Archive for January, 2008
January 31, 2008
No. Sales have not come to a grinding halt in Playa del Rey. In this little oceanside community that is sandwiched between the Pacific Ocean to the west, Westchester to the east, Marina del Rey to the north, and LAX to the south, homes are still moving. At current count, I spotted 18 single-family homes on the Redfin map listed for sale. Redfin shows that 11 single-family homes have sold in the last three months.
No doubt, a few have been sitting for a while. (For instance, 236 Waterview St. has been on the market for over 140 days.)
On October 1, 2007, 333 Waterview St. was listed for $979,900. On November 10, 2007, the sellers dropped the four-bedroom, two-bath property down to $939,900 (less than 4% reduction). But that was just enough to finally induce someone to make the purchase. The four-bedroom, two-bath home sold for $900,000 on December 31, 07. Can we say Happy New Year?
Now let’s compare. The 236 Waterview home has less sleeping quarters - just two-bedrooms and two-baths. But it’s just around the bend, giving it a peek-a-boo view of the lovely ocean sunsets. It’s also got a pretty rich looking interior, with deep-colored (and shiny) hardwood floors. Plus, there are high-end finishes you’d find in one of the Playa Vista home interiors. (Think Pottery Barn or Restoration Hardware.) It’s currently going for $1,299,000. Anyone want to guess what reduction it would take to sell this place? C’mon. Take your best stab at it. (I’m betting an 8%-10% drop would bring in some reasonable offers for a sale.)
There aren’t really any other comparable homes selling in the area. Nearby, 135 Waterview is selling for $2,450,000. It’s a four-bedroom, five-bath home pegged as an investment opportunity.
January 30, 2008
No, not real estate investors. This story from Inman News is about people who trade on housing-price futures and options on the Chicago Mercantile Exchange. They’re able to project what will happen to housing prices in 10 major U.S. markets. Here’s how they do it:
Expectations of future price changes are implied by the percentage difference in the index value for the relevant market (most recently published on Jan. 29, 2008, for the November 2007 period) and the current price of traded futures contracts expiring on future dates.
I don’t know what that means either. But the point is, these investors did some calculations and came up with some predictions about how far prices will go down the future. The bottom line: They’re predicting at least two more years of decline.
The most dramatic declines are expected in Miami with a fall of more than 23 percent and in San Francisco with a decline of more than 16 percent by 2010. Markets falling the least are Chicago, down just an additional 5.9 percent, and San Diego down 9.4 percent by September 2010.
What about Los Angeles? The investors are projecting a dip of 9.75 percent by September, a 12.74 percent drop by September 2009, and an 11.41 percent decline by September 201o.
The only good news to glean from this is that the 2010 number is a little higher than the 2009 number, meaning that perhaps by then, the worst will be over.
In the meantime, be glad you don’t own in Miami.
Recent Redfin posts:
Luck Needed for this Westwood Single-Family Home
Pasadena Big Dippers: January
January 30, 2008
There continues to be little shortage of heavy reductions to be found around the city, but I found the story behind 581 N Los Robles AVE, a northwest Victorian, to be particularly dire. Its $975,000 asking was cut by $10K last September to no avail. It was reduced yet again to $850,000 on Halloween, but for the sellers, the nightmare would linger. Fast forward to the New Year, and it has again dropped its asking to $600,000. A storied difference of 38.5% in just the last quarter of a year.
581 N Los Robles AVE
Old price: $850,000
Reduced to: $600,000 (29.4% reduction)
Beds: 8 / Baths: 3
SQ.FT.: 2,812
1153 Armada DR
Old price: $525,000
Reduced to: $455,000 (13.3% reduction)
Beds: 2 / Baths: 1
SQ.FT.: 911
181 S Marengo AVE #4
Old price: $350,000
Reduced to: $290,000 (17.1% reduction)
Beds: 1 / Baths: 1
SQ.FT.: 717
1335 Virginia RD
Old price: $3,900,000
Reduced to: $3,250,000 (16.7% reduction)
Beds: 3 / Baths: 3.5
SQ.FT.: 4,198
1525 Glen Oaks BLVD
Old price: $4,860,000
Reduced to: $4,150,000 (14.6% reduction)
Beds: 4 / Baths: 3.5
SQ.FT.: 5,100
25 S Grand AVE
Old price: 1,365,000
Reduced to: $1,165,000 (14.6% reduction)
Beds: 2 / Baths: 2.5
SQ.FT.: 2,852
45 S Grand AVE
Old price: $1,725,000
Reduced to: $1,350,000 (21.7% reduction)
Beds: 2 / Baths: 2.5
SQ.FT.: 3,260
photo credit: newwavegurly
January 30, 2008
The sun is shining once again in Southern California. Unfortunately, the same cannot be said about the housing market. The news this week brought more storm clouds to an already dark horizon.
Today, there was this story about U.S. home prices in November dropping 8.4 percent from a year earlier, according to the Standard and Poors/Case-Shiller composite index. Southern California was one of the harder-hit areas, with San Diego County’s prices slipping 13.9 percent and Los Angeles and Orange counties falling 11.9 percent.
The November index of 10 metropolitan areas saw a year-over-year annual decline of 8.4%, the sharpest annual plunge since the index began in 1987. It was the second-straight record decline for the index, following a 6.7% drop in October. The index shows Los Angeles and Orange County house prices are now 12% below their peak month, which Case-Shiller places at September, 2006.
This news followed this story Monday that new-home prices fell by a record amount in 2007:
Sales of new homes fell last year by 26 percent, the steepest drop since records began in 1963, the Commerce Department said on Monday. Last week, the National Association of Realtors reported that sales of previously owned single-family homes, a large portion of the overall housing market.
Depressed enough? Maybe it would cheer you up to learn that Countrywide Home Loans posted a $422 million fourth-quarter loss. Irresponsible lending is at the root of the current crisis, and Countrywide, the nation’s largest mortgage lender, led the way. Now, the company is fighting for its life. What goes around, comes around.
Recent Redfin posts:
The Tussle for Territory
Reduced Far Enough? A WeHo One-Bedroom
January 30, 2008
Westwood is not exactly a hotbed of single-family home sales activity at the moment, which isn’t a good thing for our new listing, at 10632 Ohio Ave. As you can see, it’s a pleasant-enough place, at least from the outside: The agent hasn’t gotten around to providing more pictures yet.
It’s priced at $1,495,000. In the last three months, there is only one other sale on Redfin of a single-family home in the vicinity: In December, the house at 10748 Ashton Ave., a two-bedroom, two-bath in 1,824 square feet, closed for $1,275,000. (By the way, that house sold in 1989 for $720,000 and again in 2001 for $630,000, proving that, despite what Realtors say, doubling your home value every 10 years is not a given.)
Around the corner, 10659 Wilkins Ave., Apt. 101, a spacious two-bedroom, three-bath, 1,976-foot unit, closed in December for $654,750. It must have been a distress sale; it was purchased in January 2007 for $760,000, a loss of $105,250 inside of a year.
A few blocks south, a three-bedroom, two-bath – 10600 Eastbourne Ave., Apt. 9 — went for $614,000. At 1,369 square feet, it sold for $449 per foot, which isn’t a bad deal for the area.
The owner of 10677 Wilkins Ave., #4, purchased his unit in June 2005 for $532,000 and is already selling, and for not much more than the purchase price. This two-plus-two, described as “just like a house,” is listed at $570,000.
January 29, 2008
Everyone has personal space. When someone else breaks those boundaries of personal space, folks tend to get a little uncomfortable. According to anthropologist Edward T. Hall, there is even a numbers game to personal space. If you’re, shall we say, on “intimate” terms with someone - 6 to 18 inches away is appropriate. Personal distance moves to 18 inches to 4 feet. When you’re talking “public” space, the distance is more than 12 feet.
Of course, cultures and personal preferences all come into play. Now, when we’re talking about a major airport (LAX) moving into neighborhood space, local residents don’t always react with open arms, either.
According to the Argonaut, the Los Angeles International Airport has recently gotten an approval on an $8.7 million dollar contract. The airport will begin an environmental impact report to study redeveloping the facilities and possible reconfiguration of the northern runways.
Prior to the approval, one “Letter to the Editor” from the Alliance for a Regional Solution to Airport Congestion (ARSAC) strongly voiced objections to the expansion.
Here is an excerpt:
LAX has several proposals to move the north runway as far north as 1,000 feet into Westchester/Playa del Rey. This may mean the complete destruction of the Westchester Central Business District, the heart of our community, to create a “clear zone” for a new runway.
We could lose all of our local shopping and dining from Sepulveda and Manchester south to LAX. Businesses such as In-N-Out Burger, Bank of America, Office Depot, Ralphs, Mervyns, TJ Maxx and IHOP could disappear forever.
Once again, our homes and businesses are threatened by more LAX expansion. We need our friends and neighbors to tell the airport commission “no” to destroying our community.
The community has been invited to input their comments on potential designs. If you’re interested in what will happen or speaking your mind, here’s the info.
What: LAX Northside Land Use Community Workshop
When: Wednesday, February 13, 2008
Time: 6:30 pm - 9:00 pm
Where: St. Robert’s Auditorium
Loyola Marymount University
1 LMU Drive
Los Angeles, CA 90045
You can get more info by contacting the LAX Stakeholding Liaison Office at 800.919.3766
January 29, 2008
Here is a one-bedroom, one-bath condo — 8787 Shoreham Drive, Unit 207, West Hollywood – that showed up as reduced this morning — from $669,000 to $625,000. The listing description says it’s owned by interior decorators, and it does seem to be done up pretty nice.
But am I the only one out there saying, “There is no way in hell that I would pay over $600,000 for a one-bedroom apartment?” I doubt it.
You could rent that apartment for around $2,000 per month. The monthly payment on a $500,000 mortgage — fixed, for 30 years at 7 percent — would run you more than $3,300 a month. Throw in homeowners’ insurance and real estate taxes and HOA, and you’re looking at a monthly nut of about $4,500. And that’s assuming you have $125,000 to put down.
Sure, if you have good credit, you could probably qualify for an interest-only loan, which would lower your monthly payments. If you don’t care about ever paying down the loan balance, this could be an option.
Some people get so carried away by the idea of being “homeowners” that they overlook the fact that, these days, owning can cost two to three times more than renting. But they buy anyway, because they’ve been taught that it will pay off in the long run.
As real-estate agents always say, “You only need one” (buyer for your house). Today, that means one buyer willing to overlook financial fundamentals.
Let’s see what else is going on in the neighborhood.
8787 Shoreham Dr., Unit 1206: No doubt our seller is heartened by this November sale of a one-bedroom, two-bath in the same building for $755,000. Gotta love the sales history on this one: Bought in 1989 for $239,000. Sold in February 1992 for $300,000. Sold in September 1992 for $180,000. Sold in 1999 for $240,000 (zero appreciation in 10 years). Sold in 2004 for $460,000. With the latest sale, this unit, at 865 square feet, sold for a whopping $873 per foot. (”You only need one.”)
A recent sale that may not bode well for our seller is up the way, at 1230 Horn Ave., Apt. 404. This one-plus-one, 797 square feet, sold in December for $475,000.
A new condo development across the street claims to have taken a “substantial price reduction” on remaining units. This one, 8788 Shoreham Dr., Unit 11, is a new two-bedroom, 2.5 bath. It can be had for the substantially reduced price of $959,000. Does this mean that other units went for more than a million? Those buyers can’t be too happy about the new pricing.
January 28, 2008
In case you’ve missed it, there has been a protracted discussion taking place over at the L.A. Times’ L.A. Land blog. The topic: When you’re upside-down in your house, is it acceptable to abandon it?
The discussion started with a comment by a woman calling herself Condoblue, who revealed that she was planning to walk away from her condo because it had declined in value from $500K to $350K:
“I realize I agreed to the deal when I signed the mortgage papers, but I am within my rights to walk away from a bad deal and suffer the consequences, just as many corporations write down billions of dollars of debt, lose money for their shareholders, and lay off people as a result of their bad decisions.”
The firestorm of comments that followed debated whether choosing to walk away from a bad investment was a moral decision or a financial one. Some people called her a scumbag for not living up to her end of the bargain. But the majority of commenters argued in Condoblue’s favor, as reflected in this poll on the site. They said it was a financial deal gone sour, and Condo was right to walk away, just as developers abandon projects when the market turns south.
Well, things had almost calmed down when Condoblue wrote in and explained herself further. She detailed how she had entered into a purchase agreement on another home and planned to stop making payments on House #1 as soon as she closed on House #2. She also said that the mortgage lender on House #2 didn’t even inquire about the status of House #1. So much for tighter restrictions on credit. She also noted that she could have elected to stay in House #1, because she could afford the payments but decided it wasn’t worth it.
“I realize my credit score will take a hit, but remember that I don’t need to rent since I own House #2. I have stable long-term employment, decent car, and no debt so speak of.”
I see the point about walking away from a home being a financial decision, not a moral one. But I can’t support Condoblue in walking away from a house that she could still afford to pay for, and then buying another house. If she doesn’t like this one, does she walk away from that one, too?
Of course, this being Hollywood, Condoblue was invited to appear on a radio show on Monday to offer her perspective on the housing fiasco. Click here for an audio link. Walk away from your house and become a star!
Recent Redfin posts:
Just Added to the Inventory (And All About [LAX] Soundproofing)
A Short Sale in West Hollywood Vicinity
January 28, 2008
Is anyone out there shopping for a condo or townhome? Well, I’m going to have to assume some of you are since they are still selling in this market. I have a list of some of the newbies so you can check them out. I’m going to concentrate on Playa del Rey and Playa Vista, since those areas tend to have “more appeal” when it comes to the condo market.
Take a look.
Playa del Rey
8765 Falmouth Ave., #215/1bd, 1bth/Second Floor/$400,000
8600 Tuscany Dr., #316/2bd, 2bth/End Unit/$545,000
8711 Falmouth Ave., #109/2bd, 2.5bth/Townhome/$545,000
Playa Vista
5935 Playa Vista Dr., #205/2bd, 2bth/Corner Unit/$760,000
You’ll note that the Falmouth property has had LAX soundproofing done. I can tell you from personal experience that this makes a big difference. Yes, you’ll still be able hear the planes (though very quietly). But it’s the difference between windows rattling your nerves and a sweet semi-silence.
For those of you who don’t know, there is a residential soundproofing program run by the Los Angeles World Airports (LAWA). They’ll come in and put double-paned glass on your windows, glass fireplace doors, new heavy-duty exterior doors, and insulation in your attic. You’ll have everything you need to make you feel nice and cozy - and sound-insulated. It’s all free. The actual construction process takes about two weeks (if you make sure they finish everything the first time around). But you could be on the waiting list for months or a year for the actual construction to take place. For more info, you can contact the LAWA-Soundproofing Office at 310.646.7444.
January 28, 2008
This three-bedroom, one-bath home at 839 N. Gardner Street (kitchen at right) was purchased in July 2006 for $1,095,000. It didn’t take long for the trouble to begin.
Back in October, it came on the market as a new listing, priced at $1,095,000 — the same price it was purchased for 15 months earlier. It has been hastily reduced several times, the latest from $945,000 to its current $895,000. Not surprisingly, it’s a short sale.
If this house sells for somewhere in the $800,000s, it will become a new comp for the neighborhood, and prices of every nearby home could be affected.
Other activity in the neighborhood:
843 N. Gardner St.: This four-bedroom, two-bath home with just under 1,400 square feet sold for $1,000,000 in November. It had been purchased in 2004 for $750,000.
852 N. Sierra Bonita Ave.: One block west, this home appears to be a flip. It was purchased in May 2006 for $1,025,000 and is listed as being “completely redone in 2007.” With three bedrooms and two baths, it’s listed at $1,295,000. Judging from the listing description, the buyers put a ton of work and money into the house. Unfortunately, they bought at a peak price. Even at the listing price, they’re probably losing money.
The three-bedroom, two-bath, 1,814-foot house at 736 N. Sierra Bonita Ave. was listed in the fall for $1,325,000. In October, it was reduced to $1,295,000. On Dec. 21, it closed escrow at a sales price of $1,174,000. This home was purchased in April 2005 for $990,000 and remodeled, as noted in this previous post. The sellers didn’t get as much as they wanted for the house, but in this market, they were darned lucky to sell for that price.
Not so lucky were the sellers of 955 N. Vista St., who bought the property in November 2006 for $1,200,000 and let it go 13 months later for $995,000.
