Wednesday, February 11, 2009

2003 prices in Pacific Palisades

On the theme of 2003 prices, here are some similar low-end examples from Pacific Palisades in the "El Medio Bluffs" area south of Sunset and west of Temescal. Above is the 3 bed / 2 bath / 1,765 SF house on a small 4,225 SF corner lot at 601 Erskine Drive that sold 12/5/03 for $860K. This looks like it may have been remodeled since that sale.

Two others in the area are 508 Muskingum Avenue, 2 bed / 2 bath / 1,157 SF house on a 5,445 SF lot, sold 9/30/03 for $910K, and 536 Muskingum Place, 3 bed / 2 bath / 1,518 SF house on a 5,053 SF lot, sold 11/26/03 for $930K.

Then there's this one. The cheapest sale in the area in 2003, this 2 bed / 2 bath / 1,143 SF house at 784 Wildomar sold 5/28/03 for $762K. Which is not surprising when you discover it's right next to the apartment building (left in photo) at the corner of Sunset and Wildomar.

Turns out it's for sale. Asking the implausible price of $1,399K (already reduced from $1,479K after 3 weeks). It's described as:

"Beautiful, zen-like setting with a good feeling of privacy. Absolutely move-in condition two bedroom, 1.75 bath Contemporary home in El Medio bluffs area. Spacious living room with fireplace and veranda. Family room off kitchen and dining - opens to recently redone oasis-type yard, large spa and patio. Separate, detached non-permitted office/gym behind garage. Some hardwood floors, beautiful wood details, frosted front door, lush landscaping. Tract 9300."

Is the reason that properties next to traffic din are called "zen-like" that one has to be in a zen state to not hear the noise?

31 comments:

Anonymous said...

I love the 784 Wildomar's listing language. It has a "good feeling" of privacy. I guess that good feeling is all you get when there is an apartment next door. Good luck to them.

Anonymous said...

Fun to dream about 2003 prices for those looking for a home.

It will take time. We are still seeing the single sale of a really great property in (insert your neigborhood here) that every other owner points to and says I can get that price as well.

Only job losses will force sales at any price. This has had not even touched the mid to high end real estate market yet. The impact thus far is from lending, and fear of job losses or economic downturn. Lending issues do not forcing an owner to sell, and fear, while a motivator, is not enough to force an owner to take a loss. (Most owners feel like they are taking a loss when they sell below peak prices, even if they bought years ago.)

Someone on SMDistress posted that this cycle will be different, quicker prices drops, because information is more available via the web. More information, however, does not force a seller to take a "loss."

Anonymous said...

Your single sale argument is meaningless, at a single sale there effectively is no market.

Similarly, your argument that only job losses forces sales is flawed in that it assumes people could afford what they bought, the loan terms they got and that they wont be earning much less but still employed.

Anonymous said...

Pretty clear that the mid/high end HAS been effected, though not to the extent of the lower end.

'Only job losses' force sales? How about job relocation, divorce, illness, death? That's life. Not to mention loan resets, etc

Yes, it will take more time, but perhaps not as much as you think.

Anonymous said...

Don't disagree however, there are other reasons for sales. Death, divorce, relocation or how about reduced income ( as opposed to job loss). Others sellers may just want to get out while they can. Many PP homeowners have their own businesses and they can be feeling the recession pinch.

Anonymous said...

Anon 10:38 here - agreed, other things can force a sale. For example,

"Death, divorce, relocation or how about reduced income ( as opposed to job loss)."

Death and divorce happen in good and bad markets, they do not drive market prices for an area.

Job losses do drive prices for a specific area. Job relocation and reduced income are in the same category as job losses, with less impact.

Anonymous said...

i don't think we are necessarily talking about selling at any cost. Just look at the PP inventory levels and the homes sold per month. In January there were 160+ homes for sale and only 7 homes sold. Many of those homes have been on the market for over 6 months. If they have any hope of competing with existing homes and new homes coming on the market they will need to reduce the price. Not saying that all homes will hit 2003 levels but I can point to more and more homes listed in the low $400 per sq ft range and still not selling. It's only a matter of time that prices will be reduced - we just don't know how low.

Anonymous said...

Until now, the national median price for U.S. homes has never dropped (since federal housing agencies began keeping statistics in 1950.)

Why? There have been many regional housing booms and busts since 1950, e.g., California in the late 80s early 90s. Regional housing busts are driven by job changes in a particular region, e.g., aerospace and defense leaving southern California in the late 80s, early 90s. Without pressure to sell, owners are very slow to lower asking prices, and some homes sell all the way down.

Even with strong economic pressures, it takes years for real estate markets to correct. Sure some will always mail in the keys, but for most the home is the last thing to go as they hold out for some turn around.

Tragically, it may be blessing to be forced to sell now as it will be worse next year.

JeffL said...

"Until now, the national median price for U.S. homes has never dropped (since federal housing agencies began keeping statistics in 1950.)"

Including now, the real (inflation-adjusted) median price for homes has declined three times:

1979-1983
1990-1993
2005-present

Also, in the 25-year period from 1975 through 1999, real existing house prices stayed roughly within the range of $135,000 to $175,000, with an average during this period of $152,700. The United States median price was $200,500 as of the third quarter of 2008. This is about 31% above the long term real median price.

Anonymous said...

what 7 homes sold?

4 homes sold. The ~16mil doesn't really factor so 3 homes sold. two of those were >5mil so really one home sold. (it was ~2mil)

Anonymous said...

Yes, homes under $2MM are the only ones that count. Come on folks, we all know that.

Anonymous said...

Okay, so the number is still 4. FOUR houses. So sales are down 50-80%+ and supply is up 3-4x. (probably more if you factor in the houses for rent or in/soon to be in foreclosure or otherwise not on the MLS... Gee, I wonder what happens next? (he's a clue, look at OC, SC, FLA, etc)

Anonymous said...

Back to the topic of 784 Wildomar.

I looked at the listing in Redfin, and I agree of course that it's wildly over-priced. But with respect to the last sale price in 2003 in the $700's, I have to think that the owner made some remodeling to this place. It looks immaculate in the picture, and the fixtures and landscaping look very finished (though the kitchen is not very updated).

So, in terms of value, I'd say this place is worth close to what it was worth in 2003 assuming a good deal of work that went into it, maybe $800k.

$1.4 is just offensive though, not even worth lowballing as it is completely insane. This is a TINY two bedrooms, no pool (or room for one), with a small kitchen in a marginal location. And one of the bedrooms is also not very useable with a slanted roof. They need to be pricing this under $1 million to be in the ballpark, I don't think there are fools left who will get suckered at $1.4 or anything close to that.

Arti

Anonymous said...

1544 12st 1.2 mil in 06 sold 1/09 for 710000

Anonymous said...

Anyone know what is going on with the modern condo building at 870 Haverford? My wife and I checked them out last year. The front units are awesome, but their $1.5 million asking price was cazy. They've been on the market for over a year. I can't imagine what the carrying costs are. The builder must be in serious trouble.

tbgpalisades said...

Re: 870 Haverford

I've seen those, as well. Nice, just way overpriced. I would also like to know the carrying costs. Why don't they lower the prices and sell them? It's been over a year, and only a few are sold. How much longer is the builder willing to hang on, and to what end?

Anonymous said...

If there's so much money on the westside, how come the stores on Montana can't stay open?

http://la.racked.com/archives/2009/02/12/racked_maps_a_rash_of_closings_on_montana_avenue.php

Montana Closing said...

If there's so much money on the westside, how come the stores on Montana can't stay open?

Anonymous said...

your url post did not come through

please use tiny url

or tell us how to see the article thanks

Westside Bubble said...

Here's the link - thanks for posting it!

Rents are so high on Montana that any downturn in revenue will sink a lot of stores.

Anonymous said...

I second that. I am personal friends with the owner of a very well known boutique on Montana, and the rents there for anyone unfortunate enough to have had to renew a lease went through the roof. What I don't understand is why they won't now cut the rent a bit to help their tenants survive. It's so stupid, they are strangling their own tenant and if they get a vacancy there it will hurt them far more and the new tenant will want a lower rent anyway.

Anonymous said...

"What I don't understand is why they won't now cut the rent a bit to help their tenants survive."

What, you don't understand this? It's clear that the 90402 will be attractive for the super-rich forever. And so if one store can't pay the rent anymore, there are thousands of boutique-owners around the country who are just waiting to snatch up a spot on Montana Avenue in order to sell their products to this distinguished clientele.

As one apparently needs to say here- I am being sarcastic. This idea that values will only go up forever (at the 20% rate of the last 8 years) not only seems to be prevalent in private real estate, but also to retail as well- at least as far as Santa Monica is concerned.

Wooster said...

Irrelevant comment here, but rents on Robertson were $20 psf/mo at the peak. How anyone made that number work is beyond me.

Anonymous said...

Anyone know what rents on Montana are right now - if i want to take one of the small empty storefronts on Montana, what price per square foot would i have to pay right now

Frank said...

If you can believe this page, Montana Ave retail is currently 8.00/sq ft triple net.

Anonymous said...

Who cares about PP? Talk more about SM

90402 isn't the only neighborhood where dumps are still moving -

125 Wadsworth Avenue in the 90405 is a 103 year old wreck (hard to believe something that old is still standing)

It just changed hands for 2.8 million

It ain't just the 90402

Anonymous said...

I agree that both Pacific Palisades and 90402 will roll back to 2003 prices

Lots of rivalry between the two neighborhoods -

both have their finer points.

But it is residents of PP that drive to the 90402 to shoot people - not the other way around.

just google the story about the shooting of 90402 people in 90402 by PP residents

___________


Second Suspect Arrested in North of Montana Shooting

Police recovered evidence and arrested a second suspect Friday in a shooting last month that injured four partygoers outside a house in an upscale Santa Monica neighborhood.

Morgan Neidlinger, a 20-year-old resident of Pacific Palisades, was arrested at a Hollywood residence early Friday morning and charged with four counts of attempted murder and assault with a deadly weapon, according to police.

Neidlinger was transported to the Santa Monica jail and his bail was set at $2 million, said Lt. Alex Padilla, the Police Department spokesman.
Evidence recovered by police. (Photo courtesy of the Santa Monica Police Department)

Police also served search warrants that three Westside residences, where they recovered several handguns, magazine clips and ammunition that may be connected to the July 15 shooting on the 400 block of 11th Street, Padilla said.

The warrants were served at 5:30 a.m. Friday in Pacific Palisades at residences located in the 17000 block of Posetano Road and in the 17000 block of Porto Marina Way,

Anonymous said...

Pacific Palisades rich kids that buy guns....wow, I'm sure we are in for a major crime wave.

We can call it the NOMO crips vs. the Alphabet street bloods....

Anonymous said...

Ha - i'd rather live in PP. Seems that the PP crips like to shoot the SM bloods but the SM bloods are too wimpy to go to PP to do drive bys

Anonymous said...

I think your are insulting the noble and illustrious fraternal brotherhoods of Crips and Piru

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