Here comes some more heavy thinking on Santa Monica prices falling 40%. The start is simple: the November 2007 S&P/Case-Shiller numbers were posted yesterday.
Compared to last month's report, they show an even even steeper cliff. Los Angeles (black line, includes Orange County) is now down 12.2% from its peak in September 2006 - 3.6% from October, which was 2.1% from September and 1.3% from August. The national (orange line, aka Composite) index is down 9.4% from its peak in June 2006 - 2.2% from October, which was 1.4% from September and .9% from August.
Besides the original city index they have each city broken into Low, Middle, and High tiers (Under $511,420, $511,420 - $735,266, and Over $735,266). Los Angeles' Low Tier rose the most and has fallen back the most so far from its November 2006 peak, 14.7%. The High Tier rose the least and rather plateaued since 2006, but it too is now falling, 7.9% so far from June 2006. (The Middle Tier is very close to the Aggregate, so I omitted it.)
Now let's compare again to the Westside. Remember how I found low-end north-of-Montana sales history fit the Los Angeles Case-Shiller index well? This time I converted those to an index to match the Case-Shiller's January 2000 value of 100. Using the $750K sale of 518 10th Street that month appears to give a good fit like before (each sale is a magenta dot).
Santa Monica rose more than the High Tier, though, fitting closer to the aggregate index. Note that the upper-right dot, 342 12th Street for $2.2M last July, doesn't represent another uptick but just an above-bottom price. Lot value appears still about $2M. We haven't seen a real downturn, however. Which brings us to....
Last November we compared prices to underlying incomes to make an estimate of likely price fall (30% in 6 years? and 30-50% fall in 6-10 years?). Here's an update.
Like the low-end north-of-Montana prices above, I converted Per-Capita Personal Income for Los Angeles (technically the Los Angeles-Long Beach-Santa Ana MSA from here) and the city of Santa Monica (from Rosebud's comment) to an index, value 100 for the year 2000 (= $31,039 in LA, $42,874 in SM), and extrapolating 2000-2005 through 2015.
Santa Monica's income has been rising more steeply, which supports a higher floor to the downturn. Nevertheless, this chart suggests a total fall of some 50% in Los Angeles by 2011, and 40% in Santa Monica. That's also only 4 years from 2007, steeper than the 6+ years I suggested before.
In comparison, low-end north-of-Montana prices fell around 25% from 1990 to 1996, but mostly by 1994, also 4 years [corrected decade].
Wednesday, January 30, 2008
November Case-Shiller
Sunday, January 27, 2008
Storybook flip
This charming "Storybook" house at 369 22nd St. was one of my first posts back on March 5th. Then it was a 1,934 SF 3 bed / 2 bath house in good condition but not updated. That's the before photo above. It sold quickly above its $2,150K asking price on 4/06/07 for $2,250K.
The good news for the neighborhood is it wasn't demolished. The resulting remodel was just listed 1/18/07, asking $3,795K. It grew to 5 bed / 4.5 baths, 3,800 SF, about twice its old size. It now boasts:
"Amazingly light & bright w/ high beamed ceilings. sunlit windows, wood floors, gorgeous moldings, Italian glass tiles, marble.State of the art gourmet kitchen w/ custom cabinetry & stainless appliances open to a spacious family rm w/ French doors, large grassy yard & entertaining patio. Four bedrms up, including a luxurious master suite w/ dual walk-in closets, spa like bathroom & romantic balcony. No expense spared to give this home the Royal treatment...."
Hmmm ... for some cost SWAGs, 1,900SF x $300 = $570K. Another $200K for new kitchen, landscaping, other rework? Broker commission 5% x $3.8M = $190K. Financing $2M for half a year at 5% = $50K. So the builder clears $500K if the price holds? Wonder if it will? The upper 3's is in the ballpark for this size house north of Montana, and it is cute.
Saturday, January 26, 2008
Reduced 20% in Mar Vista!
Another example of a flip gone bad is this 4 bed / 2.75 bath house at 3832 McLaughlin Ave., asking $879K.
"MAJOR $61K PRICE REDUCTION! VERY MOTIVATED. Gorgeous renovation with exquisite attention to detail and no expense spared. Bring your pickiest buyers. 2000 sf with open spacious floor plan. Custom granite countertops and Alderwood cabinetry in kitchen plus state of the art appliances and cabonized vertical cut Bamboo floors, Beautiful master w/ walk-in closet, hi-tech steam shower and Indian slate tiles. Double paned windows, Brand New AC unit, Redwood deck in backyard...."
This seller has at least acted on their motivation. Originally listed for $1,100K on 7/20/07, it was reduced to $995K in September, $899K in October, $940K in December, and the current $879K last week.
But it's on busy McLaughlin Ave. (Barrington becomes McLaughlin south of National Blvd.), four doors south of the mini-mall at the corner of Venice Blvd. I'm not so sure how the "pickiest buyers" will feel about its location or architecture.
Like the 28% in Ocean Park, what were they thinking on their initial asking price?! This one was bought it on 12/29/2006 for only $594K, so there's lots of room to respond to that motivation to go lower.
Friday, January 25, 2008
Weekly inventory update
1/25 - Santa Santa Monica inventory <$3M is down 2% (but SM Total is up 5%), Pacific Palisades <$2M up 19% (also noted in recent comments), and Palms-Mar Vista flat for the week. In contrast, Santa Monica inventory was falling this time a year ago.
1/18 - Santa Santa Monica inventory <$3M is up 6%, Pacific Palisades <$2M up 8%, but Palms-Mar Vista down 5% (perhaps from old listings withdrawn) for the week.
I added back this week from a year ago (1/19/07). SM and PP inventories fell during January 2007, but have been rising so far this January. Year-ago-this-week all inventories were higher, except, strikingly, total PP inventory is much higher this year: 100 vs. 71, all in the higher-priced houses.
1/11 - The number of new or returned listings this week, despite losing a few that seem expired, resulted in Santa Santa Monica inventory <$3M up 12%, Pacific Palisades <$2M up 14%, and Palms-Mar Vista up 9%.
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
-------- ------ -------------- -------------- ----------
1/19/07 60 70 115 33 71 69
1/26/07 51 60 120
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
-------- ------ -------------- -------------- ----------
1/ 4/08 42 0 54 157 21 4 80 101 80 7 106
1/11/08 52,619 48 7 59 145 24 6 90 102 88 19 98
1/18/08 51 10 61 148 26 8 100 97 84 23 99
1/25/08 53,258 50 12 64 157 31 13 106 108 84 31 92
2/ 1/08
New conforming rules
The latest on Congress raising the conforming loan limit for Fannie Mae and Freddie Mac loans from $417,000 up to $729,750 really hit me. Will it keep prices artificially high? Is it a bailout of speculators and lenders? Two items you should see are:
Yesterday's Statement of OFHEO Director on Conforming Loan Limit Increase
We are very disappointed in the proposal to increase the conforming loan limit as we believe it is a mistake to do so in the absence of comprehensive GSE regulatory reform. ...
Herb Greenberg's Reality Check on Raising Mortgage Caps on MarketWatch (emphasis added)
[C]hecking in with our old friend Mark Hanson, ... the reality is:
–New borrowers still have to qualify. Fannie/Freddie is full doc only primarily.
–Without stated income for wage earners, it’s tough to qualify for a $700,000 loan.
–In 2005 to 2007, 70% of all jumbos were stated income for a reason: Ninety percent of all stated income borrowers lied about their income to qualify.
–Refi’s will still have trouble due to values dropping in jumbo areas by such a large amount. These are the ones that really need the help. ...
Mark adds:For the past several years, a husband and wife working at McDonald’s for two years could borrower $650,000, STATED income no problem. They just put enough money as income listed on the application to qualify. Wall Street banks that ultimately bought the loans did not care. Lenders also qualified at interest-only payment rate with zero to 5% down. Credit scores at 600 were okay.
NOW, you must have earned $135,000 to $150,000 FULLY DOCUMENTED for the past two years and have a current pay stub and average ‘other’ debt to borrow $650,000. You must have at least 10% equity or down payment. You must have a credit score of 700 or above. This is not a large number of the population.
The third point relevant to the Westside is even $729,750 gets you into very little here.
So on the one hand the Fed and Washington politicians are scared enough for the economy and/or their friends at the banks to use their biggest guns, so much for "free market" rhetoric. But on the other they still are likely to be ineffectually swamped by the tsunami.
The "good" news is prices will fall. The bad news is we're really in deep doo-doo. Another $150B of national debt to send everyone checks, fire sales of U.S. assets to Middle Eastern and Asian investors, it's not pretty.
Reduced 28% in Ocean Park!
Originally listed for $1,495K on 6/1/07, reduced $100K in September, off the market then back for $1,195K October-January, this 3 bed / 2 bath house at 2613 5th St. in Ocean Park was listed again on 1/21/08 for $1,079K, a whopping 28% cut so far. ("N" points north; enlarge image.)
"Enjoy the ideal beach lifestyle! Blocks from Main Street and the sand! Charming open living space. Center island kitchen. Hardwood floors. Fireplaces in liv rm & master bdrm. 2nd story deck is perfect for viewing Sunsets or entertaining. ... Xtra lrg dbl car, direct access garage. Private & gated w/great outdoor space for pets. Must see!"
But ... not only will your (small) pets have the run of its 2,052 sq ft lot (0.05 acres, per Zillow), it's on the corner of noisy Ocean Park Blvd.!
See Anonymous' January 23, 2008 9:48 PM comment (at the bottom) for more on this one (thanks!).
Wednesday, January 23, 2008
17th Street condos
There always seem to be for-sale signs in front of the 13-unit condo building at 1144 17th, just north of Wilshire, but now there are three:
#8 - 2 bed/1.75 bath, asking $632K, LD=1/10/08
#12 - 2/2, asking $655,999, 9/28/07 (sold 3/14/07 for $633K)
#14 (front unit) - 3/3, asking $899K, 1/14/08 (sold 3/30/07 for $855K)
Those are the only two sales in the building during the last two years, according to the County Assessor. Must be a story behind them. I really doubt they'll exceed sale prices last spring.
Tuesday, January 22, 2008
Deep doo-doo
We are in deep doo-doo. Things won't be as they were the last couple of decades.
As I wrote this the Dow gyrated after the foreign markets' crash yesterday and the Fed's 3/4 point emergency rate cut, opening down 460 this morning, closing down 128.
But previous rate cuts had no lasting effect. Paul Krugman noted Bernanke's study of Japan in the 1990s and its limits to monetary policy. Herb Greenberg asked, "what if they do a big-bath cut and it doesn’t help?" Peter Viles concluded, "You can forget the parallels to the early '90s real estate slump - this is worse; the Fed just said so." And Housing Doom asked, "The Fed has apparently decided to play their 'trump card' in this round of what has become a high stakes poker game. I wonder what happens when they need to play another hand?"
Here and on other bubble blogs we've been watching the fundamentals, wondering when the markets would catch up to reality. A year ago the bulls still called for a "soft landing." Last summer was the "subprime crisis," but "contained." Now they concede a possible recession, but expect a 2Q 2008 upturn. I don't think so with their track record.
The old business cycle was business investment, especially in manufacturing. The new one has been housing construction and furnishing, prolonged by the housing bubble and mortgage equity withdrawal. Bush's one-time-payment stimulus package may only transfer private debt to public debt. We have a big debt hole to climb out of.
Longer term, be sure to see the David Walker (head of U.S. Government Accountability Office) video making the rounds (YouTube version and 60 Minutes version, July 8, 2007). It gives a bleak view of the unsustainable U.S. budget, especially Social Security and Medicare, also covered by Charles Hugh Smith, here, for example.
So, what does this do to Westside real estate prices? Hmmm ... recession, falling net worth, tightened lending standards, falling neighboring prices? It reinforces my expectation of a fall that won't end anytime soon.
Friday, January 18, 2008
Weekly inventory update
1/18 - Santa Santa Monica inventory <$3M is up 6%, Pacific Palisades <$2M up 8%, but Palms-Mar Vista down 5% (perhaps from old listings withdrawn) for the week.
I added back this week from a year ago (1/19/07). SM and PP inventories fell during January 2007, but have been rising so far this January. Year-ago-this-week all inventories were higher, except, strikingly, total PP inventory is much higher this year: 100 vs. 71, all in the higher-priced houses.
1/11 - The number of new or returned listings this week, despite losing a few that seem expired, resulted in Santa Santa Monica inventory <$3M up 12%, Pacific Palisades <$2M up 14%, and Palms-Mar Vista up 9%.
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
-------- ------ -------------- -------------- ----------
1/19/07 60 70 115 33 71 69
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
-------- ------ -------------- -------------- ----------
1/ 4/08 42 0 54 157 21 4 80 101 80 7 106
1/11/08 52,619 48 7 59 145 24 6 90 102 88 19 98
1/18/08 51 10 61 148 26 8 100 97 84 23 99
1/25/08
Wednesday, January 16, 2008
Not selling north of Montana
Despite brisk sales in 2007 and the drop in inventory at the end of the year, some hardy properties have still managed to remain unsold. If they faced a lack of buyer interest in 2007, wait'll they face 2008!
Here's the seventh mid-month list of everything north of Montana over 30 days on the market (12/15 previous). Two (re) joined the list and four were removed. We'll see how the list rebuilds next month.
476 26th St., 2 bed/2 bath, $1,795K LP, 11/7/07 LD (red. 8%)
704 15th St., 2/1, $1,990K, 8/22/07 (red. 13%) still listed
754 23rd St., 4/3.5, $2,395K, 9/27/07
416 17th St., 3/2, $2,475K, 11/29/07 (red. 3%) new
317 Alta Ave., 5/3.5, $3,850K, 11/8/07 (red. 4%)
310 22nd St., 5/5.5, $4,395K, 11/6/07
620 Alta Ave., 4/3.5, $5,395K, 10/11/07
Removed listings:
1605 San Vicente Blvd., 6/7, $22,500K, 8/20/07
557 12th St., 6/5.5, $3,495K, 6/4/07 (red. 17%)
1628 Georgina Ave., 4/3, $3,550K, 10/25/07
333 14th St., 5/6, $4,595K, 6/29/07 (red. 6%)
Not selling in Sunset Park
Here's our seventh mid-month review of everything R-1 in Sunset Park over 30 days on the market (12/15 previous). Well-priced listings have sold within a few weeks; these haven't. Two listings joined the list, while four others are no longer available.
2638 32nd St. (photo), 2 bed/1 bath, $865K LP, 6/6/07 LD (incr. 4%)
2338 Pier Ave., 3/2, $898K, 9/16/07 (red. 3%)
3118 17th St., 2/2, $1,049K, 9/7/07 (red. 19%)
1717 Robson Ave., 2/1, $1,139K, 10/12/07 (red. 5%)
2314 Pier Ave., 2/2, $1,195K, 7/9/07 (red. 4%) back
1307 Marine St., 3/2, $1,195K, 11/6/07
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%)
1702 Ashland Ave., 4/3.5, $1,399K, 10/3/07 (red. 4%)
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, $1,829K, 8/24/07 (red. 13%)
1639 Hill St., 4/3, $2,195K, 11/27/07 new
Removed listings:
3041 Paula Dr., 5/4, $1,395K, 10/5/07, (red. 7%)
1640 Bryn Mawr Ave., 3/2, $1,449K, 7/7/07 (red. 5%)
1702 Cedar St., 3/2, $1,399K, 10/8/07 (red. 5%)
2343 29th St., 4/4.5, $1,895K, 8/2/07 (red. 5%)
Not selling in Ocean Park
Here is the sixth mid-month list of single-family houses in Ocean Park over 30 days on the market (11/15 previous). One is back on the list as a For Sale By Owner, two removed appear to have expired unsold.
651 Navy St., 1 bed/1 bath, $679K LP, 10/25/07 LD
664 Marine St., 2/1, $749K, 10/18/07
718 Marine St. (photo), 1/1, $799K, 5/25/07 (red. 8%) back
724 Navy St. 2/1.5, $899K, 5/6/07 (red. 5%)
2724 6th St., 2/1, $999K, 9/4/06 (red. 16%)
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, $1,529K, 8/1/07 (red. 1%)
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, $2,095K, 11/8/07 (red. 9%)
150 Fraser St., 2/2, $2,395K, 10/4/07
2806 2nd St., 3/3, $2,695K, 10/3/07
2606 Highland Ave., 2/2.75, $2,999,999, 11/9/07, (red. 14%)
2219 Ocean Ave., 3/3, $3,300K, 9/20/05
Removed listings:
2613 5th St., 3/2, $1,195K, 6/1/07 expired?
2912 2nd St., 2/1, $1,600K, 12/29/06 expired?
Tuesday, January 15, 2008
DataQuick December plummet
DataQuick's December statistics show a continuing plummet. Los Angeles County (above) volume for December was down 48% from December 2006 (and lowest they've ever recorded, since 1988). Median price was down 10.5% from December 2006 (suggesting the distortion to the median from higher-priced sales is ending?). Note the graph above highlights in yellow the second quarter of each year, historically the highest volume and largest price rise.
From LA County's peak, DataQuick for December shows a 14.5% decline and S&P/Case-Shiller for October shows an 8.9% decline. Pretty consistent. What was that about a "soft landing"?!
Below are median prices for four southern California counties. Los Angeles prices have now retraced to mid 2006; Orange County to early 2005; Ventura County to late 2004, and San Diego County all the way to early 2004.
Saturday, January 12, 2008
New low-end north of Montana
For all you north-of-Montana fans, two new low-end (but not tear-down) houses were just listed Friday. Gut feel tells me these are plateau prices consistent with the last two years, neither attempting a step up nor discounting. Wonder how they'll do?
First is 231-18th St., 3 bed, 1.75 bath, asking $2,349K (photo above). It appears well-kept but not remodelled, on a well-located oversized 60 x 149 lot, with a pool.
"Wonderful 1935 Spanish in Gillette's Regent Square. Lrg bath has orig tiles, sep tub & shower enclosures. 2nd BA off 3rd BD. Mstr has French drs which open to bkyd w/ sparkling pool & spa. Good-sized kitchen, vintage Wedgewood stove & charming, front-facing breakfast room. Most orig. details intact. Lrg step-down living room has gorgeous, vintage fireplace. Lovely wood floors throughout. Front-facing formal dining room."
Second is 334-15th St., 2 bed, 1 bath, asking $2,295K. Its kitchen is redone and the rest appears nice, on a standard 50 x 150 lot east of 14th, which seems a little more desired. It last sold 3/06/2003 for $1,265K.
"One-of-a-kind Spanish authentically restored & updated on sunny side of one of the most picturesque & quiet blocks North of Montana. (15th Street is 1 of only 3 streets that does not connect through to San Vicente.) Beautiful living room w/ wood-beamed cathedral ceiling, Subzero/Viking/Bosh kitchen, nursery/office. Living space opens onto wood-beamed covered patio & large private backyard. Auxiliary room attached to 2-car garage could be additional office/studio." (County and Zillow call it 3 bedrooms.)
SM Distress Monitor recently profiled 416-17th St., a 2-story 3 bed / 2 bath asking $2,475K (listed 11/29/07 for $2,550K). It also feels in this price category, but with no sale so far. Then there's our oft-discussed 704-15th St. probate tear-down. It left the MLS at the end of November, but still has as sign out front and is listed on agent Gaby Schkud's website, still asking $1,990K. Waiting for court confirmation, or no takers at this price?
Friday, January 11, 2008
Weekly inventory update
The number of new or returned listings this week, despite losing a few that seem expired, resulted in Santa Santa Monica inventory <$3M up 12%, Pacific Palisades <$2M up 14%, and Palms-Mar Vista up 9%.
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
-------- ------ -------------- -------------- ----------
1/ 4/08 42 0 54 157 21 4 80 101 80 7 106
1/11/08 52,619 48 7 59 145 24 6 90 102 88 19 98
1/18/08
Not gone in Ocean Park
Two long-time low-end Ocean Park listings dropped off the MLS late last year. But they're not gone!
First (photo above), 718 Marine St., a 1 bed / 1 bath flip listed 5/25/07, asking $799K after 6% reduction, is now for sale by owner. How might one find more information about this FSBO? Ah, a box of fliers. Oops, empty. Search Google by its address? Nothing, and the first hit is our post about it! Or the old-fashioned way, call the hand-written phone number 818-515-6530 on the sign. I haven't bothered.
Second, 724 Navy St., a 2 bed / 1.5 bath flip listed 5/6/07, was asking $849K after 11% reduction. It is now listed by Clement Partners, back up to asking $899K, but not in the MLS.
Wednesday, January 9, 2008
LA Times really bearish today
How about today's LA Times Business section today for extreme bearishness?? - Declines stir talk of bear market
- Lender [Countrywide] stung by fears on finances
- Hollywood payroll company Axium files for liquidation
- KB Home loses $773 million
- Maersk Line to lay off as many as 3,000
- AT & T shares fall on CEO warning
- Gold continues to shine, surging to a record of $878
- Bear Stearns' Cayne joins exodus of chiefs
- Consumer borrowing jumps
- Global slowdown is forecast
If that's not enough, be sure to keep up with Nouriel Roubini's recent posts and Stephen Roach's Financial Times essay (via Housing Panic).
Westside real estate bulls say the reason prices fell in the early 1990s was because we had a bad recession that time, unlike now. Uh, right.
Taken off the market north of Montana
WarChestSM forwarded a flier from a local real estate agent named Amine (first name only) of Coldwell Banker's 1608 Montana Ave. office. Striking is how many houses have been taken off the market. These answer some of the what happened? in our past months' Not selling north of Montana. Because it's an interesting perspective, I'll quote his whole text (emphasis and punctuation in original).
Is our NOMA neighborhood hit by the real estate slowdown?
Our inventory has increased in the last 3 months as we currently have 13 homes listed. With only 11 escrows & the average sales time being 3 months, the pace of sales slowed by 25%. Indeed, only 26 homes sold in the last 5 months!
Prices are steady, but, an unusual trait is taking place (...) many properties go unsold as 17 homes were withdrawn!
Sellers, this is a market where you can easily transfer your current equity to a property with higher long term growth potential (newer or different size property). Buyers, there is plenty to choose from, reasonable prices and a great time to enter the market where lenders will ensure that you do not overextend your finances!
Data compiled as of 12/13/2007 at 12pm.
The "long term growth potential" is a new and original reason to sell; "not overextend your finances" is what we have wanted, but also sure is a creative spin on stricter lending standards!
Here's Amine's list of (actually 16) addresses and prices, with my notes added:
TAKEN OFF THE MARKET
433 12th St., 3 bed/2 bath, $2,240K, LD=4/26, Sold 6/29 $2,160K
447 11th St., 3/2, $2,549K, 8/18, gone ~9/27
1020 San Vicente Bl., 5/3, $2,695K (red. 10%), 7/9, ~8/23 (photo; enlarge)
215 24th St., 4/3.5, $2,795K, ~6/25, ~6/28
249 23rd St., 4/3, $2,898K, 8/7, ~8/14
256 24th St., 3/2, $2,995K, 9/12, ~11/14
1525 Georgina Ave., 4/4, $3,195K (6%), 10/30, ~12/12
703 25th St., 5/5.5, $3,295K, 2/12, ~5/11
721 Georgina Ave., 4/5, $3,450K, 8/21, ~11/5
1609 Georgina Ave., 4/3.75, $3,695K, 10/18, ~11/28
723 22nd St., 4/4.5, $3,995K, 6/22, ~7/3
230 21st Pl., 6/6.5, $4,380K (6%), 3/22, ~9/10
533 23rd St., 5/6, $4,790K, 9/25, Backup 11/16, ~11/21
421 23rd St., 6/6.5, $5,000K, 5/24, ~10/30
127 17th St., 4/4.5, $5,395K, 2/9, ~3/8
147 Georgina Ave., 4/3.5, $7,995K, 10/26, ~11/16
I expected withdrawns in the fall, presumably to relist in the spring. Actuality is more varied, with dates covering much of the year, and circumstances from what must be a change of heart in less than a week (215 24th) to months on the market to price reductions to one with a recorded sale.
Monday, January 7, 2008
Brentwood foreclosure
Property values won't fall on the Westside because we don't have foreclosures like those other neighborhoods. Or is it we don't have foreclosures because owners in trouble can still sell because our prices don't fall?
Except here's one in Brentwood, no less, a 3 bed / 3 bath house at 12443 W. Sunset Blvd. (across from Medio Dr., 3 blocks west of Kenter Ave.), asking $1,449K, listed 12/10/06, went "Looking for Backup" last week.
"Bank-Owned Foreclosure!! Private and gated cottage set back from street in great location in Brentwood. Large, charming yard features a pool, covered cabana, and grassy area. Three bed/three bath house has hardwood floors, beamed ceilings, granite kitchen counters, nice bathrooms, indoor laundry. Garage converted to 2 single units (unpermitted). Needs a little TLC, but has great potential! ..."
Granted there's Brentwood and then there's Brentwood; you see the afternoon traffic backed up on Sunset from the 405 out front in this aerial photo (MS Live link). And imagine living in one of those garage units next to Sunset!
The Assessor doesn't show a sale within the last two years, but its 11/29/2006 recording date of Land $1,139,000 and Improvements $400,000 would be pretty recent. Anyone have loan or last sale info?
Sunday, January 6, 2008
LA Times Saturday
Did you see the LA Times lead Saturday, "Job slump latest omen of recession"?
"The economy is operating at stall speed," said Mark Zandi, chief economist of Moody's Economy.com, a research firm in West Chester, Pa. "Either something is going to revive it quickly or else we're going to get into a vicious cycle of declining spending and even weaker job growth."
The obvious "something" is further interest rate cuts by the Federal Reserve, but those could threaten renewed inflation, drive down the already weak dollar and even set the stage for another bubble such as the one now deflating in the housing market.
They got the point that the Fed has limited options and may be unable to avert a recession. But then,
The report also left analysts shaking their heads over how problems in a relatively obscure corner of the financial world -- the market for mortgages made to people with poor credit -- could erupt into such an economy-threatening event and could do so in such short order. Most economists barely made note of sub-prime mortgages six months ago.
"You look at the magnitude of the sub-prime problem, and it's just not that big relative to the size of the economy or the financial market," marveled David Wyss, chief economist at Standard & Poor's in New York.
I'm shaking my head that Standard & Poor's (publisher of the S&P/Case-Shiller index that's been falling over a year) chief economist doesn't get it. It's not just "subprime," it's the whole housing bubble and debt-built consumer economy running out of steam, as economists like Nouriel Roubini (his latest) predicted over a year ago.
Saturday, January 5, 2008
Idaho flopper: the Rerun
On November 11 we revisited this flopper at 2320 Idaho Ave., SM that we first visited March 26. Originally for sale in 11/05 at $1,399K (photo above), it finally sold 4/4/06 for $1,335K. Post-flip it was listed 3/22/07 for $2,395K. After price reductions in May and July, it was still unsold at $2,195K.It's a 3 bed / 3 bath '20s house with a '60s 2-story addition on a tiny lot (4,750 square feet according to Zillow), next to an alley, across Idaho from the Franklin School playground, "Completely remodeled with hardwood floors throughout, new custom baths, kitchen with stone and stainless appliances."
It left the market at the end of November. Could it have actually sold? Nah. It's back, with a new listing date of 1/4/08. The punchline: they couldn't sell it in nine months during a hot market. So what did they do differently this time? They raised the price back to $2,395K!! Oh, that was the problem, it was too cheap!
Friday, January 4, 2008
Weekly inventory update
I wondered if anything worth reporting would happen in just three days. Yes. You don't see it in the numbers, but there was quite a bit of activity, old listings back on the market, new listings, a couple into escrow, and others off the market. Net is Santa Santa Monica inventory <$3M is flat, Pacific Palisades <$2M is up 11%, and Palms-Mar Vista is up 1%.
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
-------- ------ -------------- -------------- ----------
1/ 4/08 42 0 54 157 21 4 80 101 80 7 106
1/11/08
2007 SM featured sales prices
To help wrap 2007, here are all the recorded sales prices (from the County or Zillow) so far for Santa Monica houses featured here in 2007. Final Listing Price may be followed by (% discount off original LP). In another post I'll list a number of houses featured here that left the market but have no sale recorded after some months. Of course, it's questionable what this says about houses' value in 2008.
Noteworthy is 611 14th, low-end but above tear-down north of Montana, closed 12/5/07 for $2M even. The photo above is the "time warp" interior of 444 10th, since demolished on a lot-and-a-half north of Montana.
3208 Urban, 2 bed/1 bath, LP=$700K, SD=8/30, SP=$635K
2961 Delaware, 2/1, $699K, 6/14, $660K
728 Pacific, 2/1.75, $699K (15%), 5/1, $685K
2937 Delaware, 2/1, $720K, 10/16, $757K
813 Pier, 1/1, $729K (26%), 10/26, $703K
3345 Virginia, 3/1, $789K, 7/18, $799K
1817 Warwick, 3/1, $865K (1%), 9/14, $890K
1408 Hill, 2/1, $899K, 2/20, $896K
3011 Virginia, 3/1.75, $949K (5%), 9/21, $949K
2314 Pier, 2/1.75, $959K (4%), 3/23, $940K
1505 Oak, 3/2, $1,050K, 8/22, $1,050K
2416 21st, 2/1, $1,050K, 10/31, $1,020K
1639 Oak, 3/2, $1,328K, 7/20, $1,279K
1348 Pier, 2/1.25, $1,348K (3%), 5/25, $1,300K
1020 Chelsea, 2/1, $1,399K, 8/24, $1,478K
1518 11th, 2/1, $1,455K (3%), 10/30, $1,300K
1028 Maple, 3/2, $1,595K, 10/29, $1,595K
1036 22nd, 2/1.25, $1,799K (14%), 5/4, $1,940K
933 25th, 3/2, $1,799K, 8/1, $1,950K
611 14th, 3/1.75, $2,049K (7%), 12/5, $2,000K
369 22nd, 2/2, $2,150K, 4/6, $2,250K
627 Euclid, 3/2, $2,298K, 10/23, $2,298K
439 22nd, 3/2, $2,398K, 10/10, $2,300K
444 10th, 4/2, $2,704K, 6/6, $2,750K
528 26th, 5/4.5, $2,850K (5%), 6/7, $2,725K
333 20th, 5/6.5, $5,095K, 6/5, $5,100K
1221 Georgina, 5/6.5, $5,895K, 8/10, $5,600K
Wednesday, January 2, 2008
2008
A sparkling winter beach day (yes, we have Winter here, only it looks like this!), and a new year that I'm looking forward to. Ok, there is that "R word", that so many act as if would be the end of the world. Here's one of Calculated Risk's graphs with past recessions illustrated with gray bars (just for the bars, not the graph).
I see it more as a natural cycle. Like night is part of a day and winter is part of a year, recession is part of a business cycle. (How do you feel staying up all night?) It's coming, if not already here, reinforced by some good new commentaries in addition to Saturday's Market Ticker I previously linked.Nouriel Roubini summarizes it today,
The combination of the worst housing recession ever getting worse, a severe liquidity and credit crunch being worse now than in August, oil close to $100, capex spending by the corporate sector falling for four months nows, commercial real estate being in serious trouble, the labor market beginning its slack (as initial claims and continuing claims are surging), and a shopped-out, saving-less and debt-burdened consumer having stopped its shopping spree this holiday season will all lead to a severe - rather than mild - recession in 2008.Paul B. Farrell notes,
America's high-on-the-hog, deficits-don't-matter lifestyle is unsustainable. Wall Street knew this would happen, but was in total denial, self-absorbed in its greed-is-good world milking the subprime-credit bubble.James Howard Kunstler 12/31/07 vivid as usual, includes,
The housing market is in a death spiral. Eventually, the median price of a house will have to fall back to the median income, and it has a very long way to go, perhaps 50 percent. Until that happens, houses will be generally unsellable. At the same time, of course, an anxious finance sector will be offering fewer mortgages and on much more rigorous terms, so there will be far fewer qualified buyers even for distress sales. And the median income itself may soon not be what it has been.Charles Hugh Smith's "Brain-Dead Predictions about Housing" begins with,
1. Housing prices will fall farther and longer than every guess being bandied about in the mainstream and financial media.And see Mish, especially, "How Does One Invest For 'Muddle Through'?" and "Things That 'Can't' Happen", and Calculated Risk's "NY Times Article in Pictures" summary today.
2. The housing market won't turn around in 2008--or 2009, 2010, 2011, either.
Ok, so I read a lot of bear-ish commentators. But the bears' recent track records have called the underlying issues and direction, if not the precise timing, while the bulls have been left looking rediculous. (Remember the "soft landing" predicted by the NAR a year ago? Now they're just calling the bottom every month.)
Yet I'm optimistic. Let's get on with it, and move toward a more balanced economy after we get past the accumulated trash of the bubble, like when prices returning to a level real people could afford in the earlier 1990s.
So what do we do here on Westside Bubble in 2008? Enjoy our ringside seat of history in the making. I and other bloggers (especially Santa Monica Distress Monitor and Dr. Housing Bubble will keep documenting how it plays out, with highlights of Westside properties that you probably wouldn't want to buy at current prices.