Westside RE Meltdown

Home Sentiment Has Changed For Most Buyers

2012-01-23T23:15:00.000-08:00

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

2012-01-16T11:58:00.000-08:00

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!

2012-01-02T15:11:00.000-08:00

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

2011-12-23T21:42:00.000-08:00

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

2011-12-14T12:24:00.000-08:00

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?

2011-12-03T18:34:00.000-08:00

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 ??

2011-11-23T13:23:00.000-08:00

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?

2011-11-09T22:49:00.000-08:00

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

2011-10-29T22:08:00.000-07:00

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

2011-10-18T21:26:00.000-07:00

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.

Without Jobs, Real Estate Will Continue to Flounder

2011-10-10T21:09:00.000-07:00

It doesn't matter how low interest rates go, without good paying jobs, real estate will not recover. The artificial gov't real estate bump in 2009 was a trick and has since been exposed. All we have been left with is a continuing recession, that is now bordering on a full blown depression, with the world's banks in serious trouble. One major bank failure could be the first domino to fall in a chain of interconnected banks. Needless to say, banks are not in the business of loaning much money right now. They are trying to improve their balance sheets due to mountains of debt Mortgage defaults) that are not producing any income. The easiest way is using the carry trade (borrowing at .25% and investing in US treasuries at 2-3%. Pretty good gig if you can get it. Much better than loaning money to someone whose income stream (job) is vulnerable to being eliminated.

Let's take a look at some of the Facts:

Fact: The housing bubble on the Westside ran from 1997 - 2007.

Fact :The housing bust on the Westside is 2007 - 2011, so far.

Fact: Some Westside housing prices tripled from 1997 - 2007.

Fact: Westside prices have declined 25% from 2007 - 2011.

Fact: Easy financing was the fuel for the housing bubble.

Fact: Tough financing is the cause for declining prices, so far.

These and other numerous factors are exerting downward pressure on housing sales and prices. Unless something dramatic happens to boost our economy, or housing inventories liquidate (Both shadow and listed), the trend in housing will continue to decline into 2017. Until rents double and catch up to mortgage payments, or starter homes on the Westside fall into the $300,000 - $400,000 range, we won't see any increase in prices. Like it or not, that is what these homes are worth and are what MOST people can afford.

25% Off Prices, Where Do We go From Here ?

2011-09-25T10:38:00.000-07:00

Okay, by now everyone knows the Westside is off 25% from its' 2007 peak price. The burning question is, where do we go from here? Do we drop more, stay flat, or do prices increase from here. The argument for dropping more has already been mentioned. Let's here from those who believe differently, only backed up with data. If you don't have any data to support your claim, stop wasting your time and ours. There are buyers out there waiting to buy, but are not for a myriad of reasons. And we aren't just talking about all cash buyers in 90402, that perceive they are getting a deal or looking to park cash somewhere. That represents 11/285 transactions or 4% of the market (as per Dataquick August 2011).

Some of our best neighborhoods took double digit hits in SFR median prices during August:

Beverly Hills 90210

19 sales, $2,200,000 median (-37.0%), $561 PPSQFT

Brentwood 90049

16 sales, $1,350,000 median (-27.0%), $537 PPSQFT

Rancho Park 90064

23 sales, $775,000 median (-15.4%), $524 PPSQFT

Malibu 90265

15 sales, $1,600,000 median (-37.3%), $444 PPSQFT

Pacific Palisades 90272

26 sales, $1,348,000 median (-37.3%), $695 PPSQFT

Santa Monica 90402

11 sales, $2,391,000 median (-20.7%), $967 PPSQFT

Venice 90291

22 sales, $904,000 median (-12.8%), $740 PPSQFT

West Hollywood 90069

12 sales, $950,000 median (-61.8%), $530 PPSQFT

This doesn't bode well for the high end market. Especially, since many consider the higher end tier, the only price range moving. The lower end and middle tier markets are still about dead in the water. That translates into no move-up market to supply the higher end.

Westside Rental Database Information

2011-09-18T07:09:00.000-07:00

Thanks to all that contibuted to our Westside Rental Data Base. We have 17 properties from Santa Monica, West LA, Brentwood, Beverly Hills, Westwood, Culver City and West Hollywood.

If you have others, I will try to add them. Please use the following format:

Area
PAID price
Type of housing, SFR, TH, Condo, Apt, Number of Units, Floor
BR/BA count
Approximate Square Footage of living area
Year Built
Parking
100 Block of Street Name

Here is what we have so far:

SANTA MONICA
$10,000, SFR, 4+5, 400 block of 20th St., N.O.M. (North Of Montana)
$5,500, SFR, 3+2, Hill St.
$5,000, TH, 3+3, 2300 sqft, YB 2010, N.O.M.
$10,000, 501 Marine St.
$2,230, Apt (6 units), 2+2, 1100 sqft, YB 1995, 1 car garage, 900 block of 15th St.
$3,000, TH, 2+2, 1450 sqft
$9,500, 4BR, Faces Ocean
$1650, Apt, 1+1, 700 sqft, 21 st St., Sunset Park
$5,500, SFR, 2+1, 1100 sqft, YB 1920s, N.O.M.

WEST LA
$2,450, Apt (5 units) 3+2.5, 1850 sqft, S.M. /Olympic & Sepulveda/Westwood

BEVERLY HILLS
$3,750, Duplex, 3+2, YB 1980s, Business District, 90211

BRENTWOOD
$2,300, Apt, 2+2, 1250 sqft, laundry inside

WESTWOOD
$1,970, Condo, 2+1+ loft

CULVER CITY
$1,650, Apt, 2+2, dedicated parking, 2 blocks from downtown
$3,500, SFR, 3+1, 1000 sqft, Coverted Garage, 200 sqft
$3,700, SFR, 2100 sqft, YB 1980s, 90232

WEST HOLLYWOOD
$1850, TH, 2BR, Fairfax and 3rd

This was the only information given to me by our readers about these properties. Please don't ask me for any other details about them.

Lock And Load, Rents Going Up ?

2011-09-05T20:24:00.000-07:00

As more people realize that buying a home in this type of financial environment is too risky, locking in a good rental now has become essential. We can take a cue from builders as they have switched from constructing single family residences to more apartment buildings. Readers are finding it increasingly more difficult to find decent rentals at a reasonable price. This makes sense as more and more buyers are looking to rent now. Even real estate agents are switching to marketing "months of rental inventory"

We have a paradigm shift in housing now, where renting no longer carries a bad stigma. On the contrary, many wish they weren't burdened with an upside down mortgage or a declining investment. Most are stockpiling cash now, waiting for further declines in a still overinflated Westside Market. Precious metals such as gold and silver are becoming more popular as investments, since the government seems bent on monetizing our countries massive debt.

It would be interesting to find out what average rents are currently in the different Westside areas. If you have information of current rents being PAID and not asking prices for Westside areas, please post them here.

The Emotional Cycle Of Real Estate

2011-08-21T19:19:00.000-07:00

Is it possible to gauge where we are in the real estate cycle by the emotions of human beings? Many believe there is. It is a Sin Wave called The Point Of Maximum Opportunity. It runs through 15 different stages.

1) Optimisim
2) Excitement
3) Thrill
4) Euphoria (Point of Maximum Financial Risk)
5) Anxiety
6) Denial
7) Fear
8) Desperation
9) Panic
10) Capitulation
11) Despondency
12 (Point of Maximum Financial Opportunity)
13) Depression
14) Hope
15) Relief

And Back to Optimism

What stage is The Westside on? I believe we are less than half way through the wave's downside, in Fear, headed for Desperation. That would be 3/8ths of the way towards the bottom. After 4 years, we are 25% off of our peak prices. At this rate, the bottom, or Point of Maximum Financial Opportunity could be 7 years away in 2018 at 65% off of peak prices. Given the way we are heading towards deflation, it's probably a bad idea to buy anything now. Markets always have away of cycling through, no matter what outside interventions occur. If this cycle plays out like it always has, what will the banks do once everyone stops paying? Will the government keep it's zombie banks alive, Japanese style? Hopefully our government wakes up and realizes, the cycle has to complete itself, sooner or later. Although painful, hopefully it will be sooner and people can get back to buying houses they can afford to live in.

Venice Starter Homes Dropping into the $500,000s

2011-08-14T18:40:00.000-07:00

Starter homes in Venice have now dropped from the $800,000s to the $500,000s. Anyone who bought from 2003 - 2010, has seen their equity continue to chip away. This area was one of the hottest, from 1996 - 2007. With prices down a good 25%, it could drop another 25% or more. INMHO, it is the most overpriced neighborhood in all of Los Angeles. The lots are small and many have eliminated their garages, in order to maximize living space. Crime has always been a problem and now residents have to fight with RVs that monopolize street parking.

Venice has transformed from an eclectic beach town for artists into a yuppie haven for the entertainment set. Whole Foods decided to make Venice it's home and has now become famous for it's Whole Foods Parking Lot Video. Even a few actors have moved into the area and Abbott Kinney is one of the trendiest streets in LA. However, it is still in the city of Los Angeles and relies on it's public services. That means the roads, police, fire, schools, fees and taxes, all come at the discretion of LA politics. Would you spend 1-2 milliion here, compared to Santa Monica, where the public services are better?

On that note, let's look at some Venice houses and see what you get for your money:

1073 Amoroso Pl. 90291
3+1, 1125 sqft
YB 1947, 4320 sqft Lot
SOLD on 7/11/11 for $580,000

1147 Lake St. 90291
4+3, 2037 sqft
YB 1954, 6328 sqft Lot
SOLD on 11/9/89 for $443,000
SOLD on 2/2/00 for $440,000
SOLD on 2/6/04 for $580,000
SOLD on 7/22/11 for $610,000
Short Sale

2233 Louella Ave. 90291
3+2, 1106 sqft
YB 1923, 5850 sqft Lot
SOLD on 7/22/11 for $760,000

516 Altair Pl. 90291
3+1, 1170 sqft
YB 1923, 2700 sqft Lot
SOLD on 5/7/02 for $640,000
SOLD on 4/18/06 for $1,200,000
SOLD on 7/28/11 for $775,000 ( -35%)

2013 Canal St. 90291
3+3.5, 2192 sqft
YB 1981, 3049 sqft Lot
SOLD on 5/25/05 for $1,589,000
SOLD on 8/1/11 for $1,200,000 ( -24% )

Anyone with additional information on these recent sales or others, please post it.

Has The Next Big Leg Down Arrived?

2011-08-07T18:37:00.000-07:00

Here it is Sunday night, before the awaited opening of the U.S. stock markets tomorrow morning. After last week and the first ever U.S. credit downgrade over the weekend, many are nervous. And rightfully so. The question is, could this be the start of another big leg down in real estate? I believe so. Real estate, although tangible, is based on mortgages, which are nothing more than loans on paper. Presently, all paper assets are deleveraging, as we grind down towards deflation. This means a person's net worth and credit ability will deminish. Just as important, interest rates could rise due to the U.S. downgrade.

Westside real estate has already deflated 25% from it's peak, yet still remains about 20% - 25% overvalued. Since August of 2007, the decline in real estate has averaged 6% a year. With banks perfecting the art of "extend and pretend" lately it appeared as if home prices may have plateaued. However, with a possible sudden drop in equities and other paper investments, we could be in for another big leg down. If the real estate market comes to standstill, an additional chunk of equity will be wiped out. With increasing strategic defaults, resulting from a loss of net worth, additional job losses and declining real estate values, the market would be brought to its knees. When a rapidly declining stock market occurs, fleeing dollars ultimately go somewhere. This time it won't be real estate, as too many have been burned recently and values remain high compared to incomes.

With "Risk Aversion" the name of the game, people will seek safe havens into U.S. Treasuries, Gold and Silver.

North Of Montana Lots in 90402 drop 25%

2011-08-03T14:58:00.000-07:00

For more on this story, go to Santa Monica RE Meltdown.

Culver City Coming Down in Price

2011-08-01T17:14:00.000-07:00

Culver City is the next area we are going to look at. A longtime favorite for many families, trying to get a start in the Westside real estate market. It boast better schools, it's own city services, park-like neighborhoods and additional tax revenues from the local movie studios. Unfortunately, it too appears to be suffering from the "One and Done" syndrome, that is plaguing many Westside markets. With the lower tiered homes experiencing buyer activity, the mid and higher tiered homes appear to be stagnating. The reason is, the "move-up" buyer is all but extinct.

Normally, the real estate food chain begins with an entry level buyer. The entry level buyer buys the fist level home and the second level buyer buys the next higher evel home. And the chain continues upward all the way to the highest level. So, the second purchase in the real estate pyramid is essential for the next 2,3, 4 or more sales to continue. In the current mnarket, what we are finding is many bottom level homes are being bought at distressed prices and their is no second level buyer. Like any pyramid relationship, without the bottom, the other levels have no support and the entire pyramid eventually collapses. Equity is what feeds the real estate pyramid and unfortunately, most that have bought since 2003, no longer have any. As long as the banks "extend and pretend" policy is allowed, more and more foreclosures are due to pile up and there will be less and less with equity to move up to the next level.

For those with particular interest in Culver City, Dr. Housing Bubble writes extensively on this area. Needless to say, he is not a big fan of the area. That being said, let's look at some recent SFR sales in Culver City:

11343 Utopia Ave. 90230
2+2, 905 sqft
YB 1951, 8088 sqft Lot
SOLD on 11/4/88 for $220,000
SOLD on 8/15/03 for $449,000
SOLD on 6/10/11 for $300,000 (-33%)

3871 Westwood Blv. 90230
2+1, 1014 sqft
Yb 1941, 4805 sqft Lot
SOLD on 6/3/11 for $410,000

8931 Krueger St. 90232
2+1, 742 sqft
YB 1930, 5610 sqft Lot
SOLD on 11/12/03 for $430,000
SOLD on 4/27/11 for $435,000
Short Sale

5162 Etheldo Ave. 90230
3+2, 1356 sqft
YB 1951, 5000 sqft Lot
SOLD on 7/25/11 for $446,750
Probate Sale

11178 Lindblade St. 90230
3+2, 1518 sqft
YB 1944, 5600 sqft Lot
SOLD on 7/27/11 for $500,000

3250 Hutchinson Ave. 90232
3+2, 1048 sqft
YB 1924, 4600 sqft Lot
SOLD on 8/2/11 for $503,900

4767 Imlay Ave. 90230
3+1, 1142 sqft
YB 1947, 5000 sqft Lot
SOLD on 12/27/07 for $850,000
SOLD on 6/15/11 for $535,000 (-37%)

11237 Garfield Ave. 90230
3+2, 1205 sqft
YB 1952, 5180 sqft Lot
SOLD on 8/30/04 for $680,000
SOLD on 6/15/11 for $540,000 (-21%)
Short Sale

5211 Etheldo Ave. 90230
4+2, 1600 sqft
YB 1951, 5000 sqft Lot
SOLD on 7/13/11 for $555,000
Trustee Sale

10727 Whitburn St. 90230
3+1, 979 sqft
YB 1948, 4996 sqft
SOLD on 8/4/11 for $557,000
Lower Culver Crest

11107 Braddock Dr. 90230
3+1.75, 1296 sqft
YB 1942, 5300 sqft Lot
SOLD on 7/8/11 for $632,000

10761 Molony Rd. 90230
5+4, 2639 sqft
YB 1954, 7336 sqft Lot
SOLD on 12/30/03 for $820,000
SOLD on 6/23/11 for $935,000
Culver Crest

Please post here, any additional information on these, or other recent sales in Culver City.

Little White Lies Of A Real Estate Agent

2011-07-22T16:16:00.000-07:00

For anyone who has had the pleasure of home buying, you have certainly had the opportunuty to hear a few white lies. A white lie is when someone (i.e. real estate agent) omits certain important facts, but doesn't necessarily lie directly to you. For example, "Multiple offers" is one of my favorite. This could mean offers are suspected to come in, it had offers but rejected, 2 low ball offers, one being theirs or just plain not true. Obviously the idea is to promote some excitement and generate activity. Whenever I walk into an open house, I figure at least 75% of what I hear ,are white lies or have some other hidden meaning. I'm sure we have all had these experiences, as agents make the living by making sales. Unfortunately, this isn't a new pair of shoes or a T.V. set. It's the most important financial decision that most people will ever make. Be sure take everything an agent tells you with a grain of salt and above all "'Caveat Emptor" (buyer beware).

Let's hear some of your favorite real estate white lies. Then we can all hear them and know what they really mean.

Santa Monica Condominums Crumbling

2011-07-12T19:43:00.000-07:00

In the last 3 months, 19 Santa Monica Townhouses & Condos have sold at 2003 prices. Santa Monica RE Meltdown

Malibu Prices Plunging

2011-07-11T10:56:00.000-07:00

Malibu which has a ton of inventory, has recently shown declines up to 45% off peak pricing. Since there are fewer sales chasing a bloated inventory, prices continue to drop. Could this be the beginning of the high end clearing out it's massive inventory at 40%-50% off 2007 peak prices? If it is, the next couple years ought to be very interesting. During the early 90s' real estate bust, the high end corrected 50-60% off peak pricing. Why would this cycle be any different, if not worse? As other areas have cleared inventories at 50% off or more, it makes only sense, that's what it will take to form a market bottom at the high end. Even then, we should drag along the bottom for years.

If the banks sense another big drop, they could unload before the next big leg down. Right now, overall prices are back to 2003. The big run-up in prices started in 1999. Since we have erased gains from 2003 -2007, naturally it seems, that gains from 1999- 2003 will be next. Given the historic rise in prices on the upswing, it's also possible we could overshoot on the downside. "Caveat Emptor" (Buyer Beware)

Lets look at some of the latest declines in Malibu 90265:

26901 Pacific Coast Hwy 90265
8+9, 9971 sqft
YB 1990, 2.92 ac
SOLD on 6/16/11 for $7,430,000
Horse Property

28955 Selfridge Dr. 90265
5+5, 5558 sqft
YB 1980, 1.08 ac Lot
SOLD on 4/26/11 for $3,800,000
Point Dume w/ Beach Rights

32052 Pacific Coast Hwy 90265
4+4, 1400 sqft +
YB 1965, .42 ac Lot
SOLD on 6/12/07 for $3,820,000
SOLD on 6/30/11 for $2,100,000 (-45%)
El Matador Beach

21642 Rambla Vista 90265
3+4, 3077 sqft
YB 1997, .062 ac Lot
SOLD on 9/3/11 for $2,650,000
SOLD on 7/7/11 for $1,815,000 ( -32%)
Corner Lot

29328 Heathercliff Rd. 90265
5+4.5, 3685 sqft
YB 1989, .49 ac Lot
SOLD on 4/8/11 for $1,650,000

32910 Camino De Buena Ventura 90265
4+3, 2696 sqft
YB 1985, 4.83 ac Lot
SOLD on 6/13/11 for $1,600,000

2977 Seabreeze Dr. 90265
4+3.5, 2900 sqft
YB 1991, 9927 sqft Lot
SOLD on 3/18/04 for $1,560,000
SOLD on 6/23/11 for $1,345,000 (-14%)

21017 Las Flores Mesa Dr. 90265
2+2+den, 1991 sqft
YB 1956, 1.08 ac Lot
SOLD on 6/14/11 for $1,272,625

24737 Laurel Ridge 90265
5+4, 4008 sqft ???
YB 1995, Lot ???
SOLD on 3/19/97 for $440,000
SOLD on 6/23/11 for $794,500 ??
Lot Sale ????????

TOWNHOUSES & CONDOMINIUMS

6547 Zuma View Pl. #140 90265
3+3, 1928 sqft
YB 1998
SOLD on 3/2/06 for $1,230,000
Sold on 6/16/11 for $799,000 (-35%)

6232 Tapia Dr. Unit C 90265
3+3, 1599 sqft
YB 1965
SOLD on 11/18/04 for $718,000
SOLD on 7/6/11 for $630,000 (-12%)

6437 Kanan Dume 90265
2+2, 1077 sqft
YB 1975
SOLD on 3/9/04 for $460,000
SOLD on 6/28/11 for $312,000 (-32%)
Large Patio

Please post if you have any information about 24737 Laurel Ridge, or other recent sales in Malibu.

Westside Drops 25%. Is There Another 25% Drop Ahead?

2011-07-02T05:58:00.000-07:00

When I first began this blog in the Spring of 2007, people laughed at the possibility of a huge drop in house prices on the Westside. I had predicted a 40-50% drop then, and I'm still convinced, that's where we'll end up. Depending on your area, your neighborhood is down 25-30% already from the August peak of 2007. Given all of the headwinds mentioned ad nauseum in this blog, I believe the second leg down will be the final washout. At this point we will reach capitulation, just like every other financial market has before us. Look at our financial landscape. The top 1% of our population is doing better than ever. Unfortunately the other 99% are getting squeezed more and more each day. This scenario doesn't bode well for homebuyers, as our economy tries to gain it's footing. We had a false economy based on debt, that has now vanished. Prices will eventually revert back to the mean, where homes are used to live in, opposed to another get-rich quick scheme.

When and how, is the million dollar question. That depends on how long the banks are able to extend and pretend. Many of the banks are insolvent and the government is nursing them along in hopes of a recovery. A desperate attempt in reviving an outdated model of easy credit. It's all about jobs now. With the FIRE (Finance, Insurance & Real Estate) economy in the rear view mirror, we need something to replace it. People have been burned badly by the last 2 bubbles (Internet & Real Estate) and it will take time to re invent a new economy. If we don't start producing something, instead of just gambling schemes, housing prices on the Westside are sure to drop.

Needless to say, if you bought in 2004 or thereafter, you're probably upside down, or losing equity every day. Nobody in their right mind wants to catch a falling knife. Why should you?

Santa Monica In Distress

2011-06-19T12:34:00.000-07:00

Santa Monica, the pride of the Westside, now has 174 properties in some stage of foreclosure according to Foreclosure Radar. It includes 23 REOs (Bank Owned), 82 scheduled for Auction and the rest in Preforeclosure. This doesn't even begin to address all the shadow inventory being held off the market by banks. Some people are taking advantage of living rent free, by abandoning their mortgage right next door to someone throwing their mortgage payment down a rat hole. Oh yes, there will be 1 or 2 properties that went "multiple offers" in 90402, that real estate agents will say how strong the market is. What about the other 98 properties that are overpriced, expired, or re-listed and have been on and off the market for the last 4 years.

We are going into the 5th year of this blog and those holding off buying have seen a good 25% drop over the last 4 years. Up until now, the declines have been moderated by government and bank trickery. We have yet to reach any real capitulation, where all hope is given up and we reach a true bottom. Until that happens, we are in for more sustained declines, eating away at real estate equity. I remain confident, that my original prediction of 40-50% off 2007 peak prices, will result in entry level Santa Monica starter homes in the high 300,000s, before we see a bottom. Who knows how long it takes, that depends on our illustrious government.

Westwood And Beverlywood Spring Meltdowns

2011-06-14T22:54:00.000-07:00

According to Dataquick, May suffered some steep losses in the Southland. Total number of sales were down 17.4% YOY and 29% under the average yearly total. Over half of the transactions are distress (foreclosure or short) sales. And 29% of the sales were all cash. The jumbo loan market is still tight and according to NAR, pending sales dropped 11.6% from April to May of this year. Some of the original home in Los Angeles are located in the Westwood and Beverlywood areas. 25% drops from the 2007 peak are becoming more and more common. The question is, do we have another 25% drop ahead? I think so. Too many headwinds facing the market and banks won't be able to extend and pretend for ever. Without further adou, lets look at recent activity in Westwood and Beverlywood:

WESTWOOD 90024

1741 Ensley Ave.
3+2, 1787 sqft
YB 1926, 6750 sqft lot
SOLD on 05/11/ for $850,000

1318 Warner Ave.
3+2, 2267 sqft
YB 1936, 6750 sqft lot
SOLD on 04/27/11 for $1,000,000

10674 Rochester Ave.
3+1.75, 1656 sqft
YB 1931, 6500 sqft lot
SOLD on 05/29/11 for $1,149,000

1533 Calmar Ct.
4+3, 2511 sqft
YB 1946, 7405 sqft lot
SOLD on 04/14/11 for $1,200,000
Cul-de-Sac

10454 Wilkins Ave.
3+2, 2223 sqft
YB 1930, 8712 sqft lot
SOLD on 05/05/11 for $1,250,000
Spanish Revival

10511 Rochester Ave.
4+3.75, 4221 sqft
YB 1939, 6500 sqft lot
SOLD on 07/20/01 for $1,085,000
SOLD on 04/18/11 for $1,315,000
Short Sale

483 Dalehurst Ave.
4+4.5, 3771 sqft
YB 1935, 7540 sqft lot
SOLD on 04/26/11 for $1872,000

BEVERLYWOOD 90034

3464 Glendon Ave.
1+1, 480 sqft
YB 1926, 1880 sqft
SOLD on 04/18/11 for $167,000

8901 David Ave.
3+2.5, 1901 sqft
YB 1931, 5445 sqft lot
SOLD on 05/24/11 for $575,000
Original Hacienda Home

9124 Beverlywood St.
2+1.5, 1513 sqft
YB 1931, 4860 sqft lot
SOLD on 05/17/11 for $617,000

9100 Beverlywood St.
3+1.75, 1370 sqft
YB 1936, 4860 sqft lot
SOLD on 06/06/11 for $627,500

2723 Castle Heights Bvd.
3+1.75, 1244 sqft
YB 1949, 5410 sqft lot
SOLD on 05/18/11 for $650,000

2123 S. Canfield Ave.
4+3.5, 2841 sqft
YB 1962, 6924 sqft lot
SOLD on 03/22/11 for $793,000

Any additional information on these homes, or others in Beverlywood and Westwood is appreciated.

Brentwood And Bel-Air Beginning To Buckle

2011-05-30T10:44:00.000-07:00

Two of the most sought after locations on the Westside, Brentwood and Bel Air, are showing signs of softness. Price per square foot has dropped considerably over the past few years and more owners must be upside down. Even the National Association of Realtors announced that pending sales of previously owned homes fell 11.6% in April from March and 26.5% from April of 2010. Last Spring's bump, was absolutely artificial, as April 2010, was the last chance for the Homebuyers Credit. Not a good sign for the 2011 selling season ahead. With Case/Shiller numbers out tomorrow, it appears we might blow past the 2009 lows.

Let's take a look at SFRs, in 2 of the highest-end areas on the Westside:

BRENTWOOD 90049 (April 2011)
21 sales, median price $1,585,00 (+1.6%)
$669/sqft

3321 Mandeville Cyn 90049
3+4, 2536 sqft
YB 1958, 13940 sqft
SOLD on 05/09/11 for $730,000

1130 Chenault St 90049
2+1.75 sqft, 1618 sqft
YB 1959, 5250 sqft lot
SOLD on 09/02/10 for $1,122,500
SOLD on 03/10/11 for $850,000

2508 E. Pesquera Dr 90049
3+2, 2027 sqft
YB 1966, 12502 sqft lot
SOLD on 05/03/11 for $1,070,000
Short sale
LISTED currently for $975,000
SALE currently pending

771 Claymont Dr 90049
4+3, 2671 sqft
YB 1967, 15246 sqft lot
SOLD on 12/14/07 for $1,750,000
SOLD on 04/07/11 for $1,250,000
Short Sale

2419 Banyon Dr 90049
4+2.75, 2662 sqft
YB 1965, 15933 sqft lot
SOLD on 01/10/91 for $785,000
SOLD on 03/09/11 for $1,270,000

780 Teakwood 90049
4+3, 3068 sqft
YB 1958, 15522 sqft lot
SOLD on 04/18/11 for $1,430,000

3213 Elvido Dr 90049
4+5, 4507 sqft
YB 1971, 15507 sqft lot
SOLD on 03/14/11 for $1,626,000

11434 Ayrshire Rd 90049
4+4.5, 4258 sqft
YB 1941, 18818 sqft lot
SOLD on 05/04/11 for $2,225,000

And

BEL AIR 90077 (April 2011)
12 sales, median price $2,513,000 (+62.9%)
$594/sqft

11822 Henley Ln 90077
3+3.5, 2919 sqft
YB 1990, 4223 sqft lot
SOLD on 01/22/91 for $820,000
SOLD on 03/15/11 for $1,225,000

15531 Colina Strada 90077
4+5, 3399 sqft
YB 1976, 14750 sqft lot
SOLD on 03/04/11 for $1,310,000

933 Airole Wy 90077
3+3, 4209 sqft
YB 1962, 61420 sqft lot
SOLD on 07/13/99 for $1,300,000
SOLD on 05/27/11 for $1,650,000

10835 Bellagio Rd 90077
3+5, 5719 sqft
YB 1950, 34195 sqft lot
SOLD on 03/30/11 for $6,000,000

630 Siena Way 90077
5+4, 5437 sqft
YB 1950, 38330 sqft lot
SOLD on 03/18/08 for $8,200,000
SOLD on 04/01/11 for $6,000,000

444 North Faring Rd 90077
5+10, 10000 sqft
YB 1938, 56628 sqft lot
SOLD on 03/31/11 for $7,375,000

560 N Beverly Gln 90077
5+8, 8248 sqft
YB 1940, 47916 sqft lot
SOLD on 05/03/11 for $8,000,000
English Style

630 Nimes Rd 90077
9+14, 48000 sqft
YB 2006, 77120 sqft lot
TAXED VALUE 2010 $84,798,000
SOLD on 06/04/10 $50,000,000
French Chateau

Just click on the address hyperlink for more detailed information. Please add anything you know about these, or other properties in Brentwood and Bel-Air.

Marina del Rey & Mar Vista Spring Meltdowns

2011-05-23T05:13:00.000-07:00

We are heading into late Spring, where activity normally picks up in the housing market. However, each year seems to wrench forward with continued declines Year over Year (YOY). Marina del Rey has become the poster boy for reductions in SFRs over the last couple years. Now, Mar Vista which has showed strength, compared to other areas has weakened. Here are a few meltdowns for these 2 areas :

Marina del Rey 90292 (April 2011)
5 sales, $760,000 median price (-58.9%)
$392/sqft

3013 Carter Ave 90292
3+2.5, 1590 sqft
YB 1927, 4360 sqft lot
SOLD on 02/14/07 for $1,025,000
SOLD on 04/08 for $760,000 (-25.9%)
Oxford Triangle Remodel
http://www.redfin.com/CA/Marina-Del-Rey/3013-Carter-Ave-90292/home/6735482

704 Oxford 90292
3+2.5, 2562 sqft
YB 1997, 4094 sqft lot
SOLD on 03/30/06 for $1,540,000
SOLD on 05/13/11 for $990,000 (-35.7%)
http://www.redfin.com/CA/Marina-Del-Rey/704-Oxford-Ave-90292/home/8101875

117 Ketch Mall 90292
3 + 4.5, 4010 sqft
YB 1986, 2888 sqft lot
SOLD on 04/18/11 for $1,150,000
Silver Strand REO
http://www.redfin.com/CA/Marina-Del-Rey/117-Ketch-Mall-90292/home/6783079

825 Howard St 90292
4+4.5, 3260 sqft
YB 2008, 3484 sqft lot
SOLD on 08/24/06 for $780,000 (Lot sale)
SOLD on 04/29/11 for $1,200,000
Mediterranean Style
http://www.redfin.com/CA/Venice/825-Howard-St-90292/home/6735836

4815 Roma Ct 90292
4+5, 4601 sqft
YB 1985, 5445 sqft lot
SOLD on 09/09/05 for $2,675,000
SOLD on 05/18/11 for $1,350,000 (-49.5%)
Silver Strand Canal Front
http://www.redfin.com/CA/Marina-Del-Rey/4815-Roma-Ct-90292/home/6783180

Mar Vista 90066 (April 2011)
21 sales, $725,000 (-6.4%)
$725/sqft

4255 Alla Rd 90066
2+1+ studio, 842 sqft
YB 1941, 4400 sqft
SOLD on 05/05/06 for $675,000
SOLD on 02/25/11 for $435,000 (-33.3%)
http://www.redfin.com/CA/Los-Angeles/4255-Alla-Rd-90066/home/6736163

4018 Michael Ave 90066
2+1, 896 sqft
YB 1939, 4970 sqft lot
SOLD on 04/27/11 for $457,500
http://www.redfin.com/CA/Los-Angeles/4018-Michael-Ave-90066/home/6736086

12404 Sanford St 90066
5+3, 2241 sqft
YB 1969, 5695 sqft lot
SOLD on 08/19/05 for $880,000
SOLD on 03/01/11 for $580,000 (-34.1%)
http://www.redfin.com/CA/Los-Angeles/12404-Sanford-St-90066/home/6730967

12900 Appleton Way 90066
3+2, 1424 sqft
YB 1953, 6490 sqft lot
SOLD on 04/29/11 for $620,000
http://www.redfin.com/CA/Los-Angeles/12900-Appleton-Way-90066/home/6745345

Please comment on these or any other meltdowns in Marina del Rey or Mar Vista and I will update this original list.

Home Prices Slip Sliding Away In Beverly Hills, Pacific Palisades & Venice

2011-05-15T22:42:00.000-07:00

Home prices keep rolling downhill heading into the 5th year of our real estate decline. Shiller has an interesting chart A History of Home Values showing a reversion back to the mean. According to that chart were in for another 25% drop in home values. Not to hard to believe given the continued weakness in the RE market.

Looking at Dataquick's April release of home prices, Beverly Hills, Pacific Palisades and Venice appear to be the weakest areas on the Westside. Here are the SFR numbers:

Beverly Hills 90210
17 sales, $1,500,000 median price (-46.4%)
$612/per square foot

A few interesting sales:

2250 Betty Ln 90210
3+4, 3000 sqft
YB 1954, 13,360 sqft lot
SOLD on 04/05/07 for $2,075,000
SOLD on 05/05/11 for $1,350,000 (-33.8%)
http://www.redfin.com/CA/Beverly-Hills/2250-Betty-Ln-90210/home/6834276

14132 Beresford Rd 90210
5+6, 5978 sqft
YB 1990, .84 ac
SOLD on 04/22/11 for $1,750,000
http://www.trulia.com/homes/California/Beverly_Hills/sold/3617538-14132-Beresford-Rd-Beverly-Hills-CA-90210

503 N Hillcrest 90210
2+2.5, 2471 sqft
YB 1936, 12,375 sqft lot
SOLD on 12/17/10 fo $2,400,000
http://www.zillow.com/homedetails/503-N-Hillcrest-Rd-Beverly-Hills-CA-90210/20519407_zpid/

Pacific Palisades 90272
23 sales, $1,568,000 median price (-39.9%)
$747/per square foot

A few imore nteresting sales:

14821 W. Sunset Ave 90272
2+1, 1180 sqft
YB 1949, 6000 sqft lot
SOLD on 2/18/11 for $680,000
http://www.redfin.com/CA/Pacific-Palisades/14821-W-Sunset-Blvd-90272/home/6846747

350 Chatauqua 90272
4+3.25, 2274 sqft
YB 1952, 6098 sqft lot
SOLD on 12/29/06 for $1,695,000
SOLD on 03/04/11 for $880,000 (-48.1%)
http://www.redfin.com/CA/Pacific-Palisades/350-Chautauqua-Blvd-90272/home/6840463

526 Bienveneda 90272
4+2, 1244 sqft
YB 1942, 6272 sqft lot
SOLD on 12/29/06 for $1,287,000
SOLD on 05/03/11 for $715,000 (-44.4%)
http://www.redfin.com/CA/Pacific-Palisades/526-Bienveneda-Ave-90272/home/6842633

15314 Earlham St 90272
2+1, 1005 sqft
YB 1952, 5245 sqft lot
SOLD on 03/08/11 for $730,000
Short Sale
http://www.redfin.com/CA/Pacific-Palisades/15314-Earlham-St-90272/home/6841848

16861 Livorno Dr 90272
2+2, 1575 sqft
YB 1948, 6900 sqft lot
SOLD on 02/20/11 for $850,000
http://www.redfin.com/CA/Pacific-Palisades/16861-Livorno-Dr-90272/home/6842969

Venice 90291 (2003 pricing)
13 sales, $740,000 median price (-33.5%)
$592/square foot

Even more interesting sales:

833 Indiana Ave 90291
3+1, 916 sqft
YB 1925, 4300 sqft lot
SOLD on 10/12/04 for $675,000
SOLD on 04/05/11 for $575,000 (-14.8%)
http://www.trulia.com/homes/California/Venice/sold/953891-833-Indiana-Ave-Venice-CA-90291

2141 Louella Ave 90291
3+1, 1370 sqft
YB 1923, 5720 sqft lot
Spanish Style
SOLD on 04/22/11 for $675,000
http://www.redfin.com/CA/Venice/2141-Louella-Ave-90291/home/6744393

1524 Glencoe Ave 90291
2+2, 1301 sqft
YB 1949, 5940 sqft lot
SOLD on 04/29/11 for $716,000
http://www.redfin.com/CA/Venice/1524-Glencoe-Ave-90291/home/6745590

1225 Elm St 90291
3+2, 1661 sqft
YB 1927, 4400 sqft lot
Remodel + Studio
SOLD on 04/15/11 for $740,000
http://www.redfin.com/CA/Venice/1225-Elm-St-90291/home/6740583

939 Victoria Ave 90291
2+1, 1120 sqft
YB 1922, 3900 sqft lot
SOLD on 06/24/04 for $865,000
SOLD on 04/21/11 for $750,000 (-13.3%)
http://www.trulia.com/homes/California/Venice/sold/1128711-939-Victoria-Ave-Venice-CA-90291

30 19th Ave 90291
3+3, 1756 sqft
YB 1908, 2600 sqft lot
SOLD on 05/24/04 for $1,149,000
SOLD on 04/06/11 for $1,040,000 (-9.4%)
http://www.trulia.com/homes/California/Venice/sold/1182181-30-19th-Ave-Venice-CA-90291

Anyone with more sales or information about Beverly Hills, Pacific Palisades or Venice, please post it here.

Double Dip And A Comatose RE Market

2011-05-08T22:43:00.000-07:00

It seems as if we have no real buying seasons anymore. Here we are in May, and barely any movement in sales numbers. Sure, we have a few houses selling here and there, but buyers, bankers and sellers are in a holding pattern. Could it be, that this is the new normal? Maybe people will go back to buying houses to live in, instead of those absurd casino investments happening from 2000 - 2007. If this is the case, when, if ever, will the gov't force the banks hand? Could we have a stalemate for the next 10 years, until inflation finally catches up? If this is our scenario, than strategic foreclosures will become the name of the game, as people wake up to the new reality. And, there will be so many in the same boat, the banks will look past foreclosures in another 7-10 years, once the market comes back to life. The problem is, income (not jobs) are unable to support mortgages at current levels. Plus, more and more will simply rent, as there is very little incentive to buy. Without a good income, you can't buy a good house. Period.

Seeing how this selling season is turning out to be another bore, perhaps people can start posting the few sales that are occurring in their own neighborhoods. That was the intention of this blog all along. Readers in different areas, informing others of real activity, instead of just real estate agent hype. If you have an interesting sale in your neighborhood, please post it and lets discuss it.

A Change In Home Sentiment

2011-04-23T15:57:00.000-07:00

Don't look now, but people are thinking twice about buying a home, opposed to renting one. With the downside risk much greater than the upside, paying half the price of a mortgage in rent and not risking your 20% down payment has become the choice of many. According to the LA Times, even the wealthy are choosing leasing over buying. Nobody wants to buy property that is still declining. The housing market has crumbled, with the number of high paying jobs that have disappeared and easy credit gone, with no end in site.

So when will the decline stop? Not for awhile, if the banks are allowed to keep their non-paying assets (Homes) off the books. The housing market should be screaming with record sales given the historically low interest rates. But the banks still aren't lending as they know what lies ahead. That's why most areas on the Westside are showing only single digit monthly sales now. In the event, banks release significant amounts of shadow inventory and there is a dramatic increase in sales, we will know we are close to the bottom. Until then, sit back and watch home values reducing one by one, like Chinese water torture.

FHA Sweet Spot To Be Reduced By $100,000 in October

2011-04-10T23:05:00.000-07:00

On October 1st, 2011, the FHA limit for conforming loans is to be reduced from $729,000 to $625,000 in California. Since FHA is responsible for a great majority of loans in this price range, it will instantly reduce the price of the current sweet spot for Westside first time buyers. With only 3.5% required as a down payment, the starter level activity will see a reduction in price from $750,000 to $650,000. The 13% reduction of these starter homes will pull down prices across the board, as less move-up buyers will be able to sell. In February we saw Mar Vista 90066 as the healthiest market on the Westside, with starter homes in the $700,000 range. It's no accident, that micro markets over the FHA limit are struggling to get financing. With inventory ballooning and many zip codes showing single digit sales, the 2011 selling season looks dismal.

Westside Micromarkets, Only The Shadow Knows For Sure

2011-04-03T11:27:00.000-07:00

Now that "Shadow Inventory" is mainstream vocabulary, it's no longer a secret, that the actual inventory is much larger than listed on the MLS. NAR is being investigated for inaccuracies in calculating annual sales rates. Perhaps even 15-20% off in their calculations compared to Core Logic's numbers. In addition, the shadow inventory in California according to Core Logic was 16.8 months of inventory, in addition to the MLS inventory. These combined totals amount to over 2 years of inventory, that needs to be cleared. With a large housing overhang, appreciation of any kind is likely years away, and more price declines are in order. Even though, those are state figures, you can get an idea of how much inventory is not reported by banks (NODs, REOs and other alphabet soup products).

The Westside is comprised of many micromarkets and I have attempted to look at the relative strength of each one. The most current data available compares February monthly SFR sales totals from Dataquick and listed current SFR inventory from the Westside MLS (as of April 2,2011). Although not perfect, it will give you a relative idea of how micromarkets compare with one another. Keep in mind these figures are using LISTED MLS data. You really need to add additional shadow inventory on top of that. In my opinion, doubling the amount of listed inventory to include seriously delinquent and underwater homedebtors, would be a conservative estimate. In addition, I have included YOY changes in Price Per Square Foot from 2010 - 2011. Unfortunately, the number of sales is so low in some micromarkets, sthese areas are difficult to analyze. That in itself, might give you another indication of how weak a particular micromarket is.

To any extent, I will try to rate the micromarkets from weakest to strongest, by integrating 3 different factors:

MLS months of listed inventory (Listings/Sales)

Number of sales (10+ sales if possible)

Change in Price/Square Foot (YOY 2011/2010)

WEAKEST RELATIVE STRENGTH

1) 90265 Malibu 319/6 = 53.2 months, $647/$502 sqft = +28.88%

2) 90069 WeHo 113/4 = 28.3 months, $522/$669 sqft = -21.98%

3) 90210 B.Hills 229/13 = 17.6 months, $519/$672 sqft = -22.77%

4) 90292 M.D.R. 35/2 = 17.5 months, $459/$435 sqft = +5.52%

5) 90049 Brent 134/14 = 9.6 months, $599/$711 sqft = -15.75%

6) 90230 Culver 42/4 = 10.5 months, $441/$511 sqft = -13.69%

7) 90077 Bel Air 108/7 = 15.4 months, $625/$635 sqft = -1.58%

8) 90291 Venice 95/12 = 7.9 months, $599/$819 sqft = -26.86%

9) 90405 S.M. 43/5 = 8.6 months, $540/$713 sqft = -24.26%

10) 90024 WWood 24/5 = 4.8 months, $486/$644 sqft = -24.53%

11) 90402 S.M. 36/3 = 12.0 months, $975/$1004 sqft = -2.89%

12) 90034 BevW 53/5 = 10.6 months, $402/$366 sqft = +9.83%

13) 90046 WeH 137/9 = 15.2 months, $377/$586 sqft = +55.43%

14) 90272 PaPal 128/13 = 9.8 months, $774/$593 sqft = +30.52%

15) 90048 WeHo 56/7 = 8.0 months, $593/$483 sqft = +22.77%

16) 90025 WLA 22/3 = 7.3 months, $619/$452 sqft = +36.94%

17) 90403 S.M 16/4 = 4.0 months, $966/1077 sqft = -10.31%

18) 90064 Rancho 62/12 = 5.2 months, $488/$452 sqft = +7.96%

19) 90232 Culver 13/4 = 3.3 months, $469/451 sqft = +3.99%

20) 90066 MarV 86/18 = 4.8 months, $569/462 sqft = +23.16%

STRONGEST RELATIVE STRENGTH

Average Months of Inventory = 10.9

Taking into consideration shadow inventory, perhaps the only markets close to being healthy are Mar Vista 90066, Culver City 90230 & Rancho Park 90064. That being said, all it means is those markets could be healthy, but it's not necessarily a good time to buy.

South Bay

WEAKEST RELATIVE STRENGTH

1) 90245 El Seg 37/3 = 12.3 months, $417/$483 sqft = -13.66%

2) 90254 H.Bch 62/5 = 12.4 months, $720/$614 sqft = +17.26%

3) 90266 M.Bch 144/13 = 11.1 months, $606/$622 sqft = -2.57%

4) 90274 RPV 145/19 = 7.6 months, $409/$443 sqft = -7.67%

5) 90277 R.Bch 68/9 = 7.6 months, $610/$661 sqft = -7.72%

6) 90278 R.Bch 64/19 = 3.4 months, $380/$456 sqft = -16.66%

6) 90293 PDR 24/3 = 8.0 months, $585/$554 sqft = +4.87%

7) 90056 Ladera 25/4 = 6.4 months, $235/$225 sqft = +4.44%

8) 90045 Wstchr 93/15 = 6.2 months, $463/$438 sqft = +5.70%

STRONGEST RELATIVE STRENGTH

Average months of inventory = 7.4

The only areas that appear healthy would be Westchester 90045 and Ladera Heights 90056. Keep in mind prices may still drop further, and I wouldn't advocate buying right now.

Housing Market Is Just Plain Fugly

2011-03-23T23:39:00.000-07:00

Every graph, chart, report or data continues to show how F------ Ugly housing is. There is no denying it anymore. Just yesterday, New Home Sales hit a record low of 250,000 per year. And Gary Shilling is now forecasting another 20% drop in the housing market. The double dip has taken hold, as the government juice last spring is nothing but a fading memory. However, maybe there is a silver lining though. If the housing market continues to disintegrate AND the government/banks finally throw in the towel, we will get our capitulation. Unfortunately, this may still be years away, as the FED keeps recapitalizing banks with our devalued US dollars and the government allows them to keep tons of shadow inventory off the books.

If you are in the market for a home right now, you may want to re-think plopping 20% down. Chances are, it will evaporate in the next couple years as the real estate bust continues to cycle through. Whatever your situation may be, check out these Charts by Gary Shilling first. He has made some pretty impressive calls in the past and bases his predictions on hard data.

Earthquake/Tsunami Factor of House Buying

2011-03-13T10:16:00.000-07:00

Unfortunately, the terrible earthquake and tsunami in Japan, has people thinking "Could that really happen here?" The answer is; Yes. Although it wouldn't be 8.9 in magnitude, the local faults here could produce an earthquake in the 7s. This isn't anything new, but I am sure your local real estate agent hasn't mentioned it. Seismic hazard zone disclosures are required in any real estate transaction, but are usually scant and buried somewhere in a mound of paperwork. To be honest, Los Angeles is riddled with faults, but the major ones of concern are:

1) Santa Monica/Malibu Fault
2) Newport/Inglewood Fault
3) Elysian Park Fault
4) Whittier Fault
5) Palos Verdes Fault
6) Northridge Fault
and of course,
7) San Andreas Fault

In reality, there are many unknown faults in Los Angeles called blind thrusts (buried beneath the surface), that are invisible. The Northridge Earthquake of 1994 is a previously undiscovered blind thrust fault. Anyplace in the city where small hills or mountains exist, is due to faulting. For example, The Culver Crest Area in Culver City has great views, because it sits at the end of the Newport/Inglewood fault. Even though most people prefer not to think about earthquakes when buying a home, it should factor in your decision. The LA Basin happens to be one of the most seismically active areas in the world.

So which area would be most impacted? It depends on the fault in question. Perhaps, the 2 faults of most concern are; the Santa Monica/Malibu and Newport/Inglewood Faults. Not the San Andreas Fault. The San Andreas Fault, capable of a magnitude 8 earthquake is located over 60 miles away. Our local faults, although smaller, are located right here. The Santa Monica/Malibu Fault extends from Los Feliz, all along the Santa Monica Mountains west, to Malibu. From there, it continues offshore into the Santa Monica Bay. If a magnitude 6 or 7 earthquake occurs offshore, we almost certainly will have a tsunami. The most affected would be the low lying areas of:

Malibu (Malibu Colony)
Santa Monica (Ocean Park)
Venice (Oakwood/ Boardwalk Area)
Marina del Rey (Entire area)
Playa Vista & Culver City (Ballona Creek)
Mar Vista (Marina del Rey Adjacent)
Playa del Rey (Jungle Area)
El Segundo (Strand)
Manhattan Beach (Strand)
Hemosa Beach (Strand)
Redondo Beach (Strand)

Marina del Rey especially, would take the worst hit.

The Newport/Inglewood Fault, capable of a 7.0 earthquake, would devastate the communities from Newport to Culver City and its surrounding areas. It too, extends offshore along with the Palos Verdes Fault, and both are capable of a tsunamis.

In conclusion, I would consider a few things about earthquakes and tsunamis before buying a home close to Santa Monica Bay. First, avoid subterranean parking at all cost. They are known to collapse in severe shaking. Secondly, buy earthquake insurance. If it is not available, find another home. Third, pay attention to Tsunami Zone and Earthquake Zone Maps. They are there for a reason. If you want an ocean view, elevate yourself some, rather than being oceanfront at ground level. Lastly, always make sure the homes' foundation is solid and hasn't been damaged in the past.

Sign Wars Begin In February

2011-02-27T21:42:00.000-08:00

It's going to be a real slugfest, if we see this many signs out already. The corner pictured here, is in the heart of Montana Avenue. There were 10 signs on the south side of 14th Street alone. If a prime area such as this, has so many signs, you can imagine what the other Westside areas must look like. Normally, the sign wars don't heat up until April. It looks like some are trying to get a jump on the competition. There is only one reason a home doesn't sell. It's PRICE. Smart sellers have become painfully aware of this fact and indeed must price their properties correctly or risk chasing the market downward. It won't be surprising to see sellers (and agents) undercutting prices in order to get properties sold. Sellers watching their equity evaporate 1-2% a month, will motivate a few to get realistic about selling. Most of the homes for sale now are people who got into the market late, from 2003-2007 and probably bought more house than they could afford. With qualifying for loans tightening, the pool of true buyers has decreased dramatically. Unless the house is unique or drastically reduced, we are going to see most of the inventory just sitting during the buying season.

The Pride of Ownership

2011-02-22T21:13:00.000-08:00

"Think of owning your own home" The American Dream, and favorite real estate agent mantra, has turned into a nightmare. Anyone who bought during the last decade, is watching a slow-motion trainwreck, as home prices drop back to 2006, 2005, 2004, 2003 and beyond. The last real estate boom on the Westside, began in 1997 and ran 10 years through 2007. We are now in year 4 of the subsequent bust and have another 5-6 years to go, before we see a drop of appreciation. Think 2017, before local real estate has a chance of rising again. 10 year cycles of boom and then bust. The last real estate boom peaked in 1987 and didn't begin appreciating again until 1997. With the latest real estate binge being the bubble of all bubbles, I'm afraid we have much pain still ahead.

But, let's say your tired of waiting and decide to jump into the market, while interest rates are low. (Another bogus real estate agent argument) With $3,200 a month to spend on housing after the tax break, what can you get?

709 Ozone Street
Santa Monica 90405
2+1, 668 sqft
Lot size 1999 sqft
Year Built 1945
SOLD 2/2/11 for $542,000

$108,400 down
$3924/month payments
(Principal, Insurance, Taxes, Maintenance)
-$727/ month tax break
$3196/month for housing
$144,000/year of income to qualify

OR

Rent a 2-3 bedroom home North of Wilshire
$3200/month
No risk of losing your $108,000 down
Investing your $108,000 elsewhere
Mobile, free to move

These and other calculations to see how overpriced buying a Westside home is, can be found at HomebuyingTips.com

Even the LA Times had a story recently, about people rethinking the age-old idea of owning a home here. Renting has quickly become the weapon of choice for would-be buyers in LA. Why not, when you can live in a bigger house, in a better area, for less money and no risk?
Lastly, the Case-Shiller Numbers for December 2010 are out now and for the 7th consecutive month, home prices are down year over year (YOY). Now that the goverment is trying to exit the housing industry, it's obvious we have double dipped.

1 House on 2 lots. Not in Santa Monica.

2011-02-13T20:35:00.001-08:00

An interesting situation has come up North of Montana in Santa Monica. It appears the city is regulating what can be built on 2 adjoining lots. Check out our sister blog at http://www.santamonicameltdownthe90402.blogspot.com/

The Bottom Is In.... Isn't It?

2011-02-13T20:14:00.000-08:00

Recovery! Recovery! Look, the stock market is back to 12,000, interest rates are going up, the gov't is trying to exit the mortgage market and 2011 is the time to buy! That's the mantra lately, from all the real estate cheerleaders. Even the LA Times chimed in today, saying $1 million dollar homes up 21%. 21% from what? And what is the price per square foot? Also, you better get in ,before a 1 point interest rate hike increases your 30 years of payment by $90,000. What a bunch of whores. The market isn't close to a bottom on the Westside. Other areas are, but here, not yet.

Just a few reasons why:

1) Interest rate hike prices more buyers out
2) FHA raising down payment to 10%
3) Banks scrutinizing loans
4) Shadow Inventory still bulging
5) People out of work skyrocketing
6) People underemployed increasing
7) Only low paying jobs being created
8) Continued outsourcing of good jobs
9) Federal Debt ceiling reached
10) Volatile oil prices
11) Westside prices still 20-25% overvalued

Etc... etc.....When it comes to real estate now, It's all about jobs, jobs, jobs.

How Low Can We Go?

2011-01-31T21:20:00.000-08:00

With most areas on the Westside peaking in 2007, we can now compare the year-end numbers for all of 2010. Achieving a 15-25% drop already, an additional 15-25% drop looks very possible. Once a 40-50% drop occurs, many areas in Southern California are clearing their market inventory. The best numbers worth using are, Price Per Square Foot paid on houses. from Dataquick. Let's take a look at what happened, from 2007 - 2010. Perhaps we can estimate, how much declining, each area has yet to go.

Beverly Hills 90210 (2007) $825/sqft, (2010) $734/sqft (-11%)
Beverly Hills 90211 (2007) $752/sqft, (2010) $627/sqft (-17%)
Beverly Hills 90212 (2007) $782/sqft, (2010) $664/sqft (-15%)

Culver City 90230 (2007) $588/sqft, (2010) $458/sqft (-22%)
Culver City 90232 (2007) $570/sqft, (2010) $521/sqft (-9%)

Beverlywood 90034 (2007) $581/sqft, (2010) $467/sqft (-20%)
Bel Air 90077 (2007) $632/sqft, (2010) $550/sqft (-13%)
Brentwood 90049 (2007) $796/sqft, (2010) $673/sqft (-16%)
Hollywood 90068 (2007) $608/sqft, (2010) $498/sqft (-18%)
Mar Vista 90066 (2007) $634/sqft, (2010) $520/sqft (-18%)
Rancho Park 90064 (2007) $661/sqft, (2010) $545/sqft (-18%)
West LA 90025 (2007) $703/sqft, (2010) $609/sqft (-13%)
Westwood 90024 (2007) $759/sqft, (2010) $634/sqft (-16%)
Malibu 90265 (2007) $883/sqft, (2010) $767/sqft (-13%)
Mar. del Rey 90292 (2007) $712/sqft (2010) $463/sqft (-35%)
Pa Palisades 90272 (2007) $939/sqft (2010) $730/sqft (-22%)
Venice 90291 (2007) $918/sqft, (2010) $712/sqft (-22%)

Sta Monica 90402 (2007) $1089/sqft (2010) $846/sqft (-22%)
Sta Monica 90403 (2007) $917/sqft (2010) $822/sqft (-10%)
Sta Monica 90404 (2007) $707/sqft (2010) $609/sqft (-14%)
Sta Monica 90405 (2007) $844/sqft, (2010) $687/sqft (-19%)

W Hollywood 90038 (2007) $584/sqft (2010) $370/sqft (-37%)
W Hollywood 90046 (2007) $687/sqft (2010) $515/sqft (-25%)
W Hollywood 90048 (2007) $714/sqft (2010) $560/sqft (-22%)
W Hollywood 90069 (2007) $893/sqft (2010) $685/sqft (-23%)

And just for good measure, here is the Southbay:

El Segundo 90245 (2007) $572/sqft, (2010) $464/sqft (-19%)
Herm Bch 90254 (2007) $772/sqft, (2010) $630/sqft (-18%)
Ladera Hghts 90056 (2007) $406/sqft, (2010) $245/sqft (-40%)
Manhat Bch 90266 (2007) $765/sqft, (2010) $617/sqft (-19%)
Palos Verde 90274 (2007) $623/sqft, (2010) $520/sqft (-17%)
Playa d. Rey 90293 (2007) $517/sqft, (2010) $408/sqft (-21%)
Rancho PV 90275 (2007) $523/sqft, (2010) $453/sqft (-13%)

Redon Bch 90277 (2007) $653/sqft, (2010) $521/sqft (-20%)
Redon Bch 90278 (2007) $539/sqft, (2010) $450/sqft (-17%)

Average declines seem right around 20%. If we are only half way there, it appears we have a ways to go.

Westside Prices Are Unsustainable Without Good Paying Jobs

2011-01-24T09:41:00.000-08:00

Here we are starting Year 4 of the housing correction. A 20-25% drop, stock market rebound, job creation, GDP back around 2.5% and signs of recovery being reported daily in the media. Only one big problem. Good paying jobs that are needed to support Westside homes, are few and far between. Sure, there are jobs being created, but they are in the service and retail sectors. Hardly sufficient to qualify for a "real" loan needed on the Westside. With all of the no doc and liar loans now extinct, organic loans have come to a screeching halt. The last of the government props, FHA, is barely keeping the low end market alive. Even that, is rumored to be reduced to $625,000, which will weaken the market even more.

The real issue here is jobs. Everyone is trying to deleverage and eliminate thier debt, as they fear employment is unstable. Unfortunately, we may have reached a paradigm shift in both housing and employment. Companies are outsourcing many of the few good jobs left in California. Utah seems to be the latest state drawing Californians and high tech companies. The biggest companies are now multinational, meaning ther operations can base in places like India, where labor is cheap and they can avoid the high cost of benefits.

With these events occurring now, the housing market seems destined to fall and then scrape along the bottom for years.

Race To The Bottom

2011-01-02T12:46:00.000-08:00

It seems real estate agents lately have started "underpricing" their listings, in order to stoke a fire under their properties. With the market languishing, this strategy can induce "multiple offers" and get the property sold, as opposed to chasing the market down. The latest marketing tool is a desperate attempt, for real estate companies to generate sales in a sluggish market. Buyers need to be cautious, as multiple offers generally promote overbidding. Going into a transaction, you should:

1) Never ever fall in love with just 1 house. There will be others.
2) Set your maximum price
3) With "multiple offers" you never know how strong the offers are, or if there really is any
4) When the agent tells you there are "multiple offers", let them know tell them you are also bidding on multiple properties.

Just as homes sell at record high prices during a market boom, homes can rapidly sell lower during a market bust. The "underpricing" strategy, only works when the seller has sufficient equity to play with. As for other sellers, unless their property is priced correctly, they will be chasing the market down, towards foreclosure.

Buying, Instead Of Renting, Just Doesn't Add Up !

2010-12-20T11:17:00.000-08:00

Unless you are someone who doesn't care about housing costs, buying on the Westside in this market is just flushing cash down the toilet. In our defaltionary environment, fewer people can afford throwing their money away on housing. The name of the game now is, conserving your cash, strengthening your purchasing power and watching prices drop.

To get an idea of how much money you would be wasting, look at Patrick.net's new Rent vs Buy Calculator. I have done an example of a $750,000 Westside starter and it shows a buyer paying over $3000 more per month, just to enjoy the title of Homeowner (Homedebtor). The parameters are set with a negative annual appreciation of 3%. After 7 years of ownership the drop would be 21%. Say goodbye to your down payment. But, ignorance is bliss and real estate is always a good investment, isn´t it?

Only time will tell, if we get a few years of accelerated depreciation, or a Japaneses type scenario stretching into the next decade. The government decision to either keep our TBTF Zombie banks alive, or prosecute them for fraud, ultimately decides that for us.

Double Dip Has Arrived

2010-12-13T05:27:00.000-08:00

According to Case/Shiller, the double dip in real estate has begun across the country. It's really no surprise, given the effects of artificial government stimulus. The facts remain, our fundamentals are just plain rotten. Without steady good jobs and lending, there will be no recovery. Unless the market is allowed to clear, Japanese Water Torture is our destiny for now. We could have been through the worst of it, IF our government would have let the downward cycle run its course. Instead, we have had a bag full of tricks, gimmicks and get a protracted decline, that could last into the next decade.

On the Westside, there is debate whether its a double dip or just a steady decline. With prices off a good 25% and now stretching back to 2003/2004, what is going to reverse the trend? Clearing out all the garbage and nothing less. Extend and pretend is a losing strategy and does nothing more than dig us a deeper hole. The Federal Reserve is quickly running out of credibility and the emperor in deed, has no clothes.

Westside Real Estate vs Precious Metals

2010-11-28T21:43:00.000-08:00

If we look at a home as a financial investment, then we need to consider how it performs compared to other investments. Let's take a hypothetical scenario of a couple with $150,000 to invest over the next 2 years. Which would be a better investment; Westside Real estate or precious metals? If they invested in real estate, a couple with good income would be able to buy:

$750,000 starter house
2 bedrooms, 1 bath
4000-5000 sqft lot
60-80 year old house
West LA, Santa Monica
(APR) -10% per year

$150,000 down payment
$600,000 mortgage @ 4.5%
Mortgage Payment $3,900
Taxes & Insurance $700
Maintenance $400
Total Monthly Payment $5000

Total outlay over 2 years = $270,000
(APR) -10% for 2 years = $150,000
$5,000 x 24 months = $120,000
Net Worth = $0 (not including tax write-off)

OR

Same house
Monthly Rental Payment $3000
$2,000 surplus over ownership
$2000 x 24 = $48,000

Making a Precious Metals Purchase
$150,000 + $48,000 surplus =198,000

144 ounces of Gold (APR) 14% = $257,321
$3,000 x 24 = $72,000
Total outlay over 2 years = $270,000
Net Worth = $185,321

7,444 ounces of Silver (APR) 40%= $388,080
$3,000 x 24 = $72,000 Total outlay over 2 years =$270,000 Net Worth = $316,000

These figures are based on the past yearly performances of Westside Real Estate, Gold and Silver. The major point about this exercise is, to demonstrate not only is your 20% down payment at risk, but based on the rental value you are overpaying $2,000 each month just servicing your debt. Last but not least, your opportunity cost, which is the money lost, based on other profitable investments could be huge. If you had invested in silver, instead of Westside Real Estate over the last 2 years, the difference would have been $316,000.

Some Food For Thought

2010-11-14T18:25:00.000-08:00

There is a proposal floating around, that would eliminate the mortgage deduction for mortgages over $500,000 and any second home. This would be yet another stake in the heart of the housing market. It would certainly cause foreclosures to accelerate. If foreclosures do accelerate, it will cause rents to rise, as home prices crumble and home debtors bail out. We would have a complete shift, where home debtors would be envious of renters. This is a possible scenario, given the collapse in credit and consumer products caught in a deflationary spiral.

Meanwhile, the government keeps printing money (pushing on a string) and trying to get credit flowing. As has happened in the past 2 years, it doesn't work. Insolvent banks are just beefing up their balance sheet, at the expense of taxpayers. Can you say "Bailout" ? Sooner or later, the public will catch on and future bailouts will be more difficult. All the while, our dollar gets weaker and weaker, prices fall more and more and foreign investors eventually take their business elsewhere.

Now might be a good time to lock in a good rental and watch the real estate recession run its course. I realize this post will inflame the housing bulls. However, I don't see much, if any upside to Westside real estate on the horizon. If you want to buy, there is absolutely no hurry, just sit back and see what happens in 2011.

The Real Estate Market Is All About Perception

2010-11-08T22:20:00.000-08:00

It's incredible how differently people think about buying real estate now. 3 years ago, we were at the height of euphoria in our market cycle. Now, we are finally accepting that real estate doesn't always go up, and many home debtors are financially upside down. That combined, with banks not lending without a big chunk of skin and stellar credit, has turned the market to ice. Still ,we have yet to see the biggest shoe to drop, that finally clears everyone out. It happens every cycle, and this one is no different. The market will never come back, until some major event causes most to throw in the towel. With banks playing hide and seek and our government refusing to pull the plug, we could be in for a long drawn out process. That big shoe could very well be unemployment, which is the normal culprit in market downturns. In California, the "Unemployment Rate" according to government is a little over 12%. Most believe that's overly optimistic, by just looking around themselves. In last week's LA Times, they published statistics about voter demographics during the gubernatorial election. What caught me suprise was one category in particular. The question asked of ALL voters was :

Have you have been laid off within the last 2 years?

34% Yes
66% No

If that is indeed true, than unemployment and our housing market are in worse shape than anyone has led us to believe. How can someone risk their hard earned cash AND depend on such a shaky job situation that is now become the new norm. If this is our new reality, there is no way current home prices will be supported. Worst of all, with all of the negative sentiment, very few are even thinking about buying a home at current prices. It is all about confidence and perception, which isn't improving given our employment situation. Of course, there will be those that say "Now is the time to buy!, Rates are low, Prices have dropped" They are either industry cheerleaders, realtors desperate for a sale, or just plain out of reality. The question is, why are rates so low and still nobody is buying?

Price Per Square Foot Indicator on The Westside

2010-10-31T22:45:00.000-07:00

There are many different ways to look at real estate. Perhaps the best, is having the Schiller-Type comparable, where you can find the sales history of the same house. If you can't get that, then price per square foot ($/SFT) might be your next best indicator of value. Although not perfect, it will give you an idea of how much of a house you can buy in different areas. The number of sales will give you an idea of how strong the market is and total sales volume will give you an idea of how available financing is. Median price, that is usually stated in the Mainstream Media is almost useless, as the sales mix and a limited number of sales can skew the numbers significantly. Looking at all three of these variables will give you a good snapshot of how healthy the market is and which way it is trending.

With those things in mind, let's look at the recent September Dataquick SFR sales report for the Westside:

Beverly Hills 90210 18 sales $584/sqft
Beverly Hills 90211 3 sales $665/sqft
Beverly Hills 90212 3 sales $808/sqft

Culver City 90230 10 sales $442/sqft
Culver City 90232 5 sales $580/sqft

LA/Bel-Air 90077 11 sales $480/sqft
LA/Brentwood 90049 24 sales $634/sqft
LA/Mar Vista 90066 18 sales $493/sqft
LA/Rancho Park 90064 20 sales $545/sqft
LA/West LA 90025 10 sales $637/sqft
LA/Westwood 90024 12 sales $622/sqft
Marina del Rey 90292 4 sales $522/sqft
Pacific Palisades 90272 17 sales $622/sqft
Venice 90291 12 sales $753/sqft

Malibu 90265 13 sales $583/sqft

Santa Monica 90402 9 sales $760/sqft
Santa Monica 90403 2 sales $650/sqft
Santa Monica 90404 2 sales $554/sqft
Santa Monica 90405 12 sales $648/sqft

West Hollywood 90038 3 sales $511/sqft
West Hollywood 90046 16 sales $584/sqft
West Hollywood 90048 10 sales $589/sqft
West Hollywood 90069 7 sales $431/sqft

And a few others neighborhoods in the South Bay:

El Segundo 90245 13 sales $429/sqft
Hermosa Beach 90254 8 sales $692/sqft
LA/Ladera Heights 90056 3 sales $227/sqft
Manhattan Beach 90266 27 sales $625/sqft
Playa del Rey 90293 7 sales $445/sqft
Redondo Beach 90277 13 sales $480/sqft
Redondo Beach 90278 14 sales $513/sqft
LA/Westchester 90045 20 sales $451/sqft

Another factor to consider is the size of the home. Smaller houses in areas will normally go for a higher square footage value than larger homes in the same area. Unless, it has been remodelled significantly or newly constructed. Given the square footage of a house, any neighborhood with at least 10 sales for the month, the $/SFT will give you a good idea of what an average house is worth. Unfortunately, many of these areas are still very weak as the number of sales remains in single digits. It's amazing to think, some of these areas were well over $1000/sqft, just 3 years ago.

Looks like continued weakness with more declines ahead.....

Pandora's Box Has Now Opened With The Mortgage Mess

2010-10-24T23:10:00.000-07:00

Everyday, more is revealed about the the fraud and deceit propagated by our largest financial institutions. BOA for example has now said, it will defend each loan that it has foreclosed on, one by one, until it "reviews" all 367,000 of them. Yeah sure. On top of that, they may have to buy back billions of bundled mortgages along with all the other big banks. It's amazing how everything starts to unravel once the game comes to an end. Until the huge bonuses paid by these institutions stops, we will be rampant with more fraud. Take the money and run. Is it possible the housing crash was perpetrated by the banks, to cash in on insurance bets against it? There is an interesting article "Was Abacus the Buisness Model for the Entire Mortgage Industry" written on October 19th at Washington'sblog.com , that states foreclosures were merely part of a business model to increase profits. It's amazing the banks would sell homeowners down the river, just to increase the bottom line. It's time to put TBTF institutions into receivership and finally get rid of these crooks.

Oh, I almost forgot, Gary Shilling is now calling for another 20% drop in housing prices over the next few years. With housing prices dropping nationwide 6% over the last 2 months, that's not too hard to believe. Throw in the excess of 2 million houses for sale and 7 million foreclosures, it's obvious this market is headed south.

Fraudclosure, It's More Than Just The "Paperwork"

2010-10-17T21:20:00.000-07:00

Well, well, well. We now have a fine mess on our hands. Foreclosures in all 50 states are now being called on for complete reviews. Every state attorney general now realizes, banks could have been fraudulently throwing people out of their homes, without the legal authority to do so. The big issue at hand is, a break in the "Chain of Title" Since the mortgages were bundled, sliced and diced, and then shredded into securitized products, nobody really knows, who is actually able to foreclose. So the second phase of the financial crisis is now n full swing, thanks to those who started this mess in the first place. The Banksters. Only this time, the whole mortgage industry and the way homes are financed and sold, are at risk.

Foreclosure mills were making big bonuses for "robo-signing" up to 400 foreclosures per day. This was a sweet deal for the banks as they could move literally thousands, if not millions of properties through the pipeline as quickly as possible.. The problem is, the robo-signers didn't have the legal authority to do so. All of those foreclosures that were robo-signed, will have to be reviewed.

At this point, people in foreclosure are probably cheering, as their free housing has most likely been extended. Those who have recently bought foreclosures, must be wondering about their title being conveyed correctly. And, those hoping to buy foreclosures will be lucky to find a title company to insure their title, free and clear. Not to mention, with foreclosures making up 1/3 of the home purchases in California, the struggling real estate market could be in for another big hit.

Foreclosure Nightmare, How Scary Is This?

2010-10-12T19:49:00.000-07:00

Here we have the latest problem to hit our financial system. Because of "Robo-signers", where banks were signing off on hundreds of foreclosure documents,without reading them, the foreclosure pipeline has come to a screeching halt. Bank of America, and Chase Bank have decided to cease foreclosure proceedings until they can "review" their paperwork. Shoddy paperwork to get people in the loans and now shoddy paperwork to get them out. If the banks were individuals, they would be facing criminal charges for fraud. They have lost any credibility that was left, and the government isn't too far behind.

The whole housing market is being exposed for what it is now. A suckers game, to keep people in debt for 30 years. Only now, the odds are getting worse and worse, as the banks shadow inventory piles up behind the dam of foreclosures. Sooner or later, these homes will come to the marketplace and plunge current prices. This doesn't bode well for current homeowners, barely above water or below. Anyone thinking about putting 20% down, might as well spend it on the lottery, as it is sure to disappear before the market ever recovers.

Because of the foreclosure boondoggle,we can expect to add another 2 years to any real estate recovery. Instead of 2012-2013 as a best case scenario, we are now looking at 2014-2015, if we're lucky. The whole thing is getting so rediculous, that if you don't laugh, you'll cry. Do yourself a favor, watch this Must See T.V. and laugh a little . Jon Stewart Foreclosure Crisis.

Watching And Waiting On The Westside

2010-10-03T22:55:00.000-07:00

It seems as almost everyone, is waiting for the next shoe to drop. The word is out ,about how sick the real estate market is. Nobody is in a hurry and the few actual buyers can take their sweet time. In looking at open houses today, I did notice people looking. However, there was no sense of urgency. All I saw were Realtors hungry for a sale. In a house listed over 2 million dollars, The first words out of the agent's mouth was "We haven't had any offers" Obviously hinting the house was priced to high and please write any type of offer. Maybe their credit card bills are maxed out, after 3 years of terrible business. You can get a pretty good bead on the market, by just observing realtor behavior.

Right now there doesn't seem to be anything pointing towards a real estate recovery. Unaffordable prices, tight credit, underwater sellers, foreclosures in limbo, no private jobs being created, good jobs leaving the state, and even the employer of last resort (Government) is shedding jobs.

Even when the market bottoms, we will drag along for years, before home appreciation returns

Dead Calm on The Westside.......

2010-09-26T22:14:00.000-07:00

Is it just me, or is it absolutely dead out there? September has been an extremely quiet month, with very few sales. A handful of cash buyers trying to hedge their bets in some super high end areas, other than that, NADA! However it doesn't surprise me. Now that everyone is reducing debt loads, who in the right mind is going to make a home purchase with prices still in bubbleland. In addition, the banks seem to be quite happy with their government gig, where they can borrow at .25% and get back 2.5% in treasuries. Plus the Fed will swap all their toxic garbage for even more treasuries. No bank, is going to risk a loan on an overpriced home and the possibility of someone losing their job. The only way to get a good loan now, is by bringing a shitload of cash to the table.

It looks like we are playing the waiting game, to see if the banks ever have to foreclose on all their shadow inventory. With the dollar tanking, eventually foreign investors will force the Government's hand. The banks and our government are like a deer in the headlights now, praying not to get hit.

Real Estate or Precious Metals ?

2010-09-19T21:00:00.000-07:00

With our economy experiencing deflation at the moment, which is a better investment right now? Real estate has been declining for 3 years now, whereas precious metals have been steadily appreciating. Both are supposed to be good hedges against inflation, but with the economy fighting deflation, inflation isn't even on the radar. That doesn't mean, it isn't a concern for the future. The question is, when? It depends if you buy into the Japanese style stagflation, or German style hyperinflation. With the government pumping cash and liquidity into the marketplace, there is very little circulating. Banks are hoarding cash to bolster their bottom line.

If you have cash sitting on the sidelines, where can you put it to work in the short term (1-5 years)? With silver and gold getting all the attention now, is it a better investment choice than real estate?

Real Estate In A Holding Pattern

2010-09-11T18:02:00.000-07:00

Now that summer has almost ended, the Fall season seems unusually quiet. Could it be, there is no urgency to buy a home? With asking prices still high, we are in a holding pattern. In many neighborhoods, prices have dropped 20-30%, yet there is still very little activity. Buyers are waiting for the next leg down, that brings us another 20-30% off and back to 2000'-2001' prices. Then and only then, will we begin to clear tour bloated market inventory. The question is, when will that occur? Does the government have another bailout up it's sleeve? Will banks ever have to foreclose? Will people in droves stop paying their mortgages, to live rent free? Something has to give.

From a strictly financial point of view, buying a home now doesn't make sense for many. Good job creation and job security are at dismal levels. Banks are afraid to loan money, because of a backlog of bad loans. Record low mortgage rates can't entice buyers to jump in. And the cost of "owning" a home is still twice of what renting would be. Deleveraging of huge debts, over capacity and deflation are lowering the prices on everything, including homes.

If the Westside real estate market was a patient, it would be in intensive care on life support. Can and will the government ever pull the plug? Or, will they barely keep it alive, hoping that to find a miracle cure?

Culver City 90230 & 90232 Summer Meltdowns 2010

2010-08-29T11:00:00.000-07:00

Culver City, another city that benefits from local movie studios, is showing house prices back to 2003. Being and independent city, it boasts it's own police force, fire stations, city parks, city schools and family neighborhoods. However, with iit's inflated house prices, it too is finally coming back to earth. For the first time in awhile, we are seeing SFRs sell in the $600,000s, $500,000s, $400,000s and even the $300,000s. Is this a sign of thngs to come on the Westside?

Here are the Culver City Meltdowns :

3972 Midway Ave. 90232
3+3, 1943 sqft
YB 1980, 4982 sqft Lot
SOLD on 10/1/03 for $765,000
SOLD on 5/13/10 for $780,000
Studio Estates

3818 Tilden Ave. 90232
3+3, 2219 sqft
YB 1928, 5850 sqft Lot
SOLD on 7/16/10 for $680,000

11261 Ryandale 90230
3+2, 1549 sqft
YB 1950, 5780 sqft Lot
SOLD on 3/5/10 for $615,000

5482 Blanco Way 90230
2+2, 1375 sqft
YB 1950, 8830 Sqft Lot (Corner)
SOLD on 4/30/10 for $580,000
Short Sale

5208 Berryman Ave. 90230
3+1, 1020 sqft
YB 1951, 5600 sqft Lot
SOLD on 11/03/03 for $469,000
SOLD on 4/29/10 for $499,000
REO

4451 Berryman Ave 90230
3+1, 1631 sqft
YB 1922, 12600 sqft Lot
SOLD on 5/27/10 for $370,000

Culver City happens to be one of Doctor Housing Bubble's favorites. For more information, see his website.

Double Dip in Housing Or More Of The Same

2010-08-24T09:50:00.000-07:00

Today, the Pre-Existing Home Sales for July came in at -27% from June. Throw in a -25% drop YOY from July of 2009 and the un-subsidized market is horrible. Perhaps, even worse are the monthly inventory numbers. At the current sales rate, we now have 12.5 months of inventory (not including shadow) nationally. As was expected, the current real estate market is now horrible, without government intervention.

I came across an article published on Patrick.net that was to good to pass up. It was written by The Business Insider and anyone thinking about real estate must read it. The evidence is compelling for more real estate declines going forward. It states 15 reasons, complete with data, why housing is crashing. It's a real eye-opener.

Century City 90067 Summer Meltdowns 2010

2010-08-18T15:33:00.000-07:00

Centrally located next to Fox Studios and great shopping, Century City condos are selling at significant discounts compared to the 2007 peak. Depending on the building you choose, we are seeing some prices as far back as 2001. Perhaps lenders in these big buildings no what's in store.

Century City meltdowns are:

2160 Century Park East #1906 90067
2+2, 1416 sqft
YB 1966, Condo
SOLD on 2/3/98 for $325,000
SOLD on 1/11/08 for $840,000
SOLD on 5/11/10 for $459,000

2160 Century Park East #107N 90067
2+2, 1053 sqft
YB 1966, Condo
SOLD on 1/31/02 for $285,000
SOLD on 7/16/10 for $340,000

2160 Century Park East #701 90067
1+1, 832 sqft
YB 1966, Condo
SOLD on 1/23/04 for $330,000
SOLD on 4/2/10 for $350,000
SOLD on 7/16/10 for $316,500
10% loss in 3 months

2160 Century Park East #1403 90067
1+1, 815 sqft
YB 1966, Condo
SOLD on 6/3/98 for $138,000
SOLD on 9/18/01 for $217,500
SOLD on 12/30/04 for $450,000
SOLD on 8/30/05 for $495,000
SOLD on 4/1/10 for $310,000

2170 Century Park East #506 90067
2+2, 1416 sqft
YB 1966, Condo
SOLD on 5/17/05 for $625,000
SOLD on 12/30/05 for $730,000
SOLD on 7/17/09 for $520,000
SOLD on 1/14/10 for $385,000
25% loss in 5 months

2170 Century Park East #2108 90067
2+2, 1080 sqft
YB 1966, Condo
SOLD on 5/23/00 for $320,000
SOLD on 12/20/02 for $465,000
SOLD on 5/18/04 for $650,000
SOLD on 5/12/10 for $387,500

2170 CenturyPark East #1703S 90067
1+1, 815 sqft
YB 1966, Condo
SOLD on 5/27/05 for $449,000
SOLD on 3/9/10 for $365,000
SOLD on 7/6/10 for $260,000
Ocean View
$105,000 loss in 4 months

2220 Avenue of the Stars #1702 90067
2+2, 1339 sqft
YB 1964, Condo
SOLD on 4/3/01 for $625,000
SOLD on 12/12/03 for $710,000
SOLD on 4/8/10 for $825,000
Century Towers

2222 Avenue of the Stars #2404 90067
3+2.5, 1960 sqft
YB 1964, Condo
SOLD on 5/14/10 for $1,200,000
Century Towers
Short Sale

2220 Avenue of the Stars #1206 90067
2+2, 1334 sqft
YB 1964, Condo
SOLD on 5/11/01 for $600,000
SOLD on 6/7/10 for $710,500
Century Towers

2353 Century HI 90067
2+4, 2325 sqft
YB 1980, Condo
SOLD on 8/12/05 for $1,200,000
SOLD on 2/26/10 for $885,000
REO

2179 Century Woods Way 90067
2+3, 2487 sqft
YB 1983, Condo
SOLD on 8/15/01 for $915,000
SOLD on 4/16/10 for $885,000

2142 Century Park Lane #214 90067
3+2.5, 1773 sqft
YB 1989, Condo
SOLD on 4/3/01 for $625,000
SOLD on 12/12/03 for $710,000
SOLD on 4/8/10 for $825,000

2102 Century Park Lane #103 90067
2+2, 1530 sqft
YB 1985, Condo
SOLD on 12/12/97 for $380,000
SOLD on 7/30/10 for $780,000

2131 Century Park Lane #103 90067
2+2, 1300 sqft
YB 1985, Condo
SOLD on 8/1/01 for $450,000
SOLD on 6/7/10 for $612,500

2112 Century Park Lane #307 90067
2+2, 1330 sqft
YB 1985, Condo
SOLD on 2/8/06 for $730,000
SOLD on 4/22/10 for $590,000

It makes you wonder, how many people are upside down in Century City?

Venice 90291 Summer Meltdowns 2010

2010-08-14T17:05:00.000-07:00

Ah Venice... Where rich and trendy meets the beach. Also, the land of little lots and serious parking issues. Certainly one of the "cool" neighborhoods to live in, it could very well be one of the areas declining the most, when this all settles out. Venice has always been an eclectic mix of artists, 60s' holdovers, and beach lovers. Now, with some of the entertainment crowd having moved in, we see more and more overbuilt houses. 3000 - 4000 ft houses, on a 3000 - 4000 ft lot, are not quite as popular, as they used to be. Where before it would have been unheard of, we have started to see a few SFRs selling now in the $500,000 - $600,000s.

Here are the Venice Meltdowns so far:

1507 Louella Ave. 90291
2+2, 1580 sqft
YB 1949, 5992 sqft Lot
SOLD on 12/5/94 for $237,000
SOLD on 7/13/10 for $677,500

1105 Van Buren 90291
3+1, 1240 sqft
YB 1938, 3885 sqft Lot
SOLD on 6/4/10 for $685,000

1802 Washington Way 90291
4+2, 1628 sqft
YB 1953, 4182 sqft Lot
SOLD on 5/6/10 for $665,000

421 Grand Ave. 90291
2+2, 1095 sqft
YB 1923, 2700 sqft Lot
SOLD on 1/13/10 for for $665,000
Duplex

939 Superba Ave. 90291
2+1, 750 sqft
YB 1922, 3485 sqft Lot
SOLD on 6/16/05 for $872,000
SOLD on 11/19/09 for $750,000
SOLD on 2/19/10 for $660,00
$90,000 loss in 3 months

946 Superba Ave. 90291
3+2, 1060 sqft
YB 1914, 3485 sqft Lot
SOLD on 6/23/98 for $340,000
SOLD on 6/4/10 for $660,000

2329 Ocean Ave. 90291
2+2, 1056 sqft
YB 1921, 3485 sqft Lot
SOLD on 12/31/02 for $590,00
SOLD on 5/6/10 for $650,000
Duplex

2424 Clement Ave. 90291
2+1, 914 sqft
YB 1950, 3600 sqft Lot
SOLD on 3/18/10 for $625,000
Silver Triangle Teardown

748 Vernon 90291
1+1, 1000 sqft
YB 1998, 4801 sqft
LIST on 8/4/09 for $750,000
SOLD on 6/10/10 for $605,000
LIST on 8/14/10 for $550,000

728 Indiana 90291
3+1, 1112 sqft
YB 1952, 5280 sqft
SOLD on 2/9/7 for $800,000
SOLD on 4/20/10 for $565,000

1628 Penmar Ave. 90291
2+1, 940 sqft
YB 1949, 3050 sqft Lot
SOLD on 9/16/04 for $662,000
SOLD on 4/16/10 for $539,750

It's hard to believe that there are properties now in the $500,000s in Venice...

Cheviot Hills 90064 Summer Meltdowns 2010

2010-08-08T21:13:00.000-07:00

Another favorite neighborhood in Los Angeles is showing weakness, as prices drop back to 2004 and below. Cheviot Hills is centrally located, between Rancho Park, Beverlywood and Century City. Long sought after, because of privacy and views, this neighborhood is a secluded gem.

Here are the Cheviot Hills meltdowns:

10488 Dunleer Dr. 90064
5+4.5, 4868 sqft
YB 2005, 7720 sqft Lot
SOLD on 5/23/07 for $2,550,000
SOLD on 5/31/10 for $1,855,000
Mediterranean Villa

10385 Walavista Rd. 90064
3+4, 2368 sqft
YB 1940, 8290 sqft Lot
SOLD on 3/26/99 for $550,000
SOLD on 5/10/10 for $1,008,000

3112 Gilmerton Ave. 90064
3+3, 2294 sqft
YB 1940, 6930 sqft Lot
SOLD on 12/14/95 for $645,000
SOLD on 7/23/10 for $1,000,000

10650 Putney 90064
3+2, 1686 sqft
YB 1947, 6290 sqft Lot
SOLD on 6/22/04 for $799,000
SOLD on 4/20/10 for $795,000

10573 Cheviot Dr. 90064
2+1, 1363 sqft
YB 1928, 6250 sqft Lot
SOLD on 11/17/95 for $325,000
SOLD on 2/4/10 for $709,000

Prices continuing to fall...

Bel Air 90077 Summer Meltdowns 2010

2010-08-04T12:10:00.000-07:00

One of the most expensive neighborhoods in Los Angeles has our biggest meltdowns so far. Bel Air, home to many of the rich and famous is showing some enormous price declines. A 48,000 sqft newer French Chateau, a 9,468 sqft restored 1930s Hollywood Regency Design by Alfonso Bel and a 15,727 sqft home took hits from 33-58% off. Prices appear now to be in the range of 2004' and below.

Here they are:

630 Nimes Rd. 90077
10 + 14, 48000 sqft
YB 2006, 2.2 ac Lot
LIST on 7/30/09 for $85,000,000
SOLD on 6/4/10 for $50,000,000
French Chateau

10410 Bellagio Rd. 90077
9+13, 15727 sqft
YB 1931, .72 ac Lot
SOLD on 12/14/07 for $27,500,000
SOLD on 1/15/10 for $18,000,000

10772 Chalon Rd. 90077
6+8, 9468 sqft
YB 1930, .58 ac Lot
SOLD on 5/14/08 for $13,150,000
SOLD on 7/12/10 for $5,500,000
Hollywood Regency Design
Developed by Alfonso Bel

15506 Hamner Dr. 90077
4+4, 2951 sqft
YB 1960, 9627 sqft Lot
SOLD on 1/30/06 for $2,450,000
SOLD on 7/21/10 for $1,450,000

10505 Vestone Way 90077
4+4.5, 3843 sqft
YB 1978, 11.86 ac (?) Lot
SOLD on 7/14/10 for $1,700,000
SOLD on 11/05/04 for $1700,000
(Nice Sale)

2395 Buckingham Ln 90077
3+3, 2960 sqft
YB 1999, 7236 sqft Lot
SOLD on 6/10/06 for $2,050,000
SOLD on 4/9/10 for $1,525,000
Corner Lot, Golf Course View

10217 Scenario Ln 90077
3+2, 2040 sqft
YB 1959, 8712 sqft
SOLD on 8/4/05 for $1,400,000
SOLD on 6/16/10 for $845,000

2518 Almaden Ct. 90077
4+2.5, 2769 sqft
YB 1998, Townhouse
SOLD on 11/6/07 for $1,385,000
SOLD on 5/25/10 for $922,500

2767 Woodwardia Dr. # 15 90077
4+2.5, 2263 sqft
YB 1971, Townhouse
SOLD on 12/01/05 for $1,255,000
SOLD on 3/1/10 for $735,000

2066 Roscomare 90077
3+2, 1641 sqft
YB 1953, .4ac Lot
SOLD on 12/23/04 for $950,000
SOLD on 2/26/10 for $738,000

10393 Oletha Ln 90077
2+2, 1249 sqft
YB 1949, 4987 sqft Lot
SOLD on 8/19/05 for $949,000
SOLD on 6/18/10 for $650,000

10421 Hebron Ln 90077
2+2, 1302 sqft
YB 1946, 4791 sqft Lot
SOLD on 6/5/03 for $635,5000
SOLD on 4/6/10 for $560,000
Short Sale

Prices dropping faster now. How low will we go?

Marina del Rey 90292 Summer Meltdowns 2010

2010-07-31T12:21:00.000-07:00

Another area close to the beach is suffering badly in the downturn. Marina del Rey shows some of our biggest markdowns on the Westside, solidly in 2004' pricing and below. The Silver Strand has witnessed some big hits and the overbuilt condo market is seeing an increasing amount of short sales. Especially in the Azzurra Tower.

Here is the hit parade for Marina Del Rey:

SILVER STRAND SFRs

126 Voyage Mall 90292
4+6, 4861 sqft
YB 2007, 3150 sqft Lot
SOLD on 10/20/05 for $3525K
SOLD on 6/30/10 for $1925K
Ocean View

114 Westwind Mall 90292
4+5, 4704 sqft
YB 1991, 3150 sqft Lot
SOLD on 10/6/04 for $2360K
SOLD on 6/19/10 for $1625K
Canal View

137 Channel Pointe Mall 90292
4+6, 4960 sqft
YB 1999, 3150 sqft Lot
SOLD on 3/15/00 for $1545K
SOLD on 5/27/10 for $1700K
Ocean View

129 Top Sail 90292
4+4 4362 sqft
YB 1989, 2888 sqft Lot
SOLD on 7/14/05 for $2395K
SOLD on 7/6/10 for $1750K
Park View
Short Sale

CONDOS

20 Catamaran St. #103 90292
2+2, 1243 sqft
YB 1985
SOLD on 12/15/05 for $905K
SOLD on 6/28/10 for $687K
1 Block From Beach
Short Sale

4115 Glencoe # 407 90292
2+2, 1925 sqft
YB 2006
SOLD on 5/25/07 for $999K
SOLD on 6/15/10 for $625K
Short Sale

4708 Villa Marina #16 90292
3+2, 1582 sqft
YB 1966
SOLD on 7/28/04 for $630K
SOLD on 5/27/10 for $525K
Short Sale

4342 Redwood #101 90292
2+2, 1886 sqft
YB 1981
SOLD on 5/29/97 for $329K
SOLD on 5/14/10 for $522 K
Stream View
Short Sale

AZZURRA TOWER CONDOS

13700 Marina Pointe Dr. #916 90292
2+2, 1103 sqft
YB 2003
SOLD on 10/7/05 for $825K
SOLD on 7/9/10 for $455K
Marina & Ocean View
Short Sale

13700 Marina Pointe Dr. # 625 90292
2+3, 1431 sqft
YB 2003
SOLD on 3/6/06 for $725K
SOLD on 5/11/10 for $470K
Mountain View
Short Sale

13700 Marina Pointe Dr. #1215 90292
2+2, 1384 sqft
YB 2003
SOLD on 3/31/06 for $915K
SOLD on 6/4/10 for $650K
Marina & OceanView
Short Sale

13700 Marina Pointe Dr. # 1131 90292
2+3, 1358 sqft
YB 2003
SOLD on 11/21/05 for $900K
SOLD on 6/4/10 for $600K
Mountain View
Short Sale

13700 Marina Pointe Dr. # 311 90292
2+2.5, 1384 sqft
YB 2003
SOLD on 6/15/06 for $725K
SOLD on 7/27/10 for $425K
Courtyard View
Short Sale

13700 Marina Pointe Dr. # 1520 90292
1+1.5, 920 sqft
YB 2003
SOLD on 5/1/06 for $660K
SOLD on 7/23/10 for $385K
Marina & Ocean View
Short Sale

13700 Marina Pointe Dr. # 821 90292
1+1, 787 sqft
YB 2003
SOLD on 10/19/05 for $510K
SOLD on 5/3/10 for $315K
Marina & Ocean View
Short Sale

It looks like the banks are starting to unload in Marina del Rey. Makes you wonder, how much more inventory do they really have?

Beverly Hills 90210 Summer Meltdowns 2010

2010-07-28T07:24:00.000-07:00

Not even the most famous of zip codes can survive the real estate downturn. Sales prices are back to 2004 for well informed buyers and the smartest negotiators are getting 2003 prices and beyond. With banks just beginning to process more short sales, we could be at the beginning of another 20% - 25% leg down over the next 2-3 years. Here are a few recent sales, worth taking note of:

2101 N. Beverly Drive 90210
3+5, 3602 sqft
YB 2003, 54450 sqft (1.25 ac) Lot
SOLD on 7/27/05 for $3495K
SOLD on 6/29/10 for $2400K
(2003 pricing)

509 N.Alpine 90210
3+3, 2058 sqft
YB 1925, 12430 sqft Lot
SOLD on 8/19/05 for $3315K
SOLD on 4/19/10 for $2100K
(2003 pricing)

523 N. Elm 90210
5+2, 2814 sqft
YB 1924, 11000 sqft Lot
Sold on 4/5/10 for $1350K
(2002 pricing)

If anyone has more information on these or other recent sales, please provide.

Santa Monica Summer Meltdowns 2010

2010-07-22T17:44:00.000-07:00

We have a sister site at Santa Monica RE Meltdowns that covers all of Santa Monica. Click the link or find it in my RE/Economic Blogs section. It will focus only on Santa Monica.

Malibu 90265 Summer Meltdowns 2010

2010-07-21T19:57:00.000-07:00

Our 4th area in the summer series is home to the most expensive real estate in Southern California. Malibu. It's hard to believe, that some of the biggest markdowns on the Westside are here. In some cases, we are seeing prices that we haven't had since 2001 and 2002. For those familiar with the area, the following prices over the past 6 months are hard to believe:

5904 Kanan Dune Rd. 90265
2+2, 1472 sqft
YB 1974, 43560 sqft (1 ac.) Lot
SOLD on 8/26/05 for $1635K
SOLD on 5/19/10 for $900K
REO
(2002 pricing)

3224 Malibu Cyn Rd. 90265
3+2, 1767 sqft
YB 1957, 25700 sqft Lot
SOLD on 2/8/05 for $1658.5K
SOLD on 6/25/10 for $1362K
Ocean Views
(2003 pricing)

32023 Pacific Coast Hwy 90265
3+2.5, 2998 sqft
YB 1954, 129,330 sqft (2.97 ac) Lot
SOLD on 5/14/10 for $1250K
SOLD on 9/27/94 for $935K
SOLD on 12/16/93 for $630K
(2001 pricing)

5946 Busch Dr. 90265
4+5, 6800 sqft
YB 1984, 40506 sqft (.9ac) Lot
SOLD on 5/26/10 for $1795K !!!!!
(2002 pricing)

7012 Birdview 90265
3+5, 2889 sqft
YB 1999, 14436 sqft Lot
SOLD on 3/31/10 for $1525K
(2002 pricing)

30375 Morning View Dr. 90265
3+3, 1556 sqft
YB 1979, 82,764 sqft (1.9ac) Lot
SOLD on 4/30/10 for $1307K
Horse Property
W/plans for 8318 sqft house
(2002 pricing)

23814 Malibu Crest Dr. 90265
6+7, 6000 sqft
YB 1979, 5289 sqft Lot
LIST on 4/17/09 for $4250K
SOLD on 3/31/10 for $2650K
Malibu Knolls
(2003 pricing)

20404 Roca Chica Dr. 90265
3+3, 2612 sqft
YB 1964, 11325 sqft Lot
SOLD on 1/8/10 for $1057K
(2001 pricing)

23904 Deville Way Apt D 90265
2+2, 1407 sqft
YB 1965, Condo
SOLD on 3/8/10 for $514K
Foreclosure
(2003 pricing)

The general market in Malibu is pretty soft. If anyone has more information about these properties or others, please write.

Brentwood 90049 Summer Meltdowns 2010

2010-07-20T11:55:00.000-07:00

Here is the third area in a series of Westside Summer Meltdowns. Savy buyers are finding 2003 prices if they are well informed. It may or may not be the time to buy, depending on your own personal or financial situation. Regardless, we have a ways to go, with a bottom approaching in 2012 with 2000' pricing.

Here is the Brentwood Hit Parade:

785 Linda Flora Dr. 90049
3+2, 1656 sqft
YB 1962, 28998 sqft (.67 ac)
(Holmby Hills)
Ocean and Getty View
SOLD on 2/21/01 for $1080K
SOLD on 1/22/04 for $1170K
SOLD on 6/22/10 for $950K

370 S. Canyon Dr. 90049
5+6, 4129 sqft
YB 2004, 6752 sqft Lot
SOLD on 4/15/05 for $2485K
SOLD on 7/13/10 for $1950K

12555 Promontory Point 90049
4+4, 3384 sqft
YB 1986, 19476 sqft Lot
SOLD on 6/23/06 for $2175K
SOLD on 5/20/10 for $1480K

12143 Sunset Blvd. 90049
5+3, 3198 sqft
YB 1947, 8973 sqft Lot
SOLD on 10/25/96 for $480K
SOLD on 4/20/10 for $1000K
(2002 pricing)

Please provide any further information on these sold properties or others, if you have it.

Pacific Palisades 90272 Summer Meltdowns 2010

2010-07-15T12:22:00.000-07:00

One of the finest neighborhoods in Los Angeles has not escaped serious drops from their 2007 peak. Those who bought in 2003 - 2007, have a good chance of being underwater on their mortgage. As some people will always overpay in a declining market, I wouldn't advise buying for more than 2003 pricies, IF you have to purchase now. 1999 -2000 pricing, is likely to be the bottom in my opinion.

With Pacific Palisades as the second in a series of Westside areas this summer, my goal is to start discussions on several micromarkets. One will be able to check the archives in the right hand column of this blog, for their selected area. That being said, we need experts in each area providing sales as they come in, to help document trends. If this can be done, than others will have somewhere else to get current information, other than just realtors and the standard industry hype. My suggestion to start is, by researching Redfin and Zillow. They can give you sales history of a property dating back 10 years or more. Keep in mind, that 2007 was the peak on the Westside.

Here is a start for Pacific Palisades:

1128 Donaire Way 90272
6+4, 3219 sqft, Ocean View
YB 1961, 12066 sqft Lot
SOLD 7/30/10 for 1570K
SOLD 5/18/03 for 1550K
(definite 03' pricing)

1189 Cumbre Alta Ct 90272
7+11, (?) sqft
YB 1991, 910o sqft Lot
Listed on 1/30/09 for $5295K
SOLD on 4/30/10 for $3300K
SOLD on 3/22/94 for $1560K
(late 2003 pricing)

463 Wynola 90272
6+7.5, 7698 sqft
YB 2009, 8594 sqft Lot
SOLD on 6/22/10 for $3000K
SHORT SALE
Corner Lot
(2003 pricing at least)

1201 Villa Woods Dr. 90272
3+6, 4757 sqft
YB 1955, 16548 sqft Lot
SOLD on 12/26/08 for $2060K
SOLD on 6/9/10 for $1112.5K
(Borders Will Rogers S.P.)

621 Swarthmore 90272
4+4.5, 4165 sqft
YB 1992, 17,420 sqft Lot
SOLD on 4/4/05 for $2200K
SOLD on 11/19/09 for $1875K
(2003 pricing)

Here are some other recent sales of interest:

16711 W. Sunset 90272
$650K

16933 Livorno 90272
1250K

16821 Livorno 90272
1900K

If anyone has any useful information about these homes, please give us your input.

Westwood 90024 Summer Meltdowns 2010

2010-07-08T13:15:00.000-07:00

It's fair to say there are 2 camps here. Bears and Bulls. That's good. It's important not to have a myopic view all the time, as the real estate market is dynamic and always changing. Now that we have established pros and cons for both sides, the name of this blog is WestsideREmeltdown and this thread will be concentrating on the Westwood Area. I believe we can move on past Santa Monica onto another Westside Area. The intention of this blog was to document 20% 0r more price declines (meltdowns) in different areas on the Westside. 5 years ago, if someone told you real estate on the Westside would drop 20% in a few years they would say you were crazy. The fact is some properties have declined 20% from when they were purchased. The best way to document this is by finding multiple sales on the same property over the last 10 years or so. With prices trending down, it will give you an idea of how much further we have to drop when the real estate recession/depression plays out.

Looking at Redfin and Zillow are excellent ways to find sales histories on properties in question. Although not perfect, it is a start. In addition comparable properties in the same neighborhood is another method in finding housing values, but requires a bitmore skill. Regardless, let's move on to Westwood and see whats happening there.

The Perfect Storm is Headed This Way

2010-07-03T12:00:00.000-07:00

It seems lately, the housing numbers in May and June have been dreadful. It is no coincidence the government stimulus (Buyer bait) ended on April 30th. 30% drops Month to Month, the sapping of buyer demand pushed forward, harder to close transactions, shadow inventory on the rise, record low interest rates failing to stimulate demand, mortgage applications dropping significantly and the stock market rolingl over, appears to be leading up to the perfect storm. Those that can wait, are waiting to buy, and those that can't wait to sell, are becoming more panicked. Real estate on the Westside is seeming more and more, like a serious liability as opposed to a good asset. Everything cycles and I am afraid we are in for the nastiest part ahead. One big wave, to wash out any remaining believers, that real estate always goes up. We could easily be in for another 20-50% down leg, as unemployment, global fears, overinflated values, stock market crash, and austerity measures kick in. Anyone who can, is cutting back and buckling down. The next couple years will wipe out the rest in denial, as the true magnitude of our financial crisis hits home. The government attemps are all but worthless now. and are prolonging the agony.

Those who can weather the storm,will be patiently rewarded, as those who can't will be all but wiped out. Be frugal and don't make any large expenses now, as you will be able to buy them at incredible discounts in the near future.

Sell, If You Can and Wait to Buy. Spring Govt Bump Becomes Clear, as Summer Progresses.

2010-06-25T10:03:00.000-07:00

There it is, a definite sell signal. The window of activity is quickly closing this summer on the Westside. From a strictly financial standpoint, if you have a home and you can sell it, do so before this nasty leg down begins towards the end of summer. The downside risks are now staring you in the face and getting clearer every day.

1) Lowest interest rates ever
2) Lowest new home sales ever recorded
3) Purchase mortgage applications depressed
4) Near double digit unemployment
5) World austerity measures
6) Last second financial overhaul before G20
7) Printing presses having little effect.
8) Millions, in or headed for foreclosure
9) Millions running out of govt aid
10) RE & Financial lawsuits beginning
11) End of biggest Ponzi Scheme (RE) in History
12) RE bubble epicenter in S. California
13) Deeeeeeeeeeeeeeeeflation.
14) Record inventory (shadow & listed)
15) Credit tightening
16) Few first time buyers
17) Few high end buyers
18) RE Pyramid collapsing from top & bottom

etc....etc....etc....etc......

And the upside risks,

1) Realtors, trolls and homedebtors swearing LA is where all the money in the world is going now, as the world deleverages, (But not in RE prices here), Sunshine tax, Asian rescue (Like Japan), it's different here, 90402 is special, Hyperinflation soon, (Maybe in 3-10 years depending on how much bullsh*&%#ttt govt manipulation), All cash buyers buying everything on the Westside, Multiple Offers, Hope, Contrarian Approach, Wall Street, NAR, CNN and MSNBC.

Yeah, uh huh...

What is perhaps the latest in troubling news was, the May New Home Sales number coming in at 300,000 or a 33% drop from the prior month of April. This coincided with the expiration of the government tax credit on April 30. And, all of this is happening on top of interest rates in the 4% range. What this tells me is home builders (i.e. SPECULATORS) will drop from the market place. That has repercussions all across the country as real estate (LAND) is a poor investment. And, let's face it, we have just been through the biggest, speculative bubble in our nations history, based on fake credit. Now, that speculation, credit and not to mention jobs.... have disappeared, the govt is going to need diapers. If you want to jump into the water and have money to lose, go for it. Otherwise, wait until this next leg shakes out.

And last but not least, a little history about my name that realtors, trolls and home debtors like to attack. I knew real estate was topping in S.California after the summer of 2005. I began writing on the Piggington Blog in San Diego in 2006, under the name of Latesummer 2008. That is because San Diego was a good year ahead of Los Angeles at least, in the real estate cycle. Realtors, trolls, home debtors disagreed vehemently. in 2008 San Diego homes were selling up to 50-60% off. After, realizing Piggington was nothing more than a real estate rag, I decided to start Westside Real Estate Meltdown in early 2007. Of course, many thought the mere idea of Westside Real Estate dropping in value was ludicrous. At that time, knowing LA was tracking SD by at least a year, I began writing under the name of Latesummer 2009, thinking that LA would suffer the same fate as San Diego. If it wasn't for our illustrious government, 2009 should have begun market clearing of overpriced homes through foreclosure and we would be well on our way to the bottom of the cycle by now. But no, I was wrong in that, the government has better things in store lfor us, such as a "Lost Decade" Japan style, if we're lucky.

So, if you like paying 10xs your salary and losing 10% of your homes value each year, than enjoy and keep that good job, as you will be working for free.

Desperation, Panic, Capitulation on the Westside? Not Yet...

2010-06-20T11:50:00.000-07:00

As Westside home prices slowly inch downward, some believe we are at, or have surpassed the bottom last year. Because of an artificial government bump (Tax credits etc...), realtors, home debtors and industry cheerleaders, are now ramping up the "buy now" rhetoric. Bullsh*#%$*tt!!! We aren't even half way through this real estate cycle and like every other in history, we will complete all of it's stages. Don't forget, we are only 3 years into the downside, that usually lasts 6-7 years. Many outlying areas have gone through their 50-60% loss rapidly and are close, if not at the bottom now. The Westside is not. Government subsidy has just prolonged the agony and is delaying the inevitable.

There are 14 stages in the classic real estate cycle. Throughout time, it has ALWAYS repeated these stages. But this time is different! NO, it is not. The only thing different is just unprecedented government intervention, which should make you worry, even more. What do they know, that you don't? Here are the classic stages in the real estate cycle, of which the Westside is, somewhere, between Stage 6 (Denial) and Stage 7 (Fear):

1) Optimism
2) Excitement
3) Thrill
4) Euphoria
5) Anxiety
6) Denial
7) Fear
8) Desperation
9) Panic
10) Capitulation
11) Despondency
12) Depression
13) Hope
14) Relief

Then back to 1) Optimism

Seeing how the housing bubble started seriously inflating in 2000 - 2001, and we're down almost half of the decline side. 2013-2014, seems about the time we should touch bottom. Provided government manipulation doesn't drag out the process even more. That being said, The Westside has yet to complete the worst stages of Fear, Panic, Capitulation and Despondency. Last time, this happened ((1988 - 1995), the higher end fell deeper than the lower end, and we didn't have 1/4 the size of our most recent bubble.

"Caveat Emptor" (Buyer Beware...)

New Jobs Being Created Won't Support Westside Prices

2010-06-13T20:19:00.000-07:00

A startling statistic was reported by the LA Times this week. Looking at the 1,000,000 jobs created, since the "recession ended", 7 out of 10, only required a high school diploma. With almost half of those temporary government census jobs, it foreshadows the road ahead. Well paying jobs are now being outsourced overseas, leaving us with little, but low paying service jobs. It appears this will this only increases in the future. On Main Street, everyone is feeling the effects of deflation through job cuts, reduced hours and lost home equity. Every industry is retrenching, in order to survive. As they say "A recession is when you hear of someone losing their job", "A depression is when you lose yours".

In an environment such as this, how can entry level houses priced at $750,000 be supported? They can't. Once the bottom of the housing pyramid collapses, their is nothing to support the higher levels, as sales transactions dry up. Throw in job loss and tightened credit based on actual income and the picture isn't pretty.

I challenge anyone once again, to show me proof, that the overall real estate industry is healthy, without just spouting off their opinion. Show me YOY sales numbers, YOY price per square foot, YOY Sales Volume, or some type of EVIDENCE. Not just realtor dribble, or home debtor denial. Those posts are just tiring and pathetic.

Show Me the Money!!! Show Me the Money!!!

2010-06-06T12:36:00.000-07:00

After cutting through all the hype, hope, and denial, the underlying question still remains, how and where, are all of the lost high income jobs, once related to the FIRE (Financial, Insurance, and Real Estate ) Economy, going to come from? Without them, the still Westside bubblicious pricing ultimately fails. The government attempts of reviving it on life support have been futile and are only prolonging the agony. Unfortunately, new jobs now being created, are heavily in the service sector and cannot support Westside housing, without issuing more free money. The problem now is, the government, the banks and much of the public, are now, beyond broke. Instead of issuing bandaids, the only true medicine left, is painful and requires real solutions to extreme leverage. Anyone see what's happening in Europe lately?

How much longer will the banks and government be able to extend and pretend ? 2,3,4,5, maybe 10 years, while slowly, the wealthy become islands in a sea of p0verty? $750,000 for a 75 year old fixer in a decent area is unsustainable, period. Also, 25-50% down on a property over $1,000,000, supported by income, narrows the field considerably. All that remains are bubble prices that was unsustainable during the boom, nonetheless during a bust. Now we have a real (jobs) recession on top of a real estate recession. SHOW ME THE MONEY!! SHOW ME THE MONEY!!, as elequently spoken in "Jerry Maguire". It's not there. Just the last of smoke and mirrors, pitifully trying to sustain itself.

If anyone can explain, how or where, the income needed, to eventually buy up all the shadow and listed inventory comes from, let me know. I'm all ears.

Be Prepared to Spend 10 years in the House You Buy Today

2010-05-30T16:01:00.000-07:00

The old rule of thumb, before the massive 90s steroid housing bubble, was keeping a home at least 5 years, before selling it. That equation has now changed on The Westside to a new 10 year time horizon. As we continue with more downside over the next few years, see prices flatten out and deal with a "Burned Buyer" syndrome, a decade will have passed before, we see any appreciation from today's pricing.

Let's use a purchase price of $1,000,000 on the Westside. Here is the way I see it, given today's trends:

2010: Purchase a home at $1,000,000 (2004 Prices)
2010-2014 prices decline 20-25% (2000 Prices)
2014-2017 prices flatten out (2000 Prices)
2017-2019 prices creep back up (2004 Pricing)
2019-2020 to cover maint, taxes, insur & commission

My reasoning is based on past bubbles and recent declines in the Westside Market. First of all, it has taken 3 years for prices to decline 20-25% on the Westside so far. Like every previous real estate bubble, we are only half way through the declines, by looking at a return to historical norms. The declines have been slow, but show little evidence of stopping. In 2014, we should experience total capitulation in the marketplace and intersect the historical norm line at 2000 pricing, after accounting for a standard 3-4% annual appreciation rate. Next, it will take 3 years to scrape along the bottom, as it takes time for buyers to gain any confidence in the market again. At this point, buyers painfully remembering the lessons of the last bubble, prices begin to appreciate slowly over the next 3 years. Finally, you should be able to cover your 2010 costs, after taxes, insurance, maintenance and sales commissions, in 2020.

Now, if you love the house and neighborhood, are prepared to spend at least 10 years, or have money to burn, than go for it. Don't believe the realtor hype about anything else. They make their living through sales, remember? Especially, in this marketplace, they will do ANYTHING to make a sale. Just because a home is discounted from a higher price doesn't necessarily make it a good purchase. Perhaps, waiting a few more years before purchasing is a better strategy. Do your own research and definitely know what your own time horizon is.

For those who have purchased in the last 5 years, they could have to wait well into until the 20s, to come out even again.

House Prices Rolling Back to 2003

2010-05-22T23:12:00.000-07:00

How low can you go? We have the first documented 2003 rollback on the Westside. Newly constructed in 2004, this house recently sold 6.6% or $260,000 below its original sale price (8/13/04). This home is obviously not some outlier in a marginal area, and is situated in the heart of the Santa Monica 90402 walk streets. There are plenty of interior pictures to see on Redfin. If this trend continues, could 2004 prices be a losing proposition? Here are the details:

209 Euclid Santa Monica 90402 5+6, Mediterranean 6859 sqft YB 2004 Lot Size 7500 sqft SOLD 4/21/10 for $3,690,000

(Click on photo to enlarge)

At a loss of $260,000 + the commission to sell it, the actual loss is at least $444,000 or 11.2% below what was paid in August of 2004. This represents a solid 2003 price. We aren't even including the $48,000 annual tax bill, along with maintenance and insurance. With losses such as these on 2004 construction in prime areas, what does that say for other areas on the Westside? Even Zillow had it right on this one, with a current estimate of $3,640,000. Interesting enough, Zillow had it pegged at $6,860,000 in January of 2008. I guess they held it bit too long.

If this area did peak in early 2008, and we are only 2 years into the real estate bust, what will the next 2 years bring?

Prime Santa Monica Neighborhood Sliding About 10% A Year

2010-05-18T14:19:00.001-07:00

Santa Monica 90402, North of Montana, is on the down hill slide. Case in point is:

627 Euclid Street
Santa Monica 90402
2+2+den, 1244 sqft, pool
Remodelled Craftsman
Built in 1922, 7500 sqft lot
(Click on photo to enlarge)

Since the end of 2007 this entry level home has seen steady price erosion at 9.7% per year, a total of $549,000. Throw in sales commission and it is well over 10% (11.2%). Now lets look at a historical perspective on this house, since it has been sold 7 times since 1994:

SOLD 9/26/94
$524,000

SOLD 3/1/96
$541,000

SOLD 8/29/97
$736,000

SOLD 3/9/00
$932,000

SOLD 7/2/03
$1,401,000

SOLD 10/23/07
$2,298,000

SOLD 4/9/10
$1,749,000

This is a perfect Case/Schiller Type of Comparable, being the same house sold over and over again. If we use 3.5% as the standard rate of inflation, we arrive at a historical perspective of the price this house should be worth, in any given year. At the current rate of decline, the price of this house will intersect the historical inflation line (standard appreciation) in 2014 at approximately $900,000 (early 2000 year pricing). Rarely do we see prices drop in a straight line. Normally, they will begin to flatten, after an intial steep decline, before leveling off. If this happens, we miay not see any appreciation, until the end of the decade.

Some Big Neighborhoods Take Some Big Hits

2010-05-10T00:01:00.000-07:00

According to Dataquick, some of our most cherished neighborhoods have seen serious price erosion over the last 2 years. Perhaps one of the best measures we can easily use are, prices per square foot being paid. It's not perfect, but is certainly more informative, than just looking at median prices. Here are some prime neighborhoods, that have suffered some of the worst declines in price per square foot YOY, since March of 2008.

1) Beverly Hills 90210
(2008) $851 (2010) $516 (-39.4%) 17 sales

2) West Hollywood 90069
(2008) $1,032 (2010) $680 (-34.1%) 10 sales

3) Santa Monica 90402
(2008) $962 (2010) $724 (-24.8%) 10 sales

4) Brentwood 90049
(2008) $818 (2010) $632 (-22.8%) 17 sales

And, just for good measure:

Manhattan Beach 90266
(2008) $826 (2010) $602 (-28.1%) 26 sales

Buyers are definitely getting more house for their money. The question is, what will change, if anything, the downward trend in prices?

How Much Are Homes Really Worth ?

2010-05-01T15:23:00.000-07:00

Historically speaking, housing prices have tracked inflation at roughly 3% appreciation per year. This was of course until 1995, when the housing bubble was in it's infant stages. A starter home in a decent area was roughly $300,000 after the real estate crash of the early 90s. If we take that price and apply historical norms, smoothing out for stock and real estate bubbles, that same house today, increases by 56% to $467,000. With Westside starter homes in decent areas, priced from $750,00 to $850,000 today, we are still bubble priced. (a good 40%)

This method is easy to apply to any home purchased from 1995 to 1999, before the bogus loans distorted the prices of real estate. Just multiply the starting 90s' sales price by 1.03 for each year, until 2010. This will give you an idea of what the home price should be. It may take awhile, but we always revert back to historical norms.

Foreclosure Filings Surge in the First Quarter of 2010

2010-04-16T22:10:00.000-07:00

The number of houses hit with foreclosure notices in California from January through March was at an all time record of 216,263, according to Realtytrac. That's a 60% increase from the 135,431 during the first quarter of 2009 and a 256% increase from the 84,568 during the last quarter. It appears banks are now getting their act together, after the foreclosure moratoriums and are moving faster on properties in default. Those current numbers now mean, 1 out of every 62 houses in California is now in some stage of foreclosure. Right behind Arizona and Florida. In contrast, the national figures show 1 out of every 138 houses are in some stage of foreclosure.

But the "Westside is different" as many will tell you. Let's see how different it really is. According to Foreclosure Radar, there are now over 200 properties in some stage of foreclosure in Santa Monica. The breakdown by zip code is as follows:

90401 (8)
90402 (26)
90403 (52)
90404 (61)
90405 (64)

Total (211)

Most of these properties are Bank Owned (REO) or scheduled for Auction. If someone had told you 2 years ago, there would be over 200 foreclosure filings in Santa Monica, they would have said you were insane. This is not the sign of a healthy market, especially with the Gov't pulling out it's support last month (RMBS purchases), this month (Tax credit ending) and the banks requiring 20-25% down with FULL documentation,. To make matters even worse, California's unemployment rate just a hit a high of 12.6% last month.

Keep track of your own areas foreclosure statistics, and watch the numbers swell, as the shadow inventory makes it's way onto the market. With a smaller pool of buyers and more inventory, prices will continue their decline.

Buying vs Renting Doesn't Make Sense

2010-04-11T12:20:00.000-07:00

One of our readers has done research on "Asking Rents" of homes located in the 90402 zip code of Santa Monica. Not surprising, the cost of buying a home is about double, plus the risk and opportunity cost of a 20% down payment. When properties are appreciating, buying "might" make sense. But in today's environment, where home prices are declining, or remaining flat at best, it is a losing proposition. Below, are some current asking rents on houses in 90402:

1616 San Vicente $5500 3+2
415 14th St $5000 3+1
340 21st Pl $4500 3+1
728 26th St $4950 3+2.75
316 20th St $4500 3+1
1064 Harvard $5900 3+2
1101 Harvard $4900 3+2
328 18th St $6300 3+2.75

Let's use 340 21st Pl as an example. The location of this home is excellent and it is situated on a large lot. If the home were to sell for say $2,000,000, the mortgage payment, taxes and insurance, after 20% down, would be well over $9000 per month, or twice the asking rent. This equation works for most homes for sale on the Westside. Here is a simple calculator to do your own analysis if you know comparable asking rents and asking sale prices of the house your interested in. Mortgage Calculator Do your own homework and don't be fooled by the real estate sales hype.

It would be interesting to see the difference in mortgage payments vs rent payments on the above houses. If anyone is familiar with possible selling prices of the above homes, let us know the relative cost of buying, versus renting them.

A Paradigm Shift in Home Buying ?

2010-04-01T13:00:00.000-07:00

Going into the third year of market corrections, a new mindset about buying homes seems to be emerging. No longer are there thoughts of netting 6 figures in buying a home and selling it 2 years later. We can attribute this to the extinction of the no doc liar loans that fueled the stratospheric rise in home prices. Homes became priced as investment vehicles and ATMs, as opposed to a place to live in. In 10 years the price of a home doubled or even tripled in some cases. Looking at historical appreciation, a 40% increase instead of 100-200% appears more realistic.

So where does that leave us now? We have entry level homes starting at $750K on artificial life support via gov't intervention. Banks are extending and pretending, but not lending, jobs are scarce, and more homes turn upside down each day. Most who bought from 2005 - 2007 would come out with a loss after taxes, maintenance and sales commissions. For those who believe we are at the bottom, buying today means barely keeping up with inflation (if their lucky) over the next 2-5 years, minimum.

With the housing casino gone, that means people are forced to buy based on income, sizable down payments and what they can truly afford. In other words, probably 2/3 of the inventory (both shadow and listed) will not sell, unless the banks foreclose, short sell, or cram down the principal. Fat chance, when banks keep extending and pretending, while encouraging more buyer defaults and walkaways. Eventually, that's a ton of inventory for the market to absorb at reduced prices.

Sure, you will hear the stories of multiple offers this spring, due to the limited amount of owners with equity, actually selling. This will appear as if the market has picked up, trumpeted by the real estate industry and media . The keys to watch will be 1) Sales Volume and 2) Prices per Square Foot. Most buyers will continue saving for down payments and renting at half of the mortgage price, without risking their hard earned cash. Once again, their purchases will be based on what they can afford and not some creative loan scam trying to slam dunk them into a house. The days of $0 down, Interest Only for 2 years, and easy credit are GONE!

As the paradigm shift occurs, business will eventually return to normal, with homes selling again at reasonable prices, based on reality (verifiable income, down payment and good credit required).

How Many Zombie Listings Are Out There?

2010-03-23T14:47:00.000-07:00

We are headed into the spring selling season and listings are on the rise. The question is, how many of those listings are actually ready to sell? Many of them are so upside down they can't possibly sell. Hence the name "Zombie". Sure, there are a few sales occurring on some listings with equity, but that is a minority. The listings that are selling have attracted multiple offers only because they are few and far between. Just because there are multiple offers on a property doesn't mean the market is picking up. There will always be some that buy even when the overall market is declining.

People need to see the big picture, instead of getting bogged down on one property.

Taking a Plunge Into The Market ?

2010-03-17T12:15:00.000-07:00

There seems to be a growing chorus about jumping into the Westside market, now that prices have dropped. Realtors are pushing low interest rates as the reason to buy now. Perhaps it is true, interest rates are headed up in the near future. How will that affect the "nascent" recovery in housing? If you were to buy an $800,000 house and interest rates do rise, what effect will that have on the resale of your home later? These, and other questions need to be answered before taking the plunge.

My guess is, there are weak hands out there buying due to pent-up demand, low saleable inventory and impatience. Bidding war stories on desirable listings that aren't "zombies", have encouraged some fence-sitters to dive in. Could a double-dip in prices be in store, once the fed stops buying mortgage backed securities and ends the first-time buyer credit?

What Happens When The Government Pulls The Plug?

2010-03-06T22:06:00.000-08:00

That is the real question now, as we hear threats of the tax credits and MBS purchases coming to an end. Will they really try pulling the real estate industry off life support? Or, is just a big bluff? The housing market has been artificially supported over the last couple years and now they're talking about pulling the plug. Last time I looked, FHA was backing about 90% of the mortgages being made, interest rates were being subsidized and tax credits combined with 3% down payments were keeping the market alive. Banks certainly don't want to lend because, they know what's in store. Can the government go on indefinitely supporting the housing bubble? I doubt it. Sooner or later the bill will come due and then what? The easiest way out is, the devaluation of our currency. If you can't pay the bill, then just lower the cost. It has been happening for ages and is the end game for economies in serious trouble.

What do you think about the government decision to "wind down" its programs?

2009 Year-end Median Prices for The Westside. What a Difference a Year Makes!

2010-02-27T14:42:00.000-08:00

The 2009 median price numbers are out for the Westside on Dataquick. Where median prices appear to be increasing for the larger LA areas (Case Shiller Index), the exact opposite is true for the Westside. The lack of financing for Jumbo loans is affecting the sales mix. Lower to mid range properties are slowly beginning to move as banks and sellers lower prices. Meanwhile, the higher-end continues to suffer. In addition, banks are reluctant to foreclose as they "hope" the market turns around. Obviously, they know how bad the market is and would rather not take more losses and keep someone in the house, whether paying or not.

Let's compare yearly total sales and median prices for 2009 compared to 2008, ranked from worst to first:

Single Family Residences (SFRs) :

1) Bel Air 90077
84 sales, $1,465K, -30.7%

2) Malibu 90265
130 sales, $2,000K, -29.8%

3) Santa Monica 90403
29 sales, $1,463K, -26.7%

4) Marina del Rey 90292
26 sales, $1,225K, -26.1%

5) Rancho Park 90064
209 sales, $855K, -21.7%

6) Venice 90291
125 sales, $835K, -21.2%

7) Beverly Hills 90210
212 sales, $2,775K, -17.2%

8) West Hollywood 90069
115 sales, $1,775K, -16.3%

9) Pacific Palisades 90272
201 sales, $1,950K, -15.5%

10) Brentwood 90049
257 sales, $1,849K, -14.0%

11) West LA 90025
61 sales, $952K, -13.5%

12) West Hollywood 90048
87 sales, $940K, -12.6%

13) Culver City 90230
128 sales, $565K, -12.5%

14) West Hollywood 90046
230 sales, $919K , -10.4%

15) Mar Vista 90066
249 sales, $690K, -10.0%

16) Beverlywood 90034
142 sales, $658K, -8.0%

17) Santa Monica 90405
90 sales, $1,025K , -6.8%

18) Westwood 90025
76 sales, $1,756K +3.9%

Although I 'm not a big fan of median prices and prefer price per square foot, these yearly sales figures tend to smooth out seasonal and month to month variations. It's interesting to note, some of the more affluent areas are higher up on the loserboard. Financing has become a huge issue and there are less and less move-up buyers, as most transactions at the lower and mid levels are "one and done". Expect more continued weakness at the higher levels.

Here are the Condo prices:

1) Malibu 90265
130 sales, $610K, -29.8%

2) Venice 90291
33 sales, $835K, -21.4%

3) Marina del Rey 90292
193 sales, $585K, -20.4%

4) West Hollywood 90069
203 sales, $446K, -19.0%

5) Beverlywood 90034
33 sales, $400K, -16.2%

6) West Hollywood 90048
40 sales, $525K, -15.3%

7) West Hollywood 90046
101 sales, $440K, -13.8%

8) Bel Air 90077
20 sales, $1,025K, -12.4%

9) Brentwood 90049
151 sales, $625K, -11.0%

10) Pacific Palisades 90272
64 sales, $673K, -10.9%

11) Santa Monica 90405
89 sales, $650K, -5.9%

12) Rancho Park 90064
45 sales, $522K, -5.2%

13) Mar Vista 90066
67 sales, $42oK, -4.1%

14) West LA 90025
199 sales, $598K, -2.8%

15) Santa Monica 90403
143 sales, $750K, -2.0%

16) Westwood 90024
204 sales, $630K, -1.9%

17) Santa Monica 90402
19 sales, $1,220K, -1.8%

18) Beverly Hills 90210
26 sales, $830K, -1.5%

Once again, there are familiar names at the top. These areas had some of the most appreciation and you would expect bigger price drops. This trend should continue. The other big factor affecting condos are huge inventories left by overbuilding in areas such as West Hollywood and Marina del Rey

Real Estate Bears and Bulls

2010-02-20T20:53:00.000-08:00

Apparently, we have 2 separate camps on this blog. Those that think prices still have a ways to decline (Bears), and those who think the bottom is in and increasing home prices will leave would-be buyers behind (Bulls). Whichever camp you fall into is fine. We all have our reasons for what we believe in. However, to be taken seriously here, you need to back up your comments with a few facts. Otherwise, you are just popping off without any credibility. Nobody really knows what the future will bring. However, with a bit of research, at least you can formulate an educated guess. This blog is not about having to be right or blasting others for their opinions. It is about discussing the latest sales information and how it affects the real estate market. It would be great to see specific transactions that demonstrate price increases or price decreases, rather than bantering about what others say.

Obviously I am a Bear. The way I see it is, buying real estate is always a risk and one needs to decide exactly how much risk they can afford. What is the % of risk to the upside compared to % risk to the downside and % risk of being flat. For the Westside, I would estimate a 70% risk to the downside, a 20% risk of being flat and a 10% risk to the upside. When you find most of the risk in the neighborhood is to the downside or being flat, there is little need to buy and you should protect your future investment (down payment). With all the headwinds facing our economy, the real estate prices of 2007 are long gone. Here are just a few factors that I believe will drive prices down further:

1) Unemployment and Underemployment
2) Federal Government's ending of tax credits and subsidized low interest rates
3) Large overhang of unsold inventory. (Listed and Shadow)
4) Alt-A and Option ARM recasts from 2010 - 2012
5) Increasing default rates for Prime Mortgages
6) Record Notice of Defaults (NODs)
7) Increase of foreclosures
8) Increase of negative equity
9) Rising interest rates
10) Commercial Real Estate Bust in 2012-2013
11) Renting option being half the cost of a mortgage
12) California budget problems
13 ) Tightening of credit from banks
14) Future bailout of FHA and FHA loan foreclosures
15) Lack of move-up buyers

The list goes on and on and on etc....

With this much down side risk, or even if prices drag along the bottom for a couple years, there isn't any rush to buy. Why not preserve or invest your capital, then wait and see if prices continue declining.

Double Digit Losses Per Square Foot Over the Last 2 years on The Westside

2010-02-13T05:45:00.000-08:00

Finally, we have some Price Per Square Foot Numbers on the Westside, over the the last 2 years. They are for Median Priced Single Family Residences taken over the entire year, from 2007 through 2009. These are the best numbers yet, for averaging out seasonal variations and market mixes, providing you with a better picture of sales value. Also, it's an overall snapshot of your neighborhood and a way to ballpark figure your average house. Let's take a look at the 2009 Price Per Square Foot Numbers and their relative losses, ranked from highest to lowest :

1) West Hollywood 90038 ($370/sqft) -36.6%

2) Malibu 90265 ($734/sqft) -29.7% (2008-2009)

3) Marina del Rey 90292 ($506/sqft) -28.9%

4) West Hollywood 90046 ($525/sqft) -23.6%

5) Pacific Palisades 90272 ($728/sqft) -22.5%

6) Venice 90291 ($712/sqft) -22.4%

7) Beverlywood 90034 ($456/sqft) -21.5%

8) Culver City 90230 ($467/sqft) -20.6%

9) Santa Monica 90405 ($676/sqft) -19.9%

10) West Hollywood 90048 ($574/sqft) -19.6%

11) Santa Monica 90403 ($811/sqft) -19.4% (2008-2009)

12) Santa Monica 90402 ($876/sqft) -19.3%

13) West Hollywood 90069 ($723/sqft) -19.0%

14) Westwood 90024 ($616/sqft) -18.8%

15) Brentwood 90049 ($654/sqft) -17.8%

16) Beverly Hills 90211 ($621/sqft) -17.6%

17) Rancho Park 90064 ($547/sqft) -17.2%

18) Mar Vista 90066 ($531/sqft) -16.2%

19) Bel Air 90077 ($572/sqft) -15.5% (2008-2009)

20) West LA 90025 ($599/sqft) -14.8%

An interesting note is, the entire County of Los Angeles has corrected over 41.3% in Price Per Square Foot since 2007. Many of those places were due to the subprime explosion and inventories cleared, due to bottoming out at 40-50% discounts. The higher end still has huge inventory, when we take into account both shadow and listed properties. In addition, inventories will increase, even more, as NODs become foreclosures and the Alt-A / Prime toxic mortgages blow up over the next 2-3 years. Remember, we are only 2 years into a real estate recession, which historically on average takes 7 years to cycle through. We could be only half way through our declines on the Westside.

Hats off to Patrick.net and Jas Jain , for digging up the information from Dataquick. You can see more Price Per Square foot data on any city in Southern California at Patrick.Net Feb 12th Losses Per Square Foot Southern California (Jas Jain)

Which Areas Will Fare Best in a Large Earthquake?

2010-02-04T16:52:00.000-08:00

Living in Southern California, whether you like it or not, means being prepared for earthquakes. The area is riddled with faults due to an unusual bend in the San Andreas. Another concern is how the ground your home is built on reacts in the event of a large earthquake. Haiti should be a wake-up call for each of us to determine our relative risk. There are 2 websites you can check, to see if you live in any seismic hazard zones. The first map is to help you locate the earthquake faults in the Los Angeles Area . Click on the faults for more information. The second map shows what areas would liquefy or settle in the event of a major earthquake. This is the Southern California Liquefaction Map. Click on your square for a detailed map. Most will want to select the Venice, Beverly Hills or Topanga squares, then zoom in to find your location.

Nobody likes to think about earthquakes, but the fact is we live in earthquake country. Besides being prepared, it's important to know how susceptible an area is during an earthquake This could affect your decision in choosing where to live. How many people do you think even have earthquake insurance these days?

Real Estate in 2009 is the Worst Since the Great Depression

2010-01-31T08:44:00.000-08:00

Existing home sales for 2009 are out and the national numbers are terrible. Median prices sank 12% Year over Year, marking the worst on record since the Great Depression. Month to Month sales figures also dropped almost 17% from November to December, marking the worst decline ever. Not a great way to kick off 2010. All of this is with life support from the Federal Government through tax credits, purchases of Mortgage Backed Securities, and FHA being the lender of last resort. The question is, what happens when the Government stops buying MBS in March, ends the tax credit and FHA becomes insolvent? I'm afraid we got a taste of the numbers when the rush to buy was over at the end of November, when the tax credit was due to end. I don't put a lot of weight on Month to Month numbers, but this was hard to ignore.

Sure, you may argue the Westside is different compared to the National Market. True. But the Westside hasn't corrected as much as other areas, so the downside risk is even greater.. Of course homeowners, investors and the real estate industry will tell you the Westside won't correct any more because they have vested interests. Look at history and you will see that affluent areas take longer, but they usually drop the hardest.

With only 2 years into the downturn, throw in unemployment, loan recasts, bank failures, tight credit, rising mortgage rates, shadow inventory and record foreclosures, the next 5 years will take it's toll on everyone.

ARMs Race Is All But Over Now

2010-01-19T18:09:00.000-08:00

The proliferation of ARMs (Adjustable Rate Mortgages) is just about dead. According to Dataquick, these loans averaged over 51% of all purchases in Southern California since 2000. In December of 2009 the amount of purchase loans that were ARMs was 4.6%. Obviously these loans fueled the housing bubble that we just experienced. In addition, Jumbo Loans ($417,00+) which averaged nearly 40% before the credit crunch, averaged only 16.7% of purchases last month.
Most of the sales ocurring now are first time buyers or all cash investors. In outlying communities, people are snapping up properties at a 50% discount. With the Westside down 20-30%, it may seem like a good value, but is still overpriced, compared to other areas that have fully corrected. With fully documented loans now and the virtual elimination of ARMs, the fuel behind the Westside real estate boom is gone. Sure , there are a few affluent buyers out there getting good deals with tough negotiationsl. However, compared to the amount of inventory listed and in the shadows, it will be awhile before we work through the overhang of homes on the Westside through short sales and foreclosures.

What is the risk in waiting a couple years, compared to getting up to 20% off? Without liar loans and ARMs, it might be the difference between losing your down payment or not.

Under House Arrest ? To Walk Away Or Not

2010-01-08T11:11:00.001-08:00

That is the question for some upside down in their mortgages. Obviously, there is no clear cut answer and it depends on your own particular situation. However, let's discuss the pros and cons of such a decision where people are under "House Arrest".A must read is Dr. Housing Bubble's January 8th article on Moral Hazard and Strategic Defaults. It speaks very frankly about walking away from a mortgage . His take is, it has become more of an ethical decision rather than a financial decision for many homeowners. When in reality, businesses make financial decisions like these daily, without the blink of an eye. Perhaps, the most important factor is whether your state has recourse over your other assets in the event of a foreclosure. I'm no lawyer, but I believe that California is non-recourse state, when it comes to foreclosure of a home with it's original mortgage. Mortgages that have been re-financed however, are a different story. With banks playing more games like "Extend and Pretend", it can take up to 18 months for foreclosure and some are banking their mortgage payments. I have also heard others are buying second homes before letting their first one go.

So, what are the advantages or consequences of walking away from a mortgage?

Regardless, I am not an expert in real estate law, however I think it's time we have a meaningful discussion about walking away from a mortgage. Remember, this blog is for discussion only, and it is imperative that you speak with a professional before making any type of financial decision .

Out With the Zeroes, In With the Teens, Happy New Year!

2009-12-31T16:08:00.000-08:00

As 2009 comes to a close, we can only wonder what 2010 will bring. In 2009 we saw affordability improve some, due to foreclosures and government intervention. Not exactly the preferred method of a real estate recovery. Notice of Defaults (NODs) have soared in all neighborhoods, and sooner or later these properties will come to market. If you own property, ask yourself if it increased during 2009 or not. That should give you an answer about your particular market, despite what anyone in the media says. Overall, I would venture to say there have been losses of varying degrees based on which neighborhood you live in.

So what does 2010 have in store for home values on the Westside? With the gov't throwing in everything but the kitchen sink and home values still dropping, the future has more downside than upside. The reality is, housing is still on life support. Now that rents are running about half of the price to "own" a home and it doesn't risk losing money or damaging credit, I can't see many rushing to purchase in 2010. With the Westside peaking in 2007, a good year later than most areas, it makes sense that declines would come later also. Only time will tell.

Lets hear some of your predictions for 2010.

Will Strategic Defaults Become the Rallying Cry in 2010?

2009-12-23T20:31:00.000-08:00

Lately, there has been alot of discussion about strategic defaults. Essentialy, that is where someone decides it is no longer in their best interest to keep paying an upside down mortgage or on a declining assett. The reasons for this are numerous, some good and some bad. Let's open it up and see what others are thinking, especially with more recasts on Alt-A, Option Arms, and Interest Only loans accellerating in 2010.

I am not advocating this particular strategy, but am curious what others have to say, given the current changes in our economy.

FHA is the New Subprime

2009-12-10T15:05:00.000-08:00

With only requiring 3% down on homes up to $750,000, our beloved FHA is the lender of choice these days. Along with the government $8,000 credit, that means coming up with less than $15,000 to "buy" a house. Nice try at re-inflating the bubble with a few "buyers" that want to be home debtors. Chances are, they can't really afford the payments and destined for foreclosure, with little skin in the game. Home prices are still at least 25% overvalued on the Westside and the timebomb is ticking away with Alt-A and Option ARMs. Foreclosures are piling up higher behind the dam, only to be a bigger disaster once it breaks.

Now that FHA appears to be approaching insolvency, what government agency is next to throw under the bus?