What Does $10,000,000 Buy In Santa Monica These Days?
(Click on photos to enlarge) 
A brand new 10,621 sqft spanish style home with 10 bedrooms and 7 bathrooms on a 24,280 sqft lot overlooking Santa Monica Canyon at 808 Adelaide Place, 90402. That's a hefty sale when supposedly the market is so weak isn't it?
Well, lets take a look at the history of this house a little closer.
Listed for $16,975,000 on 3/31/08
Reduced to $12,450,000
Reduced to $11,450,000
Sold for $10,650,000 on 4/27/09
Reduced to $12,450,000
Reduced to $11,450,000
Sold for $10,650,000 on 4/27/09
(Hat tip to Westside Bubble)
-$6,325,000 or -37.3% off the original list price in just over 1 year. Amazing how quickly things can change in a year. Sure, this is an extremely select market, but it does set a tone for other multimillion dollar properties on the Westside. If this huge new home, with views, on a 24,280 sqft flat lot on the most expensive street in Santa Monica is $10,650,000, what are prices like in the rest of 90402? Even big money is now expecting huge discounts before buying. 25% off isn't good enough anymore. As we head towards summer, more sellers will find their property sitting and losing valuable market time if not priced correctly. Serious sellers will need to be at least 10% off the lowest comp, if they want their properties sold. Otherwise, chasing the market down could end in foreclosure.
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7 comments:
This is probably more an example of overly optimistic original asking price than sky falling on the westside. Not that I'm not praying for sky falling, but I think your application of this example is stretching.
Actually, the data I have seen shows quite dramatic drops in median prices in about 85% of Westside ZIP codes in April. There were a few ZIP codes where the medians actually went up, but these all had extremely low volume (1-2 sales), so their individual medians are of no value. But when you take the average across all Westside ZIP codes, it seems prices have already fallen 20-30% even in the best of neighborhoods.
Many home owners seem emotionally invested in keeping pricing elevated, but I have yet to hear any reason why prices will not revert to trend on the Westside and elsewhere. If anybody has any data-based argument why bubble pricing levels will be maintained, I'd love to hear it.
Looking at the fundamentals of price/rent or price/income there is no rational reason why Westside prices will remain at elevated bubble prices. It has been slower to correct, but is only a matter of time before it does. Looking at historical norms indicates another 25% drop, before we reach any type of bottom. Even then, we scrape along the bottom for some time until wages begin to rise again.
There are numerous reasons to believe why the Westside is different, unfortunately they aren't based on facts. The market ultimately decides what the real values are.
Anon no1 here. I'm not disagreeing with your premise that westside prices will revert to long term trends. Hell, I agree with that. I was just pointing out that use of this property as an example of price direction on the westside is a misapplication of data. This is a house originally asking 17 mil that sold for 10 mil. In no way does this reflect the standard house, buyer, or situation on the westside. Even in great zip codes this would be pretty exceptional and atypical. It's like making a sweeping judgment about the market for acuras based on whether beverly hills mercedes had to take a hit on their 400K mclaren.
free forclosure website with preforclosure, auction and bank owned data
www.realquest.com
I got this from MBC blog, very good site
The real question on this Adelaide listing should be 'When did the house last sell and what was the selling price?
Then you can gauge the ridulculousness of the offer.
An opening 'pie in the sky' price and then watching it fall to earth/reality is a different matter all together.
Here is a link who think none of the wealthy are living beyond their means or overlevereged.
http://online.wsj.com/article/SB124268209889631903.html#articleTabs%3Darticle
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