Recession & price cuts

More reasons to be bearish, even on Santa Monica real estate (not to mention the bizarre zig-zags of the stock market over the last week):

"U.S. Recession May Have Begun in Last Quarter of 2007", Bloomberg reported today (via Mish and CR).

Neil's analysis of the latest Case-Shiller data at Real Estate Comments notes (but read the full version!):

Despite how weak this spring/summer selling season was, price declines slowed. However, do not forget, we are exiting the best time of the year for SELLERS! The traditional time of the year for price corrections is October through February. With the integral of price declines to date, I think the market is close to breaking.

I see this fall as the transition to the real-estate emotion of Panic. I see the spring being a switch to Capitulation. Capitulation is the time of the greatest price drops. ... My final conclusion is to note that a 4% per YEAR drop is the equivalent of free rent.

Closer to home, price decreases this week - 6 in Santa Monica and 1 in Pacific Palisades - seemed especially prominent in cumulative effects.

They didn't exaggerate when they wrote, "UNBELIEVABLE NEW PRICE!!" for the 3 bed/2 bath house up a hill at 16463 Akron in PP. It's now been reduced 50% from its initial $3,200K to $1,595K in a little over a year (and thanks, Anon(s))!

The 6/8 at 411 Lincoln in SM came to market at the incredible $5,795K, but in 3 steps in 2 months has cut 22% to $4,495K.

Marble and Gatedness at 212 24th cut another $100K, to $2,895K.

An interesting indicator of lower-end north of Montana, the 3/2.75 at 517 14th cut another $99K to $2,250K.

And the 4/3 at 1135 Berkeley is now down 20% in over a year, from $2,388K to $1,899K.

May Case-Shiller

Today's May 2008 S&P/Case-Shiller numbers continued down, although not as steeply.

Los Angeles (black line, includes Orange County) is now down 27.5% from its peak in September 2006 - 1.9% from April, 2.2% from March, 3.6% from February, 4.3% from January, 3.7% from December 2007, 3.6% from November, 3.6% from October, 2.1% from September and 1.3% from August. The national (orange line, their original 10-city Composite) index is down 19.8% from its peak in June 2006.

Besides the original city index they have each city broken into Low, Middle, and High tiers (Under $401,614, $401,614 - $606,600, and Over $606,600; updated down again for May). Los Angeles' Low Tier rose the most and has fallen back the most so far from its November 2006 peak, 36.5%. The High Tier rose the least and plateaued for awhile before falling more steeply, now down 20.0% from June 2006.

I'm still waiting for 517 Euclid Street to close (LP=$2,139K) for another low-end north-of-Montana data point for my index of sales on 9th, 10th, 12th, and Euclid. Is the shortage of such sales in the last year a reflection of sellers holding back, or a permanent depletion of such houses as north of Montana mansionizes?

And a 5.8 earthquake hit an hour ago, centered between Diamond Bar and Chino Hills, after a long quiet period. Remember 1994 in and around Santa Monica?

Weekly inventory update

7/25 - SM and PP are slightly down; MV is a little up, including a couple of re-listings.

7/18 - Pretty flat to just slightly down, with more price reductions, withdrawals, and expired listings.

7/11 - SM, PP, and MV are all flat. But for Mar Vista that included a lot of changes: expired and withdrawn listings, listings back on the market, new listings, and listings into escrow.

7/4 - SM is down by the 5 listings that expired this week. PP and MV are down just slightly.

      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
 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  70    
 3/ 2/07 41,251  42  14  51 114  26  10  68  79  55  25  76
 4/ 6/07 42,857  41  23  49 107  18   8  73 103  54  52  50
 5/ 4/07 45,918  46  28  54  92  19   6  82  79  71  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
-------- ------  --------------  --------------  ----------
 2/ 1/08 53,722  54  16  67 157  26  16 101 118  89  36  96
 2/29/08 53,520  50  10  68 178  29   8 108 108  88  21 103
 3/28/08 53,566  57  17  81 171  32  14 122  92  82  22 105
 5/ 2/08 54,098  59  14  83 159  35   7 136  93  90  33  96
 5/30/08 53,216  56  23  79 147  34   9 142 106  91  29  89
 6/27/08 53,058  74  28  98 131  30   6 129 107  96  26  95
 7/ 4/08         69   1  91 124  29   1 126 105  95   5  96
 7/11/08         69   3  91 131  29   3 127 106  95  14 103
 7/18/08 52,049  69   8  90 132  30   5 123 116  93  22 102 
 7/25/08         65  10  88 128  29   5 116 123  96  24 111
 8/ 2/08

thirtysomething

For something different, not to mention on the topic of who lives in Santa Monica / Pacific Palisades now, I just happened upon a May 11 Sunday LA Times "Hot Property" item about thirtysomething TV star Mel Harris listing the Pacific Palisades house she's owned since 2003 for $4,197K. It was described as 4,500 SF on a corner lot, with "a brand-new marble-countered kitchen and bathrooms." Like about every other PP listing.

I won't list the address since the Times didn't, but you can do what I did. Go to the named listing agents' website, click on Our Listings, narrow the search to Pacific Palisades, voila! there's the photo. Then look up the MLS# to find the scoop.

Listed 3/27/08 for $4,347K, already reduced once to the Times' featured price, it's now down $500K to $3,847K at close to four months on the market. So the only thing that came from being featured in the Times ... was another price reduction.

For some small celebrity stuff about thirtysomething and Santa Monica real estate. I was at an open house north of Montana at a decade+ ago. A car pulled up, I talked briefly with the guy who got out, then immediately recognized also getting out was his (then-) wife Mel Harris. Which of course left me tongue-tied. No, they didn't buy that house.

But another thirtysomething star Peter Horton is in his second house north of Montana. You can see his EV-1 car being taken away in its alley in Who Killed the Electric Car. And thirtysomething writer and producer Paul Haggis, who went on to write Million Dollar Baby and direct Crash, is also in his second north of Montana house.

Ocean Park outcomes

To wrap up Santa Monica, here are the outcomes for Ocean Park listings.

Ocean Park seems home to the biggest price reductions. Maybe because a basic shack really isn't worth a million or more? For example, 2724 6th (photo above) took a whopping 16% + 20% reduction and over a year and a half to finally sell!

The attempted flip at 2614 2nd (corner of Ocean Park Blvd., photo below) was first listed 23 months ago. It's off the MLS, but appears still active on Fizber. Ouch!

Sold

651 Navy St, 1/1, LP=$639K (-6% from OLP), OLD=10/25/07, SD=4/1/08, $615K (-4% from LP)
727 Marine, 2/1, $799K, 2/7/08, 6/11/08, $750K (-6%)
659 Copeland Ct, 2/1.75, $875K, 5/28/08, 7/10/08, $975K (+11%)
724 Navy, 2 bed/1.5 bath, $899K (-6%), 5/6/07, 1/25/08, $849K (-6%)
2724 6th, 2/1, $999K (-16%), 9/4/06, 5/5/08, $800K (-20%)
2613 5th, 3/2, $1,079K (-28%), 6/1/07, 3/24/08, $1,000K (-7%)
3117 5th, 3/2, $1,299K (-4%), 2/20/08, 6/25/08, $1,319K (+2%)
427 Pier, 3/2.5, $1,795K, 11/28/07, 1/15/08, $1,625K (-9%)
2806 2nd, 3/3, $2,390K (-11%), 10/3/07, 5/19/08, $2,205K (-8%)
3114 4th St, 3/2.75, $2,398K (-4%), 11/26/07, 4/23/08, $2,225K (-7%)

Sale Pending

426 Ashland, 2/1, $1,050K (-19%), 4/17/08, Pending 7/2/08

Expired or Withdrawn

635 Ashland, 3/1.75, $1,398K (-15%), 5/21/08, Withdrawn 6/25/08
419 Hill, 4/3, $1,880K, 10/8/07, Expired 4/08
750 Navy, 2/1.5, $1,900K, 3/3/08, Expired 3/08
216 Bicknell, 3/4, $2,150K, 6/9/08, Withdrawn 7/21/08

Information Needed

664 Marine, 2/1, $749K, 10/18/07, Backup 11/07, Gone 1/08; on Fizber asking $749K
718 Marine, 1/1, $799K (-8%), 5/25/07; was FSBO sign in front; on RealEstate.com asking $729K
2614 2nd, 3/1.75, $1,339K (-10%), 8/28/06, Gone 3/08; on Fizber asking $1,339K; leased, per comment.
2513 3rd, 3/1, $1,695K, 2/1/08, Backup 2/08, Gone 3/08

Sunset Park outcomes

Next up: Sunset Park outcomes, from the low-end below $1M (2620 24th, photo above, finally pending after a 23% price reduction to $900K), to the high-end passing $2M (2307 Ashland, photo below, sold for $2.2M, although below its attempted $2.39M), and a lot in-between.

Two examples came out of the gate with very attractive low-end prices and got bid up. While others took months and big price reductions to finally sell, like 2516 Cloverfield that tried for a record $2,595K, finally in escrow after a year and a 27% price reduction.

Striking is half sold for below $1.1M, clearly a desired price range, while the unsold inventory is the higher-priced stuff.

Some recent resales didn't do well. Previously-featured 1621 Ashland is finally in escrow, but presumably at a loss from $1,450K in 2005 to most recent asking of $1,415K, not to mention commission, etc. And will the "Airport View" flip at 2314 Pier, bought spring 2007 for $920K and finally in escrow break even after expenses?

Also time to reinforce my masthead disclaimer, that I do my best to accurately bring together data from multiple sources, but there certainly could be errors in my sources or my bleary-eyed transcription. Hey, don't make a multi-million dollar decision only from an anonymous blog!

Sold

2376 Dewey, 3 bed/2 bath, LP=$699K (-39% from OLP), OLD=3/2/07, SD=5/15/08, SP=$678K (-3% from LP) (sold 11/22/06 $1,100K)
2638 32nd St, 2/1, $865K (+4%), 6/6/07, 4/16/08, $815K (-6%)
2338 Pier, 3/2, $898K (-3%), 9/16/07, 6/3/08, $875K (-3%) (sold 3/9/07 $860K)
2010 Hill, 2/2, $949K, 6/9/08, 7/18/08, $998K (+5%)
2658 32nd, 3/1.75, $959K, 2/19/08, 4/1/08, $960K
2651 33rd, 2/1.5, $978K (-2%), 12/12/07, 5/2/08, $940K (-4%)
1026 Ozone, 3/2, $999K, 5/5/08, 6/18/08, $980K (-2%)
1322 Maple, 2/1, $999K, 3/12/08, 7/8/08, $929K (-7%)
2520 26th, 3/2, $999K, 4/10/08, 6/4/08, $1,160K (+16%)
1717 Robson, 2/1, $1,039K (-13%), 10/12/07, 6/2/08, $949K (-9%)
3118 17th, 2/2, (red. $1,049K), 9/7/07, 2/22/08, $1,067K (+2%)
3409 Pearl, 3/2, (red. $1,099K), 1/7/08, 3/3/08, $1,055K (-4%)
1720 Cedar, 3/1.75, $1,100K, 3/13/08, 6/6/08, $1,000K (-9%)
838 Pacific, 4/3, $1,168K, 12/19/07, 3/08, $1,073K (-8%)
1307 Marine, 3/2, $1,195K, 11/6/07, 2/21/08, $1,100K (-8%)
2723 11th, 2/2, $1,199K (-11%), 5/2/07, 6/17/08, $1,075K (-10%)
2643 31st, 5/2.5 (duplex), $1,250K, 1/7/08, 2/20/08, $1,300K (+4%)
3041 Paula, 5/4, (red. $1,395K), 10/5/07, 2/26/08, $1,170K (-16%)
1348 Hill St, 3/2, $1,450K (-9%), 9/17/07, 4/1/08, $1,450K
2511 25th, 3/2, $1,499K (-6%), 3/31/08, 6/23/08, $1,490K (-1%) (sold 7/11/07 $1,000K)
2334 26th, 3/2.5, $1,600K, 12/28/07, 4/1/08, $1,575K (-2%)
1336 Sunset, 4/3, $1,625K, 12/14/07, 2/28/08, $1,568K (-4%)
2343 29th, 4/4.5, $1,895K (-4%), 8/2/07, 2/4/08, $1,825K (-4%)
1639 Hill St, 4/3, $1,997K (-9%), 11/27/07, 4/11/08, $1,900K (-5%)
2307 Ashland, 5/5.5, $2,390K, 2/7/08, 4/15/08, $2,200K (-8%)

Sale Pending

2620 24th, 2/2, $900K (-23%), 12/26/07, Pending 7/14/08
2392 Dewey, 3/2, $919K (-5%), 6/2/08, Pending 7/18/08
2314 Pier, 2/2, $1,099K (-12%), 7/9/07, Pending 7/7/08 (Sold 3/23/07 $920K)
1519 Hill, 2/2, $1,099K, 6/18/08, Pending 7/5/08
1621 Ashland, 2/1.5, $1,415K (-16%), 8/13/07, Pending 7/17/08 (Sold 10/31/05 $1,450K)
2637 34th, 4/3.5, $1,600K (-6%), 3/25/08, Pending 6/13/08
1047 Pacific, 3/2, $1,750K (-8%), 2/25/08, Pending 5/29/08
2516 Cloverfield, 4/3, $1,900K (-27%), 7/15/07, Pending 7/4/08
2246 25th, 4/5.5, $2,649K, 4/25/08, Pending 6/18/08

Expired or Withdrawn

1731 Cedar, 3/1, $1,135K (-12%), 1/18/08, Expired 6/08
926 Ozone, 3/2.5, $1,149K (-19%), 7/29/06, Expired 5/08 (Sold 2/24/06 $945K)
1702 Ashland, 4/3.5, $1,339 (-8%), 10/3/07, Expired 3/08
2641 32nd, 2/2, $1,399 (-7%), 4/24/08, Withdrawn 7/17/08

Information Needed

1320 Pearl, 2/1.75, $939K (-31%), 11/21/06, Gone 5/08 (Sold 4/28 $1,270K)
2432 21st, 3/2, $990K (-14%), 10/10/07, Gone 5/08
2610 31st, 2/1, $1,225K, 1/15/08, Gone 3/08
1741 Maple, 3/2, $1,275K (-20%), 10/14/07, Gone 5/08 (Sold 4/5/06 $1,300K)
2202 Marine, 5/4, $1,395 (-7%), 4/8/07, Gone 4/08
1640 Bryn Mawr, 3/2, $1,449K (-5%), 7/7/07, Gone 1/08
834 Maple, 3/2, $1,829K (-13%), 8/24/07, Gone 2/08

South of Montana outcomes

Unlike the perennial listing at 2320 Idaho Ave (photo above) there have been sales south of Montana, north of Wilshire. Although some have taken big discounts - 14% to 27%, below - off original listing price to finally sell.

Sold

1047 Chelsea, 3 bed/1.75 bath, LP=$1,639K, OLD=3/10/08, SD=6/11/08, $1,585K (-3%)
1047 Harvard, 3/2, $1,650K, 2/1/08, 4/9/08, $1,620K (-2%)
865 Harvard, 2/1, $1,849K (-7%), 1/16/08, 7/11/08, $1,725K (-7%)
1050 Princeton, 4/2.5, $1,949K, 5/9/08, 7/15/08, $1,960K (+1%)
866 Stanford, 3/2, $2,075K, 3/6/08, 7/2/08, $2,011K (-3%)
2714 Washington, 6/5, $2,350K (-18%), 8/13/07, 3/11/08, $2,135K (-9%)
1016 Franklin, 3/2, $2,699K, 1/24/08, 2/22/08, $2,699K
848 25th, 5/4.5, $2,995K (-11%), 7/30/07, 1/8/08, $2,850K (-5%)
841 Franklin, 3/2, $3,150K (-10%), 1/22/08, 5/20/08, $2,740K (-13%)

Sale Pending

1018 Yale, 2/1.5, $1,529K (-6%), 5/9/08, Pending 7/3/08
944 23rd, 3/2, $2,095K, 6/10/08, Pending 6/11/08
936 26th, 5/4.5, $2,395K, 5/7/08, Pending 7/18/08
837 22nd, 4/3.5, $2,575K (-6%), 11/26/07, Pending 6/10/08

Expired or Withdrawn

1053 17th (photo below), 2/1, $1,300K, 1/8/08, Expired 7/08
1015 25th, 2/1, $1,475K, 1/8/08, Expired 7/08 (Sold 1/12/07 $1,200K)
2222 Washington, 4/2.75, $1,495K (-12%), 6/25/07, Expired 2/08
1123 Berkeley, 3/2.5, $1,798K, 4/14/08, 7/15/08, Leased 7/15 $6,200/mo

Information Needed

2512 California, 3/2, $1,495K, 3/18/08, Gone 4/08
812 Centinela, 3/1.75, $1,899K (-5%), 10/4/07, Gone 1/08
942 26th, 3/3, $2,295K, 1/19/08, Gone 3/08

North of Montana outcomes >$3M

Here's the higher-priced part of all the outcomes I've been able to find for houses formerly listed in 2008, and how many of those are expired or withdrawn, over $3 M north of Montana. (Below $3M)

The high end has been a mixed bag. Well-priced houses sold quickly. But then there are ones like 333 14th (photo above), that took a 14% list price reduction plus another 5% in over a year to finally sell. Another is 202 14th, 14% + 7% price reductions and nearly 8 months.

In a class by itself is 1221 Georgina (photo below), sold last August for a record $5.6M, now resold for only $4,475K, a whopping 20% haircut!

A number more are pending, as are Expired and Withdrawn listings, mostly after months unsold. Finally, there are five former listings below I don't have an outcome for. Anyone else know?

Sold

115 17th, 3/2.5, LP=$3,195K, OLD=4/17/08, SD=6/16/08, SP=$3,000K (-6% from LP)
703 25th, 5/5.5, $3,195K, 3/14/08, 6/17/08, $3,000K (-6%)
202 14th, 6/4, $3,288K (-15%), 5/24/07, 1/18/08, $3,050K (-7%)
528 16th, 4/3.5, $3,439K, 3/27/08, 6/6/08, $3,410K (-1%)
517 Lincoln, 5/4.5, $3,450K, 4/21/08, 6/18/08, $3,450K
317 Alta, 5/3.5, $3,799K (-5%), 11/8/07, 7/8/08, $3,625K (-5%)
434 22nd, 5/6, $3,995K, 1/24/08, 4/23/08, $3,930K (-2%)
610 25th, 5/4.5, $3,999K, 2/25/08, 5/30/08, $3,800K (-5%)
333 14th, 5/6, $4,195K (-14%), 6/29/07, 7/2/08, $3,975K (-5%)
1221 Georgina, 5/6.5, $4,995K (-5%), 3/20/08, 6/6/08, $4,475K (-10%) (Sold 8/10/07 $5,600K)

Sale Pending

541 Euclid, 4/4.5, $3,200K, (-7%), 4/7/08, Pending 6/12/08
518 10th, 5/4.5, $3,400K, 6/9/08, Pending 7/2/08
369 22nd, 5/4.5, $3,495K (-8%), 1/18/08, Pending 6/27/08 (Sold 4/6/07 $2,250K)
809 Georgina, 4/4.5, $3,695K, 6/2/08, Pending 7/14/08
316 25th, 5/5.5, $3,995K (-15%), 2/6/08, Pending 7/10/08
424 14th, 6/6.5, $4,195K, 3/6/08, Pending 5/24/08
620 Alta, 4/3.5, $4,375K (-19%), Pending 7/6/08
609 24th, 5/4.5, $4,725K, 3/10/08, Pending 4/17/08

Expired or Withdrawn

557 12th, 6/5.5, $3,495K (-17%), 6/4/07, Expired 1/08
739 23rd, 5/4, $3,995K (-7%), 6/4/08, Withdrawn 7/7/08
636 22nd, 5/4.5, $3,995K, 3/14/08, Withdrawn 6/13/08
311 11th, 5/6.5, $4,150K, 2/26/08, Withdrawn 5/2/08
425 4th, 5/5.5, $4,890K (-6%), 2/4/08, Withdrawn 6/4/08
147 Georgina, 4/3.5, $7,500K (-6%), 10/26/07, Withdrawn 5/20/08

Information Needed

343 21st Pl, 4/3, $3,100K, 1/4/08, Backup 1/08, Gone 2/08
515 21st, 4/4.75, $3,295K, 3/25/08, Backup, Gone 4/08 (Sold 4/3/07 $2,725K)
324 Euclid, 5/4.5, $4,250K, 12/1/07, Gone 1/08 (Sold 8/16/06 $3,972.9K)
310 22nd, 5/5.5, $4,395K, 11/6/07, Gone 5/08
2121 La Mesa, 5/8, $12,500K, 1/7/08, Backup, Gone 3/08

North of Montana outcomes <$3M

Reader comments yesterday led to this: first, a list of all the outcomes I've been able to find for houses formerly listed in 2008, and second, how many of those are expired or withdrawn? I'll break it down by area, and for north of Montana, by price.

Clearly the lower-priced north of Montana houses (like 231 18th, photo above) sold quickly during the first half of 2008, typically for $2.3M+. Tear-down value is less clear, with few data points. Update: 710 19th Street may be a new one at $2,086K.

Striking was 214 Euclid, 3/2, asking $2,700 but sold for $3,350K. Described as, "Once in a lifetime chance to build a dream home on a rare 1+1/2 lot - in prime Santa Monica. First time on market in 42 years", this is a data point for those here seeking double lots.

As some comparison, on May 20 when I last listed houses north of Montana over 30 days there were 21.

(LP=latest List Price; OLP=Original List Price; OLD=Original Listing Date, across re-listings; SD=Sale Date; SP=Sale Price)

Sold

476 26th, 2 bed/2 bath, LP=$1,685K (-14% from OLP), OLD=11/7/07, SD=5/28/08, SP=$1,575K (-7% from LP)
1140 San Vicente, lot, $1,895K (-14%), 1/30/08, 6/4/08, $1,675K (-12%)
704 15th, 2/1, $1,990K (-13%), 8/22/07, 2/25/08, $2,100K (+6%)
219 23rd, 3/2.5, $2,195K, 1/28/08, 4/9/08, $1,880K (-14%)
710 19th, 3/2, $2,295K (-8%), 3/10/08, 7/19/08, $2,086K (-9%)
334 15th, 2/1, $2,295K, 1/11/08, 2/8/08, $2,400K (+5%)
249 18th, 3/1.75, $2,349K, 4/10/08, 5/28/08, $2,500K (+6%)
231 18th, 3/1.75, $2,349K, 1/11/08, 2/8/08, $2,325K (-1%)
447 11th, 3/2, $2,385K (-6%), 8/18/07, 4/15/08, $2,385K
327 21st, 3/2, $2,395K, 6/12/08, 7/2/08, $2,300K (-4%)
416 17th, 3/2, $2,399K (-6%), 11/29/07, 2/26/08, $2,360K (-2%)
701 20th, 3/3.5, $2,595K, 3/24/08, 5/20/08, $2,500K (-4%)
316 18th, 3/1.75, $2,598K, 2/8/08, 3/28/08, $2,415K (-7%)
238 17th, 4/3.5, $2,635K (-2%), 3/11/08, 6/20/08, $2,550K (-3%)
241 24th, 3/2, $2,695K (-7%), 1/9/08, 4/15/08, $2,695K
214 Euclid, 3/2, $2,700K, 4/4/08, 5/22/08, $3,350K (+24%)
621 19th, 3/2.5, $2,895K, 3/8/08, 6/9/08, $2,675K (-8%)
710 23rd, 4/3, $2,999K (-9%), 7/13/07, 4/29/08, $2,900K (-3%)

Sale Pending

517 Euclid, 5/2, $2,139K (-3%), 4/19/08, Pending 6/6/08
626 19th, 4/3, $2,389K, 6/13/08, Pending 7/1/08
633 Euclid, 4/3, $2,750K, 4/22/08, 6/3/08, Pending 5/29/08
303 22nd, 3/3, $2,895K, 6/23/08, Pending 7/7/08
234 Alta, 3/3, $2,980K, 3/14/08, Pending 4/14/08

Expired or Withdrawn

754 23rd, 4/3.5, $2,279K (-15%), 6/8/06, Expired
460 Lincoln, 3/3, $2,395K, 4/14/08, Withdrawn 6/9/08
738 22nd (photo below), 3/2.5, $2,395K, 2/11/08, Expired
1020 San Vicente, 5/4.5, $2,665K (-11%), 7/9/07, Expired

Weekly inventory update

7/18 - Pretty flat to just slightly down, with more price reductions, withdrawals, and expired listings.

7/11 - SM, PP, and MV are all flat. But for Mar Vista that included a lot of changes: expired and withdrawn listings, listings back on the market, new listings, and listings into escrow.

7/4 - SM is down by the 5 listings that expired this week. PP and MV are down just slightly.

 LA County Santa Monica Pacific Palisades Mar Vista
              <$3MNewTotDOM<$2MNew Tot DOMTotNew DOM
-------- ------ ------------ ------------- ---------
 1/30/06 27,732
 2/28/06 29,420
 3/31/06 31,819
 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 70 
 3/ 2/07 41,251 42 14 51 114 26 10  68  79 55 25  76
 4/ 6/07 42,857 41 23 49 107 18  8  73 103 54 52  50
 5/ 4/07 45,918 46 28 54 92  19  6  82  79 71 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
-------- ------ ------------ ------------- ---------
 2/ 1/08 53,722 54 16 67 157 26 16 101 118 89 36  96
 2/29/08 53,520 50 10 68 178 29  8 108 108 88 21 103
 3/28/08 53,566 57 17 81 171 32 14 122  92 82 22 105
 5/ 2/08 54,098 59 14 83 159 35  7 136  93 90 33  96
 5/30/08 53,216 56 23 79 147 34  9 142 106 91 29  89
 6/27/08 53,058 74 28 98 131 30  6 129 107 96 26  95
 7/ 4/08        69  1 91 124 29  1 126 105 95  5  96
 7/11/08        69  3 91 131 29  3 127 106 95 14 103
 7/18/08 52,049 69  8 90 132 30  5 116 123 93 22 102
 7/25/08

West LA TV flip house

I saw this house on a TV house-flip show last week. After an intro highlighting the Westside with images of Santa Monica, the general plot line was a contractor and his wife bought a West Los Angeles 1-bedroom tear-down pretty cheaply ($525K on 9/7/07 per Zillow, built 1937), stripped it to the floor and one wall, and built more foundation and a new house on it. Drama came from rain delaying construction and losing construction financing, resolved by the extended family chipping in to finish.

The climax had a real estate agent say he would list it for $1.05M (I think I recall). But the end titles noted there had been no serious offers. So where is it? It wasn't in the MLS, but I found this listing via Google, and recognized the TV agent's name, Zan Sacker, for this 3 bed/2 bath at 2617 Corinth Ave., asking $974,999:

"PRICE REDUCED!!! Stunning All New Contruction Craftsman home as featured on the hit TV show "Flip This House". This never lived in before Cul de sac home is appointed throughout with the highest quality Kohler fixtures, Pella dual pane windows, solid bamboo flooring, & slate flooring, travertine, Ceasarstone & granite counter tops. ..."

No MLS# in that listing (Why would you list with an agent that doesn't put it in the MLS?). But a newer 7/14/08 listing is now on the MLS, reduced again to $939K.

A couple of shots from the back yard showed a freeway bridge. Of course you don't see the freeway (separated only by a flag-lot driveway) in the listing photo. Why would you do a flip in this location??

June DataQuick

The June DataQuick numbers show median prices are down again (-24.5% for Los Angeles County from its last-August peak). Volumes are seasonally up slightly for the month (June is the peak month of the year), but well down from June 2007 (-25.6% for LA County). Orange County was a slight exception, with volume down but prices up for the month. (May DataQuick post)

This puts Los Angeles County prices back to late 2004, Orange County back to spring 2004, Ventura County back to the end of 2003, and San Diego back to spring 2003.

Think that a year ago we were still waiting to see any fall in DataQuick median prices for Los Angeles, and some were arguing they wouldn't. Now it's a certainty, they're down a quarter in less than a year, losing over three years of increase.

The remaining question is just the Westside. It's been a longer wait than we expected, but the bears have otherwise been right. The economic wreckage from the national bubble continues to spread, overwhelming premature calls of "containment".

Adelaide x 4

There are four listings on Adelaide Drive (the north edge of Santa Monica, overlooking SM Canyon). Above is the landmark Craftsman bungalow at 236 Adelaide, 8 bed/4.5 bath, asking $7,995K.

For this house, with the lawn looking out at the view and great Moreton Bay Fig tree in the back, if I had 8 million lying around, bubble or not.... BTW, you know I try to do something different for photos; this was taken in 1978.

"Located on one of the most scenic & historic streets in Southern California this Landmark property rests on over 3/4 of an acre w/spectacular views of the ocean & mountains. Constructed in 1911 by Isaac Milbank & owned by the same family for nearly a century, some say this is the best example of Craftsman style in Santa Monica. Graciously perched above the street the property boasts expansive lawns, mature trees, pathways, gardens, & several ancillary structures. Truly a piece of So Cal history...."

Or you can buy the little house across the street on the edge of the canyon at 237 Adelaide, 1/1.5, asking $2,895K.

"Platitudes aside, this is simply the best view in the best location in Santa Monica. Ocean,canyon and mountain views above Santa Monica Canyon!! Living room w/2-story ceilings, wall of glass. private pool, separate private office Bedroom wing off of patio area. Fabulous location for buyer/investor looking to live or build. It is currently a stunning pied-a-terre..."

Or up the block at 526 Adelaide, 7/4.5, $7,950K:

"Only a handful of regal homes grace the south rim of Santa Monica Canyon overlooking the Gold Coast, Santa Monica mountains and azure Pacific. So, it's rare indeed when one of these great estates is offered for sale. For the first time in 33 years, this one-time home of Santa Monica's first mayor will find new owners. In pristine condition, the lovely gated property includes 7BR's and enclosed pool house. Walk to the beach, Montana Ave. or the bluffs above the sea. Imagine the possibilities...."

Or the first of the two houses on the north side, at 645 Adelaide, 7/6, $7,395K:

"This Mediterranean inspired estate is situated on one of Santa Monica's premier streets boasting views of the ocean, mountains & canyon. This home has been masterfully re-defined & updated w/state-of-the-art materials & finish reminiscent of the Amalfi Coast. 6BD, 6BA + media rm, den/ofc/7th BD. Gourmet kit w/stainless steel appliances. Features walnut hwd flrs, custom archways, beams & molding. Elegant master w/custom closets, French doors & lg balcony overlooking patio & pool w/amazing views...."

Weekly inventory update

7/11 - SM, PP, and MV are all flat. But for Mar Vista that included a lot of changes: expired and withdrawn listings, listings back on the market, new listings, and listings into escrow.

7/4 - SM is down by the 5 listings that expired this week. PP and MV are down just slightly.

      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
 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  70      
 3/ 2/07 41,251  42  14  51 114  26  10  68  79  55  25  76
 4/ 6/07 42,857  41  23  49 107  18   8  73 103  54  52  50
 5/ 4/07 45,918  46  28  54  92  19   6  82  79  71  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
-------- ------  --------------  --------------  ----------
 2/ 1/08 53,722  54  16  67 157  26  16 101 118  89  36  96
 2/29/08 53,520  50  10  68 178  29   8 108 108  88  21 103
 3/28/08 53,566  57  17  81 171  32  14 122  92  82  22 105
 5/ 2/08 54,098  59  14  83 159  35   7 136  93  90  33  96
 5/30/08 53,216  56  23  79 147  34   9 142 106  91  29  89
 6/27/08 53,058  74  28  98 131  30   6 129 107  96  26  95
 7/ 4/08         69   1  91 124  29   1 126 105  95   5  96
 7/11/08         69   3  91 131  29   3 127 106  95  14 103
 7/18/08

Barn door finally closing

In the finally closing the barn door after the cows are long gone department, the LA Times reported today:

On Monday, the Federal Reserve is expected to require lenders to document borrowers' incomes and verify that they can afford their mortgage payments -- including the higher payments that come when adjustable-rate loans reset.

"These new rules, which will apply to all lenders and not just banks, will address some of the problems that have surfaced in recent years in mortgage lending, especially high-cost mortgage lending," Federal Reserve Chairman Ben S. Bernanke said at a conference Tuesday.

Think of the wreckage that would have been avoided had the Fed done this, say, three years ago. And whose fault it was that they didn't.

Also, quoted widely but worth repeating:

"Many of today's unusually high number of foreclosures are not preventable," Treasury Secretary Henry M. Paulson Jr. said in a speech Tuesday. "Due to the lax credit and underwriting standards of the past years, some people took out mortgages they can't possibly afford and they will lose their homes. There is little public policymakers can, or should, do to compensate for untenable financial decisions."

Edlen's Case-Shiller for Palisades?

Reader Josh passed this on via WarChestSM (thanks both of you!), a column by local broker Michael Edlen in the July 2008 Santa Monica Sun (emphasis added).

Rigorous Study of Home Values

Most people are aware of the shift that has happened in home values across the country and many also know that the market price changes have been far greater in some areas due to various demographic and economic factors. There seems to be a consensus that overall prices are lower by 10-40% depending on which area is being considered.

It has been my position that most Westside neighborhoods would have a significantly different experience than what clearly was impacting many other areas. For example, quarterly median Pacific Palisades sale prices have increased during five of the last seven quarters. As a matter of fact, the all-time high median sale price in Pacific Palisades reached $2,550,000 for the first quarter of this year - not what the economists and nay-sayers had predicted. For the record, the median sales price this year-to-date has dipped to $2,315,000, which is still 11% higher than for the same time period last year.

Common sense would indicate that "real prices" cannot possibly still be increasing at this time. In an effort to approach the question more accurately, one might wish to compare apples with apples. We have arduously accomplished such a comparison by identifying nearly 50 Pacific Palisades homes which have sold two or more times in recent years, with a repeat sale in 2007 or 2008. We made every reasonable effort to eliminate any homes that had been remodeled or significantly altered between the dates of their sales. We calculated the annual rate of price change. For example, a home sold in March of 2006 for $1,925,000. The same home sold in April of 2008 for $1,999,000. This is a $74,000 price increase, 3.8% over a 24 month periods. On a yearly basis this is a 1.9% rate of increase. We performed the same steps for all identified repeat sale properties in 2007 and averaged the percentage change on an annualized basis. The same procedure was performed for 2008 repeat sales. As a result, we were able to measure as accurately as possible what the actual recent price movement has been here. We found that the annualized rate for 2007 was an increase of 7.4%. Thus far, 2008 has shown an increase of 6.5%. This reinforces the overall analyses cited above, indicating that prices have not yet shown any measurable actual decrease in our community.

It should be noted that three of the recent Pacific Palisades home sales indicate an annual appreciation rate of only one percent, and these sets of sales occurred within the last 18 months. It is reasonable to expect that we finally will see some actual median price decreases as the year progresses, though it is unlikely for it to be reflected in year-to-date figures until the fourth quarter.

It echos the S&P/Case-Shiller, could be done pretty accurately by someone who knows a local market, and kudos for not just citing median prices.

But after more thought I wonder about its methodology. It appears to be assuming a straight-line annual appreciation between the earlier sale date and sale in 2007 or 2008, then averaging those, which could overstate appreciation in 2007 and 2008. How far back did they go to get "nearly 50" examples? And did higher or lower price ranges behave differently?

So his 7.4% and 6.5% may be questionable, but his conclusion seems consistent with my sense of a plateauing since latter 2005 and likely downturn ahead as inventory builds, adjacent markets spill over, and the economy falls. (updated 7/8)

SM tipping point?

I wonder if Santa Monica prices are finally starting to tip, with much inventory not selling and some some substantial price cuts.

Or I'm just getting bored seeing the same listings week ... after week ... after week. Some well-priced good houses sell promptly (like 1519 Hill Street at $1,099K is in escrow in 19 days), but then there's the other stuff, long unsold even despite big price reductions. Here are some current lowlights for Santa Monica.

Above is 1621 Ashland, 2 bed/1.5 bath, is reduced again, now 16% to $1,415K, 329 DOM (days on market from first listing). They're now under the $1,450K they paid on 10/31/05.

Also in Sunset Park 2620 24th, 2/2, is reduced 23% to $900K, 194 DOM. After only 398 DOM 2224 Navy, 2/1, is down 16% to $1,050K.

Another flip gone bad, 2314 Pier, 2/2, is reduced 12% to $1,099K, 364 DOM. They paid $920K for it 3/23/07.

It took 27% off (from $2,595K to $1,900K) and 358 DOM, but 2516 Cloverfield, 4/3, is finally in escrow.

In Ocean Park, the 3/2 at 654 Ashland is reduced 19% to $1,859K at 242 DOM. The 2/2 at 150 Fraser is reduced 12% to $2,195K at 277 DOM. And the new 2/2.75 at 2606 Highland is reduced 14% to $3M even, at 241 DOM.

Two long-spurned houses north of Wilshire, both now asking $1,995K, are 2320 Idaho, 3/3, reduced 17% at 473 DOM, and 1135 Berkeley, 4/3, reduced 16% at 364 DOM.

The poster child north of Montana must be 620 Alta, 4/3.5, reduced 19% (over a million from $5,395K to $4,375K), 270 DOM.

The recent (5/29/08) 6/8 listing at 411 Lincoln has already reduced 14%, from the rediculous $5,795 to merely $4,995K. And 316 25th, 5/5.5, has reduced 15% to $3,995K at 152 DOM.

Weekly inventory update

7/4 - SM is down by the 5 listings that expired this week. PP and MV are down just slightly.

      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
 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  70      
 3/ 2/07 41,251  42  14  51 114  26  10  68  79  55  25  76
 4/ 6/07 42,857  41  23  49 107  18   8  73 103  54  52  50
 5/ 4/07 45,918  46  28  54  92  19   6  82  79  71  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
-------- ------  --------------  --------------  ----------
 2/ 1/08 53,722  54  16  67 157  26  16 101 118  89  36  96
 2/29/08 53,520  50  10  68 178  29   8 108 108  88  21 103
 3/28/08 53,566  57  17  81 171  32  14 122  92  82  22 105
 5/ 2/08 54,098  59  14  83 159  35   7 136  93  90  33  96
 5/30/08 53,216  56  23  79 147  34   9 142 106  91  29  89
 6/27/08 53,058  74  28  98 131  30   6 129 107  96  26  95
 7/ 4/08         69   1  91 124  29   1 126 105  95   5  96