Home Sentiment Has Changed For Most Buyers

The "American Dream" has turned into the "American Nightmare" for buyers who bought homes within the last 10 years. With the market top on the Westside in the summer of 2007, homes are still dropping day by day, month by month and year by year, at a rate of 1 year in price for each year of decline. Pricing rolling back to 2002 is beginning to appear and there doesn't seem to be anything currently to prevent further declines. At this rate, we will be looking at 1999 - 2000 pricing in 2014 - 2015. How much further down it could go, nobody really knows. The old saying that "real estate is a great investment and always goes up" has been shattered and prospective buyers are re-thinking about "owning" property for now. Even if you only put the FHA 3.5% down, you are out 15% in your first year if you consider closing (3%) selling (6%), taxes (1.25%), and maintenance (2%) costs. Throw in the average 5% yearly loss in home valuewe have seen over the last 5 years and that's a 20% hole by the end of 2012.

Needless to say, many have a different take on home buying and it has become an albatross if they are dependent on financing. This is affecting the overall market , as most of the transactions seem to be either short sales or bank foreclosures, which sell at a large discount to organic sales (regular non-distressed). Why would anyone take on that big of a risk, when you could rent a comparable home for much less than a mortgage right now? Sure there are always some buyers where money is no object, but they are few and far between and hardle enough to support the entire Westside housing inventory. (both shadow and listed).

With an uptick in apartment construction, builders know what's on the horizon. Condominiums are surely to be hit hard, as new apartments come on line in the future. Condominiums are essentialy apartments that allowed buyers to enter the real estate market, when it was appreciating. Those days are gone for now and probbaly won't see a bottoming of prices for at least 5 years. Even then, we normally bounce along the bottom for another 2-3 years, which could mean 2020 before we have a chance of any appreciation.

Best Areas With Good Public Elementary Schools And Homes Under $1,000,000

One of our readers suggested this thread. For families with young children, a good public elementary school is one of the prime factors in choosing a home. The cost of private schools can take a huge bite out of your income and reduce the amount spent on housing. Why not find a good public school to maximize this amount. The question is, where? On Redfin, they list a Great Schools Ratings ranging from 1 - 10, based on standardized test scores and school performance. Although not the only way to judge a public school, at least it's an objective measure in which to evaluate how well their curriculums are aligned to the California State Standards.
Santa Monica, Brentwood, Bel Air, Pacific Palisades and Culver City have some of the best public elementary schools, with homes under $1,000,000. Lets compare a few in the $850,000 - $925,000 range and see what you get. In addition, I'll list the public elementary schools along with their Great School Rating.

SANTA MONICA
436 Entrada Drive 90402
3+1.75, 1534 sqft
YB 1948, 10668 sqft Lot
SOLD on 12/23/11 for $925,000
2 Lots
Canyon Elementary School (10)

BRENTWOOD
1036 N. Kentner Avenue 90049
2+3, 2694 sqft
YB 1960, 5378 sqft Lot
SOLD on 3/31/05 for $1,630,000
SOLD on 11/2/11 for $925,000 (-42.2%)
Short Sale
Kentner Canyon Elementary (10)

BEL AIR
1333 Stradella Road 90077
3+2, 2660 sqft
YB 1973, 13939 sqft Lot
SOLD on 11/28/11 for $880,000
Short Sale
Community Magnet  (9)
Roscomare Elementary School (10)

PACIFIC PALISADES
891 Chattanooga Avenue 90272
3+2, 1273 sqft
YB 1953, 5200 sqft Lot
SOLD on 7/22/05 for $1,350,000
SOLD on 11/29/11 for $917,000 (-32.1%)
Short Sale
Marquez Charter Elementary (10)

CULVER CITY
5263 Dobson Way 90230
4+2, 1794 sqft
YB 1950, 6286 sqft Lot
SOLD on 11/29/11 for $855,000
La Ballona Elementary (7)
Farraquat Elementary (10)

Please fill us in, if you have information about these homes or elementary schools. Also, the cost of competing private schools would be helpful.

End Of The Year Goes Out With A Bang In Brentwood!

Brentwood said goodbye to 2011 with some imprressive price drops in December. Being one of the most sought after neighborhoods in Los Angeles, it may come as a suprise to some. The truth is, no neighborhood has now been spared by the real estate decline going into it's 5th year. Places like Brentwood that claimed, "this area is different", or "that's happening only in the outlying areas" are just plain wrong, or in denial. Short sales and foreclosures have now begun in all of the best neighborhoods of Los Angeles. The debate is no longer if prices are declining, but how much.

All that being said, let's turn out attention to some specific sales in Brentwood and discuss these individual houses. The first one on Albata Street is particularly interesting. This home was built in 2007 and sold in November of that year, which was the peak on The Westside. It demonstrates a 29.2 percent decline in just 49 months. by my calculations, that's a loss of $207,000 per year on new construction.
If anyone has more information about these houses, please provide us with  insight so we can discuss them intelligently.. As for those who resort to name calling or personal attacks, they will be deleted immediately. A zero tolerance policy is now in effect.


BRENTWOOD


11426 Albata Street 90049
4+4, 4000 sqft
YB 2007, 5250 sqft Lot
Sold on 11/15/07 for $2,895,000
Sold on 12/19/11 for $2,050,000 (-29.2%)

3432 Mandeville Canyon 90049
3+2, 2016 sqft
YB 1955, .34 acre Lot
Sold on 6/2/99 for $750,000
Sold on 12/22/11 for $941,150 (+25.5%)
SHORT SALE

738 N. Kenter Avenue 90049
4+5, 2987 sqft
YB 1957, 11515 sqft Lot
Sold on 12/27/11 for $1,400,000
SHORT SALE

152 Granville Avenue 90049
5+4.5, 3757 sqft
YB 1947, .34 acre Lot
Sold on 11/14/00 for $1,875,000
Sold on 12/12/11 for $2,300,000 (+25.3%)
SHORT SALE

632 Hanley Avenue 90049
5+5, 5561 sqft
YB 1983, 10070 sqft Lot
Sold on 7/28/93 for $1,180,000
Sold on 12/23/11 for $2,020,000 (+71.2%)

11174 Sunset Boulevard 90049
3+3.5, 3448 sqft
YB 1951, .30 acre Lot
Sold on 12/7/11 for $1,425,000

13020 Baltic Street 90049
4+3, 2636 sqft
YB 1952, 9899 sqft Lot
Sold on 12/16/11 for $1,617,250

733 S. Burlingame 90049
4+3, 2950 sqft
YB 1926, 9000 sqft Lot
Sold on 12/22/11 for $2,200,000
Spanish Hacienda

379 Fordyce Road 90049
4+4, 3400 sqft
YB 1950, 40956 sqft Lot
Sold on 12/6/11 for $900,000 ??????

Attack Of The Zombies

Zombie banks, zombie houses and now zombie realtors. Is their any credibility left in the housing profession? NAR just "re-benchmarked" their sales figures by 14% or roughly 3,000,000 homes during the years from 2007 - 2010. Just a small accounting mistake, I guess. In addition, they had to restate their figures for 2011 by 15%. This group has become the posterchild for deceit and dishonesty. Still trying to sell the heartwarming commercials about the "American Dream" as it has become a nightmare for those who bought in the last 8 years.

The only thing worse are the banks. Exactly how long will they be able to suspend "mark to market" accounting? We´re going on 5 years now, do they just get a free pass for the next 5,10 or 15 years? This strategy was already proven a failure in Japan and created an army of zombie banks. Insolvent institutions of all sizes that are allowed to exist due to the habit of "extend and pretend". What´s even worse is, the homes that should have been foreclosed on, have become zombies themselves as "owners" are allowed to stay rent free for years. This keeps the house off the banks books and they are not held responsible for maintenance or abandonment.

So where does this all end? Do we just accumulate more and more zombie houses through strategic defaults, thereby creating bigger and bigger zombie banks, and the privilege of more bogus inventory counts and sales numbers from zombie realtors?  At this rate, shadow inventory will continue to amass, as more and more sink underwater. It will be interesting to see just how many zombie houses can be kept off the market and for how long..

No criminals were ever prosecuted on Wall Street for the great real estate swindle. Why would banks or realtors be treated any differently? Do we just keep kicking the can down the road, until there is no more road left and we hit a cliff? If so, that´s where it ends, and when it ends, it ends badly.

Meanwhile, just sit back and watch the slow motion train wreck.

Entry Level Buyers Having A Hard Time Getting Loans

As reported by the LA Times today, homes over $500,000 in Southern California dropped 16% YOY (November). This effects our entry level buyer on the Westside and has put a serious damper on transactions up the entire real estate food chain. One entry level transaction can affect 2,3,4 even 5 other higher level transactions. Bankers are scrutinizing every applicant and demanding 20% down. Quite a bit different from giving anyone with a heartbeat a loan, as in the early and mid 2000s. They know prices are still declining and don't want anymore deadbeat loans on their books. It's all about jobs folks. You can't qualify for a loan without a good steady job and work stability. The real estate pyramid is deteriorating from the top and bottom simultaneously now. If this continues another 2,3,4,5 years or more, all the Westside markets will be 50% off their peak prices, if not more.

Does anybody have reasons why the market should turn before then? If so please enlighten us.

What Are The Best Public High Schools On The Westside?

This question seem to comes up over and over in our discussions. Certainly a huge factor for families moving to an area is, what are the public schools like in the neighborhood ? Without a doubt, parent involvement is vital to a good school. Without getting into a full blown discussion about private versus public schools, let's discuss what people know about the different public high schools on the Westside.

Here is a list of schools of which to discuss.

Palisades High
Venice High
University High
Hamilton High
Fairfax High
Hollywood High
Marshall High
Westchester High
Santa Monica High
Malibu High

Culver City High

Beverly Hills High

If you are familiar with any of these high schoosl, let us know your experiences with them.

What's The Matter With Malibu ??

Beloved Malibu has consistently been one of the worst performers since our downturn began in 2007. Last month's (October 2011) Dataquick numbers are horrendous. With the global economy in a serious state of flux, it seems almost nobody wants to touch the high end right now. Let's take look at the numbers YOY for Malibu in (2007), and see how far we have declined to this year's October (2011) Dataquick Report. Keep in mind the declines are measured against the preceding years (2007 vs 2006) and (2011 vs 2010). Perhaps the most significant is the price being paid per sqft, $777/sqft vs $429/sqft (-44.8%). Big money is not being spent in Malibu like it used to.


Malibu 90265 (2007)
SFRs 14 sales, $1,595,000 median, (-34.9%), $777/sqft
CONDOs 6 sales, $1,125,000 median (-2.2%)

Malibu 90265 (2011)
SFRs 11 sales, $738,000 median, (-79.5%), $429/sqft
CONDOs 5 sales, $396,000 median (-35.2%)


Just in time for Thanksgiving, here are a few turkeys:

28304 Rey De Copas Ln
2+3, 1306 sqft
YB 1974, CONDO
SOLD on 11/22/11 for $365,625

26665 Seagull Way Unit A212
2+1.5, 953 sqft
YB 1973, CONDO
SOLD on 11/3/11 for $510,000

27777 Winding Way
Raw Land, 3.79 Acres
Malibu Riviera
SOLD on 11/7/11 for $675,000

31555 Pacific Coast Highway
Raw Land, 7.33 Acres
North of Zuma
SOLD on 3/29/04 for $850,000
SOLD on 10/28/11 for $570,000 (-33.0%)

18277 Wakecrest Drive
3+2, 2027 sqft
YB 1962, 6800 sqft Lot
SOLD on 12/26/03 for $1,095,000
SOLD on 10,26/11 for $1,050,000 (-4.1%)
Short Sale


Let's hear from Malibu on these and other sales in 90265.

Just In:

35560 Las Flores Cyn Rd.
2+2, 1488 sqft
YB 1976, 2.6 Acres
Ocean and Canyon Views
SOLD  on 6/29/07 for $1,753,000
SOLD on 11/23/11 for $795,000 (-54.7%) !!!!!

These are the types of discounts off the peak during Summer of 2007 where it makes sense to seriously consider buying. Finally, we are just beginning to see some sane pricing. I have said all along, that 50% - 60% off of peak pricing will clear the inventory. Happy Thanksgiving to someone who bought this one!

Can Anything Force The Banks Hand?

Here we are into the 5th year of our market decline and nothing has improved to give buyers hope that we are close to the bottom. Delinquencies surged 5.9% YOY in October and an estimated 28.6 % of all mortgages or 14,300,000 mortgages are underwater according to Zillow. If you take into account the 6% selling cost and a minimum 10% down payment on another home, the effective underwater rate swells to 50% or over 25,000,000 mortgages. Those numbers are staggering and don't seem to be slowing down, as prices creep back further in to the early 2000s. Can anything cause the banks to foreclose on delinquent properties and mark to market? Or do we just head down the hill "Japanese Style" and slowly bleed equity, until inflation eventually catches up to our declining prices. The problem with the Japanese scenario is, wages are not keeping up with inflation and are now actually flat or have declined over the last 10 years. Is another 10 years of stagnating wages and creeping inflation (stagflation) in store ? Left up to the banks, this is what they would love to see.

The big problem with zombie banks and zombie homeowners is, it eliminates the move-up market so most people trying to sell, can't and the pool of buyers for higher end properties shrinks. How long before your neighbors say "why should I pump money into a losing proposition, when the banks won't foreclose? As more and more slide underwater, unless the gov't forces the banks to keep a real balance sheet, the housing market will continue to deteriorate.

Let's look at some recent area numbers from Dataquick, YOY, for September.


Beverly Hills 90210
14 sales, $1,455,000 median, (-48.7% ), $530/sqft

Beverlywood 90034
7 sales, $510,000 median, (-41.7%), $347/sqft

Brentwood 90049
19 sales, $1,580,000 median, (-25.1%), $541/sqft

Mar Vista 90066
29 sales, $634,000 median, (-19.2%), $501/sqft

Westwood 90024
4 sales, $995,000 median, (-32.5%), $532/sqft

Malibu 90265
18 sales, $1,475,000 median (-41.0%), $521/sqft

Pacific Palisades 90272
19 sales, $1,500,000 median (-25.0%), $740/sqft


And just for good measure,


Calabasas 91320
16 sales, $1,350,000 median, (-21.3%), $311/sqft

El Segundo 90245
7 sales, $670,000 median, (-24.7%), $429/sqft

Hermosa Beach 90254
10 sales, $1,068,000 median (-37.5%), $465/sqft

Palos VerdesPenninsula 90274
19 sales, $1,199,000 median, (-18.5%), $452/sqft


The number of sales, median price and price per square foot continue dropping. Even with interest rates under 4% , credit keeps tightening and this market gets uglier by the day.

Also, current weekly sales information for Santa Monica is now being posted on Santa Monica RE Meltdown

Permabear vs Permabull is not the Issue

Recently there has been a continuous discussion about the Permabear vs Permabull debate. That is not the reason for this blog. Whether a person buys or rents, is an individual decision that depends on many different factors, too many to mention here. From now on, whoever mentions either Permabear, Permabull, or attacks another poster will be deleted. I would like this blog free of trolls and those trying to make this into a pissing contest. If you can't add to the topic, get lost and find a life. We are here to discuss recent sales and trends of the Westside Real Estate Market. Obviously, I am researching information on Redfin that anyone else can do, if they take the time. I encourage this, as no one person can claim to be an expert on the entire Westside. The goal of this blog is to post sales for discussion in different areas and get a running dialogue to educate those who are thinking of buying OR selling. Hopefully we can provide a more objective view, than realtors and mortgage brokers trying to sell houses.

Here are the meltdowns for the month of October in Brentwood, Bel Air and Westwood:


BRENTWOOD

640 S. Bundy Dr. 90049
4+3.25, 2496 sqft
YB 1950, 13,014 sqft Lot
SOLD 10/24/11 for $1,075,000

11200 Homedale St. 90049
3+3.5, 2776 sqft
YB 1936, 9603 sqft Lot
SOLD 6/23/06 for $1,595,000
SOLD 10/26/11 for $1,239,000 (-22.4%)

1367 Jonesboro Dr. 90049
4+2.25, 2264 sqft
YB 1955, 12196 sqft Lot
SOLD 10/26/11 for $1,400,000

620 Tuallitan Rd. 90049
3+2, 3245 sqft
YB 1950,  13216 sqft Lot
SOLD 10/5/11 for $1,405,000

3256 Mandeville Cyn. 90049
4+4, 3723 sqft
YB 1972, 29158 sqft Lot
SOLD 10/14/11 for $1,681,250


BEL AIR

2220 Beverly Glen Dr. 90077
2+1.75, 1412 sqft
YB 1955, 5146 sqft Lot
SOLD 4/18/00 for $555,000
SOLD 10/7/11 for $720,000 (+29.7%)

11806 Folkstone Ln. 90077
4+3.5, 2900 sqft
YB 1990, 5465 sqft Lot
SOLD 10/13/11 for $1,175,000

1147 Chantilly Rd. 90077
4+3.5, 3049 sqft
YB 1962, 15069 sqft Lot
SOLD 10/29/02 for $1,850,000
SOLD 10/27/11 for $1,995,000 (+7.8%)

WESTWOOD

10532 Ashton Ave. 90024
4+5, 3170 sqft
YB 1925, 6500 sqft Lot
SOLD 5/18/89 for $950,000
SOLD 10/28/11 for $1,385,000 (+45.8%)

854 Thayer Ave. 90024
5+4, 3570 sqft
YB 1929, 7429 sqft Lot
SOLD $1,475,000

Let's stay on topic.......

Meltdowns Of The Month

Each month I am going to try and post the best meltdowns of the month in as many areas as possible on the Westside. Hopefully others that have knowledge in the chosen areas can chime in and give us any particulars. The purpose of this will be to educate as many as possible that are looking to buy in these areas and update any current trends.

Let's start with these:

26258 Farside Rd. Malibu 90265
4+3.5, 2600 sqft
YB 1976, 5995 sqft Lot
SOLD 12/6/07 for $1,250,000
SOLD 9/22/11 for $706,500 (-43.5%)

4732 La Villa Marina Unit J MDR 90292
3+2.5, 1763 sqft
YB 1966, Townhouse
SOLD 8/19/08 for $640,000
SOLD 10/13/11 for $487,500 (-23.8%)

1514 Maple St. Santa Monica 90405
2+2, 935 sqft
YB 1941, 6299 sqft Lot
SOLD 6/10/05 for $900,000
SOLD 9/23/11 for $675,000 (-25%)

510 San Juan Ave. Venice 90291
5+2, Duplex, 2000 sqft
YB 1965, 2570 sqft Lot
SOLD 1/7/09 for $1,100,000
SOLD 9/30/11 for $480,000 (-56.4%)

1047 N. Crescent Hts. W.H. 90046
3+2.5, 1508 sqft
YB 1924, 6550 sqft Lot, 2 houses on a Lot
SOLD 7/13/07 for $1,025,000
SOLD 10/12/11 for $679,000 (-33.8%)

2044 Coldwater Cyn. B.H. 90210
4+4, 2873 sqft
YB 1952, 9150 sqft Lot
SOLD 12/6/06 for $1,800,000
SOLD 9/21/11 for $1,207,000 (-32.9%)

3862 Huron Ave. Culver City 90232
2+1, 901 sqft
YB 1941, 7497 sqft Lot
SOLD 3/24/05 for $652,000
SOLD 10/12/11 for $425,000 (-34.8%)

4244 East Blvd. Mar Vista 90066
3+2, 1418 sqft
YB 1940, 5688 sqft Lot
SOLD 12/6/05 for $750,000
SOLD 9/30/11 for $500,000 (-33.0%)

854 Thayer Ave. Westwood 90024
5+4, 3570 sqft
YB 1929, 7490 sqft Lot
SOLD 10/19/11 for $1,475,000

I will try to post other areas as soon as possible.