Tuesday, August 26, 2008

High-end financing (again)?

Last November I listed the ten properties over $4M that sold in Santa Monica so far in 2007 (January-August), wondering how they had been financed.

Thanks to Phillip, we found they all had loans, ranging from 30% to 80%, predominantly variable. But that was before loans got worse.

Updated: Thanks to Phillip (again!) I've added % financed loan data he was able to find.

Let's try it again. Only there haven't been ten sales over $4M January to August this year. Just four. So this time I'll list the ten over $3.5M:

2121 La Mesa, 5 bed/8 bath, LP=$15,450K (-9% from OLP), SD=4/29/08, SP=$10,850K (-13% from LP)
1333 Palisades Beach, 5/4.5, $5,895K, 7/2/08, $5,895K
1221 Georgina, 5/6.5, $4,995K (-5%), 6/6/08, $4,475K (-10%), 74%
609 24th, 5/4.5, $4,725K, 8/13/08, $4,395K (-7%)
333 14th, 5/6, $4,195K (-14%), 7/2/08, $3,975K (-5%), 25%
424 14th, 6/6.5, $4,195K, 7/29/08, $3,960K (-6%), 60%
434 22nd, 5/6, $3,995, 4/23/08, $3,930K (-2%), 80%
610 25th, 5/4.5, $3,999K, 5/30/08, $3,800K (-5%)
316 25th, 5/5.5, $3,995K (-15%), 8/15/08, $3,810K (-5%)
317 Alta, 5/3.5, $3,799K (-5%), 7/8/08, $3,625K (-5%), 50%

For someone with access to loan records, could you post how much was financed, and what loan type? (For privacy, no owner names, please.)


Anonymous said...

This is interesting. Can you also do a sample of houses north of Wilshire in the $1.5 to $2.5 range and in Sunset Park $1.0 to $1.25 range?

Anonymous said...

hey 7:19 - that would be more interesting, but with this blog's obsession with 90402 you won't get anything like that. Look it up yourself.

Anonymous said...

With all due respect, many of the active participants in this blog are really only interested in 90402

we think the rest of Santa Monica is beautiful, rest of Santa Monica is better than 90402 in many many ways, but we only are interested in 90402

We leave it to the moderator to decide how much time to spend on 90402 but perhaps we could organize a survey or something - if the survey of all the users here indicates interest in 90402 only perhpas the moderator will change the focus

Anonymous said...

Maybe the name of the blog should be the "90402 bubble blog" or the "90402 everlasting bubble blog" for the bulls out there.

Anonymous said...

I would have to agree -- I think the Westside includes just a wee bit more than 90402.

How about Brentwood and Westwood??

Anonymous said...

I don't mind the 90402 focus, but the banter and original posts have become so repetetive. It would seem that there's more to discuss in other parts of SM.

Westside Bubble said...

I'm bored with 90402 too, but have used it as a long-term price index and an indicator of how high-end houses are financed.

Don't forget the Ashland & Hill prices post earlier this month. I will also soon be posting on sales prices in Mar Vista and Pacific Palisades.

I looked at Westwood and Brentwood a little last year. They would be good to update too.

Anonymous said...

A Westwood update would be interesting.

Anonymous said...

What about 90066? That is Westside. Or Venice.

Oh, excuse me, only poor wannabee "Westsiders" are interested in 90066.

Yes, this board should be called the "90402 non-bubble blog".

And anyone who aspires to own in 90066 will not be allowed to post.

Westside Bubble said...

Until I do some new posts, here are three from last fall on Mar Vista (I am interested in 90066):

Mar Vista west of Centinela

Mar Vista Hill below $1M

Mar Vista Hill

And one about the southern part of Westwood:

East of the 405, north of Pico

Anonymous said...

2121 La Mesa:
Transfer Date: 04-29-2008
First Loan Amt: $6,600,000
Lender: Hsbc Mortgage Corp
Interest Rate Type: V

- DialM

Anonymous said...

my annual contribution to this blog:

Palisades Beach - No lien recorded at this time per DQ

1221 Georgina - No lien recorder at this time per DQ

609 24th - 1st: $3.296 M (BofA 5.87% terms n/a)

333 14th St. - 1st: $1M (Wells - terms n/a)

424 14th St - 1st: $2.376M (Wells - term n/a)

434 22nd - 1st: $3.144M (BofA 4.89% (has to be variable)

610 25th St. No Lien recorded at this time per DQ

316 25th St. No Lien Recorded at this time per DQ

317 Alta - 1st: Charles Schwab $1.825M 5.52% says fixed?)
2nd: Charles Schwab $700K Credit line revolving

all records per dataquick...no time to check backup sources.

my two cents on all of this is that all high end coastal areas will see significant continued downward pricing for the next 2 to 4 years or so. the alt a market is dead and only people with cash, income and/or assets can buy in these neighborhoods now. the severity of the probable recession and the effect it has on good high paying jobs in los angeles will determine the exact extent of the devaluation. 90402 is one of my favorite areas to live in the socal, and it will be interesting to see if the demand/supply can hold prices up.

btw i was shocked over the weekend visiting listings in lower westwood (below sm blvd) $800 psf...same as ocean view in la jolla, del mar..wow!!

good luck to all navigating this roller coaster market.


Dan said...

Thanks Phillip.

While I don't follow SD area at all, I was down there recently and notices that the prices of places with ocean views are significantly better there. And, LJ and Del Mar have much nicer ocean views than up here. I suppose the larger number of jobs and proximity to a "real" city makes things cost more up here.

Anonymous said...

yeah, bad comparison by me. sd definitely lacks some things that l.a. has, especially high paying jobs. but, if you're a beach person and your career allows you to work practically anywhere, i'll take an ocean view there(lj, dm, sol beach, cardiff) anytime.

my point was that since the low's of the early to mid 90's i am shocked how prices went up so much everywhere in l.a. (i was out of town for a few years) being in real estate, development and finance for several years, and seeing how re agents and mortgage brokers were selling the payments, not the price, i always figured prices would reverse substantially when the interest rates went up to historical norms, although i never anticipated all the new loan programs would vanish into thin air.

i did some commercial neg am's in the late 80's and saw how it can be risky (as in lose your property risky) in the short term if the market turns.

the neighborhoods that used to be affordable on the westside, now require hefty downs and income. just don't think these prices can hold up well at all without the easy credit that was available, unfortunately for some, fortunately for others.

at this point i'm just really hoping the banking system doesn't completely collapse from all of their(bankers)lack of good judgment and the federal and account(trade) deficits are addressed before it is too late

Anonymous said...

y'all need to get a life.

Mr.Mortgage said...

We make a combined 400k and are waiting at least two years to buy again. We couldn't touch these homes with less than 600k income. We will wait 2-3 years. Read our latest article for more on the inventory overhang:
Millions of home sellers failed Econ 101?

dlp said...

Do not forget that San Diego/La Jolla shot up in price before L.A. did. No one thought the OC would get hit like it has. Westside will take its lumps. Its just a matter of time.

Anonymous said...

The rates above strike me as pretty darn good.

Anonymous said...

let's say that in 2006 it was relatively easy to get a loan to buy a house in 90402

let's say that today it is harder

perhaps the average income of a person buying in the 90402 today is HIGHER than those that bought in 2006

probably fewer people who can't afford the 90402 moving in today vs in 2006

make sense ?

Anonymous said...

Re 1221 Georgina

I do not believe this is an arms length sale but the transfer of this house from the BK LLC owner to one of the principals.

Wooster said...

11:31 - that makes sense, but you are missing the point. That "fewer" is where the impact is. There are a lot fewer bidders to hold up the prices. But yes, those who ultimately do buy are probably doing so with stronger credit fundamentals.

Anonymous said...

i agree that 90402 prices are going DOWN
i am a bear

however, if people in 90402 are worried about getting people with lower incomes moving in they shouldn't be -

a nice home in 90402 used to be 4.5 million. it might head down 33% to 3 million

but even after this crash in the 90402, people who earn less than 500k a year still wont be able to move in to 90402

so even with crash in prices, there will be NO crash in incomes of the people moving in to 90402

Anonymous said...

two years ago people with 500k of income would stretch and stretch in various ways in order to get in to a 4.5 million home north of montana

with the coming rational reasonable lending rules someone with 500k of income will typically ONLY be able to get in to a 3 million home

so the same person who before paid 4.5 will today pay 3.0

the point is that the income needed for 90402 may stay same or go up - it is not going down