Santa Monica inventory is back up, but Pacific Palisades is down. Mar Vista continues up, now at a record 103 for 2007-8.
Low-end north of Montana data point 517 Euclid finally closed for $2,079K. This is a loss from its 6/7/07 purchase for $2,250K, and overall a flat indicator for my index.
And 1621 Ashland is back on the market, fallen out of escrow.
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
8/ 2/08 51,906 66 14 89 125 34 8 120 136 99 35 101
8/ 8/08 69 6 91 119 30 2 108 130 103 12 103
8/15/08
16 comments:
so i guess that indicates that standard vacant lots in 90402 are still selling for exactly two million - or does it indicate a price lower or higher for land there
Empty lots in 90402 get drive by bids for $1.9 million, everyone knows this.
Knowing these markets for years, I recently witnessed something that could likely effect prices and housing as much as the upcoming deluge of Option Mortgage resets.
In talking with some accomplished people interested in schools in Santa Monica or the Palisades , I saw evidence of a fascinating psychology shift in attitude toward 90402 and perhaps other higher cost areas.
These people were wealthy but searching for a good community to raise kids in (Sound familiar)?
Basically, they recognized that larger houses were seen, and continue to be seen in 90402, as good financial investments. They accept (whether true or not) the idea that 90402 houses maintain or increase in value over time.
They and some of their peers look at the "excesses" of these new houses and see that much of it as consumption rather than investment. The consumption is not only appliances, granite tops etceteras, but the amount of square footage and subterranean living areas, etc.
They look at living in NOM and 90402 as another form of consumption, rather than investment. Especially out of Franklin district, they see the high cost, the cachet associated with the area as consumption ( not just luxuries, but something that does not have value to anyone else after it is used up. Which I guess is another way of saying that they think these "excesses" will not be highly valued in 5 to 10 years, but more like 'white elephants' or out of style).
These are smart wealthy people. It was fascinating. An amazing change in perspective.
The developers will hate this idea, because their mark-up is all associated with things that are being labeled as consumption.
Consumption has a value of course. But people are less willing to pay to consume a house than they would be willing to pay to make an investment.
It makes a lot of sense because it is consistent with changing perspective in the larger world.
In other words, if this trend continues, especially from people that can afford it, then there will be a reduced demand for precisely the things that people speculate most about on this blog: mansion, 90402, the wealthy continuing to flock to NOM housing, etc.
Of course, that begs the question: where are they going to live? They are considering Manhattan(NY), Bel Air, and the Valley.
The main criterion: where are good private schools. At $25k/yr per child, that is where they want to put their consumption money rather than lose $50,000 or more a year owning in 90402 ( and perhaps still having to send the kids to private school).
anon @ 12:26pm -
Silly speculator, don't you know that your anecdotes mean nothing to the people in 90402 where teardowns get drive-by offers of $2 million?
Just kidding. I know that someone will say that again in this thread. I'm just sick of hearing it.
Has anyone noticed that many financial institutions, talking heads, random economists for the gov, etc have started to publicly acknowledge further price declines of upwards of 20%? It seems like there is a whole lot more capitulation going on here. It seems like the consensus message is shifting from we are near bottom or about to turn a corner to we are midway through a long game or problems are deepening?. Maybe it's just me, but the message seems to have moved past denial. Unless you are listening to a Realtor.
"Of course, that begs the question: where are they going to live? They are considering Manhattan(NY), Bel Air, and the Valley."
I don't agree, you must know different people than I do. I personally know over 10 buyers in 90402 over the last 2 years, and know of 4 more prospects who were recently transferred by my company with a six figure housing allowance.
All say the same thing - SM is a place to hang their hat and raise a family in a small-town kind of way. Yes, they may move based on career opportunities, but moving to Manhattan, Bel Air, the Valley, or OC as a discretionary thing is not going to happen. A short commute, low crime, clean air, and family oriented lifestyle rule the day. And, all of these folks are under 45, some early 30's, and none stupid. Buying a house and 'making' or 'losing' money is a secondary issue compared to putting energy into their lucrative careers and trying to amass enough wealth to retire by their fifties. The pricy real estate is just an expense along the way that makes the stay-at-home moms (and dads) happy.
I have to say I agree with the last poster
Most of the people I know who have bought north of montana could have easily afforded manhattan nyc. They could have easily afforded bel air
They chose north of montana for the family friendly atmosphere that you just don't get in those other places
Now if you argue that a house north of montana is consumption and not an investment they might agree. Key thing is that it is consumption that they are happy to do
Today, the price of a brand new 6 thousand foot spec home in 90402 is around four million
What is the concensus on this blog - do the people who today own in the 90402 want the cost of that spec home to go down or do they want it to go up?
What is in the best interests of those of us who already own in the 90402 and intend to stay for 30 years
3:59 pm, 8:36pm -
You guys are using a lot of "they" when referring to residents of the 90402. What are you backgrounds that give you such experience with the sentiments of people in 90402? Seems like your argument boils down to wealthy people don't care about losing $500k-$1 million dollars because they like the neighborhood. I would think that it might be true with a few of the buyers, but 90402 is essentially a $2-8M neighborhood with the bulk of the product selling around the $2-3m range. Buyers of these homes rarely have the kind of F-you money that it takes to think like that. It's not Point Dume over here. I think you are way overselling the resilience of the buyer in 90402. Just look at how things are sitting on the market now. Good luck.
"Seems like your argument boils down to wealthy people don't care about losing $500k-$1 million dollars because they like the neighborhood."
You don't lose if you don't sell.
The only time you ever "lose" on your investment in your primary residence is when the declines in your area exceed the declines in the broader market. Nobody believes that's going to happen in 9040anything.
Of course, you could argue that you are "saving" by timing the market and not buying now... but that's a very different mentality than "losing."
This board has become a single topic blog--the prices and merits of 90402.
"Westside Bubble" should be changed to "90402 and Rich People".
Thanks for nothing--I'll be moving on.
1:17 -
You are right. 90402 is kind of boring. I'm in 90405 and always hope to see more of it. Oh well. Since I'm not stepping up and starting my own blog I guess I can't really complain because WB can write about whatever feels like writing and 90402 seems to be the subject that draws out the most freaks. I can see Sunset Park being uninteresting, but what about Ocean Park?
"Most of the people I know who have bought north of montana could have easily afforded manhattan nyc. They could have easily afforded bel air "
Yeah listen to this guy, in fact I'm in the market right now to buy two or three SFRs in 90402 for my family. Very cheap compared to NY, so you must buy now or be priced out forever, because it will hold its value. 90402 is immune you see. There is no bubble. Now is the time to buy.
don't feed the trolls.
there is a big difference between a careful and fiscally prudent family buying one house in 90402 and planning to live there for 20 years vs speculators buying multiple houses
the speculators are not a big factor in the 90402 market - families are
"there is a big difference between a careful and fiscally prudent family buying one house in 90402 and planning to live there for 20 years vs speculators buying multiple houses
the speculators are not a big factor in the 90402 market - families are"
If this is the case then we shouldn't see any declines, as nobody intends to sell for 20 years which is much longer than this predicted cycle, and 90402 should ride things out unscathed.
yes, I'm excited to see how unscathed the 90402 finishes in this downmarket.
Sunset Park
See today's post!
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