Thursday, March 12, 2009

Biggest reductions!

As we wait for prices to return to reasonable levels and the Westside market to get unstuck, let's celebrate the sellers who've led the way with the biggest price reductions!

Ok, some were way overpriced to begin with, but it's momentum in reductions that counts, so lets compliment rather than laugh at them for missing the market being so overpriced.

Ranked by % reduced, here's everything I've found currently available in the MLS over 25% reduced from first listing. Keep up the good work, keep cutting those prices!

Address, bed/bath, current price (-% from orig.), orig.list date

Santa Monica

629 Pico Pl., 2/3, $1,250K (-47%), 7/25/08
819 Pier, 2/1, $625K (-42%), 5/9/08
3218 Arizona, 1/1, $410K (-38%), 6/20/08
1643 Hill, 5/4, $1,350 (-27%), 8/5/08
2222 Marine, 4/4, $1,450K (-27%), 5/17/07
808 Adelaide Pl. (photo above), 7/10, $12,450K (-27%), 3/31/08
2010 Cloverfield, 2/2, $599K (-25%), 1/29/08

Pacific Palisades

16463 Akron, 3/2, $1,345K (-58%), 7/11/07
1104 Via de la Paz (photo below), 2/2, $1,249K (-44%), 11/2/07
820 El Oro, 4/3, $1,300K (-35%), 10/10/07
838 Fiske, 5/3.5, $1,450K (-26%), 7/18/08
16751 W Sunset, 3/2, $899K (-25%), 8/3/08

Palms-Mar Vista

3637 Redwood, 4/3, $975K (-35%), 5/5/08
3462 Moore, 3/4, $1,650K (-33%), 10/29/08
4085 Alla, 3/1.75, $599K (-32%), 2/4/08
13221 Venice, 3/2, $550K (-31%), 3/28/08
3766 Sawtelle, 3/2, $485K (-30%), 10/7/07
12729 Gilmore, 2/1, $525K (-30%), 10/23/07
3710 Grand View, 3/3.5, $1,750K (-27%), 7/30/08
3218 Maplewood, 4/4.5, $2,150K (-27%), 7/22/08
3953 Inglewood, 1/1, $399K (-26%), 8/11/08
10735 Queensland, 5/2.75, $1,699K (-25%), 6/26/08


Anonymous said...

When I look around at some of these houses in this post I get all confused about some of the pricing. It seems like they have been discounted 30% from their original listing price, yet their current listing price is at or very near the peak of the market. Were many of these homes really listed at 20-30% above the peak? I have been following housing in the west side for about five years and to think that something like 10735 Queensland was ever valued at $2.265MM is pure insanity.

Or $2MM for 2222 Marine? That's an abomination. Given the severe location disadvantage for 2222 Marine I would put it at maybe $1.5M when sold to a fool at the peak. If we conservatively estimate that 90405 is only down 15% then it seems like it should be priced under $1.3M with the expectation that it's going to sell for $1.2 or less (and be willing to accept that offer).

Anonymous said...

Anyone else building right now?

What is the all in hard and soft costs to build now - I am putting in low ball bids for SFR lots in the 90403 at 1.05 million a lot

I know that this is a little below the comps but i am in no rush - want to just take advantage of the most distressed sellers

when i win my lot, i will want to build inexpensively - can i get a typical 4 thousand sq foot house done for 250 a sq foot or 1.0 million right now ?

Anonymous said...

Typical, yes. It won't be that special and you expect some off the shelf design.

Anonymous said...

808 Adelaide is now listed at $11.45M, not $12.45M.

I think if they drop the price another $4M or so someone might take this one seriously.

Anonymous said...

Here is the math for April 2009

plan A - buy a teardown north of montana - will cost you 1.5 million
spend 1.0 million building a mid range 4 thousand sq foot home

plan B - buy a teardown south of montana - will cost you 1.0 million for land and 1.0 for mid range 4 thousand sq foot home - all in cost 2.0 million

which is smarter - 90402 at 2.5 or 90403 at 2.0

Evan said...

I've been in that house on's in some rough shape. The bathroom is right next to the kitchen, which is kind of strange, and it had the smallest sink I've ever seen. Walked through about a month ago, and the realtor was just talking to a friend the entire time and showed no interest in us. If he's like that the entire time, no wonder no one's biting! The location is okay, but the house next door isn't helping things--they paved over the lawn and parked a car on it, and have a rusty weightlifting set sitting out there.

Anonymous said...

I don't think you can build a house worth a SM address for less than $300-350 sq. ft. With all the crap City of SM makes you go through? With the 2 year carrying costs?
Landscaping, new utilities, demo, arch and engineering fees, public works improvements, it goes on and on BEFORE you are picking out nice tile!

I saw an article in the LA Times home section about some small custom modern house in Sunset Park, built for $1.5M ????? Wasn't that big or special if I recall from the article last week....

Evan said...

Anonymous @ 2:13pm:

Were you talking about this place?,0,5733770.photogallery

I drive by that every day--trust me, it is not a small house.

Anonymous said...

When i said $250 could be done i wasn't thinking about soft costs, just hard costs for a decent home that won't be a total joke. However, if you keep your design and layout very simple you can do a lot with$250 psf.

Anonymous said...

I walk by that house on 17th every day. I enjoy that house a lot. $1,500,000? Could be, but I think that house is about 4,000sf. They probably spent at least $500 psf on that place including soft costs given the quality architecture.

Anonymous said...

$250 per sf is do-able, but you have to be super-tight, including no changes, near-perfect logistics, and no screw ups. I hit near $250 on my construction, but literally did not re-do a single item. Every build, pour, and install was one-time,and no finishes or colors were changed. I eyeballed each day's progress, and did make small changes that were within the workflow, like adding more boxes during the electrical rough-out. I was able to spend 2 hours a day gophering and spec'ing items like applicances, windows, doors, tiles, etc. If I left it all to the general I would have been over $300.

Anonymous said...

I understand how you did it for $250 and that makes sense

It seems to me that if my general contractor shows me five houses he completed in the past 12 months, and i just choose one of them and say - make me an exact exact copy of this just in another color - don't change a thing - just do the exact same thing - that my GC should be able to do it for $250 without any input from me - and i can get the house i want with no hassle at all and the GC should be able to do it for $250

i have experience with additions to my previous houses and no experience building from scratch. I am really not that picky, i just want to be able to have a GC build me something new with mininal hassle and minimal cost

so I figure i buy land in the 90403 for 1.0, pay my GC 1.0 to put up a 4 thousand sq foot house, and then pay 200 thousand on top of that for permits and landscaping and pay 100 thousand to demolish the old crummy house on my land

so All in I get a new house in the 90403 for 2.3 million - (assuming no carrying costs)

I know many architects - high end architects, that get angry and sick when they ask me about my plans and i lay out the above

these architects treat you like a sinner if you don't hire an architect to do something artistic and creative - architects hate the idea that i can just have my GC copy what he did before and pay an architect nothing or almost nothing

but end of the day if i want to come in under 2.3 all in i can't hire an architect to design from scratch

Anonymous said...

I see your point about wanting do a copycat house on auto-pilot. I can't stress enough the need to stay on top of the job, adding an inch of concrete here, a larger header there, an extra foot or two in a room, etc. The goal is to build something that looks like $350 at a highly managed price. At $250 per sf on GC auto-pilot, you will get what you pay for - a spec house with cut corners. You see a few these NOMA and more in 90403; after the freshness wears off in 8-10 years, they are teardowns all over again, back to lot value. The first giveaway is the cheap vinyl or aluminum windows set in rough texture stucco.

Anonymous said...

I agree....if you want a house that holds its value, put a bit more $$ into the new construction budget. I do believe people will pay for quality and a well done house.

I can give you a lot of examples of houses that look like apples to apples comparable houses in which one sells for $500-800K more. Its usually about the quality of finishes and floorplan.

Anonymous said...

I respect very much what people are saying here.

Let's say that i want a new four thousand sq foot home in the 90402. One choice is to pay 1.0 million for 250 per sq foot construction. another choice is to pay 1.4 million for 350 per sq foot construction.

OK - let's walk through the scenarios. If I spend the extra 400k today, and then i live in the house for 18 years and then i go to sell it in 18 years, how much more will I get for the house?

The way I look at it, If I am paying 4% on the extra 400k I borrow, I need to get an extra 800k when i sell in order to compensate me for the 400k i put in today. If i get an extra 800k as a result of putting in the 400k today I can in my mind see it as break even

So my question is, when i sell in 18 years will someone really pay me an 800k because i used more high end fixtures and finishes and design?

In my humble opinion the answer is no. Even if my $350 per sq foot home looks great today, in 18 years it will still look somewhat dated.

Put it another way - no matter how nice the kitchen i put in today is, in 18 years the buyer is going to want to rip it out and put in a new one

So by the above logic I just can't justify paying 350 a sq foot instead of 250 on the basis of the numbers

but i invite dissent

Anonymous said...

2 thoughts on the $1.0M versus $1.4M scenario.

First, if you go $1.0 with off the shelf plans you may have a tough time with approvals. Not much on the low-end gets by in 90402, the City will ding your plan submissions until they can see you are doing construction commensurate with the surrounding neighborhood.

Second, the prior poster is correct - a first class floorplan with solid construction is the key driver of long-term value, less so the updatable finishes. Ever wonder why 60 year old Spanish houses command a premium? Yup, it is timeless architectural style, layout, materials like smooth stucco, solid wood finishes, and exterior/interior tiles, and solid construction.

Anonymous said...

This is very helpful

current hypothesis - build a four thousand square foot very solidly built spanish home - with solid construction and the right floor plan

use spanish tile in the floors of the main level

use truly middle of the road surfaces in the kitchen and surfaces in the bathroomns and middle of the road appliances in the kitchen and in the laundry room

if I follow this plan, can I do four thousand sq feet for 1.2 million?

Sounds like this SOLIDLY built spanish style home will sell for more money in 18 years than a "contemporary" or "modern" house that I put up today for a little less money

Anonymous said...

No, I would say Spanish style is hard to replicate without having a decent budget, all that woodwork and details add up.

I would say build a modern house with the latest technology and finishes and you will get your money out of it. You HAVE to do decent tile and solid surface countertops in the baths, no question there whatever your budget.

Again, I do think you get your money out of paying a designer/architect to select finishes for you. They are in the design market everyday and will be the best to advise you. Don't even ask your friends or contractors about their opinion!!

Anonymous said...

The above post is right on - don't skimp. Check out some of the brand new Spanish-style townhomes not selling in 90403. Knock on the 'wood' beams and architectural details inside and out - plastic resin and foam! Do yourself a favor and go as first class as possible. The results of cutting corners are more obvious than you think (like a bald guy who thinks no one notices his comb-over).