Monday, September 21, 2009

Lot of house for $2M

This new listing (9/14/09) at 721 19th St. is another interesting indicator of falling north of Montana prices. It's a 5 bedroom / 3 bath, 2,418 SF house on a 60-foot (8,940 SF) Gillette lot, asking $2,050K. The two-story remodel looks in good condition but a bit dated. It's on the lowest block, but not a busy street or right next to Montana. That's a whole lot of house compared with what $2 million bought not long ago!

"Fabulous opportunity North of Montana. Beautiful classic Spanish in prime Gillette Regent Square exudes w/ potential on huge 8940 square foot lot. Spacious home w/ 5 bds, 3 ba. Frml entry leads to liv rm w/ beamed ceiling s, hrdwd flrs, frplc. Kit opens to lrg breakfast rm & fam rm w/ Frnch drs leading to wooden deck & expansive yard w/ mature fruit trees. Mstr suite has vaulted beamed ceilings, gorgeous treetop vws & private balcony. Tremendous value and great potential. Near shops/restaurants!"

Click to enlarge photos.

64 comments:

Anonymous said...

I agree Westside. It hasn't been expanded to excess or given the cliche 2007 "updates." This price doesn't even seem to have much of a premium attached for its being in Santa Monica. My guess is that the realtor is hoping to attract a bidding war. That is the only way to list a property now if you actually want to sell it. It will be surprising if this does not sell for a little bit above this price.

Anonymous said...

teardown.

Anonymous said...

7:38 is a troll
this is in no way a teardown, Especially in today's market where construction loans are hard to get.
Troll

Anonymous said...

Not a teardown! A $200k refresh makes this very nice and livable; $300k makes it primo. I am the guy who restored a spanish-revival 6 blocks over and have no financial interest in this, but this is a nice footprint and style. If an enlightened buyer can learn to live with 2,500 sf they can have a classic gem on a 8,500 sf lot (a great backyard set-up is possible).

I will be very disapponted if this is torn down because some pretentious buyer HAS to have +4,000 sf. If that is the case, please buy one of the existing SM spec McMansions on the market or check out BH or PP - plenty of big boxes there to meet your needs.

Tom said...

2500 sf is large. Nothing to have to "learn to live with." People who want 4000 sf are usually just wasteful types.

Anonymous said...

Anon at 7:38 has a house on the MLS and is crapping his pants at the prospect of a great house like this selling for a mere $2 million. Get used to it, most of the "froth" of the Bubble is correcting, there is nothing you can do.

As for this listing, it's a nice size, big yard, oversize 9000 sf lot with no street discount in GRS. This would have been $3 million two years ago.

Good job to the seller of this place, he is definitely going to get attention and sell this house. I'll be the first to congratulate a sale.

Anonymous said...

9:11 here

I checked out the house this morning, a very nice configuration.

If it sells for $2.0 or thereabouts, another $400k for a first class detailing would mean $2.4 all-in. It would probably lose a bedroom in the process, but you would end up with a 4/3 with 2,500 sf that blows the spec junk out of the water for elegance and long term value. The backyard space is great, wish my lot was as large.

So $2.4M for a big lot, fully restored period Spanish Revival? I call that a deal for a long-term sophisticated buyer.

Pencil this out against a lot purchase anywhere else in the City, add at least $400 per sf for quality build and materials (beam ceilings, period tiles, etc.) then add landscaping, construction loans, and other soft costs. I would love to see this and others like it restored; hopefully dropping prices means more folks can afford the buy and restore approach.

SR

Anonymous said...

Have any of you actually been inside the house? The only one who maybe has is the anon with the one-word comment.

Furthermore, what is it with everyone who thinks they have a say in what the future owners do to this property? Do you believe we already live in a socialist country?

Anonymous said...

the 9000 sf lots on better streets (i.e. further from Montana) have been going for 1.7. This thing needs 300-400K to be nice, and that's not taking into account the back yard. So if the property sells for 2.0 and then you spend 400K to update the house, you've essentially spent 700K for a 2400 square foot house. I guess I'm not seeing the screaming deal here.

Anonymous said...

"but not a busy street or right next to Montana."

It might not be right next to Montana, but it's close enough to be adversely affected by the incessant weekend traffic. It's also much too close to a gaggle of apartment dwellers.

Anonymous said...

"the 9000 sf lots on better streets (i.e. further from Montana) have been going for 1.7. This thing needs 300-400K to be nice, and that's not taking into account the back yard. So if the property sells for 2.0 and then you spend 400K to update the house, you've essentially spent 700K for a 2400 square foot house. I guess I'm not seeing the screaming deal here."

THANK YOU -- just because things have dropped does not mean the prices are sane or sustainable. If anyone on this board is so enchanted, step up and buy it. Otherwise....

Anonymous said...

This is priced a little high but about right for what it is: an older "small family" house needing updating that would have been a tear down 2 years ago. 3 years ago similar houses with similar footprints were torn down in GRS. They sold for lot value at about $2.2m

Not a particularly intriguing deal to me, but a sign of lower prices ahead.

However, my guess is that it closes near $1.9m fairly fast.

But why pay so much for something dated?

I speculate that in two years, the market for it will be about $1.65 mill, even with or without the $400k renovation (that will not materially increase market value because you are in 2400 square ft).

What does a buyer have to put down to get into a conforming and also get the loan to do the construction of $400k? IS it even possible?

Certainly not a energy green house.

Anonymous said...

Agree with comments that buying for $2m and putting in $400k is not a great deal. Perhaps it is more reasonable than some of those praying for $3m+ but $2.4m isn't great. For instance, some might rather pay $1.5m for a non GRS lot and build a brand new 2500 sqft home for $1m to be $2.5m in but with a floor plan and HVAC/electrical all new.

Anonymous said...

Yes, the issue is that the value of the structure, like it or not, is limited at 2500sqft. Most of the wealthy buyers will look at this as lot value...perhaps someone can live in it for a while but when it comes time to sell again the universe of buyers willing to pay more for the structure is somewhat limited. That's why someone buying here needs to be very careful on price unless they have a stable enough job, etc. to live there for a long time (with no wife pushing to upgrade from 2500sqft).

Anonymous said...

Very nice house is updated tastefully. Not a teardown. Excellent setup.

Anonymous said...

Should say "Very nice house if updated tastefully. Not a teardown. Excellent setup."

Anonymous said...

3:44 nailed it. This is a 2400 square foot house. 90% of the 90402 buyer pool want much more house than that.

Anonymous said...

"This is a 2400 square foot house. 90% of the 90402 buyer pool want much more house than that."

90% is a big number - how do you know for fact what potential buyers want? 90402 spec builders think they know exactly what buyers want, built a bunch of vanilla Tuscans, and in some cases got stuck with white elephants they have to take a loss on.

Times change and tastes change, 2,400 sf may be just perfect for a couple, a small family, ex-pat folks who have lived in cosmopolitan cities (try 2,400 sf in London!), etc. The sf quantity over quality mind-set is so Las Vegas subdivision, circa 2005. Anyone up for a soaring 20 foot entry foyer with sponge painted walls and marble floor insets?

Anonymous said...

Couple of items to consider:
1. Anyone who says this house is in great condition is lying. a) the foundation needs repair. The floors are warped and slopping. b) the layout is all messed up. most people today want an open floor plan. Who has a dining room with doors as if it was a den converted into a dining room? c) the room leaks - look at the upstairs bedroom. d) come on, the bathrooms upstairs are crazy. the master bathroom is two rooms split across a hall. the other bathroom is so tiny that you can't really close the door while you are in it. The outside of the house has curb appeal but the inside leaves A LOT to be desired. Its on a good street but you are 6 houses in from Montana and this is probably the ugliest streets in Gillette Sq. Look at 20, or 21. They look so much better.

2. Construction loans are not available today so building a new house is out of the question. Therefore, the buyer pool is limited to people who want to live in a 2400 sq foot house that is in need to significant renovation.

3. You need to put 25% down these days so unless you have $500k sitting around, you're out of luck. Even if you can make the downpayment, you still have a $10k a month mortgage + property tax bill. People with $500k aren't looking for a run down home.

4. While the price is a discount to sales in the past 2 years, we really have to ask ourselves, going FORWARD, would someone pay that price in the next 5 years? Unemployment in LA is at historical highs. And the LA economy is not getting much better. People are moving out of the area.

I'm not saying that the house won't sell around $2. There are always people who buy on emotion or false senses of reality. That's how we got into this mess in the first place.

Anonymous said...

I want to know what camera the realtor used. It works miracles because the house is sooooo much more worn down and dated than the pictures show. I liked the location, but the house is a tear down, or at least a significant remodel. OVERPRICED.

Anonymous said...

"While the price is a discount to sales in the past 2 years, we really have to ask ourselves, going FORWARD, would someone pay that price in the next 5 years? Unemployment in LA is at historical highs. And the LA economy is not getting much better. People are moving out of the area."

Ya, people are leaving in droves, I see the moving vans every day headed for the midwest and southwest desert areas. I think Detroit is the new hot spot for Westside transplants.

The buyers for the next 5 years and beyond are the successful and lucky among us. The better Westside neighborhoods are not for the marginal types in second tier careers. There is the rest of the world to move to if you can't make it here.

Wooster said...

yeah, good point, but totally dickish.

Anonymous said...

"90% is a big number - how do you know for fact what potential buyers want?"

How many new homes built in 90402 in the last three years are less than 4000 square feet?

Anonymous said...

"yeah, good point, but totally dickish."

Your realtor radar is broken.

Anonymous said...

"The buyers for the next 5 years and beyond are the successful and lucky among us. The better Westside neighborhoods are not for the marginal types in second tier careers. There is the rest of the world to move to if you can't make it here."

Since you have access to all the realtor data, how many of these successful and lucky buyers are scooping up 90402 houses each month? 1, or is it a whopping 2?

Anonymous said...

I wrote the post (OK, kind of dicky, I am cranky about debbie downers) and am not a realtor.

FYI, I can't afford to buy in 90402 at today's prices and tight credit. I make $500k (myself) a year and bought a small 90402 house 10 years ago (when our 2 person income was $250k), so I squeaked in. There is no way I could afford a $1M+ mortgage today, a remodel, and live half decently.

My point is new folks moving in got to have a serious deal going, and bigger cajones than I will ever have.

Anonymous said...

"There is the rest of the world to move to if you can't make it here."

So you made it pre-bubble, readily admit that you couldn't make it today, and then laugh at people who complain about not being able to make it today and tell them to move to Detroit? You are indeed a douche.

Anonymous said...

anyone think this house is really worth over $1.8?

Anonymous said...

12:00pm and 1:21pm

MORE IMPORTANT than the name calling and the arrogance:

the douche did not realize his/her argument of why prices must fall to where douches like him/her could afford the neighborhood! Why on Earth (oh douchey one) do you think that there are more $$$ folks now than then, and that all those equal to you will be failing to get a house and will have to move elsewhere? Isn't it more likely that the housing bubble price will DROP to meet the market demand? I do hope you did not re-fy yourself into a bad spot over the past few years....





"There is the rest of the world to move to if you can't make it here."

So you made it pre-bubble, readily admit that you couldn't make it today, and then laugh at people who complain about not being able to make it today and tell them to move to Detroit? You are indeed a douche.

Wooster said...

I agree that ownership of a decent place on the westside is pretty much reserved for those with the means or those who really, really want it. There are plenty of more exciting neighborhoods around LA that offer vastly improved housing options for significantly less investment, but so many people just can't get used to the idea of not being a westsider. And they are programmed to thing that by being renters they are not really part of the society. There are several ways to live here, but you have to get over some of the stigmas if you are going to do it on the cheap. For most of us there are always going to be wealthier, smarter, more innovative, luckier people who are moving to the west side and making finding the right house much more difficult than it has to be. Right now there is probably someone in Fontana who is about to release some new invention on the market and will become a candidate for a $2,000,000 home. Chances are the person is heading to a better city, perhaps Santa Monica. It's just not for everyone here, and if you can't afford it you will be happier giving up and buying elsewhere. Disclosure: I think no one in any LA County neighborhood should be buying yet, so we should all just chill the f out).

Anonymous said...

It is all relative, this blog has some people that can easily afford South of Montana but who are desperate and crying for a place North of Montana. Then there are people that can afford the West Side, but nothing at all in Santa Monica. Then there are people who can't even afford anything on the West Side. Everyone is focused on what they can't have.

Hell, even North of Montana some of the people moan and groan about how they can't afford Franklin and are forced to live outside the Franklin neighborhood. I have news for you - everyone has something to envy

Anonymous said...

So let's get back on track here. Where do people think this house ultimately sells? My general opinion is around 1.85mm. thoughts?

Anonymous said...

$1.80 is a good offer - the lot (and maybe the spanish style, if you keep it) is worth a $150k premium over 7,500 sf lots with a smaller structure outside of GRS.

Anonymous said...

Probably somewhere around $1.75MM is my guess. As far as square footage goes from the comments above, I have to agree that 2,500 is plenty for me and most I know. I'm currently in a 1,900 sf home after upgrading from a 1,150 pre war in Sunset Park and everyday it feels huge. Add another 600 sf and it's about all I'll ever need. I'll top out at two kids though. If I had four kids then I would want more, I guess. Many of us grew up in older LA/SM neighborhoods where you rarely see homes as large as 2,500 sf, so this is good enough, but if you grew up in AZ where most neighborhood have 2,500 as the small homes the maybe you want 4,500 sf.

Anonymous said...

What is the biggest house in Sunset Park? Couldn't you get the biggest, fanciest new construction house in SP for under 2m?

Wooster said...

Yes, you can, but you should be able to get it for under $1,500,000.

Anonymous said...

"As far as square footage goes from the comments above, I have to agree that 2,500 is plenty for me and most I know."

What does that have to do with anything? If there was a substantial percentage of people who could afford 90402 and wanted smaller, slightly more affordable homes, builders would build them. The fact that no builder does tells you what the vast majority of people want in a 90402 home. Which means anyone who buys this place, if and when they want to sell, will have very few potential buyers who want a 2500 SF home- which means it has to be valued as a teardown.

What you and your friends need in a home is irrelevant.

Anonymous said...

"There are plenty of more exciting neighborhoods around LA"

And exciting is a code word for what exactly?

Anonymous said...

"So let's get back on track here. Where do people think this house ultimately sells? My general opinion is around 1.85mm. thoughts?"

I guarantee the seller expected to get a bidding war going and sell for over asking, which hasn't happened. There were a lot of people at the scheduled appointments, but as others have said, once you get past the decent curb appeal and the yard size, there isn't much else to get excited over.

Anonymous said...

heard two offers are in. but i bet they were low ball offers. i agree with others, the resale is hard so you have to be conservative on valuation. many people show up and few are motivated to bid.

if they get over 1.85, i would consider then lucky. the potential buyer may be foolish as this house really needs to be renovated in order to resell it. too bad construction loans aren't available.

Anonymous said...

If the house doesn't need to be renovated to sell it, why would it need to be renovated to resell it?

Anonymous said...

"If there was a substantial percentage of people who could afford 90402 and wanted smaller, slightly more affordable homes, builders would build them. "

Builders build larger for the profit margin on a per square foot basis. Period. They are like GM turning out high margin SUV's until the very end.

The affordability issue is the lot value. With a past starting lot value of +$2M, the type of buyer attracted was going for the gusto with 4,000 sf and a price tag over $4M.

When lot values drop below $1.3 you will see buyers looking for construction < $1M for an all-in in the low $2's.

That will change the spec landscape, and put a bullet in the 4,000 sf spec resales trying to get $3M+.

Anonymous said...

An addendum to my 11:53 note..

I think the other factor that will hurt the aging spec market is the big difference between the Tuscan aesthetic and the newer green or modern aesthetic.

The Tuscan aesthetic was all about faux finishes, 'rich' dark woods, marbel and granite overkill, unnnecessary media rooms, his and her offices, wet bars, etc. and no energy saving considerations.

The newer aesthetic is more open plans, outdoor and backyard orientation, energy engineering, and more straightforward (not staining pine to look like mahogany, more natural stone) use of materials.

The spec Tuscans will be white elephants, and the remodel costs to get a 10 year old Tuscan in touch with today will be in the +$200k range.

Anonymous said...

Why do people on this blog always want to blast people for their obviously anecdotal comments. Without hard research it's all most can offer. Most of the haters here are pathetic.

Anonymous said...

Are there multiple offers on this in to the broker now?

What is the status

Anonymous said...

I just heard that an offer of $1.87M has been accepted.

Anonymous said...

You are thinking small. There are those of us who can definitely afford to buy North of Montana. NO need to whine. We just have zero interest in overpaying. Better to be patient. I think I will make $1mm over the next year or so by doing nothing!

******************

It is all relative, this blog has some people that can easily afford South of Montana but who are desperate and crying for a place North of Montana. Then there are people that can afford the West Side, but nothing at all in Santa Monica. Then there are people who can't even afford anything on the West Side. Everyone is focused on what they can't have.

Hell, even North of Montana some of the people moan and groan about how they can't afford Franklin and are forced to live outside the Franklin neighborhood. I have news for you - everyone has something to envy

Anonymous said...

lot value is 1.6mm. house is probably forth next to nothing

Anonymous said...

$1.87 is about the right value... implies a $150-200k premium over 7,500 non-GRS lots (not on bad streets).

Anonymous said...

I heard that they had 5 offers as of yesterday afternoon and that today was the last day for offers. I'd guess that there will be more offers based on the number of people in the open house. I also heard that they are reviewing offers today. If all of this information is correct, they will probably counter the good offers and get an offer over asking price. My prediction is $2.15.

Anonymous said...

Let me offer my congrats in advance to whoever "wins" that bidding war!

Anonymous said...

Anyone know how much the house sold for? Curious to see if home prices for the area are falling.

Anonymous said...

I predict 2.1 if they accept the highest ALL CASH offer

If they are willing to accept offers that require financing I think they get 2.2

Anonymous said...

It is frustrating to have decided that 30% off peak prices is enough, and to then see how little is on the market and be forced into a bidding war on a very marginal property like this. No thanks.

Anonymous said...

It's an old house on a raised foundation that requires leveling and possibly retrofitting. To really see a major upside, one would have to put in significant money to increase the square footage. If you could get the property for under asking, it would be a deal. To pay over asking is not.

Anonymous said...

Does anyone know how much it costs to fix a raised foundation? What does it entail? I ask because there are so many homes I see with a raised foundation and I would prefer the house to be level with the ground but don't know what that would entail or cost.

Anonymous said...

Level with the ground is a slab, trailer park style. Raised foundations are needed for access, and are not the end of the world to level and reinforce. Just about every older house needs a retrofit anyway - cripple walls, anchors, vapor barrier, etc - along with a leveling job. A foundation job may end up costing the same or less than a high-end kitchen remodel. Hold the Poggenpohl kitchen, and get the foundation and earthquake retrofit 100% squared away.

Anonymous said...

If these sellers at this particular Santa Monica house has 11 offers as of a couple of days ago, why is it still an ACTIVE listing??

Anonymous said...

I heard they picked the highest bid and have back-up - last night. I don't know why it's still active.

Anonymous said...

some people on this board are so cynical. they got 11 bids and the winner paid SIGNIFICANTLY more than asking. They told the winner last night. the price it was sold at is not a good comp since the buyer was VERY unique. excluding this buyer, the house would have cleared at the original asking price...

Anonymous said...

winner my a$$

Anonymous said...

Yes, the "winner" was very irrational and drove up the price. It's definitely not worth over $2.2 considering the house needs extensive work and the foundation has severe problems.

Anonymous said...

$2.2MM, plus 300-400K to fix, and then you have a 2400 square foot house just a few houses from Montana on a relatively ugly street. I have been outbid on 4 houses in the past month, including this one, and yet I feel like the winner. As other nice posters have said, maybe I just can't cut it here, I should take my $1MM down payment and pay cash for half of Idaho.

Anonymous said...

Many of the posters on this blog remind me of the people who didn't buy in 2000-2002 because they thought prices were too high. They are some of the same people who are now waiting for a rollback to 2003 prices. Many will keep waiting for that perfect deal which, even if it comes, they will not get because someone will outbid them. They will then justify losing that opportunity by claiming that the winning bidder paid too much. All the while they will be renting a place that is not their own, for which they get no tax breaks, and for which they are not accumulating any equity.