Tuesday, January 20, 2009

"winter of our hardship" bankrupt contractor

Hope you saw the inauguration today. On a sunny day filled with enthusiasm for "hope" I heard a heavy view of the near term in Obama's speech. Here's its last paragraph:

America. In the face of our common dangers, in this winter of our hardship, let us remember these timeless words. With hope and virtue, let us brave once more the icy currents, and endure what storms may come. Let it be said by our children's children that when we were tested we refused to let this journey end, that we did not turn back nor did we falter; and with eyes fixed on the horizon and God's grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations.
This new listing (photo above), of the 2 bed / 3 bath failed flip at 2219 14th Street, second lot north of Pearl in Sunset Park, asking $725K, is another example of growing local distress:

"Prime Santa Monica Location. No occupancy permit at present. Soon to be bank-owned. Contractor declared bankruptcy mid-rehab. Residence is still on temporary electical pole. Plans and inspection correction notices available. Property is listed as-is only and is subject to bank approval. Newly painted throughout. Most fixtures are new. Needs flooring, except kitchen and dining area which have been newly tiled. Wonderful fireplace in living room. Santa Monica School District."

I don't have a last sale price, but the Assessor valued it at $589,659 on 9/9/04.

37 comments:

Anonymous said...

these contractor declared bankruptcy listings are VERY interesting.


Please keep covering them

in the last recession, the very best deals were the ones in which the builder went BK and the bank took the property

when a bank is trying to sell a property that needs major work, you can get it for 50 cents on the dollar

please especially cover properties like this in the 90402 and 90403 - many of us would like to put in low ball bids on bank owned wrecks like this in those two areas

latesummer2009 said...

The first of many failed flips, builder bailouts,speculator specials and bank distress bombs in Santa Monica.

Pretty good location, nice tree-lined street. I See 600s...

Anonymous said...

"Hope you saw the inauguration today."

Actually, no I didn't. I saw a pantomime in which the chief justice led the president elect in an unconstitutional misreading of the presidential oath. Obama is not president. He hasn't taken the oath. At this point it would take a ruling of the Supreme Court to install him in an extra constitutional fashion. For the time being the country has no legally installed leader. Thank god.

dwr said...

"Pretty good location, nice tree-lined street. I See 600s..."

Most would not consider 14th a good location due to traffic. There is also an absolute wreck of a house next door (on the corner).

Anonymous said...

"Actually, no I didn't. I saw a pantomime in which the chief justice ..."

Blablablah. Do you have nothing better to do?

Westside Bubble: Keep this blog focussed on real estate. Admonish the right-wing trolls to take their shallow rants elsewhere.

Richard Mason said...

At this point it would take a ruling of the Supreme Court to install him in an extra constitutional fashion.

No, it wouldn't. If the first oath was bad, he just has to call up a Federal judge and say the oath again. He probably already did. If I were a Federal judge and happened to see him at the Inaugural Ball, I would certainly offer to hear a do-over.

Evan said...

"Most would not consider 14th a good location due to traffic. There is also an absolute wreck of a house next door (on the corner)."

It can be kind of busy (live up the street from here), and ambulances and police cars take 14th as a shortcut because there aren't any speed bumps or speed-reducing obstacles. And I agree about the house on the corner (plus, most of the places on Pearl between 14th & 16th aren't great-looking). But I love the neighborhood. The rest of the houses are all very well-kept, you're within walking distance of Yummy and a few places on Pico, and this address isn't too far away from the nice row of shops on Ocean Park. It's a very walkable and transit-rich neighborhood, which isn't always the case in Sunset Park.

And thanks for this post--since I'm in the neighborhood, I was always wondering what was going on with this place. The temporary electrical pole has been there for more than a year. This house (and the one on the corner) stick out because of their condition, but I think this could be something really nice.

Evan said...

Any idea what that is above the garage? Studio?

Anonymous said...

I looked at the exterior of this house. The run down place next door is actually apartments. And condos lurk over the backyard area. There are two bus lines that run in front of the house on 14th street. 7AM - 8PM. Not any real back yard for kids to play. Maybe you could fence in the front. But it's quite small. Narrow and shallow lot surrounded by high density housing units. Pass.

Evan said...

Anonymous, there's only one bus line that goes up 14th Street, the Big Blue Bus Crosstown Mini Blue. It goes by every 15 minutes.

The BBB's system map (http://www.bigbluebus.com/systemmap/downtownsm.asp#)
still lists the Pico Market Mini Blue that went up 14th, but that has been discontinued, and besides, that only ran on Saturdays, when the Crosstown doesn't run (it's Mon-Fri).

dwr said...

"The rest of the houses are all very well-kept, you're within walking distance of Yummy..."

What is Yummy?

Evan said...

Small grocery store on Pico/Euclid. It's Yummy.com, an online delivery grocery store, but you can also go in there. Good sandwich counter.

van said...

Evan, there were two different buses that came through when i was there. One turned off of Pearl and onto 14th toward pico; and the other one came straight down 14th from ocean park toward pico...not sure what lines they were. It looked like there were people on board them. Maybe one of them was diverted?

the two story building in the back has a garage underneath and living quarters above.

Tom said...

Zip Realty shows it was listed at 725k on 1-18

Anonymous said...

Maybe it's because I'm a rube from fly over country, but if that house is worth a cent more than &125k, Im President Obama.

For decades California real estate tracked the nation and then went nuts during the 1970's and has never readjusted. Maybe it's about time someone told you.

A butt ugly half remodeled house on a micro lot is not the stuff that dreams are made of.

Anonymous said...

This will sell for lot value only.
650k?

Anonymous said...
This comment has been removed by a blog administrator.
Westside Bubble said...

You're welcome, Anon #1!

Not to worry, Anon #2, Obama retook the oath yesterday just to be sure.

Yes, Anon 1/22 9:13, it makes me wonder too if financial reality will cause people to rethink "it costs how much for that?"

Thanks for the neighborhood comments, but in my opinion Anon 1/22 9:37's reference crossed the line and I've deleted it.

Evan said...

Good decision, Westside Bubble.

I'm kind of confused about this situation still. The contractor declared bankruptcy--were they also the owners and/or the tenants? The photos on the MLS make it look like whoever was there left a bunch of junk behind...was that just the contractor's stuff that they left inside? Or were there separate owners that have bailed on this place?

Wooster said...

That stretch of 14th is probably one of the least desirable sections of east-west street in Sunset Park. I think 20th takes the cake though. When this does sell it will establish a temporary marker for very low end Sunset Park lot values. Then it will probably be passed by the rest of the neighborhood coming down past that level. My guess is that true median/typical 7,000 sf lot value in Sunset Park bottoms out somewhere between $400k and $500k.

Evan said...

"That stretch of 14th is probably one of the least desirable sections of east-west street in Sunset Park."

You mean north-south?

latesummer2009 said...

I have to agree with Wooster. Santa Monica Starter Homes in this area will settle around $400K, when it's all over.

Anonymous said...

"Santa Monica Starter Homes in this area will settle around $400K, when it's all over."

Not so sure about $400k. Don't forget the investment factor and what a renter is willing to pay for a small house in the SM school system. R/E investors will jump in at the $500k level, even at a break-even cashflow, in anticipation of (very) long-term appreciation and increasing rents.

Westside Bubble said...

Evan, I presume it's just the contractor's stuff, and the house is otherwise vacant.

The fact that the contractor went bankrupt and the house then is bank-owned suggests the contractor was the owner. Anyone know for sure?

Evan said...

There's also still a tarp-covered minivan sitting in the driveway.

Anonymous said...

The starter home market has tended to hit a psychological floor at $500,000. It holds there for a while, then possibly continues down depending on the overall state of the economy. The next floor (historically), in this part of town, is around $300,000.

Anything beneath that and your talking about breaking from historical trends by too large of a margin.

And when we're talking about starter homes in Santa Monica, we're talking about 90404 by the freeway, and fragmentary lots of 3500 square feet and under. Theis house isn't great, but it's a step up from there.

Evan said...

Yes, as many qualms as some people have about 14th St., there are other places in SM that would be a worse location. I've seen a lot of listings for affordable condos on Kansas, but that pretty much backs up onto the freeway, and that neighborhood around Stewart is "iffy." Same for north of Pico and souther of Olympic around Virginia Park.

Anonymous said...

"And when we're talking about starter homes in Santa Monica, we're talking about 90404 by the freeway, and fragmentary lots of 3500 square feet and under."

No, you're talking about garbage. A starter home is 1000+ feet on a 7500+ foot lot in a nice residential neighborhood with decent schools.

Evan said...

Anonymous has spoken.

Anonymous said...

And Evan disagrees?

Evan said...

Not necessarily, but I think context matters in defining "starter home." I think those requirements might be a bit unrealistic in an expensive city like Santa Monica.

Anonymous said...

I'm new to the area and since I work in SM I would have bought a "starter" home in SM last year for 700,000 even with my east coast sense of pricing. Obviously there was no such thing. I now rent a 4bd in Redondo. I don't want to argue over the merits of one town or another, I just wanted to point out that If I made this choice, many others might do the same.

Anonymous said...

Sorry I didn't finish my thought in that last post. Now that I'm down here me and my family love it and I wouldn't buy one of those SM starter homes for 3,4, or 500k. My thought is that if this downturn lasts long enough perceptions about what is desirable and the value they place on that may change.

Anonymous said...

Redondo is a nice place, but impossible to get in and out of...

Anonymous said...

Please let me know when home prices fall to 400 k for a home on a nice block in Santa Monica. I will buy six of them and rent them to all of you.

Marty Zigman said...

I can demonstrate that there are some neighborhoods on the westside that appear to be flat or have gone up in price for the last two years and are against the trend illustrated by the Case Shiller Los Angeles High Tier price index. Pacific Palisades, Beverly Hills and Hermosa Bearch. See the images here (bottom of page):


http://dollarcrisis.wik.is/Market_Indicators/LA_Home_Price_Charts


This really is difficult for renters that are looking to buy in those neighborhoods as the prices are still way out of line. I suspect it has to do with minimal foreclosures in these communities; or buyers are still in a fantasy about the values...

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