These February 2008 inventory graphs speak for themselves. But look especially at the huge jump of Pacific Palisades <$2M over February 2008! And unlike total L.A. County inventory, Westside inventory (bottom chart) is significantly up over 2008.
Tracking the real estate bubble on the Westside of Los Angeles, especially in Santa Monica ... available housing inventory, highlights/lowlights, and the larger economy.
Obligatory Disclaimer: I do my best to accurately report publicly-available data, but take no responsibility for what you do with it!
Contact westsidebubble {at} gmail {dot} com .
44 comments:
Looks like 10% unemployment and mortgage resets are kicking in on the westside.
Too bad there are a whole lot less buyers around...
Yeah there were a few idiots over the past six months, the "weak hands", who jumped in with both feet just because the westside went down 20% and they thought they were getting a deal.
They were in way too early. Housing doubled and then doubled again in just a decade. It's going to correct very severely to give this back up, especially as salaries keep getting slashed and peoples' net worth is melting.
Anyone looking to sell or not in love with their house better sell right now while they can still get some of the Bubble appreciation. If you wait, your house will be worth a lot less and there won't be any appreciation for a very, very long time.
Sell now or be priced into your house forever.
Arti
Arti -
thanks for your post -
I mostly agree with you
small two bedroom houses in the 90402 routinely sold for 700 thousand bucks each in 1995. They then doubled to 1.4 million
then they went up 50% to peak out at 2.1 million in 2007
My point is that these houses doubled and then went up 50%
these houses were THREE BAGGERS for the people that bought in 1995
NOT four baggers
Looking at townhouses at the realtor sites
It appears that the five year old townhouses in Playa Vista are now $300 a square foot
The five year old townhouses in the 90403 are selling for $600 a square foot.
BIG price spread there
I am not saying it isn't justified but keep this in mind when you buy
townhouses/ condo price related to HOA $
I heard there are condos in Compton for $20 per square foot. Please keep that in mind when buying in the 90403.
I was just noticing new condos along California Avenue with "For Lease" banners, not even trying to sell.
Wow, the Palisades is about to see a massive price decline with the current quantity of inventory and the rate at which hardly anything is selling. We haven't even seen the spring inventory come onto the market.
The 90402 inventory is up massively -
My view, after looking at the listings is that most of the inventory increase is from older one story houses in the 90402
As far as I can tell the cheapest two story house in SM 90402 is still 365 23rd which is asking 3.2 million
Even better--have you guys checked Mar Vista? I'm seeing more and more attractive propositions there. I'm seeing nothing attractive in SaMo yet (which means it has substantial declines to go).
I would feel 100% better about a purchase in an area that has already taken a good 30%-plus whooping, there's less downside. Buying in SaMo is like handling a grenade.
uh - teardowns in the 90402 have already taken a good 30% whupping
they peaked at 2.3 and they are now changing hands at 1.6
that is 30% down - doesn't that meet your criteria
Is there a lot of 1.6m listings in the 90402? All tear downs?
Haven't seen anything with good value for a SFR in the 90402....not yet.
90402 TEAR DOWNS are indeed down 30% look at the numbers
numbers don't lie.
Down 30%
Pac pal re Appraiser buddy is battening down the hatches for a long quiet year, hoping that things pick up in 2010.
"that is 30% down - doesn't that meet your criteria"
Good point. But I don't think that's enough, this area shot up suddenly 150% during the Bubble pyramid scheme. It is going to go down a good deal more before we're at fundamental value.
I agree with the poster who said buyer in SaMo is like holding a hand grenade.
90402 down 30%
that means the tear downs down 30% and also the nice new houses that used to sell for 5.0 are now 3.4 million
That your pac pal appraiser buddy can afford to live there is just another sign of how overheated this real estate ponzi scheme was. They should be living to the east with the people who work at mom and pop escrow companies.
What's sad is that all these people who bought during the Bubble ponzi early enough, like 2002 or 2003, are also holding. When the market corrects back to fundamental value in line with rents, incomes and the historical graph, and we're back to 2000 prices, they'll have lost all their appreciation. It's terrible.
Someone should tell them they should sell now, asap, while they can still get 2004 and even 2005 prices. They can rent a nice place in the same zip for two or three years, then buy the same house as they had before for hundreds of thousands less, PLUS they'll have pocketed all that money they made when their house appreciated during the Bubble ponzi.
It's sad how few people actually do this even when they know it's the financially right thing. Guess it's hard to think of selling your place, even when doing so will literally set you up financially for life (pocketing a huge again plus purchasing later an equivalent place for so much less mortgage). Psychologically, they only think about the "top" value their home was ever appraised at, and can't do the right thing because they can't get over the psychology.
I'm curious if anyone out there is that ballsy and selling to pocket the profit and re-buy later for a lot less. Most of the people who were sitting on huge gains are going to see it all evaporate. I guess that's what happens in all Pyramid Schemes (which is what bubbles are), you're a winner if you get out early, you're a loser if you stay in it too long and end up holding the bag/underwater mortgage.
If it were me I'd get over the psychology and sell ASAP at whatever I can get, it will set me up for life to not get underwater and pocket the ponzi gains.
Arti
Arti, problem with that logic is that the timing is dicey for getting back into the market.
I sold a house in 2003 and wish I could get back into it today as the interest rates are so favorable. But that home would be difficult now for me to buy with the credit markets. At least once you are in a home and can afford the payment, the bank doesn't call the shots.
Usually, land/real estate becomes cheaper when interest rates are higher, limiting the number of people available to buy...driving prices down.
I do see a parallel to that now as interest rates are low, but credit is hard to get. I know two extremely well qualified buyers who fell out of escrow due to the homes not appraising or reluctance to lend.
So selling is hard and buying seems even harder.
"It's sad how few people actually do this even when they know it's the financially right thing."
Some people treat their home as just that, a home, not an investment. Being a renter sucks a$$- you know it and so does every other renter on this board.
"I know two extremely well qualified buyers who fell out of escrow due to the homes not appraising or reluctance to lend."
What were the home prices?
How much do these buyers make?
How big were their down payments?
"I know two extremely well qualified buyers who fell out of escrow due to the homes not appraising or reluctance to lend."
What were the home prices?
How much do these buyers make?
How big were their down payments?
2:00 pm - you sold your house in 2003 and then the market shot up insanely. I understand it's hard for you to get back in since that was your move. No one had any idea that we would rocket up for so long and so much, but by selling in '03 you definitely hurt yourself. Now, for someone to sell now they could still get a decent appreciation (provided they bought before '05 or so) and lock in some gains, wait a year or so, and buy back in. That's a much easier timing proposition because there's a whole lot of certainty about which way prices are heading. When the market is irrationally heading up, on the other hand, it's harder to time things. Then again, if you want to stay in your house and can pay for it, I understand that proposition as well.
Anon 2:17
Houses were a tad over a mil. Buyers make about 250K. Great credit. Have to have 30% down now(banks are that wary)
Single family homes (sidebar: in my opinion a WAY better investment than buying air space in a condo) didn't appraise or banks were not taking the appraisal due to 'current market conditions'
Now if these folks can't buy a million dollar house with that income (I think they got a 5.5% interest rate)....then the market conditions have gotten so bad that there will be NO closed sales in Calif. Scary.
anon 4:50.
I think you're right that these buyers should qualify under these conditions--especially if they are willing to throw 300K into the house.
So to all. Are the banks right that these houses are just going to lose value and it's not worth making the loan, or are they too tight these days?
Others, I think it is pretty unreasonable to think that families are going to disrupt their lives for an opportunity to short their houses. If they plan on living there for 30 years and can make the payment they're not even reading this blog. If you are going to sell in the next 5-10 or want to move up, however, I agree. Sell now.
Santa Monica's Montana Avenue just keeps losing tenants. Between June 2008 and now, over 30 businesses have said goodbye to the street (including the eight recent closings we mapped a few weeks ago.) All the vacancy signs are having a terrible effect on morale, notes the Santa Monica Daily Press in an article that itself can't be so great for morale. "It just makes you not want to shop at all," one visitor said, thereby articulating up every local vendor's worst fears. The silver lining, such as it is: Rents are most definitely coming down.
That great....but this isn't a 'commercial market rent outlook' blog
No this is a very important post
The shops on Montana avenue - the environment on Montana avenue is certainly part of the reason for the high values a around montana
not most of the reason but part of the reason
i mean if they put in pawn shops and thrift stores on montana it will impact the price of houses
wonder what they will fill all that empty space with
Anon 8:22....my Appraiser pal is a lifelong resident. and very smart and cautious with his money. he will be more than fine.
wonder what they will fill all that empty space with
Before the now-closed chi-chi stores, Montana was full of mom-and-pop businesses that actually catered to locals, not out of town looky-loos. The closed stores and lower rents are a good sign - we can get the mom-and-pops and funky stores once again. This will actually improve the neighborhood, and attract more local foot traffic and shopping. Thank you recession, and good riddance designer boutiques.
You think out-of-town looky loos were the ones buying $200 jeans? I think not.
This is more evidence that the 90402 is nowhere near as bulletproof as many people still believe.
I've lived in Santa Monica for about 20 years and since then the shops on Montana have always had something equivalent to $200 jeans and overpriced trinkets and other nonsense. The neighborhood has always commanded a serious premium over the rest of Santa Monica. Regardless of what the retail market is doing, 90402 will still be what it is today. That said, it will probably fall lock-step in price with the rest of Santa Monica.
it will fall in lock step that is for sure - it will always maintain its premium over the rest of santa monica
if the typical house in the 90402 is 3 million today and the typical nice house in a cheap part of santa monica is today 1.5 million,
the 90402 house will get cut in half to 1.5 and the house in cheap santa monica will be 750 k
fall in lock step
but the 90402 will maintain its premium since it is much safer and cleaner than the cheap parts of sm
"The closed stores and lower rents are a good sign - we can get the mom-and-pops and funky stores once again."
God I hope that Williams Sonoma store closes down. I was so mad when I saw they were building one. It's a blight, and has absolutely no place on Montana. I actually drive to the one in BH just to boycott the Montana one, we don't want it here.
"You think out-of-town looky loos were the ones buying $200 jeans?"
Actually, that jeans store that's closing down was selling $300 jeans (they had a few around $240). They're liquidating at 50% off, so you can actually get jeans for $150 now.
I get well cut, modern Levis for about $50-60, and $100 if I decide to splurge on their Capital E line. If you spend $240-300 on jeans you are quite the fool. However, you need to charge that for jeans on Montana in order to afford the exorbitant retail rents.
I welcome the changes on Montana - we need more restaurants and cafes and fewer stores - more places to hang out and relax and fewer places to buy stuff
let's give Montana more of a neighborhood feel
"I welcome the changes on Montana - we need more restaurants and cafes and fewer stores - more places to hang out and relax and fewer places to buy stuff"
You sound like one of the 10,000 renters who live just south of Montana.
"I was so mad when I saw they were building one. It's a blight, and has absolutely no place on Montana. I actually drive to the one in BH just to boycott the Montana one, we don't want it here."
Could there ever be a more classic example of a NIMBY mentality than this? How about you boycott the whole store? No, you can't do without their $40 oven mits. Disgusting, why do I even think about living in the 90402!?
"fall in lock step
but the 90402 will maintain its premium since it is much safer and cleaner than the cheap parts of sm"
I have to know- where is your apartment, and how small is it?
You think out-of-town looky loos were the ones buying $200 jeans?
I am on Montana all the time during the day, and see the shoppers. The first set is tourists in rental cars with maps, not sure what they buy, but they park and walk up and down the street. The second set is groups of women, all decked out, in luxury cars with plates from Calabassas Mercedes, Encino, Sherman Oaks, etc. dealers and clearly dressed like the shops they are going to - and they buy bags and bags of stuff. The last category is the women with drivers, not as often, but they also buy a lot. Trust me, the locals don't buy from the boutiques; the locals are getting their shoes fixed, coffee, a bite to eat, etc.
of course the locals shop there, don't be ridiculous. All kinds of people shop there, of course, but as a local (with an expensive wife and daughter), I can definitely assure you that locals shop there all the time. Interestingly, locals also buy cars in Calabasas, Encino, and Sherman Oaks. I bought mine in Ontario and it still has the dealership license plate frame on it, so don't be confused by what you see.
Some quotes from Warren Buffett over the years:
If past history was all there was to the game, the richest people would be librarians.
We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.
There seems to be some perverse human characteristic that likes to make easy things difficult.
The investor of today does not profit from yesterday's growth.
Price is what you pay. Value is what you get.
Risk comes from not knowing what you're doing.
Let blockheads read what blockheads wrote.
It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
I strongly prefer the shops and galleries and overall vibe of Main Street and Abbott Kinney, to those of Montana. But homes are less alluring there - lots are tiny, schools aren't great, streets are laid out funny and parking is impossible.
It is all about the school district.
If you live in Venice or near Main Street in SM the average kid in the school district is different than the average kid in Franklin.
It depends who you want your kids going to school with
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