, ..." for $515K.

It's now "3rd bed 2nd bath no permits, roof needs to be replaced, lots of termite damage, needs to be tinted. lots of code violations.laundry in back no permits. ..." for $399K. Whew, talk about a failed act of attempted flipping!

The second documents a Daly City listing's fall from $850K in January to $639.9K in August to $514.9K in December. This could be a taste of the Westside in 2008, when we too are no longer so special.

Weekly inventory update

12/28 - SM <$3M is down 2%, PP <$2M is down 5%, and MV is down 4%.

12/21 - SM <$3M is down 9%, PP <$2M is down 17%, but MV is flat.

12/14 - SM <$3M is down 6%, PP <$2M is down 4%, and MV is down 8%. Surprisingly there are a couple of new listings.

I've also been intermittently tracking Westwood-Century City <$2M (17 on 11/30, 16 on 12/14) and Brentwood <$2M (25 on 11/23 and 26 on 12/14).

12/7 - Not a lot happening heading into December. SM <$3M is down 4%, PP <$2M is up 4%, and MV is down 5%. No new listings in SM so far this month.

       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
 9/28/07  58,973  59  17  74 103  26   9  90  81  87  20  87
11/ 2/07  58,731  62  19  81 120  29   7 106  77  98  35  88
11/30/07  59,108  52  14  67 136  24  11  88  94  96  23  96
12/ 7/07          50   0  65 139  25   2  87  97  90   4  99
12/14/07          47   2  60 146  24   2  86 103  83  10  98
12/21/07  55,803  43   3  56 144  20   2  74 110  83  12 105
12/28/07          42   4  53 151  19   2  73 116  80  13 113

EXTRA! LA Times discovers Option-ARMs!

Good to see today's LA Times discovered Option-ARM loans, and it's a good piece. But come on, once again the bubble blogs have known about their coming impact for a loooong time. My October bookmark was merely an update. The Times begins:

Thought the mortgage meltdown was just a sub-prime affair? Think again. There's another time bomb waiting to explode, experts say: risky loans made to people with good credit.

So-called pay-option adjustable-rate mortgages, or option ARMs, were the easiest and most profitable home loans for lenders and brokers to make for much of this decade. Last year, they accounted for about 9% of the volume of all mortgages made in the U.S. and were especially popular in California, Florida and Nevada -- states where home prices rose the most during the housing boom and are now falling most sharply.

An option ARM loan gives a borrower the option of paying less than the interest due, causing the loan balance to rise. If it rises too much -- say, by 10% or 15% -- the opportunity to make a low payment vanishes and the required payment skyrockets.

That scenario is becoming increasingly common. In fact, more than 75% of option ARM borrowers have been making only the minimum payments, analysts at Standard & Poor's Corp. said last week. As a result, the delinquency rate on option ARMs already is jumping and is likely to keep rising sharply, S&P said. Because option ARMS went only to "prime" borrowers, they aren't eligible for a much-publicized interest rate freeze that is part of a White House-backed plan to stem sub-prime foreclosures.

One upshot could be foreclosures growing more common in affluent neighborhoods. ...

"The only reason for taking [an option ARM] was to use the minimum payment to get more house or a bigger refi than you otherwise could afford," said Guy Cecala, editor of Inside Mortgage Finance.

The familiar chart above shows the coming bulge in resets through 2011.

Also on page 4 was the news that:

Citigroup Inc., JPMorgan Chase & Co. and Merrill Lynch & Co. may write down an additional $34 billion in bonds linked to the collapse of the sub-prime mortgage market, analysts at rival Goldman Sachs Group Inc. say in a new report.

Once again, industry reports that the problems are behind them are premature. So far, the bears have been calling this a lot better than the bulls.

October Case-Shiller

The October S&P/Case-Shiller data were released yesterday. The drop is getting steeper, now including August's mortgage meltdown. Los Angeles (includes Orange County) is now down 8.9% from its peak in September 2006 - 1.9% from September, which was 1.2% from August. The national index is down 7.3% from its peak in June 2006 - 1.3% from September, which was .7% from August. See Calculated Risk yesterday for more discussion.

Happy Holidays!

Then there's the LA Times Christmas Eve heart-tugger, front of the California section, "Foreclosure on Christmas" in Boyle Heights.

It has all the bubble elements. A 53-year-old grandmother, a long-time renter, was persuaded to buy with two loans at the peak of the market when a "a well-dressed man knocked on their door one day", a real estate agent. "'We were so happy. We never had our own house,'" Maria Debora said."

Weekly inventory update

12/21 - SM <$3M is down 9%, PP <$2M is down 17%, but MV is flat.

12/14 - SM <$3M is down 6%, PP <$2M is down 4%, and MV is down 8%. Surprisingly there are a couple of new listings.

I've also been intermittently tracking Westwood-Century City <$2M (17 on 11/30, 16 on 12/14) and Brentwood <$2M (25 on 11/23 and 26 on 12/14).

12/7 - Not a lot happening heading into December. SM <$3M is down 4%, PP <$2M is up 4%, and MV is down 5%. No new listings in SM so far this month.

       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
 9/28/07  58,973  59  17  74 103  26   9  90  81  87  20  87
11/ 2/07  58,731  62  19  81 120  29   7 106  77  98  35  88
11/30/07  59,108  52  14  67 136  24  11  88  94  96  23  96
12/ 7/07          50   0  65 139  25   2  87  97  90   4  99
12/14/07          47   2  60 146  24   2  86 103  83  10  98
12/21/07  55,803  43   3  56 144  20   2  74 110  83  12 105
12/28/07     

Links

I expect most of you also read Santa Monica Distress Monitor. If not, be sure to see his now-4-part series on The 90402, which seems to be everyone's favorite subject here.

Second, I watched this video of economist Paul Krugman last night, via Calculated Risk. It's an excellent lecture that summarizes what went wrong to get us to here in the housing bubble. Here's also his NY Times blog.

DataQuick November

DataQuick's November stats show more of the same. Los Angeles County (above) volume for November was down 46% from November 2006. Median price was essentially flat at $499K from October's $500K, and down 3% from October 2006. Note the graph above highlights in yellow the second quarter of each year, historically the highest volume and largest price rise. Below are median prices for four southern California counties.

Prices must fall

Today's LA Times says it succinctly: prices must fall for the market to recover. That needs to become the reply to NAR spin and narrow blame on subprime.

James Baker, a Lancaster agent, said years of unrealistic financing, such as loans with artificially low "teaser" rates, led to wild price inflation. For the market to recover, "the median price has to come down to match incomes," he said.

Edward Leamer, director of the UCLA Anderson Forecast, agrees with that assessment. The White House plan "focuses on a sliver of individuals at risk of foreclosure but ignores the bigger picture," he said.

"Californians need to get interested in buying again," Leamer said. That won't happen, he said, until prices inflated by the shaky loans of recent years fall further.

Barrington flopper

This little 640 SF 1923 2 bed / 2 bath house at 1120 S. Barrington Ave., second block north of Wilshire in Brentwood, is for sale asking $695K. X above marks it; it's a skinny 2,250 SF lot between the other houses (enlarge map). The listing says it (emphasis added):

"Back on market. Least expensive Brentwood home. Rare, development opportunity in Prime Brentood (90049) on R4 lot! Perfect for first time buyer or buillder. Walk to shops. Build TWO with LA’s new “small lot subdivision ordinance.” Lot is already split. This is a key lot, and seller on either side could decide to sell. Seller decided not to build at this time. Seller is Broker. Drive by only, there is no sign. Subject to a bank approval...."

It last sold 7/8/2005 for $772.5K. Lot of things you could do with this lot, but this seller is bailing, hoping the lender will accept a nearly-$100K haircut. Hmmm.

Not selling in Ocean Park

To complete the trio, here is the fifth mid-month list of single-family houses in Ocean Park over 30 days on the market (11/14 previous). Five were added, three removed.

651 Navy St., 1 bed/1 bath, $679K LP, 10/25/07 LD new
664 Marine St., 2/1, $749K, 10/18/07, new
724 Navy St., 2/1.5, $849K, 5/6/07 (red. 11%)
2724 6th St., 2/1, $999K, 9/4/06 (red. 16%) new
2613 5th St., 3/2, $1,195K, 6/1/07 (red. 20%)
2614 2nd St., 3/1.75, $1,339K, 8/28/06 (red. 10%)
2327 5th St., 2/1, $1,499K, 7/13/07 (red. 6%)
213 Pacific, 3/2, $1,499K, 8/1/07 (red. 3%)
2912 2nd St., 2/1, $1,600K, 12/29/06 (incr. 10%!)
2629 6th St., 3/2, $1,750K, 10/3/07 (incr. 3%)
419 Hill St., 4/3, $1,880K, 10/8/07
654 Ashland Ave., 3/2, $2,295K, 11/8/07 new
150 Fraser St., 2/2, $2,395K, 10/4/07
2806 2nd St., 3/3, $2,695K, 10/3/07
2219 Ocean Ave., 3/3, $3,300K, 9/20/05
2606 Highland Ave., 2/2.75, $3,475K, 11/9/07, new

Removed listings:
718 Marine St., 1/1, $799K LP, 5/25/07 LD (red. 8%)
716 Marine St., 4/2.75, $1,589K, 4/20/07 (red. 10%)
2404 2nd St., 2/2.75, $1,875K, 6/21/07 (red. 17%)

Not selling in Sunset Park

Here's our sixth mid-month review of everything R-1 in Sunset Park over 30 days on the market (11/14 previous). Well-priced listings have sold within a few weeks; these haven't. One listing joined the list, while nine others are no longer available. Some may be expired (* below): when a listing disappears without "Backup Offer Accepted" status an even number of months from its listing date, one suspects.

2638 32nd St., 2 bed/1 bath, $865K LP, 6/6/07 LD (incr. 4%)
2338 Pier Ave., 3/2, $898K, 9/16/07 (red. 3%)
1717 Robson Ave., 2/1, $1,139K, 10/12/07 (red. 5%)
3118 17th St., 2/2, $1,149K, 9/7/07 (red. 11%)
1307 Marine St., 3/2, $1,195K, 11/6/07 new
926 Ozone St., 3/2.5, $1,199K, 7/29/07 (red. 15%)
2723 11th St., 2/2, $1,249K, 5/2/07 (red. 7%)
3041 Paula Dr., 5/4, $1,395K, 10/5/07, (red. 7%)
1702 Ashland Ave., 4/3.5, $1,399K, 10/3/07 (red. 4%)
1702 Cedar St., 3/2, $1,399K, 10/8/07 (red. 5%)
1640 Bryn Mawr Ave., 3/2, $1,449K, 7/7/07 (red. 5%)
1348 Hill St., 3/2, $1,539K, 9/17/07, (red. 4%)
1320 Pearl St., 2/1.75, $1,570K, 10/7/07
2222 Marine St., 4/4, $1,725K, 5/17/07 (red. 13%)
834 Maple St., 3/2, $1,879K, 8/24/07 (red. 11%)
2343 29th St. (photo), 4/4.5, $1,895K, 8/2/07 (red. 5%)

Removed listings:
1615 Marine St.*, 3/2, $985, 8/13/07 (red. 14%)
2432 21st St., 3/2, $1,149K, 10/10/07
2224 Navy St.*, 2/1, $1,150K, 6/5/07 (red. 8%)
2314 Pier Ave.*, 2/2, $1,195K, 7/9/07 (red. 4%)
2407 31st St.*, 3/2.5, $1,395K, 7/9/07 (red. 5%)
1101 Cedar St., 3/2, $1,399K, 4/11/07 (red. 11%)
1741 Maple St., 3/2, $1,590K, 10/14/07
1337 Ashland Ave., 3/2.75, $1,728K, 8/20/07 (red. 4%)
2516 Cloverfield Blvd.*, 4/3, $2,395K, 7/15/07 (red. 8%)

Not selling north of Montana

How's north of Montana doing as we head for the end of the year?

Here's the sixth mid-month list of everything north of Montana over 30 days on the market (11/14 previous). Four joined the list and four were removed.

476 26th St., 2 bed/2 bath, $1,950K LP, 11/7/07 LD new
754 23rd St., 4/3.5, $2,395K, 9/27/07
557 12th St., 6/5.5, $3,495K, 6/4/07 (red. 17%)
1628 Georgina Ave., 4/3, $3,550K, 10/25/07 new
317 Alta Ave., 5/3.5, $3,850K, 11/8/07 (red. 4%) new
310 22nd St., 5/5.5, $4,395K, 11/6/07 new
333 14th St., 5/6, $4,595K, 6/29/07 (red. 6%)
620 Alta Ave., 4/3.5, $5,395K, 10/11/07
1605 San Vicente Blvd. (photo), 6/7, $22,500K, 8/20/07

Removed listings:
704 15th St., 2/1, $1,990K, 8/22/07 (red. 13%)
710 23rd St., 4/3, $3,150K, 7/13/07 (red. 4%)
239 14th St., 5/5.5, $3,998K, 5/29/07 (red. 11%)
533 23rd St., 5/6, $4,790K, 9/25/07

Weekly inventory update

12/14 - SM <$3M is down 6%, PP <$2M is down 4%, and MV is down 8%. Surprisingly there are a couple of new listings.

I've also been intermittently tracking Westwood-Century City <$2M (17 on 11/30, 16 on 12/14) and Brentwood <$2M (25 on 11/23 and 26 on 12/14).

12/7 - Not a lot happening heading into December. SM <$3M is down 4%, PP <$2M is up 4%, and MV is down 5%. No new listings in SM so far this month.

       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
 9/28/07  58,973  59  17  74 103  26   9  90  81  87  20  87
11/ 2/07  58,731  62  19  81 120  29   7 106  77  98  35  88
11/30/07  59,108  52  14  67 136  24  11  88  94  96  23  96
12/ 7/07          50   0  65 139  25   2  87  97  90   4  99
12/14/07          47   2  60 146  24   2  86 103  83  10  98
12/21/07     

Really Ancient Listings

I've written before on the Westside's Ancient Listings - those that have managed to last for month after month unsold, despite an active 2007 market. I count from original listing, despite some relistings and a few off the market awhile but no sale recorded. Santa Monica has the oldest ones. Here's the top-ten countdown from Santa Monica, Pacific Palisades (<$2M), and Palms-Mar Vista:

325 days - 1931 22nd, SM, 3 bed/2 bath, $1,150K, originally $1,325K listed about 1/22/07
331 - 3436 S. Centinela, MV, 3/2, $949K, $999K on 1/16/07
349 - 2912 2nd, SM, 2/1, $1,600K, $1,449K about 12/29/06
354 - 3735 Globe, MV, 3/1, $659K, $725K on 12/24/06
398 - 16602 Pequeno Pl., PP, 3/2, $1,299K, $1,495K on 11/10/06
436 - 2629 6th, SM, 3/2, $1,750K, $1,699K on 10/3/06
465 - 2724 6th, SM, 2/1, $999K, $1,190K about 9/4/06
472 - 2614 2nd, SM, 3/1.75, $1,339K, $1,495K about 8/28/06
502 - 926 Ozone, SM, 3/2.5, $1,199K, $1,410K about 7/29/06
814 - 2219 Ocean, SM, 3/3, $3,300K, $3,300K on 9/20/05 (photo)

Year-end deals

Suppose you're looking for a year-end deal vs. waiting a couple of years for the market to decline. In tracking past sales I've noticed a range of sold prices for similar properties, and there's some history of closing a good price in the winter. If you can save $100-200K now on a property you like, you may feel less like waiting for a general decline.

One type is a stale listing, perhaps with a history of price reductions, heading toward winter with few buyers still shopping. An example is 1629 Wellesley Dr., 2 bed/2 bath, listed in May '06 for $1,300K, reduced three times, finally to $995K (23%) in October, and closed 11/21/06 for $985K.

Another is 450 Lincoln, 2 bed/2 bath, listed in July '06 for $2,195K, also reduced three times, finally to $1,749K (20%), and closed 11/6/06 for $1,605K.

Another type is a quick-sell listing in the off-season. An example is 1408 Hill St., listed in January '07 for $899K and closed fast on 2/20/07 for $896K. Although since torn down, its price was a big discount off most other sales on Hill Street.

So are there any interesting stale listings as we head toward the holidays?

At the low end of Santa Monica in a reasonable location (but a fixer on a 40-foot lot) there's 2638 32nd St. (photo), 2 bed/1 bath, listed 6/6/07 for $829K, incredibly increased to $865K earlier this month.

For other possibilities I'd look at Zip Realty, which you can sort by listing date. Some of their dates have been relisted, but our past features Biggest price reductions, Not selling north of Montana, Not selling in Sunset Park, and Not selling in Ocean Park have original dates and may be a useful starting point.

Me? There's really nothing out there now that I like, let alone at all close to a price I'd consider, so it looks like I'll keep waiting.

Flopper archives 2

Here's the second edition of Flopper Archives, updates on past acts of attempted flipping documented here.

Let's start with 724 Navy St. (above) from May 22, which has become a poster child here for flopping in Ocean Park.

It is a 2 bed/1.5 bath house on a 2,000 sq.ft. lot, second block west of Lincoln. Originally listed 5/6/07 for $949K, its latest LD is 9/29/07 and price $849K. Over 200 days on market, and managed to fail to sell in an active year.

Even 716 Marine one block over, new 2-story 4 bed/2.75 bath listed 4/20/07 for $1,759K, reduced to $1,589K, went Looking for Backup mid-November and off the market early December. Its neighbor at 718 Marine, 1 bed/1 bath, listed 5/25/07 for $869K, reduced to $799K, and was off the market late November. Did it sell too?

Another in Ocean Park that we featured July 2 is 2614 2nd St., corner of Ocean Park Blvd. It's a 3 bed/1.75 bath, listed August last year for $1,495K, off the market Dec-Feb, now with a listing date of 9/25/07 asking $1,339K. Unsold a year and a quarter.

Two recently covered long-time floppers left the market late November: 1101 Cedar St. (corner of 11th), listed 4/11/07 for $1,475K, last asking $1,399K, and 2320 Idaho Ave. listed 3/22/07 for $2,395K, last asking $2,195K. Did they finally sell (at what discount?) or will they be back in 2008?

And be sure to see SM Distress Monitor's Sunset Park - The Airport Flip **Update 1, NOW AVAILABLE FOR RENT**.

Weekly inventory update

12/7 - Not a lot happening heading into December. SM <$3M is down 4%, PP <$2M is up 4%, and MV is down 5%. No new listings in SM so far this month.

       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
 9/28/07  58,973  59  17  74 103  26   9  90  81  87  20  87
11/ 2/07  58,731  62  19  81 120  29   7 106  77  98  35  88
11/30/07  59,108  52  14  67 136  24  11  88  94  96  23  96
12/ 7/07          50   0  65 139  25   2  87  97  91   4  99
12/14/07

Bush's plan on Marketplace

Be sure to read or listen to yesterday's Marketplace "Putting a freeze to mortgage meltdown". It covers the issues well. Excerpts:

PRESIDENT BUSH: We should not bail out lenders, real estate speculators, or those who made the reckless decision to buy a home they knew they could never afford.

MOON: "This is a Band-Aid when the patient needs major surgery."

MOON: But [Moody's Economy.com chief economist Mark] Zandi does say that that assumes homeowners will be able to weather a very bad storm that's still ahead. He says he's already factored in the administration's new plan -- and even then, he's predicting a crash in home prices that will add up to more than 30 percent in many parts of the country before this crisis is over.

JOHN TAYLOR: What's been offered, at best, will probably not help more than 300,000 of the borrowers, so maybe 10 or 15 percent. It's simply not enough.

MOON: And there's even a question then, about whether this plan is going to survive in the courts, Kai. If Wall Street can't convince investors who hold all those mortgage-backed securities to go along with it, then it may be dead on arrival.

News items

Tonight (12/6), 6:30-9:00 p.m., City of Santa Monica Transportation Workshop, Civic Auditorium East Wing, 1855 Main St.

Yesterday on public radio's Marketplace, the lead item about the housing bubble mortgage freeze and another on the art bubble. Tulip bulbs, anyone?

"Food bank cupboards are going bare" in Saturday's Daily News. The local economy is tightening.

LA Land blog's "Reader mail: A rate freeze 'rewards bad behavior'" yesterday should be an Op-Ed in the paper.

Biggest price reductions

Not a lot happening at the end of the year. Let's revisit the September 28 list of ten price reductions of at least 15% on the listings I've been tracking. Here are the current 14. Two are left over from the previous list (old%); guess they should have reduced more.

15% - 926 Ozone, SM, 3 bed/2.5 bath, $1,410K to $1,199K, 7/29/07
16% - 2724 6th, SM, 2/1, $1,190K to $999K, 9/4/07 (photo)
17% - 557 12th (16%), SM, 6/5.5, $4,195K to $3,495K, 6/4/07
17% - 3624 Maplewood, MV, 3/2, $1,068K to $890K, 5/31/07
17% - 12217 Palms, MV, 3/1.75, $1,075K to $895K, 3/20/07
18% - 2714 Washington, SM, 6/5, $2,850K to $2,350K, 8/13/07
18% - 3832 McLaughlin, MV, 4/3, $1,100K to $899K, 7/20/07
18% - 11886 Beatrice, CC, 4/4, $1,448K to $1,185K, 6/13/07
19% - 11917 Palms, MV, 5/4.5, $2,288K to $1,849K, 10/11/07
20% - 2613 5th, SM, 3/2, $1,495K to $1,195K, 6/1/07
20% - 11959 Charnock (18%), MV, 3/3, $2,250K to $1,795K, 4/29/07
23% - 4036 Moore, MV, 2/1, $879K to $675K, 8/27/07
24% - 4030 East, MV, 3/4, $2,229K to $1,695K, 8/31/07
31% - 11300 Kingsland, MV, 5/3, $1,300K to $900K, 1/16/07

Rate freeze

Friday's LA Times "Officials act to forestall foreclosures" made me ask the question who would bear the cost of such a rate freeze on negatively-amortizing teaser-rate mortgages. The owner of the mortgage? More negative amortization to the debtor? Taxpayer bailout?

MSNBC's "Banks, U.S. near deal on subprime mortgages" (also here) clarifies it would be investors in these mortgages:

The major thrust of the proposal would be to get lenders to extend for a number of years the low, introductory rates that were offered on subprime mortgages, loans usually offered to borrowers with weak credit histories.

An estimated 2 million of those initial low, teaser rates are scheduled to reset to much higher levels by the end of next year, pushing the payment on a typical mortgage from $1,200 per month to $1,550, an increase of $350. The concern is that many homeowners will not be able to meet the higher payments, triggering hundreds of thousands of defaults.

That would dump even more unsold homes on an already glutted housing market, pushing home prices down further, jolting consumer confidence and raising the risks of a full-blown recession.

By offering a broad approach to extend the teaser rates for a certain period — officials and the industry are debating time periods of two to five years — it would allow between homeowners to keep making payments while the housing industry regains its footing.

Once the industry stabilizes and home prices are no longer falling, it will be easier for homeowners to refinance their adjustable rate loans to more favorable fixed-rate mortgages.

Asked about the proposal on Friday, presidential press secretary Dana Perino said, "The president has been clear that no taxpayer money should be used for any sort of bailout."

The plan under consideration does not include any government funds, but it would mean losses for investors who purchased mortgage-backed securities because they would be getting a lower income stream reflecting the delay in having the introductory interest rates reset. But it would still represent more money than if the mortgage went into default.

But if they can't afford fully-amortizing payments now, how would higher housing prices help? And as if this would end falling prices.

See also Housing Doom's "Most ARMs Not Likely To Be Affected By Reset Freeze":

... at best, this bailout might freeze around one in six ARMs from resetting. The plan, however, will not be able to prevent ANY home values from falling, which means that the risk of loans defaulting remain high.

Added Monday: See Calculated Risk on Secretary Paulson's statement categorizing homeowners, ending with CR's comment:

Whenever the freeze ends, most of the homeowners in the defined group will still face foreclosure. So the purpose of this plan is clear - since the industry lacks the infrastructure to handle the work load, this guideline helps decide which loans to foreclose on now, and which loans to foreclose on later.