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 21, 2008
Quietly, almost imperceptibly, the Bank-Owned shingle is cropping up along with For Sale signs in desirable neighborhoods throughout Sherman Oaks. Though I feel a bit self-conscious parking and stepping out of my car on a fine Saturday afternoon to photograph these properties, neighbors rarely appear to question my presence. 
One who does is using the drive of the foreclosed 2-bed, 2-bath house at 14842 Hartsook St. to detail and polish her gleaming black Cadillac. She says it lends the property some class; given its condition, she may be right. We have a friendly chat and she tells me the gate is unlocked and invites me to step in and look around the grounds. We commisserate about the sad invasion of McMansions in the neighborhood and hope this tasteless trend has run its course. Listed for just over two weeks on the market at $460,000, this fixer-upper will take a lot more spit and polish than the neighbor’s Caddy to shine again.
About a mile east on Hartsook, this attractive pool home at 13920 has been on the market for $694,900 only a month but is already accepting backup offers. From the street, at least, it looks cheerful, well-maintained and ready for occupancy, indistinguishable from the neighboring homes. To the buyers it must appear to be a bargain compared to the $959,000 it sold for in August 2005. We’ll see - ask them again in another three years if they still think so.
**********************************************************
Just a few blocks north of Notre Dame High School and across the street from Millikan Middle School is this 3+2 REO at 5146 Sunnyslope Ave. foreclosed on by the lender last January for $685,000. It apparently failed to find a buyer conventionally in the months since then and now appears to be set for public auction. The signage tells the story.
The news here is that these properties are all located in the midst of attractive, desirable Sherman Oaks communities that heretofore have seen few, if any, foreclosed homes for sale.
They won’t, however, be the last.
July 21, 2008
Ok. So I know this isn’t exactly my area, but I couldn’t resist. There’s been a bit of buzz in recent years about a unique, more affordable way to build your home - with shipping containers. If you follow the latest in residential architecture news, you’ve probably already heard of it. If not, the whole concept might sound downright odd to you.
In comments on a USA Today article, this type of construction has been described as everything from “affordable” and “versatile” to “the new trailer trash”. I, personally think they’re kind of cool looking. I don’t see shipping containers in the finished product, but modern, aesthetically pleasing architecture. Take a look at the photos of this Redondo Beach residence. You may disagree with me - or not. Let me know what you think.
Anyhow, the architect, Peter DeMaria, plans to market the homes at a starting cost of $150 per square foot. Here is a snippet from the article.
With high construction costs throughout California, Anna and Sven Pirkl turned to DeMaria for a lower-cost modern dwelling that used recycled materials for their Redondo Beach lot. DeMaria designed a 3,220-square-foot home on a 8,860-square-foot property for the couple, DeMaria said.
More than a year later, the Pirkls don’t mind that their home, completed in May 2007, stands out in the neighborhood because of its modern design, Sven Pirkl said.
On the outside, the Pirkls didn’t try to hide that their home is made from six shipping containers cut into eight, although the couple did use beige acrylic paint to cover the containers. On the inside, the Pirkl’s home has high ceilings, concrete floors, recycled cotton insulation and walls framed from formaldehyde-free plywood, Pirkl said.
As an added benefit, by retaining many of the features of the containers, the Pirkls won’t have to deal with costly upkeep, he added.
DeMaria is planning to offer the container houses starting at $150 per square foot, or $300,000 for 2,000 square feet, through Logical Homes, a website being launched this month to let customers purchase the homes that arrive on location quickly and need little on-site labor, he said. Costs for a traditional custom home in Manhattan Beach run around $225 to $250 per square foot, he added.
Now let’s move onto some homes that are more affordable (relative to the area, of course) around LAX.
Right now, I’m looking at the average cost per square foot of homes in Westchester. As of this posting, they’re at an average of $475 a square foot for listed properties. Sold properties are at $425 a square foot.
Here are some homes that give you more for your money.
6420 W. 85th Pl./4bd, 2bth/$330 per square foot/$599,000
5575 W. 79th St./4bd, 2bth/$331 per square foot/$750,000
7631 Kittyhawk Ave./4bd, 3bth/$336 per square foot/$729,000
July 19, 2008
Are you serious? Last time I posted about the pending sale of my house, I mentioned the inspection went well and that I was looking forward to a smooth closing. Well, things never really go so perfectly. I recently received a list of requested repairs and I wasn’t very excited about it.
By the way, I doubt the buyers are reading this, but if you are - all I can say is “hello.”
Here is the list so that you all can be part of my experience.
1. Install sidewall metal flashing on roof between sloping roof on house and garage.
2. Repair termite/wood rot on east facing window sill.
3. Correct electrical drop hazard on roof.
4. Replace outside electrical panel with UL approved panel.
5. Service/clean floor furnace.
So here were my thoughts.
1. The flashing would be installed in this case as a preventative measure and is not something that is typically done by a seller from what I understand - especially when there has been no damage nor any imminent threat of damage from water. (In other words - not my problem.) Even the inspection report notes that there is only a “chance of water damage”. (I also have a chance of winning the lottery.)
2. This one is a non-issue because it gets covered when I have to do work on the house overall per the termite inspection.
3. I’m going to call the electrical company and see if they’ll make any required changes.
4. See above, #3.
5. Fine. I’ll vacuum out the dog fur already. And yes, the heater does work. I got someone out to repair it early in the year.
So far, all I’ve heard is that the buyer really wants to get the flashing done. I’ve been advised that this deal may be dead if I’m not willing to pony up a few hundred for the flashing. (I used to draw details of those things back in my architecture days.) I’m thinking. Are you kidding? You’d walk for something that isn’t a safety issue and that is typically not a seller’s responsibility? I’d be surprised.
At the time I’m writing this, I’m waiting to hear back on their decision. Any reader comments on this issue are appreciated.
Stay tuned to find out whether I’ve called their bluff or whether I’ll be eating my words.
July 19, 2008
There actually aren’t that many FSBO houses in this area right now. I’m going to be optimistic and hope that’s a sign that there are fewer in-trouble owners in this zip than there were a couple months ago. There are also very few foreclosure sales listed right now, so let’s hope…In the meantime, here’s what’s for sale by those intrepid folks who don’t want an agent - not even Redfin!
- This is a cozy 2/1 with 900 square feet on a 4,879 square-foot lot. It’s been remodeled and is on a cul-de-sac. It looks like a nice, well-maintained starter home and is listed for $510,000.
- This listing is pretty scant on details, but it’s a 1/1.5 for $691,000 on Silver Lake Boulevard. It looks like it is probably a condo.
- This is actually in Echo Park - it’s a 2/1 for $390,000. It last sold in 2006 for $435,000, so it looks like the owner may be trying to get out.
- Lastly, this one lies in the triangle between the 2 and 5 freeways. It’s a cute 2/1 built in 1936 and listed for $445,000.
July 18, 2008
Residential real estate transactions closed within 10 percent of asking prices in Glendale and Pasadena during the past three months, according to data gathered by Redfin and presented by CEO Glenn Kelman at the Westin Pasadena Red Carpet event for homebuyers this week. (See the chart and a link to the Power Point slides here.)
Glenn gave attendees a great rundown of real estate sources and their pros and cons. He also covered Redfin’s extensive search features and the fine points of negotiating in today’s market.
What stood out to me in his comments was: 1) though 20 to 40 percent of inventory in Southern California is distressed, sellers’ situations, bidding wars, or bank requirements are moderating bargain prices, and 2) buyers are getting more time to evaluate their purchase: contingency periods range from 14-21 days in this market, while two years ago they averaged 7-10 days.
I actually found three price increases on Redfin this past week. This Glendale home went up $20,000 in price; the listing states “Short Sale Approved.” A Pasadena townhouse went from $410,000 to $555,000 with no evident explanation, but someone obviously needs more money. This Orange Grove townhouse is back on the market at $55,000 more than its original listing price. It must have fallen out of escrow; its listing says “must sell!”
Closing within 10 percent of listing price seems impressive, but perhaps sales are occurring after price reductions. Against three price increases, I counted 59 price reductions in my Glendale and Pasadena Redfin email updates this past week. The smallest price cut was $5,000, the largest was $292,000, and the average was $43,000.
Also during this week, 16 listings went from active to off market or contingent (into escrow), while 23 listings went from off market or contingent back to active status, meaning they most likely fell out of escrow. In this difficult market for both buyers and sellers, Redfin’s homebuying class is definitely worthwhile.
Here are some of the interesting price reductions in Glendale and Pasadena this past week:
3065 E. California
Pasadena 91107
$2,188,000
5 beds/4.5 baths
4,318 sq.ft.
$507 per sq.ft.
On Redfin 24 days
This large Mediterranean home sitting on more than one-half acre with tennis court, guest house, and multiple amenities came down $292,000 in price in less than one month.
1830 Calafia Street
Glendale 91208
$731,405
3 bed/2.5 bath
2,411 sq.ft.
$303 per sq.ft.
On Redfin 34 days
This home just north of Glendale Community College was reduced by $38,500. It is listed as an REO. It sold for over $1,000,000 in 2007.
1321 Carmen Drive
Glendale 91207
$790,000
3 bed/3 bath
1,726 sq.ft.
$458 per sq.ft.
On Redfin 239 days
According to the listing, this home is proudly seated on a beautiful tree-lined street. It was listed at $1,049,000 in 2007, reduced in January 2008 to $975,000 and just last week reduced another $185,000 to $790,000. It last sold in June 2005 for $765,000.
July 18, 2008
I’ve lived in Los Feliz/Silver Lake a long time, but I never knew that this building on Griffith Park Boulevard just a few doors down from the intersection of Hyperion is a recording studio owned by the Scientologists. Apparently, I am the only person in a 5-mile radius who didn’t know this. The other day as I was trying to regain a semblance of my pre-baby body by doing pilates at the new Pilates Plus Studio, I noticed a half-dozen paparazzi outside—one was even armed with a ladder. It’s apparently called Mad Hatter Studios, and according to its MySpace profile, artists from Scientologist Beck to Paul McCartney have recorded there.
This part of Silver Lake is actually pretty intersting housing-wise. Hyperion was a very industrial stretch up until about 5 years ago, when people started fixing up the scattered houses in between auto repair shops and even building new ones. The street has also seen a few new shops and restaurants open recently. The latest addition are these new condo/loft-type things that were just completed. I’m curious to see if they sell or not—it’s not a traditional residential area, and they are fairly expensive:
- 2508 N. Hyperion - There are 5 total in the complex. This one (unit #1) is a 2/2.5 with 1,406 square feet ($486 per square foot) with a roof deck. It’s listed at $710,000.
For comparison, here are some other condos and houses nearby. They aren’t as new, but they give you an idea….
- 2018 Griffith Park #111 - This 2/2 has 1,179 square feet ($466 per) and offers a pool. It’s been on the market 118 days.
- This FSBO on Rowena is a condo with 2/2.5 and 1,486 square feet. It was build in 1984, and it’s been on the market for 147 days. It just dropped its price more than $100,000 and is now listed at $685,000.
- Over on Silver Lake Boulevard, this 2/1.5 has 1,400 square feet ($456 per) and a price tag of $639,000. It’s been on the market 101 days.
July 18, 2008
Cindy Allen reported earlier in the week that Bravo TV house-flipping star Jeff Lewis recently sold this Los Feliz property to Dominic Monaghan, former hobbit and current (or recently deceased?) Lost character Charlie. The house is on Commonwealth, about a half block from a back entrance to Griffith Park. Realestalker had this to say about it:
According to property records, the 1,938 square foot house featured on the current season of the terrifically entertaining television train wreck that is Flipping Out was sold to a bizness entity that MizSpillerguts swears on her mama’s dee-voon collection of vintageBalmain suits belongs to young Mister Monaghan. We can’t verify that, but children, our Miz Spillerguts is neh-vah wrong.
The street seems to be becoming a Young Hollywood Mecca—just down the road from Monaghan, star stalkers could find the Spanish abode of Entourage hottie Vinnie Chase, a.k.a. Adrian Grenier. And the end of the road, where it hits the park, it’s a big draw for film crews—at least once a week, the area is taken over by filming, the latest being a crew from Universal. So what’s all this mean for you? We’ll here’s a few places you could scoop up if you want to count the young and famous among your neighbors:
- This 4/2 Tudor is just around the corner and boasts great views over the city. It’s listed at $1,297,000 and has been on the market a little over two months.
- Up the hill on Amesbury is this 4/4 that no one is going to call shabby. It’s got 4,040 square feet of English Norman style, and even boasts a koi pond. Listed at $2,197,000.
- Also up the hill on Farmouth is this 3/2.5 for $2,195,000. It’s a “dramatic Spanish” and that ain’t no hype.
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
Ah, Pasadena: Early evenings at the Paseo, the Rose Bowl, and data-hungry home-buyers.
Last night Redfin had our first Red Carpet Event at the Westin Pasadena. Redfin CEO Glenn Kelman presented about home prices and the state of foreclosures around Pasadena, as well as tips for touring, negotiating, and generally being a savvy home-buyer. Following a host of buyer questions, people broke into little groups eating tasty snacks and talking local real estate. For those of you who missed it, the slides are here.
On the forums, folks were asking for a class outside of Pasadena. We’ll look at doing one downtown or West LA soon. Next Wednesday, there’s a class in Huntington Beach, and then on July 30th in Carlsbad. You can find the schedule and RSVP on our site.
Until then, here’s some data on Pasadena real estate to tide you over:
Pasadena Houses Sold From April 15 to July 15, 2008
Note: One $2m + transaction in Pasadena NW skewed the average price in that area high.
| Area |
# Deals |
Final v. List |
Average Price |
| Glendale-Chevy Chase/E. Glen Oaks houses |
6 |
99.4% |
$635,333 |
| Glendale-Northwest houses |
10 |
100.9% |
$529,290 |
| Glendale-South of 134 Fwy houses |
5 |
93.4% |
$529,500 |
| La Crescenta/Glendale/Montrose & Annex houses |
4 |
96.3% |
$520,750 |
| Pasadena NE houses |
4 |
96.9% |
$510,225 |
| Pasadena NW houses |
3 |
97.9% |
$1,081,667 |
| Pasadena SW and SE houses |
7 |
91.3% |
$867,000 |
| Rossmoyne & Verdugo Woodlands houses |
6 |
96.2% |
$871,000 |
Pasadena Condos Sold from April 15 to July 15, 2008
| Area |
# Deals |
Final v. List |
Average Price |
| Glendale-Northwest condos |
12 |
92.0% |
$341,908 |
| Glendale-South of 134 Fwy condos |
9 |
108.9% |
$399,011 |
| Pasadena condos |
8 |
97.4% |
$504,750 |
Photo credit: rappensuncle’s on Flickr.
