Saturday, July 11, 2009

Westside Starts to Crack, 42% off in Santa Monica 90402.

Here we are in mid summer, and a significant meltdown in Santa Monica Canyon has just appeared. Hats off to Santa Monica Distress, for coming up with this one:

333 E. Rustic Rd. Santa Monica, 90402
2+1, 1029 sqft house, 6403 sqft lot
Built in 1924

Sold on 7/26/06 for $1,500,000
Sold on 7/6/09 for......$875,000

That's a hefty $625,000 or 42% off. With the market peaking in 2007, it's probably close to 50% off it's peak price. Sure, there are those that will say, "but that is in the canyon". True, however this is still one of the prime areas in Los Angeles. Perhaps, even more important is, this house was an REO, and shows banks are getting more realistic. If the banks begin unloading their shadow inventory, look out below. We may get something like we have never seen before.

On a side note, I'm hearing even Little Holmby is showing signs of distress. A lot of inventory for sale, long market times, few reductions and no buyers. Sounds like some are headed or already underwater.


larealtyreport said...

Only a matter of time until the banks start unloading their "shadow inventory". Brokers these days are telling their agents that short sales will eventually comprise 70-80% of all listings.Interesting times ahead, for sure.

Anonymous said...

This is the best real estate blog out there. thank you for the great work -

one small correction - from a fan - the little holmby neighborhood is totally distinct from brentwood - brentwood runs only as far east as the 405. on the other side of the 405 as you continue east you get the neighborhoods of westwood and bel air. little holmby is to the east of westwood .

i have typically seen little holmby defined as the neighborhood that has westwood to the west, sunset to the north, wilshire to the south and the la country club to the East

Best homes in little holmby border the country club. For a wonderful view of some of the largest houses in California not surrounded by hedges, I suggest a drive along mapleton. You can get a good close look at houses that sold for 30 or 40 million at the peak of the bubble.

Latesummer2009 said...

thank you for your support and correction Anon 1:21. One can only wonder what those properties are worth now. 20-27 million (1/3 off)?

Anonymous said...

Check out the comments section at SM Distress for even more info on this place - Sold in 2005 for $800k, then a year later for $1.5. Hmmm...Maybe not a bargain at any price?

Anonymous said...

If anyone cares..."Old school" Little Holmby is different than Westwood north of Wilshire between Westwood Blvd and Beverly Glen.

Little Holmby is east of Beverly Glen between Wilshire and Holmby Park. North of Holmby Park and east of Bev Glen begins Holmby Hills (mega bucks - think Aaron Spelling's mansion).

Little Holmby is also directly west of Beverly Glen between Sunset and Wilshire, but once you go east past Dalehurst you are in what was once called Westwood... now also called Little Holmby as this is all part of Warner School District and therefore very desirable.

WillyWanker said...

As a former denizen of the city of Beverly Hills (NORTH of Sunset but NOT in the 'Post Office'~~~where the price of houses is measured by how close you are to the Beverly Hills Hotel), I can assure you that there is a WORLD of difference between 'Little Holmby' and Holmby Hills. Holmby Hills is where the richest of the rich want to buy. Little Holmby, not so much. To move from Beverly Hills into Holmby Hills is a step up but to move to Little Holmy is, decidedly, a step down.

Anonymous said...

you guys are so LA.

Anonymous said...

i agree that holmby hills begins at holmby park - everything north of holmby park is holmby hills

but what percentage of the homes in holmby hills are north of sunset and what percentage south of sunset ?

latesummer2009 said...

So what kind of discounts are we looking at in Little Holmby?

Anonymous said...

US Foreclosures Continue Shattering Records: RealtyTrac

Anonymous said...

ppl r on summer break; see ya

Anonymous said...

I'm getting really impatient with the market. I'm totally committed to the theory about a second wave of mortgage defaults (prime borrowers) and the Westside eventually catching up to the rates of price adjustment seen across the country. Why is it taking so long!?

I have a realtor who is OK. He doesn't pressure me and keeps me on the MLS for Westside property (SM/CC/MV) and even Westchester. All I see are houses in the 620-700K. The houses listed in the high 500Ks are garbage (i.e. next to the 405 or 10 freeways, Sepulveda, etc.).

He sold a house in the 90066 for 600K (just a month ago) that, I thought, was garbage. It was a 1000 square foot 2 +1 with construction stopped half way in some rooms!! He said they had several offers right around 600K. (many right below that, one at). WTF?? Who are these dorks buying at that price?? They are keeping sellers' hopes up. Damn!

When will we see the price adjustments we are looking for?? 630K houses selling for 600K (or 700K selling for 650K) are not where we want to be!

Help me stay patient.

Anonymous said...

Dude-these sellers are on crack! I see all sorts out there now, they are at like 2005 prices. alot bougt in 2003+ and they are trying to make a buck and can't understand that they are lucky if they break even. Crack I say!

Anonymous said...

these buyers believe that this may be the only opportunity they will have to buy in CC otherwise they will be priced out forever. Plus, these buyers probably aren't very smart. Drug dealers probably. People with money and brains do not buy shitty 600k homes in CC. They buy in Pacific Palisades and north of Montana.

There will always be stupid people out there--and these FHA loans encourage it.

Anonymous said...

Just a thought here... sellers aren't the problem. Real estate agents aren't the problem. The current *buyers* are the problem. As long as there are people willing to pay these prices, sell side folks have no real incentive to drastically lower prices. I, a potential buyer with a salary of around 1/4 million and more than that in liquid investments, have no clue why anyone would pay these prices. I certainly won't, but it is what it is.

latesummer2009 said...

People are still in the mindset of "Price" instead of "Value". The price may appear good to them compared to recent history. However, the value is not, compared to it's fundamentals. Also, since our current trend is deflationary, it make their decision even worse.

Just because someone has money to spend, doesn't mean they are smart. Especially, if it comes to an emotional reaction, when buying a home.

Anonymous said...

" The price may appear good to them compared to recent history. However, the value is not, compared to it's fundamentals."

Totally agree, I guess I'm just wondering what, if anything, is going to change this belief...

P said...

LA times did some mapping work trying to define neighbourhoods...should help with your 'little' issue on Holmby.

latesummer2009 said...

The results are in from our reader poll:

The price of a Santa Monica Starter Home at the bottom:

$300K-$400K (40%)
$401K-$500K (20%)
$501K-$600K (7%)
$601K-$700K (26%)
$700K+ (7%)

That's 60% that believe a starter home will end up in the $300Ks or $400Ks at the bottom. With prices for a starter hovering around $700K today, that's a huge drop. You definitely would lose your down payment (20%) and remain underwater for years.

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