Cindy Allen
Recent posts
July 24, 2008
When people near retirement age, they often move to a smaller, more manageable
space. That’s what Candy Spelling is doing. Now that her husband, T.V. mogul Aaron Spelling, has passed away, and she’s apparently patched things up with daughter Tori, the 62-year-old is ready for a simpler lifestyle.
So, like many others in her situation, she went the condo route. She purchased the top two floors of an under-construction upscale high-rise in Century City for a record $47 million, or $2,848 per square foot.
From the L.A. Times story:
[T]he 62-year-old heiress with a reputation for embracing opulence will be moving out of Los Angeles County’s largest home — a 123-room, 56,500-square-foot mansion on six acres in the Holmby Hills neighborhood off Sunset Boulevard.
Her new home will be less than a third the size of the old one — just 16,500 square feet — but with a killer 360-degree view spanning the horizon from downtown Los Angeles to Santa Catalina Island. The condominium building called the Century is going up next door to the Century Plaza Hotel on Avenue of the Stars and will be completed in late 2009.
Such a drastic downsizing means that Spelling may have to forgo some amenities she enjoyed at the Holmby Hills place — like the gift-wrapping room, perhaps — but the new pad will have some nice touches as well.
The lower floor will have a living room with two working fireplaces, a dining room for 25 guests, and staff quarters. The top floor will house the bedrooms, including a 4,000-square-foot master suite, a massage room, an exercise room, a conservatory complete with rose garden, and a swimming pool and deck.
Just like any other downsizing senior.
July 23, 2008
The big news on Tuesday was that California lenders issued a record number of notices of default — the first step in the foreclosure process — in the second quarter of ‘08, according to DataQuick Information Systems. From the DataQuick news release:
Mortgage servicers recorded 121,341 “notices of default” during the April-through-June period. That was up 6.6 percent from a revised 113,809 for this year’s first quarter, and up 124.9 percent from 53,943 in second-quarter 2007, according to DataQuick Information Systems.
Last quarter’s number of defaults was the highest in DataQuick’s statistics, which go back to 1992.
The only possible good news was the small increase from quarter to quarter, noted DataQuick president John Walsh:
“The small increase in defaults from the first to the second quarter may indicate that we’re nearing a plateau. We won’t know until the end of the year, but it may be that some lenders are starting to prioritize workouts with homeowners instead of grinding things through the foreclosure process. Of course, they may just be swamped and can’t handle processing any more paperwork,” he said.
Other tidbits:
– The median homeowner in default is five months behind on mortgage payments, with a median owed of $11,583 on a median $346,400 loan.
– The number of homes in default was about 3,000 less than the total number of defaults because some borrowers are defaulting on multiple loans.
– The default numbers represented a record in almost all counties, including Los Angeles County.
– Statewide, mortgages in San Francisco and Marin counties were least likely to go into default, and most likely in Merced and San Joaquin counties.
If you want to see how certain SoCal ZIP codes are faring on the foreclosure front, the L.A. Times has updated its list of home prices, sales and foreclosures to include the most recent numbers. You might be surprised which ZIPs recorded the biggest increases (hint: Rancho Palos Verdes). Click here.
Recent Redfin Posts:
Solar Loan Law Passes While Loan Bailout Debate Continues
Falling Fast on South Highland Avenue
An Uphill Walk: Sales and Listings in Verdugo Woodlands 91208
July 23, 2008
That word is, of course, SOLD!
I was walking the dogs in my new neighborhood the other day when I came across a house with a For Sale sign in front of it. Right away I knew there was something different about it. As I came closer, I saw the SOLD sign on top.
Memories came flooding back — of days when SOLD signs went up almost as fast as For Sale signs. It seems like only yesterday, but it’s actually been more than two years since the big cooling-off began. I couldn’t remember the last time I’d seen a SOLD sign.
There is no active MLS listing on the house (pictured above), which is at 826 S. Citrus Avenue, just southwest of the Hancock Park border. But the Redfin database shows that it’s a two-bedroom, two-bath house in 1,910 square feet, last sold in 1976 for $64,500. The agent created a Web site for the property (according to her listing, it has three bedrooms).
I’m sure when the home came on the market, but in May, it was reduced from $929,000 to $899,000. That was its listing price when it went into escrow in late June.
We’ll have to wait until it closes to see what it actually went for. But one thing is certain: It needs a lot of updating. Had it already been updated, it might have fetched a higher price.
It hasn’t closed escrow yet, of course. But other homes in the area have sold, even if we haven’t seen the signs.
812 S. Highland Ave.
Sold for $1,175,000 on June 27
4BR/3B/2,191 square feet
Notes: One block over, and on a much busier street, this house must have been impressively remodeled to fetch such a high price.
639 S. Citrus Ave.
Sold for $1,005,000 on 4/11/08
3BR/2B/1,652 square feet
Notes: This one is north of Wilshire.
936 S. Citrus Ave.
Sold for $970,000 on 6/24/08
2BR/1B/1,270 square feet
Notes: As long as people pay a million bucks for tiny houses with one bathroom, there’s little hope for the rest of us.
July 22, 2008
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.
July 21, 2008
The Associated Press decided it was time to write a little analysis piece about the state of the real estate market, and, interestingly, it decided to focus on the Los Angeles market to illustrate its points.
The main point the author wanted to make was that even if prices slide another 10, 15 or even 20 percent in L.A. and other “bubble” metro areas, plenty of hardworking folks still will find themselves unable to afford a home near where they work.
That’s the dilemma this week for the nation’s lawmakers and millions of Americans who are priced out of homeownership: any rescue policy to stem foreclosures could artificially prop up home prices and perpetuate the affordability crisis in many major cities coast to coast.
Here’s a real-life example:
Courtney Lind and her husband have a combined income in the six figures. They’ve been biding their time to buy in Los Angeles for three years, but they want to buy before their second child is born in December.
The Linds can afford up to a $500,000 home — above the median price for the county — but still short of what homes go for in the Los Angeles neighborhood where they rent.
“We would love to stay here, but anything in our neighborhood is $600,000 or above,” said Lind, 33.
In their price range, she said, they can get an 80-year-old fixer-upper, with about 1,000 square feet of space, and a very little yard on a busy street.
That’s exactly the situation in the area I live in near Wilshire and La Brea and many similar neighborhoods in central and western L.A. You can rent a two-bedroom duplex for a fraction of what a mortgage payment would be. Decent (but small) homes start at about $900,000; a two-bedroom fixer costs around $700K, if you can find one.
The folks highlighted in the story are considering moving farther away from the city to a place where houses are cheaper, as many have done. The tradeoff, of course, is the stress, expense and wasted time of commuting. Whether that’s worth it or not is a personal decision.
A Torrance resident quoted in the story says he’s considering a move to Long 
Beach, which he thinks is not as nice as Torrance but is comparably affordable. That’s an area my husband and I were looking at, until someone told us that it can take up to two hours to get to the Miracle Mile, where I work, during rush hour. Still, I agree that the prices in Long Beach are lower than other places — and Long Beach is centrally located, has some nice older homes and historic neighborhoods, and, last but not least, the only off-leash dog beach in Los Angeles County.
Recent Redfin Posts:
Note to Buyer: You’re Going to Walk Out Over Flashing?
REOs in Sherman Oaks
For Sale by Owner in the 90039
Bargains Elude Bidders: Glendale-Pasadena Sales are Within 10% of Listing Prices
July 18, 2008
The June DataQuick numbers for Southern California came out this week, and for the most part, it was more of the same. Median prices of existing single-family homes and condos in L.A. County fell 24% compared to last June; the median in the county is down to $415,000, close to what it was four years ago. Sales were down 25%.
But the Inland Empire showed signs of life. Sales were up 11.8% in Riverside County and 1.1% in San Bernardino County as median prices in both counties continued to tumble. In Riverside County, the median slipped to $275,000; in San Bernardino County, $240,000. That’s a price drop of 31% and 34%, respectively.
Buyers in the Inland area, where the majority of sales are foreclosures, obviously think that prices are at or near the bottom. Which got me to thinking about how the last housing market recovered.
I was working at the L.A. Times in early 1998 as a well-off colleague was trying to buy a home in Newport Beach. She was frustrated because, suddenly, homes were being snatched up before they even hit the MLS. At this point, the housing market had been depressed for about eight years.
It turned out that the coastal activity heralded the very beginning of the housing recovery. It started in the beach areas and, like a giant, slow-moving wave, made its way inland. The following year, we finally found a buyer for our Riverside County house (which we had bought at an auction in 1993 at a steep discount). A couple of years later, people who had been upside-down for years were back to where they started.
It looks like the housing downturn is taking the exact opposite course. It started in the farthest reaches of Inland Southern California, i.e., the high and low deserts and the Inland Empire, and, like a Santa Ana wind, is sweeping toward the great Pacific.
L.A. economist Christopher Thornberg pretty much confirmed this in the L.A. Times:
“In the places that were harder hit, it’s pretty clear we’re getting close to the bottom,” Thornberg said, but “places like West L.A. — where people said, ‘It can’t happen here’ — are starting to stumble now. It’s a function of time.”
It makes sense. The places where everyone wants to live, like the coastal areas, will never be hit as hard by a downturn as the less distinctive, more far-flung regions. The desirable places are the last to suffer in a downturn, and first to recover.
How long before the wind reaches the coast? Here’s one prediction from DataQuick analyst Andrew LePage, from The Times’ story.
“At some point prices stabilize, but that is six to 12 months later easily,” LePage said. “Then you’re also looking at years of relative stagnation” before prices actually rise.
That, too, was true of the last downturn.
Recent Redfin posts:
Pasadena Real Estate Update and Tips for Buyers
Jeff Lewis Flips ‘Commonwealth’
Support Your Local News Media
Blog News: Rentals, Home-Buying Incentives, and More
July 17, 2008
If you’re not watching the new season of Bravo TV’s realty reality show “Flipping Out,” you’re missing out. It’s really, really compelling this year.
Frankly, I wasn’t all that impressed with the first season of the show, mainly because I found Jeff odd and unlikeable. I tuned in this year because Los Feliz, being part of Hollywood, is in my coverage area, and because I was curious to see how Jeff would fare in the market downturn.
It turns out Jeff has had to take on some remodeling projects to make ends meet. One, a Hancock Park home, turned into disaster when the owner turned out to be 10 times more demanding and difficult than he is. He had to give that project up because the owner was impossible (but previews show that she may try to rehire him). He’s also remodeling a home in Encino (with a nice owner).
But he’s still selling properties. He sold the Ben Lomond property that was featured on the show last year. And now, thanks to the great Real Estalker blog, we learn that the Commonwealth house, which Jeff and company were living in and working from in this week’s episode, has also sold.
Here’s the Redfin listing for the house, and the Property Shark report. (Scroll down to the large street-view photo in the Redfin listing; you can see construction materials in the driveway.) Jeff purchased it in March of 2007 for $800,000. It’s a two-bedroom, three-bath with 
1,938 square feet. It went on the market in November for $1,795,000 and finally sold in May for $1,595,000 — to actor Dominic Monaghan (right) of Lost and Lord of the Rings, according to the Real Estalker.
So presumably the gang has moved out of Commonwealth and into new digs — Valley Oak, perhaps? According to the listing, Valley Oak was just reduced in price again this week — to $2,595,000. That’s $600,000 less than when the house first appeared on the market in April. (Jeff paid $1,710,000 for the place in March 2007 — the same month he bought Commonwealth).
It’s not just Jeff’s business direction that’s different this year — it’s Jeff himself. He’s still a relentless workaholic, but he’s less weird (no more pet astrologers and psychics) and more human. His relationship with his assistant Jenni seemed strained last year, but this year he’s treating her with more respect — and compassion, since Jenni’s marriage to her husband, Chris, also employed by Jeff, is breaking up. (Jenni says Jeff’s installation of a nannycam to spy on Chris did not cause the breakup.)
Jeff talks about his personal transformation in this L.A. Times article:
“Unfortunately, I was so stubborn and self-centered and narcissistic I needed something this big, I needed this show to be played in front of millions of people for me to learn my life lessons,” he said. Unlike many reality stars, he says, Lewis believes TV has humbled him.
The Hancock Park owner was crazy to fire him. Who better to handle a huge remodel than an anal-retentive workaholic contractor with mad talent and obsessive-compulsive disorder? Glad to see she’s apparently come to her senses.
July 16, 2008
Congratulations to fellow blogger Christina Chan: Her home is in escrow after about five months on the market. We’re looking forward to hearing the juicy details about her sale after she closes.
Judging from one comment to her post, and others that have been posted on the blog in the past few weeks, there are folks who don’t understand why a blog for a company in the business of selling real estate includes posts about the sad state of the real estate market.
The answer is simple: credibility. If we came on here and promoted buying homes day after day, why would anyone read this blog? No one wants to read sales pitches. People want and need useful, accurate information about the market; that’s what we try to provide. And Redfin fully supports what we do, so long as our posts remain intelligent, reasoned, and respectful.
In my case, what I post about is based primarily on two things: news stories (from the L.A. Times, Associated Press, and other media) and my analysis, based on personal experience and from studying what’s going on. The reason the blog often appears bearish is because market conditions frankly suck right now. That’s not just my opinion: It’s borne out by the numbers, the data, and the experts whose job it is to assess such things.
That said, I recognize that there are reasons people want and need to buy and sell homes. I’m not anti-home buying; there are reasons for owning homes that have little to do with money. There’s something wonderful about having your own home. But the financial realities need to be weighed along with the emotional ones.
And every situation is individual. Not every home is in foreclosure; not every home is a bad deal; not every market — or neighborhood – is in distress. And although sales are way down from a couple of years ago, homes are still buying and selling. And with money as tight as it is, the buyers out there have got to be smart people who know what they’re doing with money.
To clear up any misunderstandings, I’m going to sum up my views about homeowning in this post. I think I’ve been pretty consistent about them, and they’re based not only on my personal real estate experience but on data and others’ learned opinions. This way, the next time people complain about the blog’s negativity, I can refer them back to this post to save time. Here goes:
1) A home should be looked upon as a place to live, not an investment. If you happen to get a check when you sell, great, but that should not be the reason for buying. Historically, homes have been promoted as an inflation hedge; that’s a more reasonable way to look at them.
2) Homes work best financially for people who are staying put for awhile — at least seven years and preferably more. Otherwise, the expense of buying and selling tends to make owning a bad deal. The longer you stay, the closer you’ll be to owning outright and being mortgage-free in retirement — assuming that you don’t use your house as your personal piggy bank.
3) Homes are money pits. Besides your mortgage payment, a house sucks up a good chunk, if not all, of your savings for the down payment. Then, besides the monthly payment, you have to pony up for taxes, association dues, insurance, repairs, maintenance, and upgrades. That’s a financial reality that buyers need to understand.
4) Your monthly mortgage payment should be comparable to what you would pay to rent a similar place. Unless you are absolutely certain that the place is going to steadily rise in value, there is no reason that owning a home should cost twice or three times as much as renting the same place.
5) There’s nothing wrong with renting. It’s a smart choice if you need to conserve cash, are planning to move in a few years, or just don’t want the hassle of owning. Renting is not “throwing money away” when you get to keep all your savings and when it’s considerably cheaper to rent than to own (as it often is in L.A.). In fact, many people who bought homes in the last few years are the ones who threw money away.
Ultimately, buying a home is a personal choice, an individual decision. But it’s important that home buyers and sellers make informed choices. That’s why we’re here: to provide information and resources people need to make those important decisions. And when market conditions change, and home-buying becomes a good deal for the masses again, this blog will tell you so.
Recent Redfin posts:
Sound Advice for Sellers
Listings Near IndyMac Bank: Front-Row Seats to the FDIC Takeover
Melrose Place Reinvents Itself
July 14, 2008
No, not the 90s T.V. show (its creator, Darren Star, is far too busy with Sex and the City), but the little street that juts off the western end of Melrose Avenue in L.A. (Star, a Maryland native, lived in West Hollywood after graduating from USC, so he had to know about the real Melrose Place).
The L.A. Times did a write-up last week about Melrose Place, which evolved from a residential street to an antiques and home-furnishings enclave to its current iteration: high-end fashion destination.
The transformation began, by most accounts, a little more than three years ago, when Marc Jacobs and Marni moved on to the block in quick order. They were followed by other upscale retailers, including Carolina Herrera, Sergio Rossi, Mulbery and Lambertson Truex.
The retailers were drawn to the street’s intimate charm, privacy, and lovely old buildings. But parking and walkability remain problems, which is why it’s to your advantage to live nearby.
Plenty of the pricey condos near Melrose Place have come down in listing price. Smaller, lower-priced units seem to be moving more than the high-end ones.
For sale:
718 N. Croft Ave., #303
$999,000
3BR/2B/1,679 square feet
Notes: This condo is part of a brand-new complex called Croft Villas at Melrose Place. The price has been reduced twice; from $1,149,000 to $1,049,000 to its current price. The listing says the place is 40 percent sold out, which means the majority of units are still available. Those prices have been reduced, too.
560 N. Croft Ave.
$1,275,000
3BR/2B/1,751 square feet
Notes: This house has been on the market for nearly a year. It hasn’t changed hands since 1999. It would appear that a price reduction is warranted.
740 N. Kings Road, #220
$362,500
1BR/1B/667 square feet
Notes: This is a lender-approved short sale.
Sold:
740 N. Kings Road, #215
Sold for $350,000 on May 1, 2008
1BR/1B/664 square feet
850 N. Croft Ave., #101
Sold for $912,500 on May 23, 2008
2BR/2B/1,682 square feet
8350 Waring Ave., #302
Sold for $550,000 on Feb. 13, 2008
1BR/2B/1,388 square feet
July 14, 2008
In the wake of the failure of Pasadena-based IndyMac Bancorp last week comes this extraordinary press release from the Office of Thrift Supervision (OTS), whose job is to oversee banks:
The OTS has determined that the current institution, IndyMac Bank, is unlikely to be able to meet continued depositors’ demands in the normal course of business and is therefore in an unsafe and unsound condition. The immediate cause of the closing was a deposit run that began and continued after the public release of a June 26 letter to the OTS and the FDIC from Senator Charles Schumer of New York. The letter expressed concerns about IndyMac’s viability. In the following 11 business days, depositors withdrew more than $1.3 billion from their accounts.
“This institution failed today due to a liquidity crisis,” OTS Director John Reich said. “Although this institution was already in distress, I am troubled by any interference in the regulatory process.”
So the government agency charged with regulating banks is blaming a U.S. senator for a bank’s demise. Gee, OTS, don’t you think IndyMac’s penchant for writing Alt-A mortgages (a.k.a. ”liar loans”), which don’t require income documentation, had a little something to do with it?
Schumer apparently is a bit of a media whore; a poster on L.A. Land called him “the Gloria Allred of Congress.” But that doesn’t change the fact that IndyMac was in trouble. And Schumer might have done consumers a favor by giving them a heads-up.
OTM is “troubled by any interference in the regulatory process?” Maybe OTM is troubled that it was caught with its pants down. From a Bloomberg News story:
“Given their focus on Alt-A and a heavy concentration in California, they would have suffered meaningful losses in almost any scenario,” Brian Horey, president of Aurelian Management LLC in New York, said before the seizure was announced. Aurelian is short-selling IndyMac shares to gain from declines.
Had IndyMac “applied some common sense and changed their approach to underwriting as the housing market peaked, they might have lived to see the next cycle,” Horey said.
Sen. Schumer promptly turned the finger of blame back at OTS.
“If OTS had done its job as regulator and not let IndyMac’s poor and loose lending practices continue, we wouldn’t be where we are today,” Schumer, a New York Democrat, said in an e-mail today. “Instead of pointing false fingers of blame, OTS should start doing its job to prevent future IndyMacs.”
It’s not like IndyMac’s problems should come as a surprise to anyone. IndyMac was brought to us by the fine folks at Countrywide, according to this Wall Street Journal article.
IndyMac was set up by Countrywide in 1985, but the two companies severed ties in 1997 and became direct competitors. The company’s name stands for Independent National Mortgage. It was created to specialize in jumbo mortgages — those that are too big to be sold to government-backed Fannie Mae and Freddie Mac. In 1997, under the direction of Chief Executive Michael Perry, a protege of Countrywide chief Angelo Mozilo [left], IndyMac set off on its own.
Recent Redfin posts:
Downtown Breakdown
Lesson for 91103’s Linda Vista-Annandale Homeowners: Start a Blog!
How’d You Like to Buy a Home for $250 a Square Foot?
