July 22, 2008

Falling Fast on South Highland Avenue

Back in March, I wrote a blog post about 738 S. Highland Ave., pictured above. At that time, the 1,864-square-foot 3+2 had just come on the market for a whopping $1,595,000.

Anyone familiar with this Hancock-Park-adjacent neighborhood knows that this part of Highland Avenue is a heavily trafficked two-lane street – a feature that could turn off buyers with children and/or seeking quiet. 

The gist of my post was that $1.6 million seemed a lot to ask for a house this size on a street like this in a market this bad.  It also looked a lot like an ill-advised flip:  Someone had purchased it in July 2006 for $990,000; less than a year later, in April 2007 — well after the market had peaked — someone came along and shelled out a cool $1,250,000 for it. 

A few weeks later, I blogged about a price reduction on the property, to $1,350,000. And today, my daily Redfin alert let me know that the property had been reduced in price again.  Actually, there have been four reductions since my last post: $1,250,000; $1,150,000; $999,000; and now $949,000.

Sure, the price was bloated to begin with, but these are some pretty rapid and deep cuts. I decided to call the listing agent, Ricardo Pardo, to find out what was going on.

He said that the 2007 buyer was indeed hoping to flip the property.  She spent $200K in renovations, he said, then promptly lost her high-paying job.  Although the listing doesn’t say so, it’s now a short sale. 

I asked whether the lender had approved the sale; it hadn’t.  Mr. Pardo said he had submitted one “ridiculously low” offer to the lender — “almost an insult,” he said, but the lender hadn’t responded.

Will this latest drop bring the house more in line with other sales in the area? Let’s see what’s been selling.

812 S. Highland Ave.
Sold for $1,175,000 on 6/27/08
4BR/3B/2,191 square feet
Notes: This should be a good comp for our seller.  This house hadn’t changed hands in 14 years, so presumably the sellers had price flexibility.

716 S. Citrus Ave.
Sold for $1,017,109 on 1/24/08
3BR/2B/2,228 square feet
Notes:  The oddball purchase price means it’s bank-owned.  And it’s already back on the market — with an asking price of $893,000.

639 S. Citrus Ave.
Sold for $1,005,000 on 4/11/08
3BR/2B/1,651 square feet
Notes:  This house is north of Wilshire and on a quieter street — attributes that help explain the healthy sales price. 

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