Anon just posted about this in a comment; it's too good not to expand here! Let's start with the idyllic description of this 3 bed / 2 bath house at 2527 Barry Ave. in West Los Angeles, asking $789K (X above; enlarge; north is to the right; Pico Blvd. is just beyond the freeway):
"Offering a warm and comfortable ambience, this home has been remodeled with utmost style and class. Besides other unique features, the huge, master bedroom suite is located in a private, secluded area of the home. With park-like grounds, the lot size is over 7,000 sq ft, lending itself to unlimited potential. Close to shopping, beaches and freeways, the location is the best...."
It sure is "close to shopping" - the mini-mall just across the alley from its triangle-shaped lot (think deliveries, trash pickup)! And to the freeway, just up the block. Not to mention airplanes landing at SM Airport. But the beach? And does it take a "secluded area of the home" to get away from the aforementioned neighbors? Anon noted more backstory:
Current owner (realtor, of course) tried to flip it (made minor, cosmetic improvements). ... purchased for $612k in October 06 and originally priced it in spring 07 at approx. $850k.
Over the next 9 months or so the price went down to $739k. (owner rejected offers for far more than that, along the way down.) Then the owner received a NOD in January.
Owners reaction: Price raised $50k. Now selling for $789k.
I guess the low price was the problem. I'm sure it'll sell now.
28 comments:
At this point, isn't pretty much every listing pretty ridiculous?
Every house I've seen in that price range in the West LA-Westwood-Rancho Park area where my target is has some kind of impossible to overcome flaw. They are either a stone's throw from the freeway or on a horribly busy corner. We are not yet at the point where a "nice" house has such a "reasonable" asking price. I noticed the increase in price too. What are they thinking?
The last slump in the nineties was like this as well. I was house hunting and every place had a major flaw. They were overpriced and sat for months to years with no movement.
Many of my friends were also looking and we would get together and laugh at the trash that was out there, and how every weekend our agents would march us around the same tired listings.
But things did sell. Decent places that were correctly priced would sell within a couple of days. You needed to have good agent or else you would never see a house you would want to live in.
That is what deflation looks like. All of that trash sat there on the market waiting for inflation to eat the owner's equity. Sure they eventually got their price, but they got in smaller dollars.
It will be the same this time around I expect. Don't think gorgeous homes will sit there while you visit multiple times and hem and haw. Good places will go in days, or never make it to market as they go in private deals. The crap will sit there and fester until the dollar is worth even less.
$459,000
Nah, that's too much. $399,000.
Current listing prices and fatal flaws are really entertaining, except for the fact that I want to buy a home.
I agree with Westwood. Barring some economy wide serious recession or location specific economic issue, good properties will not have the huge price decreases that some expect.
At some point I will just have to jump in.
don't kill the buzz!
you got hundreds of people on this blog expecting that houses they like will fall 80% in price
if you tell them the prices won't fall that much they may just have to face the fact that they may as well buy in the valley
don't kill the buzz!
don't kill the buzz!
you got hundreds of people on this blog expecting that houses they like will fall 80% in price
if you tell them the prices won't fall that much they may just have to face the fact that they may as well buy in the valley
don't kill the buzz!
Santa Monica may never be a "cheap" place to live, but the concept that prices could slip back to 2001 levels is not without merit.
And that would be with an "economy-wide serious recession". Because declining housing values causing a declining economy, is a feedback loop that will only get worse in the months and years to come.
Westside - thx an incredible funny post. Well played!
This is very very funny
this house is a P_O_S
@anonymous 6:43
The important caveat is that the property must be correctly priced. Decent places at reasonable prices will disappear as rapidly as at the market peak (we eventually bought a place where we viewed and offered within hours becoming available). If the property is over priced it won't matter how attractive it is, it will sit until the seller comes to their senses, or the dollar deflates to the point where the asking price is in line with the market price. Dollar deflation occurs relatively slowly and I think that's why markets take so long to correct. What was it 6 years last time?
I believe that some places will fall close to 80% in real terms. I wouldn't want to live in any of those places. In fact I wouldn't want to go collect rent in most of those areas either.
Right - but those people expecting single family houses in SM to fall 80% are unrealistic
I think SM is overpriced, but it is one of the most desirable places to live in L.A.,,,,good schools, good air quality, mild year round weather,own fire and police force,access to high paying jobs....oh, and the beach!
I have 2 homes in SM, and have laughed for years at the people who have said SM housing prices will drop like a stone someday and thats when they are going to snap up cheap single family homes.I bought in a recession when the Savings&Loans were going under, bought both houses from the Government (thats how bad the economy was) and STILL had to get in a bidding war as the properties were desirable. Lesson: Good location+high income area=stable markets. All RE goes through cycles, I would like to see the bloggers talk about long term growth.....Santa Monica will always be desirable over the Valley, I.E., etc. It was a great investment for me and I would guess that anyone who buys today will be pleased with their investment in 5-7 years time as well.
Oh, and anyone try to get a house built or remodeled in SM? There is another reason why the prices are inflated. Its a nightmare to deal with the City's building codes, so less properties will be built, thus driving up existing home prices.....Don't miss out on your chance to buy in SM just because you are nervous about jumping in....the values will continue to climb (albeit more sanely than in years past) but rest assured....it will continue to go up....
"I bought in a recession when the Savings&Loans were going under, bought both houses from the Government (thats how bad the economy was) and STILL had to get in a bidding war as the properties were desirable."
Uh... gee, I wonder what the previous owners of your houses were saying before the recession in which they lost their houses? Maybe something like:
"the values will continue to climb (albeit more sanely than in years past) but rest assured....it will continue to go up"
You bought at the bottom of a cycle. Congratulations. We're nowhere near the bottom of this one.
I like your "attitude" Westside! You're blog is sounding more like the "Housing Panic With An Attitude Problem" Blog!
Please keep this blog going. It will be fun to look at your data and comments in the future.
response to JBR:
I agree with you on the people who defaulted on the Sunset Park property before I bought it....they overpaid, bought a house for $150K (in 1989) more then I paid for it in 1994. They were bummin' big time. But now that same house is worth 3x what they paid for it.....so who is the bumming now? Lesson again: well located property in good neighborhood=long term value
"But now that same house is worth 3x what they paid for it.....so who is the bumming now? Lesson again: well located property in good neighborhood=long term value"
Are real estate bulls really this stupid?
Hey Sherlock, it might be 3x today, it will be 2x in a couple of years. That's why it made sense to wait in 1990, and why it makes sense to wait today. Comprende?
6:52 am
I guess you can safely join the thousands of members in the 'woulda,coulda,shoulda' club....It doesn't take a genius to figure out that buying in 1993/1994, while scary as the Aerospace industry was collapsing, was a brilliant move. Those 'overpriced' houses are worth double to almost triple today. Aren't the biggest returns always risky? I think SM real estate is not that risky, and it will give you steady return. And leaving your children a piece of real estate by the beach in So.Cal will be their best inheiritance. I am looking for some other income property in SM now.....thats how confident I am on the long term potential.
"I guess you can safely join the thousands of members in the 'woulda,coulda,shoulda' club...."
Actually I own a house in SM, and will be renting it out and buying more properties in a couple of years. And if you really consider yourself to have followed real estate cycles and made "brilliant" moves in the past, then you would know that the following statement of yours is idiotic:
"It was a great investment for me and I would guess that anyone who buys today will be pleased with their investment in 5-7 years time as well."
My inpression of the bloggers on this site is that they are all waiting for the prices to come down so they can feel smug about the fact they didn't buy 5 or 6 years ago.....am I right?
What is it about Westside real estate that gets people so passionate about the right time to buy or sell??? Has anyone (other than spec builders and serial flippers) really lost a ton of money in SM real estate to date?
"What is it about Westside real estate that gets people so passionate about the right time to buy or sell??? Has anyone (other than spec builders and serial flippers) really lost a ton of money in SM real estate to date?"
Ask the people who bought in 1990 if they wish they could go back in time.
the idea that buying today is a smart move could only be espoused by real estate agents.
nowadays, the new concept in real estate is a downpayment--maybe one should consider investing one's money where its value isn't descending on a daily basis?
sure, SM real estate will be fine in 7-10 years. but why would i buy now, when i can get a MUCH better place in SM in 1-2 yrs.? am i stupid?
In response to 'Ask the people who bought in 1990 if they wish they could go back in time'
My neighbor bought a house at the top of the market in the 90's....500K....but she held on and sold her house 3 months ago for $1.3M.....so doesn't that tell you that even if the house goes down in value, the long term hold strategy wins out???
Response to
'nowadays, the new concept in real estate is a downpayment--maybe one should consider investing one's money where its value isn't descending on a daily basis?'
And where would that be....the lousy treasury bond returns, CD's? Money Markets? roller coaster stock market?
No thanks....i'll take a risk on purchasing well located property in the best climate in the world instead!
Anon@12:54 pm
My neighbor bought a house at the top of the market in the 90's....500K....but she held on and sold her house 3 months ago for $1.3M.....so doesn't that tell you that even if the house goes down in value, the long term hold strategy wins out???
OK. The value of $500,000 in 1990 is equivalent to $808,753.53 today simply due to inflation (this is calculated on the consumer bundle which is not the same as the CPI). $808,753.53 invested in 1990 producing a return of 1.3M in 2007 produces an annualized rate of return after inflation of 3.6%. If your neighbor bought in 1995 the return moves to a hair over 5%. Of course buying in 1995 was near the trough of the market wasnt' it?
"My neighbor bought a house at the top of the market in the 90's....500K....but she held on and sold her house 3 months ago for $1.3M.....so doesn't that tell you that even if the house goes down in value, the long term hold strategy wins out???"
My neighbor bought in 1929 for only $2000, what a genius!
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