Tuesday, January 19, 2010

December DataQuick

Today's DataQuick numbers for December ranged from a small uptick for Los Angeles to a small downtick for Ventura County, overall with little direction.

Los Angeles County's median was $339K, now down 38.4% from its peak in August 2007. Volumes were up 31% year-to-year from December 2008. (October DataQuick post)

That left Los Angeles County prices at August 2003, Orange County at August 2003, Ventura County at March 2003, and San Diego County at July 2002.


Anonymous said...

I just saw this on another blog and think it is very relevant to this thread - so am posting it

I think that interest in the 90402 among your readers has permanently declined. And I don't think it is coming back.

Here is my theory. Back when you started blogging, just about every one of your readers knew that we were in a bubble and knew that house prices would fall.

No one knew how far they would fall. Huge numbers of the people reading your blog looked at their incomes and legitimately thought that after the bubble deflated they would be able to afford to buy in the flats of the 90402.

So a lot of the discussion of the 90402 on your blog was written by people who thought that perhaps one day in the future they could buy in the flats of the 90402.

Well due to a combination of factors, most of your readers who thought that they might be able to afford the flats of the 90402 have thrown in the towel on ever being able to live there.

Many of your readers have seen their incomes fall faster than prices in the 90402 have fallen.

Bottom line - If 70% of your readers a few years ago thought they should follow the market in the flats of the 90402, today a much smaller % of your readers want to follow that neighborhood.

People who read your blog have given up on the flats of the 90402. They are focused on other neighborhoods

Anonymous said...

1:58 PM "People who read your blog have given up on the flats of the 90402. They are focused on other neighborhoods"

Does that mean prices will drop more in 90402? Supply and demand would seem to indicate so.

Anonymous said...

"Does that mean prices will drop more in 90402? Supply and demand would seem to indicate so."

Not necessarily. That logic assumes that the people clamoring to live in 90402 on this and other blogs were legitimately part of the demand for that neighborhood, i.e., that they could afford to buy a house in 90402 and were contributing to high demand. So, if people were merely dreaming that 90402 prices would return to 1992 levels, the fact that they've given up and gone elsewhere really says very little about actual demand.

Anonymous said...

Who are you kidding. Every time a new, decent listing come up in 90402 it gets multiple offers. You are talking to yourself and wishing it was true.

Anonymous said...

9:32 made the most perceptive comment I have ever seen on this blog.

There are 80 thousand people living in Santa Monica not in the 90402.

How many of those 80 thousand will ever get a chance to move to the 90402? A very small number.

How many of those 80 thousand dreamed and fantasized about moving to the 90402? Who knows? But certainly more dreamed about moving to the 90402 than the number of spaces available.

Very very very few houses are put on the market in the 90402 each year. There is room in the 90402 for very few people each year.

This is a spectacular blog, but it is clear that once the fantasy of living in the 90402 disappeared for so many people, traffic fell off a cliff.

Something must be done to re energize this blog

Anonymous said...

You all have it bass ackwards. If traffic here has fallen off, it's more likely due to the near pathological obsession over "the 90402" by a lot of commenters here. I have news for you. It's one little hood on the west side. I do not give a flying fig about it. I'm sure a lot of others feel the same. I'd rather live in Cheviot Hills, Hancock Park etc. SM is way over rated. IMHO

Anonymous said...

The very front page of this blog says

Tracking the real estate bubble on the Westside of Los Angeles, especially in Santa Monica ...

clearly this blog was created in order to be especially focused on Santa Monica

So this will stay a Santa Monica focused blog

The real issue is, what neighborhoods of Santa Monica should we focus on?

Santa Monica has some housing that is affordable, unfortunately that housing is in the trailer homes located next to Seward Park. Most people on this blog could afford a trailer there but are not interested.

Santa Monica has some really nice housing, unfortunately it is on La Mesa where houses never sell for under $5 million each POST CRASH
Most people on this blog would live there but can't afford it.

Where do we as a blog community find the middle ground between the trailer Park and La Mesa, where do we find the neighborhood in Santa Monica that is of most interest to the majority of the people here?

clearly the dreamers are gone from this blog. This blog now belongs to those of us who are looking in neighborhoods that are realistic

Anonymous said...

I can speak for one of the "dreamers" who's been following the housing blogs since about 2005- I'm tired of it. I also can clearly see that with the socialists in charge this crash is going to play out for another several years, at a minimum. So I don't post as much. But many of you are talking as if the crash is over and this is the bottom for the beloved 90402. Not even close. Yes there is very little inventory and bidding wars are happening, but that won't last for long.

Anonymous said...

I don't buy the move-up comment, that boatloads of prospective 90402 buyers are hanging out in other SM zips.

I know most of my 90402 neighbors in my immediate area (and a few other blocks), and don't come across a lot of SM move-ups. Most are transplants (Brits, NY's, immigrants) and executive transfers who made 90402 their CA address in a single leap. Maybe they were steered by corp relo, family members, etc. but 90402 was not on their radar screen as an obsession before the move.

Regardless of market conditions, the out-of-towners keep showing up, joining the local career climbers in the hunt for deals. FYI, a number of relo's I know think SM is a relative bargain compared to where they came from (especially the London + NYC folks).

Anonymous said...

10:06 thank you for your comments - your post makes you smell like someone that actually lives in the 90402.

That being said, the average house in Franklin 90402 is three thousand square feet and sells for 2.8 million right now, post crash.

In my humble experience, if you look at the very finest suburbs of NYC, Greenwich, Darien, Scarsdale, Alpine, Saddle River, and etc it is literally impossible to pay that much money for a three thousand square foot house on a small lot. There is no way anyone could see Franklin 90402 as a bargain compared to any suburb of NYC.

However if someone is moving from Manhattan to 90402 then indeed 90402 will seem like a spectacular bargain. A three thousand square foot townhouse in a decent neighborhood of Manhattan still today post crash costs you $4 million and comes with no back yard to speak of.

so yes, if you sell your townhouse in Manhattan for 4.0 and buy a normal 90402 Franklin home for 2.8 you are getting a great deal.

One more factor - in most of Manhattan you can pay 4.0 for a townhouse and not feel ok sending your kids to the public schools. But come to 90402 and send those same kids to public schools.

10:06 can you give us more details - are the people you know moving from NYC to 90402 moving from the suburbs of nyc? And the ones that move from Manhattan to 90402, are these people who would NOT send kids to public schools in Manhattan but DO send them to public schools in 90402?


Anonymous said...

I am seeing opportunity again. I am looking at lots and major fixers where i can pick up something around the 1mm mark. These same properties were 1.7-1.8 - over 2 years ago......

As Warren Buffett says, 'If you think the market will turn soon, it already has...'

Anonymous said...

I actually know 2 people who live in the trailer park by Stewart St. I doubt any of us could live there because it is low income housing. One of the people I know there is on permanent disability.

I know two families with homes in 90402. Both have lived there a long time and bought when it was more affordable. One is a surgeon/lawyer combo and he told me he could not afford to buy there now. They moved there for the schools. One is in GRS. Both send their kids to public schools.

I knew one NYC relocation, they moved in the the upper Kenter area and were Manhattan people. They are back in Manhattan and rent their place out for less than their payment in hopes that long-term the price will go up.

Now that my husband's office has moved there is no reason for me to stay in SM, I think it is very overpriced. I am looking at less expensive areas and still waiting. All the propping of the market is making me nuts, especially since the responsible are bailing out the irresponsible. If I, a mere housewife, saw a bubble, I can't imagine why the professionals were so surprised.

I have seen occasional rental parity is some areas, just not many. I will be looking this summer, if I can hit rental parity then if I move I can keep the place and rent it out without a loss. If the market drops more I will have some protection. I am sick of living in a condo because I am missing having a garden. The least nice part of Ladera Heights is very affordable right now, but I am holding out for the nicer parts. I think that area is a better value.

Anonymous said...

"10:06 can you give us more details - are the people you know moving from NYC to 90402 moving from the suburbs of nyc? And the ones that move from Manhattan to 90402, are these people who would NOT send kids to public schools in Manhattan but DO send them to public schools in 90402?"

Specifically, the 3 sets of NY folks I mentioned are ex-Manhattanites. One is a high-powered attorney from the UES, the other a media exec also from UES, the third a former pro athlete from downtown. The attorney sends his kids to public schools, as does the athlete; the exec couple does not have kids. The parents sent their kids to private in NYC; the attorney household had a nanny, cook, driver, dog-walker, etc., all gone with a more casual SM lifestyle.

None of the above are talking about moving back; I think the year-round mild weather and casual living is right up their alley. I socialize informally with these folks, and the media exec is in my business circle - a small world.

Anonymous said...

It is a different lifestyle in the 90402 vs Manhattan.

While you save money by getting rid of the private school bill and the driver that are customary in Manhattan - The money is not the main thing. The main thing is getting to live a normal life connected to your neighbors, with older kids able to walk around rather than needing to be driven everywhere

Anonymous said...

What did 3024 Arizona go for? I walked through and there were MANY bids already. They were asking $699,999. I thought about putting one in, but it seems to have closed/ been delisted.

Anonymous said...

What should a 4 bedroom/ 2 bath house in GRS rent for? This is an old house, painted but not remodeled, with a nice yard and about 1700 sq.ft.of interior space.
So many of the price discussions about 90402 relate to the rent/purchase price ratio, but I'm not sure where rents are today.

Anonymous said...

Well it looks like the lot value NOM, 7500 sq ft lot is officially $1.635. The dump at 409 16th posted. The house is a def teardown. So does this put a 8940 sq ft lot at $1.95?

Anonymous said...

I think there is room for a healty debate here - are the people who are buying these houses North of Montana right now move up buyers or are they dropping in from other markets.

One person here said the buyers are moving up from crummier parts of Santa Monica. Someone else said they are coming in from LA and London.

What is the truth

Anonymous said...

We are move up people. We sold a large custom home in Cheviot because we felt this was a major opportunity to buy in Brentwood, NOM, or Little Holmby which we could not afford before. We lived through the bubble and we watch those neighborhoods soar. We plan to take advantage of the downturn but we really don't believe we have even come close to the bottom. It has really only been 2 years. The last downturn was 7 years down and 7 years up. I just wonder how many people there are like us, renting, sitting on our cash, waiting for the right thing to pop up at the perfect price?

We would not buy S of Montana or in Ocean Park or really anywhere else in SM because it really isn't that attractive. While we will not need to take advantage of the schools we know they add value but more importantly, NOM for the most part is pretty to walk around, beach close, has fresh air and is convenient to the freeways and shopping.

Anonymous said...

Congrats on selling close to the top of the market and renting until the market nears bottom

I think that is a very smart thing to do

I also congratulate you on your honesty in saying you would only live North of Montana and don't want to look at any part of Santa Monica South of Montana. Few people admit that

what price will the North of Montana houses have to hit before you are eager to buy

Anonymous said...

We are hoping we can hold out until the market drops another 15-20%. We are looking for a major fixer so we are probably not the typical buyer. But mainly, this purchase is all about location, location, location.

Anonymous said...

That sounds good -

My shopping North of Montana leads me to see the following in non busy streets

(1) teardown 1.6 million
(2) nice relatively new five bedroom house 3.0 million
(3) three bedroom major fixer, but not a teardown 1.8 million

So clearly you save a ton of money by opting for a major fixer instead of a nice relatively new home.

When I look at the incomes of the people today living in the 90402, I thnk the only sustainable price levels would be 50% of these. In other words, based on that metric, prices need to fall 50%

Unfortunately, today we have people who can easily afford 3.0 million for a nice new home - these people are not the same as the majority of the people in the 90402. These are the people that are moving in from out of town. so although the fair and honest prices for these houses should be down 50% from here, I fear that prices might not go down due to the new people moving in.

In the past, lots of people from out of town would gravitate to Beverly Hills but Beverly Hills has a different feel today than it used to in the past and as a result lots of people seeking a walkable community for 3.0 million are moving to the 90402.

Let's hope that these people stop moving to the 90402 from out of town

Will they stop

Anonymous said...

Given up on 90402? hell, I've given up on Santa Monica.

Anonymous said...

I would not call us move up buyers, we are more move across since the last two homes we bought were very large and we would never live that big here.

We moved here in 2006 at the peak of the bubble, and have been renting ever since. The last time we lived in CA was from '91-'93 and we rented then as well. Everywhere else we have bought. The last three homes we owned free and clear so I am not game to take on a large mortgage just to own when I can rent for less. I am hoping to find something at least at rental parity this summer. Ideally we will find something less expensive than where we are renting because I don't want to throw away so much on housing.

Our taxes are so high here that taking on a mortgage will probably make sense. Since we are the "rich" we do not get many tax breaks and 3 kids will soon be in college with no financial aid.

The last time we left this state my husband took a 10% pay cut and our take home rose while our expenses dropped due to cheaper housing. He has a great job here, but if anything came up elsewhere with a lower tax rate I'd be game to move. I love living here and I hope the state gets its act together.

Anonymous said...

"Yes there is very little inventory and bidding wars are happening, but that won't last for long."

Please tell us more. Why will the demand drop off this year when it didn't drop off during 2007, 2008 and 2009 during down years for other communities?

"I know most of my 90402 neighbors in my immediate area (and a few other blocks), and don't come across a lot of SM move-ups."

From my experience its about 50/50 for new residents and move-up/down in 90402. But the move-ups come from all parts of LA not just other SM zip codes. There are some move down people from BH. I believe a lot of these out of town new residents ask their real estate agents for good houses in nice neighborhoods with top rated schools for their kids. They also want an area that can hold its value and will appreciate well when the economy returns to normal. There are very few pockets in LA that fit the list and 90402 has been one of them.

"10:06 can you give us more details - are the people you know moving from NYC to 90402 moving from the suburbs of nyc?"

I'm not the 10:06 poster but my experience is the people are not from the suburbs of NYC that move to 90402, they are from Manhattan. No offense to those burbs but just like in NYC those burb people can't afford or won't pay for the best of neighborhoods.

From what I have seen only the upper east/west side NYC transplants put their kids in private school after moving to SM. Most 90402 residents with kids chose the area for the school system & use it.

The 8:32pm comment nailed why so many people needing or wanting to move to LA try to move to 90402.

"We are hoping we can hold out until the market drops another 15-20%. We are looking for a major fixer so we are probably not the typical buyer."

You might actually find a place for that price since you are looking at major fixers. Move in ready houses have kept in high demand the last 3 years. I doubt we'll see much more decline in high quality 90402 residences.

Anonymous said...

Its really interesting to see how the bubble blogs are dying.

Like the first anon said, this blog was filled with many who fanticised about buying in SM. Yet as it became increasingly clear that SM would never suffer the pricing cataclysm seen in other areas, most of the dreamers have given up and moved on to buy in other areas.

As more and more of these buyers leave and move on with their lives, the only remaining posters are the biggest of bears who are convinced that if they simply wait long enough, a cataclysm will come to SM.

Such is the case with all bottoms. Prices stabilize and slowly start moving up again in 2011, 2012, 2013...Yet our permabears will still be here, all engaged in an echochamber of permadoom where all you hear is its "a dead cat bounce, and far from over, etc". We saw this in 1996-1997 in the waning days of the last LA Area bottoming, and we are seeing it again now.

Such is a sad but true state of affairs. The question now is, how long does our gracious host allow those permabears to continue to embarass themselves here on this site? When does he humanely put them down and simply pull the plug on this blog? We shall see.

Anonymous said...

The perma-bear course is getting old. The sky did not fall... 90402 is not under $1M, there is not a tsunami of foreclosures, mass unemployment of homeowners, etc. 90402 is not a boom town like Las Vegas, full of recent arrivals, leveraged to the max, who walk away when hard times hit. The area is stable and riding out the recession with declines in the 30% range - not a bad story, given the run-up. No one is pulling the fire sale alarm, and 'smart money' is not scooping up great deals for pennies on the dollar. Sorry perma-bears to rain on the parade, but the 'anyday now' predictions are getting tiresome.

Anonymous said...

What a joke.

Do you know that in 1930, all of the smart money rushed in to the stock market, thinking that the decline was over? then the stock market declined an additional 70% and those new buyers were wiped out again.

Just because the nice houses in 90402 are moving quickly at 3.0 million today doesn't mean another leg down isn't coming.

The state is heading for a bankruptcy filing. That means crummier services and higher taxes.

The people that can easily drop 3.0 million of a house in the 90402 often have highly mobile jobs that let them live anywhere in the USA that they want.

The sunshine is nice, but at some point they move to a lower tax environment

Anonymous said...

"Just because the nice houses in 90402 are moving quickly at 3.0 million today doesn't mean another leg down isn't coming."

Posted in 2010, and will again be posted by the permaberas in 2011, 2012, 2103....

Anonymous said...

"Please tell us more. Why will the demand drop off this year when it didn't drop off during 2007, 2008 and 2009 during down years for other communities?"

The demand didn't drop off during 2007, 2008 and 2009? Really? How many sales in 90402 happened in 2008 and 2009 compared with 2005 and 2006?

Anonymous said...

The people who think it's over are the same people who believed the "soft landing" nonsense. It's best to ignore them.

Anonymous said...

"The perma-bear course is getting old. The sky did not fall..."

Yeah sure. Interest rates are at all-time lows and despite that prices are down 30%. But when rates rise back to more normal levels, prices won't drop any more because everyone's an all-cash buyer, right?

Anonymous said...

Case shiller reports yet another gain for LA.

Anonymous said...

Who let the relitters in?

Anonymous said...

Well I thought after the drop in q1 of 2009 there would be another 5 to 10% steady decline in all the sm zips and it just hasn't happened. Other people more bearish than I thought it would be more like 20% to 50% in the second half of 2009. Nada. The sky is still up there. A rollback to 2003 prices is where we seem to be pegged. There may be another leg down but I don't see what is going to cause it to happen quickly and dramatically. Foreclose inventory? Nope. State bankruptcy? Last I checked most people in these zips especially the 90402 don't work for the govt. What is going to cause the next decline? If you do know please write Mr. Bernanke and clue him in as he starts his new term.

Anonymous said...

What's a real joke are the people who think that 90402 will go sub $1MM and they will be able to buy a formerly $3MM house for $800K.

If that happens your tract home on the East side will be worth $1.

This may not be the bottom but its close enough that future losses will be small & easily recovered. Sit on the fence and call the bottom. All you'll end up doing is miss it.

Anonymous said...

"A rollback to 2003 prices is where we seem to be pegged." I agree for SM. People view the beginning of the meteoric rise leading to the bubble as starting in 2003. We saw a bump in 2000-01 then 9/11 happened and 2002 was a down year wiping out most 00-01 gains. Then 2003 started to see growing gains.

Many people have it in their head they'll buy the house they want if it ever reaches that 2003 price again. Its the pre-bubble price many wish they got during the bubble. A flood of fence sitters will be buying up SM if prices steadily reach 2003 prices.

It already happening with multiple bids on every property I've tried to buy at 2004-05 prices. Every place has went for close to asking or more.

My advice for those looking to buy a quality place in 90402 is don't bother putting in a low-ball offer. You won't even get a response because 3 other people will be offering asking price.

This is only the case for nice quality 90402, 90403 & Palisades homes. This doesn't apply to fixer uppers as people with money to buy are seeking out the move in ready homes, not a construction project.

"What is going to cause the next decline?"
People here think its the shadow inventory that will kill 90402. They don't realize the banks aren't going to fire sale their inventory in an area that has slightly increasing prices. Banks have been and will continue to trickle inventory on the market and collect top dollar - or at least top foreclosure dollar which at times is equal or more than what the bank has in the place. No need to dump inventory in highly desirable areas where money can be recovered. Inventory floods only happened in places that have no upside for the next 3-5 years, like Stockton (no upside for the next 10 years), Riverside, enter your East side town name here.

dwr said...

"What's a real joke are the people who think that 90402 will go sub $1MM and they will be able to buy a formerly $3MM house for $800K."

Can you show one comment of anyone (even an anon) saying anything along those lines? That's about 75% off, please show me one.

Anonymous said...

Related to 90402 hanging in there, a realtor friend (I am not one) says the stream of 90402 blowhards touring open houses has nearly stopped. She said a year ago the same people would come to open houses, loudly denounce the house condition and ask price, and claim they will get something better for much less in the spring/fall. She told me the loudmouths never ponied up their names or ability to buy, and thankfully have tucked their tails and moved on.

She has several active 90402 listings right now, and claims the fail to close escrow issues of last year are giving way to more qualified dead-serious buyers trying to get the best deal. We will all see if more deals close, but I think her obnoxious lookey loo observation is telling.

Anonymous said...

There are two sides to the story - some very nice houses have closed in the 90402 for 3 million plus recently

However some slightly less perfect four and five bedroom houses in the 90402 continue to linger for a year or more on the market.

What would be productive is if someone on this blog looked at all four of the GRS houses that are on the market right now and evaluated what price they should sell at right now

Let's discuss specific houses

Anonymous said...

A house was foreclosed - it was originally asking around 4.7 million and is now asking 2.9

Bank is hungry to sell
House is 6500 sq feet and is around Georgina and 22nd

Anyone been inside that ? 2.9 for 6500 is a COMP KILLER

Let's have a more honest discussion here - YES the bulls are right, some houses are selling FAST at 3.0 million
YES the bears are right - most houses over 2.0 million are NOT selling

Anonymous said...

Huge numbers of people N of Montana have rented out their houses instead of selling in to weakness

Getting good rates too - Please drive by 322 25th - just a normal nice house, nothing special. They got offered 12 thousand a month rent but turned it down in order to try to get 14 thousand. I am not saying they are smart, but they are holding on for 14 thousand. Check out the house and talk to them

Anonymous said...

"Can you show one comment of anyone (even an anon) saying anything along those lines? That's about 75% off, please show me one."

Those comments were all over the place this past summer. Probably just troll bait tho. I'll leave it to someone else to dig those up. I do seem to recall you specifically making some predictions (not 75% or anything like that) that called for a general decline over the year, broken down roughly by quarter all the way to right about now. I can't remember the numbers but I don't think they held up.

Anonymous said...

Let's be polite and civil here.

We all know that there are some people on this blog that really really want the nice houses in 90402 to plummet massively from here. You can't fault people for wanting lower prices. There are other people here (people that already own a large house) who really really want prices to NOT go down. We come to this from opposite sides of the table but this is a place for us to be polite and debate the issues without rancor

dwr said...

"I can't remember the numbers but I don't think they held up."

Pick a name anon, don't be a sissy. And yes I did make some predictions. And your belief that they didn't hold up is because some houses are currently selling for $3 million? What would they have sold for 24 months ago? 12 months ago? I'm sure you have no answer, but thanks anyway.

Let me see if I get this straight- the bears are wrong and have always been wrong because prices are only down 30% (so far) in 90402? Is that the crux of the argument?

Anonymous said...

End of 2008 dwr predicted prices would drop another 20% in SM next year. Well its a year later and prices have held up in 90402, 90403. Nowhere near the 20% drop last year.

My point is stop trying to bully people on this blog. Anytime someone makes a comment that isn't in line with your beliefs you pounce. Let everyone have their say otherwise people will start looking at your 18 months of missed predictions where you hoped SM would fall off a cliff. Can't we all just get along here?

dwr said...

"End of 2008 dwr predicted prices would drop another 20% in SM next year. Well its a year later and prices have held up in 90402, 90403. Nowhere near the 20% drop last year."

Show me where I wrote that. I'm confused, have prices held up, or have they fallen, just not 20%?

Frank said...

I've been reading DWR's bullying posts for years now, too. He likes to tell people they are pulling things from "you know where" and then doesn't back up his info with sources.

DWR in April 2008 http://westside-bubble.blogspot.com/2008/04/north-of-montana-2008-sales.html
"Either that, or someone who realizes we still have another 30% to go."

DWR in June 2008 http://westside-bubble.blogspot.com/2008/06/may-dataquick.html
"I think it'll be only 48% (give or take a point or two)."

Has NOM dropped 30%-48% Since middle 2008? Those were just two of the many bearish posts by DWR about the NOM market. Most just say things are going to have a huge crash.

DWR is calling someone a sissy for not having their name posted. Its as if DWR thinks he has some credibility because he set up an account under some vague user name. I agree with the anon poster that wrote stop trying to bully people on this blog. Let people have their say without the self-righteous attacks we've been reading for years.

Maybe this blog has a drop off in visitors because they get tired of some of the regulars regurgitating the same info & bullying anyone that posts differently.

Anonymous said...

I agree. We have a few people here who are "desperate and hungry" to own in the 90402. The same type of people are on the Manhattan blogs, constantly pounding the table that prices will eventually fall 50%. But here we are - Franklin 90402 is at $800 a square foot and Manhattan is at $1100 a square foot. There are people buying at today's levels.

There are plenty of people who saved up money over the past decade that are buying what they want now. I personally am hoping for prices to fall and I also think that prices will fall. But I have to admit there are two sides to this story. No more bullying

Anonymous said...

Let's try something new here.

Let's all visit specific open houses and then discuss the actual house here.

The conversation here will be more meaningful if it makes reference to a house that we have all been inside

310 22nd is in my humble opinion a comp killer. Nice, high quality finishes, 6500 square feet. Really nice home. Bank owned, with the bank hoping for 2.9 million but willing to take more.

If you can easily buy 6500 square feet for 2.9, that has to push down the comps for all the SMALLER houses looking for 3.0 and above

So that is why I call this a comp killer and call for all of us to attend the open house between 2 and 4 this coming Sunday.

Let's attend the open house and then discuss it in detail.

Anonymous said...

Dude, "dwr" just means that you have some anonymous account on blogger. It doesn't link to jack, doesn't say what your interests are or other blogs you may or may not participate in or run. It just ties all your random posts together to one identity.

The fact is that you were wrong about the slide continuing in SM last year. You just tied "dwr" to your posts. Its the same as saying "people said such and such last year" you are just as anonymous as the next guy. Except now when people see "dwr" on a post they will know that whomever you are you are full of *ahem* "opinions based a strong personal feeling, not facts". Thats about the nicest way I can put that.

Anonymous said...

"Has NOM dropped 30%-48% Since middle 2008? Those were just two of the many bearish posts by DWR about the NOM market. Most just say things are going to have a huge crash."

Where did I say in either of those that we'd drop that much by now?

Why are your anons who think it's all over even here on this blog? Go out, buy a $3 million house, everyone's doing it, real estate never goes down.


Anonymous said...

"Where did I say in either of those that we'd drop that much by now?

Why are your anons who think it's all over even here on this blog? Go out, buy a $3 million house, everyone's doing it, real estate never goes down.


DWR, do you really think NOM will drop 48% off its peak by the time this correction is over? So a $3MM 90402 house in mid 2007 will end up at $1.5MM?

To answer your question I am currently shopping in 90402 in the $2MM-$2.25MM range. I am still on this blog because every so often there is tidbit of good information after I sift through the chicken little comments. I'm one of the people who think NOM is within 10% of its bottom. So I'm shopping the $2.5MM places hoping to get them for $2.25MM. Unfortunately I've been outbid many times.

Anonymous said...

"I'm one of the people who think NOM is within 10% of its bottom."

I am with the anon above. I am looking in the $1.8M range for a specific 90402 fixer. I am not a flipper, more of a lifestyler. I can't afford what I want, so I fix up something that gets me close. Over the last 15 years I have bought and fixed in 90405 (starter), 90403, and finally in 90402 (small Spanish, low basis, major remodel 7 years ago).

I now know what I specifically want in terms of location, architecture, backyard, etc, and am hunting for what I hope is my final fixer. I am not seeing a lot of inventory (including a number of pocket listings I am aware of) or weakness right now, and expect to pay near ask in a multiple bid situation. I know the area inside out, and just don't get a sense of the market softening a lot more for desirable fixers on good streets in the <$2M range.

On the flip side, I would not be surprised to see some new lows for lots just off Montana, the busy streets (7, 14, 26), the odd-ball 5,000 foot lots, etc. Those lots were never desirable and and should fall to where they belong.

Anonymous said...

"I am not seeing a lot of inventory (including a number of pocket listings I am aware of) or weakness right now, and expect to pay near ask in a multiple bid situation. I know the area inside out, and just don't get a sense of the market softening a lot more for desirable fixers on good streets in the <$2M range."

The competition on move-in ready places is just as strong as the fixer uppers. Many people with $2M+ don't want to remodel after shelling out that kind of money. An upscale move-in ready place in SM is rare & inevitably gets multiple offers.

Anonymous said...

I am the 1:29 anon..

90402 'fixer' and 'move-in' is a weird zone right now.

The turn-key move-ins are in the +$3M range, with some of the 7+ year old specs starting to look dated and needing a refresh.

The low $2M's I have seen have been more fixer than move-in, needing bathrooms, kitchens, and some reconfigurations. I think a smart $200k is needed to refresh.

As expected, the < $2M fixers have been rough, god help the buyer who stretches and thinks a coat of paint will make it livable. Some are truly wrecks with settled foundations and bad floorplans that need a total gut. My plan is to buy one and spend a well managed $500k to get it perfect for my needs (guest house, spa bathroom, solar, etc). For about $2.3-$2.4M all-in, I will be on par with some aging specs selling for +$3M today (perhaps I will have a little less SF, which is fine with me).

Please post if you see a different market; I look at everything and see a lot of tired looking stuff.

Anonymous said...

Thank you -
I am in discussions with the owner of a major fixer - it is half a block North of Montana in the Franklin district - this house is 1100 square feet -

It is on the West side of the street and so gets afternoon sun in the back yard.

How much is the market for an 1100 square foot house these days? How much should I bid if I want him to sell to me without a broker, ie I want to bid a little under market since he is saving the broker commish

Anonymous said...

1:29 anon here..

You are on the good side of the street, the half block off Montana is a hassle if you are in the shop district - and on some streets prepare to tuck your mirror or get it knocked off!

1,100 is tiny, you will need to add to the footprint and maybe go up ($500k for starters). If the lot is 7,500 and the structure is somewhat usable, $1.4M is a market deal (post commission), bid $1.3M!

Anonymous said...

Yes, 1100 square foot structure on one level means I need to add a second level
So if I add on to the existing level and also add a second level I can get it up to 2400 square feet for a home.

OK - I will spend 500k to turn this in to a 2400 sq foot home

So I bid 1.3 for what is there, drop 600k total to bring it up to snuff and I am all in for 1.9

Sounds like a plan

Anonymous said...

Let me make sure I understand -
Everyone on this blog seems to be saying that if I buy a tear down and tear it down and put up a normal four thousand sq foot 90402 quality place I will pay 400 a square foot when all is said and done, so for all hard costs and soft costs and everything else, I should count on 1.6 million out of my pocket. That is fine.

What about if I can't afford 1.6 and I instead want to put up a 2500 sq foot place. Benefit of 2500 sq feet is of course less cost and also much bigger back yard to enjoy.

If I put up 2500 sq feet am I still talking 400 a sq foot - that is can I get a great Design Build firm to do this? Can I write a check for 1.0 million and have absolutely everything done to produce me a 2500 sq foot quality home - or is the cost for 2500 sq feet more than 1.0 million?

Anonymous said...

6:55pm Anon, if it were only that easy people would be lining up to tear down homes and build what they want in SM.

Start with buying a fixer upper for $1.3M, using the above Anon's example.

Now you'll learn how hard it is to get permits to completely tear down in SM. That's why most people do gut remodels and add sq ft instead of tear down.

Lets say you were lucky and get approved for a tear down. I hope you liked paying a mortgage while living in an apartment the last 4-6 months dealing with permits & your design team.

I don't know the cost to tear down and rebuild but I know a major remodel with you watching every penny will be 4-500k. Starting from scratch has to be more.

Again lets assume you can build yourself a 2500 palace from the ground up for 500k. You are into this place for at least $1.8M.

I'm sure it will go smoothly with no hiccups or cost overruns & you'll have a nice place you've just spent a year to build paying a mortgage on $1.3M plus all the building costs and rent on a place to live. Lets hope you were able to keep your job during that time as building a place on a limited budget means you have to be on site a lot.

My numbers are iffy but my point is a remodel or tear down is not for the guy looking to get a place on a budget. You'll get eaten alive unless you really know what your doing. If you're asking advice about buying & building on this blog you don't know what you're doing.

Anonymous said...

Your point is very well taken.
What you are saying is, unless you really really really know what you are doing, don't buy a tear down. Don't buy a major fixer.

Bite the bullet and buy something ready to move in to.

If someone doesn't know what they are doing they will get eaten alive

Anonymous said...

I agree with the last 3 posters......leave the major fixers up to the pros. You are nuts if you think u can get a second story for 500K on an existing POS house. You will have to re-pour the foundation, redo the structural, all new beams/framing...plus all electricial, plumbing, mechanical, etc...might as well build new in this scenario.

I just built a new house from the ground up and i can tell you...it was brutal...every step was fraught with bad news and headaches...

No wonder people pay a premium for new in SM!!!!

Anonymous said...

And 500K for 2500 sq. ft? Forget it.

Maybe in Nebraska. Try 400/sq. ft. PLUS soft costs...

Anonymous said...

1:29 anon here..

If you are new to the SM permit process, have never done a remodel, and are EVEN thinking of a teardown w/o prior experience... you will get killed. Yes, killed, and you will go broke. My ad vice is suck it up and buy a move-in condition property. My comments and observations are intended for the experienced buyer and remodeler, not a budget-hunting neophyte.

Anonymous said...


I hear you loud and clear.

I am a bit confused. My understanding is that there are two separate ways to get a 2500 sq foot house up on land that you already own.

The first way is to try to save money by being your own general contractor and supervising each of hte subs yourself.

The second way is to hire a design build firm that already has done more than 20 homes North of Montana.

Obviously the first way is crazy for a newbie. Cross it off the list.

My question is with regard to the second way. My understanding is that there are a number of design build firms that have a long track record of getting things done in the 90402. In the bubble, many of them got in to the business of doing specs, and in the early to mid part of the bubble, the spec builders put 400 thousand bucks in profit in their pocket each time they did a spec house.

So in the early to mid bubble these design build firms wouldn't talk to me about a custom build project cause they were making so much money elsewhere.

Today, there is no financing at all available for these guys to do spec homes. They are desperate for any work at all to let them keep their teams together.

If I come to these experienced design build firms and show them that I have 1.0 million in cash (and need no loan) and I show them that I own the land, and show them that I am not going to drive them crazy with lots of customization requests, my understanding is that there ARE some high quality design build firms that will do the entire 2500 sq foot job for 1.0 million all-in. It won't be bespoke quality, it will be builder quality, with basic fixtures and finishes, but if I pay 1.0 million they can get the job done, simply because they have already done dozens of the standard 4200 sq foot 90402 jobs.

Again, I am a newbie and I know that the people on this board have done this plenty of times already. I am not stupid enough to think that I can do this by myself - not stupid enough to think option one is viable. I am simply asking if my scenario two is realistic if I pick the right design build firm.

If I am mistaken I want to hear it. Don't hold anything back - give it to me straight.

Anonymous said...

I'd say the quality design firms in 90402 are still busy with house refreshes in that area. The speculator design firms that built junk during the bubble for quick cash are the ones desperate for work. Beware of any design firm with less than 10 years of experience building in SM. If it were me I'd look for a business with a good track record over 20+ years in SM.

After 20 years of good work they know the SM code, how to get permits through and probably know the inspectors personally. This is worth a lot in the Republic of Santa Monica. SM government is like no other in CA. They can be even harder to deal with than Malibu.

If you are hiring out all the work don't skimp on the design firm\builder.

Anonymous said...

I second the above Anon's comment. Be careful of builders that claim 30 years of experience and work in Santa Monica. In reality they have 25 years in Rancho Cucamonga and 5 years building in Santa Monica. Do your homework on these builders. Santa Monica is a different animal compared to other locations. Experience dealing with the city is everything.

Anonymous said...

1:29 anon here..

The good and reputable contractors are busy, with projects in the pipeline. Drive around 90402, see the existing projects, and ask about the possibility of getting next in line. The good contractors are not desperate, not discounting, and are booked at least 1-2 projects ahead.

The fly-by-nights and out-of-area spec guys are more than happy to get the band back together and take your money.

The bottom line: there is not a cheap way to get a quality build in 90402 (that will get through city hall). Trying to pick a weak contractor's pocket will result in you getting seriously screwed with poor quality, huge cost over-runs, and 2+ years of frustration.

Forget the cheap lot + cheap build = $2.5M dream house scenario. It is a pipe dream.

Anonymous said...

I agree
you want a design build firm that has more than 20 years of experience in the 90402. You want to visit a few houses they built ten to 20 years ago and see how they are holding up.

Sold on that.

But what is the all-in-cost that one of these high quality time tested design build firms will charge? If I want to write one check, all cash, what is the total total all in cost for 2500 square feet with no shoring, no excavating, just a basic box 2500 sq feet on two levels on a flat 90402 lot?

When you say do not look for a discount, I agree. When you say to hire someone who is already very busy I say yes. But what is the all in tab for 2500 sq feet

Anonymous said...

$1.3M at a minimum, hard and soft costs, demo, landscaping, all-in with 10% cost over-run allowance. Adding another $100k to be safe is reasonable on a project of this size. Ever wonder why you see just started projects that get sold at a discount? The owner probably figured $300 sf all-in and realized through permits and demo they will not have enough money to finish the job. "Approved plans and permits" in the listing says it all.

Get a spreadsheet going, talk to builders and architects, and ask owners who just finished the process.

Anonymous said...

I'd put a basic 2500 sqft box in 90402 from a reputable builder at closer to $1.5.

If you are going to buy in a premium location like 90402 you are shortchanging yourself to build a basic box. The resale on a basic box will not be good in 90402. People buying move-in ready homes in 90402 don't want a basic box. Unless you plan on selling your home in the future as a tear down.

The ROI on a basic box build in 90402 is not nearly as good as the ROI on something with luxury in 90402. Spend more on the build an you will get it back in the NOM area.

Anonymous said...

Why does 12:41 Anon keep asking for an all in number? No one can accurately give him that info. He needs to ask builders for quotes.

If you are looking to cut a check to someone all in for a build in 90402 I'll send you my routing number. You can wire the money to me and I'll have your house built in no time. I don't even need to know the lot address.

It'll be easy just like you want.

Anonymous said...

Let's keep this blog focused on actual real houses you can buy.

A lot of the open houses in the 90402 for today (Sunday) were cancelled - check again before walking over to any of these open house.

By the way, a house in the 90402 just hit the market - asking 27.0 million. Look it up. I bet that one won't be hosting any open houses

Anonymous said...

I agree with the above Anon's that you'll recover less of your money going cheap on a build in an upscale neighborhood. Just as overbuilding a house for a neighborhood is throwing away money. Underbuilding a house is leaving money on the table.

Anonymous said...


Bulls are out in force.

Enjoy those mega-jumbo-option-ARM resets!!