The Skinny on Real Estate By John Skinner

Westside October sales volume lagging

2011-11-04T13:05:00.000-07:00

*click to enlarge image

The recent run of slow sales volume on the Westside for Single Family Homes continued into October with Santa Monica leading the way with only 7 sales which is almost three times less than last month’s number of 19 and last year’s number of 20. Most of the areas stayed fairly consistent compared to last year with Beverly Hills Post Office and Bel-Air the only areas seeing a solid increase over last year’s numbers.

Overall, sales volume for the areas calculated dropped 17 % compared to last month and 8% compared to last year. Sales are still firmly ahead of the dreadful 2008 numbers by 20%. Overall, it has been a frustrating market for serious buyers with very little inventory on top of having to deal with a tough lending market. The influx of tech companies to the Westside along with garnering a strong interest from international investors bodes well for property owners on the Westside at this time.

A look at some individual sales:

932 Chautauqua sells in 3 days- This Pacific Palisades 5 bed/6 bath, 6,500 sq. ft. home on a 9,452 sq. ft. lot hit the market for $4.695M in early August. After about three days the seller’s accepted a $4.5M sale price and closed in early October. This resort style home was build in 2009 and featured great indoor/outdoor flow, chef’s kitchen, pool, wine room and workshop. An entertainer’s home with a family twist.

1513 Sorrento sells for over asking- LOCATION, LOCATION, LOCATION! This view property situated in the Palisades Riviera on over a 22,651 sq. ft. lot with phenomenal views sold for $5.0M in multiple offers with a $4.395M asking price. Lots this size with views are a rare commodity on the Westside and always garner a ton of interest from the elite in Los Angeles. Unless a seller is asking for an outrageous sum properties like these go pretty fast.

820 Princeton sells for 100K over asking- This quaint and charming Santa Monica Tudor just south of Montana boasts 3 bed/1.75 baths, 1,584 sq. ft. on a 8,800 sq. ft. lot. It sold for $1.408M and closed October 21st. It was listed at $1.295M and the low asking price fetched a multitude of offers.

12495 Promontory sells for $1.7M- About 10 years ago the 24 hour guard gated Moutaingate estates was considered a hot place to buy on the Westside. Nestled above the 405 freeway near the Getty Center the location provides equal access to the Valley and the Westside along with resort like amenities. However, since its heyday this area that used to attract a decent amount of celebrities has fallen on some difficult times and you can pretty much pick up a home that is a bit dated but with good bones for under $400 a sq. ft. 12495 Promontory just sold for $1.7M after debuting on the market for $2.250M. We sold a home in the area that was completely updated for $2.0M in late 2010 so this sales price makes sense. The area is saddle with high HOA dues ($700+) per month but not a bad alternative for a large family looking for a Brentwood address.

These two took a huge hit-

130 Delfern Drive in Bel-Air sells for $8.4M…nearly ½ off the original $16.5M list price- This 1.2 acre estate in Holmby Hills that boast 4 separate structures but in need of updating originally made its debut on the market at the ridiculous price of $16.5M in May of 2010. After finally being dropped to a $9.995M list price in July of this year it sold on October 25th. A good buy for over 1 acre of land in prime Holmby Hills

9550 Heather Road in BHPO sells for $8.194M…just slightly off the original $15.5M ask price…LOL- Situated on over 1.7 acres this 6 bed/9 bath home (sq. ft. not reported) finally sold on October 24th after being on the market for 254 days. I have never understood why seller’s, especially in sophisticated neighborhoods think someone will just magically appear and pay them way over market. Most buyers who can afford multi-million dollar homes tend to make good financial decisions or have people working for them who do…

Interest Rates back below 4%

2011-11-04T13:01:00.000-07:00

Investor worries over the European debt crisis helped drive the average rate for a 30-year fixed home loan down to 4% this week, according to Freddie Mac.

The figure, down from 4.1% last week, was the second lowest in the 40 years Freddie has been conducting a weekly survey of the terms being offered by home lenders. The lowest average rate recorded was 3.94% four weeks ago.

Freddie Mac said lenders were offering 15-year loans, a popular choice for homeowners who are refinancing, at an average rate of 3.31%, down from 3.38% a week earlier. That rate was below 3.3% for three weeks in late September and early October.

To obtain the loans at the rates being offered this week, a borrower would have to pay upfront fees averaging 0.7% of the amount borrowed.

*Source: LA Times

Real Estate articles you should review

2011-11-04T11:35:00.000-07:00

Here are some recent articles from the LA Times that are worth taking a look at:

Victims of improper foreclosure practices can submit claims
Fourteen mortgage servicers have begun mailing out 4.3 million letters to potential victims of robo-signing. The letters will invite borrowers to submit their cases for a free review by independent consultants.

Mortgage refinancing to get easier under revised U.S. program
The plan could help 1 million to 2 million people get significantly lower monthly payments in hopes of stabilizing the real estate market.

Factoring energy efficiency into a home's value
Under the SAVE (Sensible Accounting to Value Energy) Act, estimated energy-consumption expenses for a house would be included as a mandatory new underwriting factor.

Dot-coms want the beach in their address
The commercial real estate rental market is booming in Santa Monica, where the office vacancy rate is a fraction of the L.A. County average. Tech and entertainment firms like the lifestyle.
**We wrote about this impact on the residential market 6 months ago. No doubt the “Silicon Beach” effect is impacting the residential market on the Westside in a very positive way.

Tight inventory and record low rates making it tough for Westside buyers

2011-09-30T11:09:00.000-07:00

You can characterize the Westside real estate inventory as pretty tight these days. There’s plenty to choose from in some categories and at some price points, but much of what is available has some kind of issue – from location to price – that causes buyers to put on the breaks and if we were playing Monopoly it is like the seller is being sent to jail.

On the flip side, quality offerings priced appropriately usually see multiple offers and pretty easy escrows thanks to record low interest rates and buyers from all over the world seeking property in this particular market.

We are seeing quite a bit of purchasing activity in price points that can be considered “entry level” depending on the micro market. Entry level for the 90402 zip code in Santa Monica for a non-tear down home is usually around 2-million (give or take based on sq. ft.) while in the 90066 zip code of Mar Vista north of Venice and West of Centinela it is around 750K. –Quick insert: With the current conforming loan limit dropping from $729,500 to $625,500 on October 1st look for markets like Mar Vista, Culver City and South Santa Monica to lose some buyers who will no longer be able to afford the higher payment.

Due to many potential sellers being financially handcuffed and unable to sell their homes the inventory that is available to buyers throughout the Westside is minimal leading to some segments of the market seeing a 5-10% uptick over the past 12 months, despite the economy. High-end buyers are taking advantage of a 15-20% drop in price from the height of the market along with record low interest rates around 4%. They feel it is a tremendous buying opportunity with some real estate analysts calculating that if you take the current interest rates combined with the drop in value of the past five years in actuality you have more like a 40-45% drop in Westside real estate value from the heights of 2005.

The best way to track value: A look at recent re-sales in SM and the Palisades

2011-09-30T10:43:00.000-07:00

Though we have seen an uptick in the market as of late due to the factors mentioned in a previous post we still have seen quite a bit of price erosion. One of the best ways to look at value in certain market segments is to look at homes that have sold twice in the past 7 years that are in similar condition. Here are some great examples from the Pacific Palisades and North Santa Monica markets:

215 24th Street, Santa Monica- 9.8% drop in value since 2009 purchase- This beautiful 3K sq. ft. Spanish style home on a 8,700 sq. ft. lot recently sold for $2.3905M after debuting on the market for $2.745M in February of this year with a different broker. Unfortunately for the seller the home seemed to fall out of escrow on two different times before finally settling on a buyer. This leads us to believe that the home may have had some type of inspection issue pop up. The home is updated and light/bright. It features a pool/spa and was a good buy at this price. The home was sold in 2009 for $2.650M.

Ouch- 1436 Floresta, Pacific Palisades, sells for 25% less than 2007 purchase price and well below 2005 purchase price- This 4 bed/4 bath, 5,130 sq. ft. home on a 16K sq. ft. lot recently sold for $2.580M after being originally listed for $2.795M. It was on the market for 48 days. The same house was purchased for $3.450M in July of 2007. It was sold in 2005 for $3.130M so the home has dropped to around its 2003/2004 value.

On the upswing- 458 Toyopa, Pacific Palisades- sells for more than 2010 purchase price- This 6 bed/9 bath, 9K sq. ft. house on a 24,742 sq. ft. lot (home sq. ft. not reported) built in 2008 featuring many high end amenities including huge master with his/her’s baths, pool, spa and putting green recently sold for $9.8 Million after being on the market for 161 days. The house was sold in 2010 for $8,750,000 resulting in over a 10% increase in sales price. Even after brokerage fees not a bad return for a 1 year investment in a bad economy. Further proof that inventory is not great on the Westside and we have seen prices increase for properties of this nature.

710 23rd Street, Santa Monica- 9% drop since 2008 with only one agent involved- The seller got a fair price at $2.650M for this home but did it get exposed to the whole market? It was pretty difficult to set up a showing and a little surprised they would take a $250K reduction and go into escrow after only being on the market for 11 days. However the list price was high and the reduction in purchase price may have taken the place of repairs that are needed.
This is a 4 bed/4 bath, remodeled architectural style home that is 2,848 sq. ft. on a 8,851 sq. ft. lot with a pool and Gourmet kitchen. It was purchased in April of 2008 for $2.9M.

942 Galloway, Pacific Palisades- Still worth more than 2004 purchase price- The Palisades definitely functions as a micro market. On one hand you have a house in the Marquez Knolls dropping below its 2004 price point but this house in the alphabet street is still holding its value about its late 2004 purchase price. This 4 bed/3 bath home on a 5,200 sq. ft. lot (sq. ft. of house not reported) was on the market for just 13 days and sold in late August for $2.120M above its $1.965M purchase in price in November of 2004.

SELLER AND BUYER BEWARE: buyer non-representation can lead to a myriad of issues.

2011-09-30T10:31:00.000-07:00

After closely examining closed transactions on the Westside over the past few months the occurrence of the same sales agent(s) representing both sides of the deal stood out. This trend is a little alarming to some seasoned real estate agents and hope buyers and sellers understand the substantial risks involved with dual agency to try and save a few bucks.

The seller and buyer will argue they can potentially drop the commission amount and it can be beneficial for both sides of the transaction. Furthermore, the agent will state it is easier for them to manage the deal as it eliminates another agent and they can “control” things more easily. Everybody will save money and the agent will pocket more money meaning everyone is happy is right? Not so fast.

Oftentimes these deals can get quite messy for a myriad of reasons. First and foremost the agent has a fiduciary responsibility to both sides of the transaction and a duty to disclose all facts and be honest and deal in good faith with loyalty. How can an agent who was initially employed by the seller (and will be paid by the seller) fulfill its fiduciary responsibility to the buyer? How can they be loyal to both sides when they have conflicting interests?

When an agent representing both sides of a transaction discusses a purchase price with the buyer and what they are willing to pay, wouldn’t that provide the agent intimate knowledge of where they can get a deal with the seller even though the buyer/seller might be willing to pay more? How does an agent properly juggle that? Throw in the fact the agent will make at least 1% to 2% more by getting the deal done as opposed to having another agent involved or even worse not properly disclosing known facts.

Where does the agent’s priority lay? On a typical $1.5 million dollar purchase on the Westside the difference to the agent could be an extra $15-20k.

The agent will literally have to walk the line perfectly to pull this off and many of the agents who are partaking in this are not the types to do this and frankly most have a reputation for being greedy. Many will justify their actions and say they referred the buyer to a buyer’s agent in their office. In this case the agent is getting a major cut of the “buyer’s agent” commission which still leads you to wonder where the fiduciary responsibility lies.

The language of the Real Estate Agency Relationships Disclosure is somewhat fuzzy when it comes to this. After being in this business for over 8 years I find it fascinating that one sales agent can represent both sides. In legal cases does the same lawyer represent both sides? In the case of referring the buyer to a buyer’s agent it is the same thing. Would the other side of a case go to an associate working under the partner who has the other side?

In the end it is the agent that ends up with the best deal and the buyer and seller in a potential lawsuit as lawsuit occurrences where one agent is involved is much higher than in a normal transaction.

A good buyer’s agent will earn their commission and also give the seller piece of mind that they have been properly represented.

Anybody who is looking to list a home with a sales agent should always ask the sales agent how they feel about representing both sides and how frequent they do it. Be wary of agents who tout the ability to represent both sides. A few successful Westside agents have a reputation for not making properties readily available for other agents to show to clients and have also gone to the lengths of not even presenting offers to the seller that were made by other agents. This is especially prevalent with short sales and lender owned properties where the listing agent is dealing with a negotiator on the other end that is working on 100 other transactions.

As a seller you have to completely trust that your agent is presenting every offer and most importantly that other agents want to show your property since they might be prejudicial toward your agent due to the “shelving” of contracts in the past.

Unfortunately greed is king in real estate and as much as I hate to say it this industry is full of people who will stop at nothing to take advantage of a situation where they can control everything and make more money doing it without much concern for either side.

Many reputable agents do not represent both sides in a transaction unless explicitly told to do so by the seller. We applaud those agents who understand the fiduciary responsibility they have to their clients and do not let greed interfere.

**Please note this only pertains to sales agent’s and not brokerage houses. Many brokerage houses like Prudential employ thousands of agents as Independent Contractors so having a company like Prudential represent both sides is not the issue. The issue is having the same sales associate represent both sides.

Typical 30 year Mortgage back above 4%

2011-09-30T10:25:00.000-07:00

Blink and you may have missed it -- the average rate on a 30-year fixed mortgage rate has crept higher since plunging to a record low of less than 4% late last week.

On Thursday Freddie Mac stated the 30-year loan was being offered at 4.01% on average for solid borrowers who paid 0.7% of the loan balance upfront in lender fees and points.

In the Western U.S., including California, the typical rate was lower at 3.95% early this week. Both figures are record lows.

*Source: LA Times

Sales volume increases in Manhattan Beach but median price down 6%

2011-09-30T10:15:00.000-07:00

Sales volume is the highest it has been in Manhattan Beach since 2007 despite the tight inventory of appropriately priced listings. The rise in sales volume doesn’t mean prices have gone up as the median price was down 6% for the city compared to last year. Check out the sales volume graph below comparing the past four years:

Source: Manhattan Beach Confidential

Governator's old compound in Pacific Palisades back on the market

2011-09-30T10:10:00.000-07:00

14209 West Evans Road-Pacific Palisades- The Pacific Palisades home once owned by Former Governor Arnold Schwarzenegger and soon to be ex-wife Maria Shriver is back on the market with another broker but interestingly at a much higher price. This 9 bed/9 bath 10k sq. ft. house on approximately 2.5 acres has been on a pricing roller coaster since it was listed in 2006 for $26 Million. For the past five years the house has traded brokers and zig zagged on price. The house dropped to a list price of $23M and then again to 21.9M in late 2007 to 18.9M in 2009 and then dropped to $15.9M later that year and then up to $23.5M early this year and now dropped once again to $19.5M…umm, if it didn’t sell at $15.9M doesn’t common sense say that listing it at this price is a waste of time??

A titanic drop in Malibu

2011-09-30T10:00:00.000-07:00

31634 Sea Level Dr- Malibu- This ocean front Architectural modern on a gated street off Broad Beach is a 4 bed/4 bath home built in 2008. Designed by David Grey this home originally appeared on the market at the crazy high price of $15M in early 2009 when the Malibu Beach market was absolutely dead. Over the next year and a half the list price was reduced all the way down to $6.495M before going into foreclosure and falling into the banks hands. The property was listed by the bank in May for $5.750M and finally sold in late August for $5.350M.

Dropping almost 300% from its original list price this is a prime example of the greed and non-rational thinking that touched every segment of the real estate market.

Important real estate articles you should be aware of

2011-09-30T09:48:00.000-07:00

Conforming Loan Limit Officially Drops to $625,500 October 1st: The loan limit officially drops October 1st.

Troubled Homeowners, Beware of “Mass Joinder” Lawsuit Invitations: All trouble homeowners should read.

Federal Agencies 20% down plan faces political hurdles: Legislation requiring all purchases to have 20% down will face a ton of opposition.

In-Depth Look at Single Family Home Sales Data for July

2011-08-05T14:42:00.000-07:00

The summer keeps humming along on the Westside and in Manhattan Beach. Sales were down slightly compared to last month but thanks to record low interest rates and tight inventory, multiple offers are still the buzz. The overall average difference between original list price and selling price was -8.33%, which is lower than last months’ -10.07%.

Both of those numbers are inflated by sales on the ultra high end that were way overpriced. For instance, you will notice that in Bel-Air the % difference between the original list price to the selling price is an alarming -39%. This is due to one sale that occurred @ 594 S. Mapleton Drive between heiress Petra Eccelstone and Caro Spelling. This huge 14 bedroom, 27 bath, 56,500 sq ft. house was listed on 9/1/10 for $150M and sold on 7/14/11 for $85M. If you dismiss some of these larger sales that should have never been listed at the current list price, the difference between original list price and sale price shrinks to around -6.5% which is close to the -5% in a healthy market.

Sales dropped slightly from the previous month, however, most areas stayed consistent with last months’ numbers with the following exceptions:

Santa Monica had a great month with 21 more sales then last month. Half of the homes sold within 60 days of the list price, and the average% difference between the original list price and the selling price was only 6%. Almost all the homes in Santa Monica that sold for more than $2.5M sold within two weeks of coming on the market.

Culver City sales were also up from last month with the average% difference between the original list price and the selling price only 5%.

On the other side of the spectrum, Pacific Palisades sales were lower than last month with the majority of properties selling within 90 days of the listing date. Brentwood sales were considerably lower as well and the average % difference between the original list price and the selling price was much higher at 11% with properties on the market for a longer period of time.

Though Manhattan Beach and Mar Vista dipped against last month’s numbers they are still holding strong in terms of volume. In fact this is the second straight month that Manhattan Beach outpaced sales for the month compared to 2007 and 2005.

Condo/Townhouse Sales Data for July

2011-08-05T14:25:00.000-07:00

Mortgage Rates Down in the Basement Again

2011-08-05T13:38:00.000-07:00

The typical rate on a 30-year fixed mortgage fell this week to 4.39%, the lowest level since November, according to home finance giant Freddie Mac, while other popular loans were at all-time lows in Freddie's weekly survey of lenders.

That trend drove the yield on the 10-year Treasury note to 2.58% Thursday morning -- it had been above 3.7% in February -- and home lending rates followed suit.

The record lows were for 15-year fixed mortgages, a popular option for people refinancing their homes, and for loans with a fixed rate for five years that then become variable. The previous records for these mortgages also were set in November.

Lenders were offering the 15-year loan at an average of 3.54%, down from last week's 3.66% and eclipsing the previous low of 3.57% in the Freddie Mac survey.

The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.18% this week, down from 3.25% a week earlier, which had tied the previous low.

The average offering rate for 30-year fixed-rate mortgages had briefly dropped below 4.2% in the survey last fall. The 4.39% rate that Freddie reported Thursday was sharply below last week's 4.55%.

Borrowers would have paid less than 1% of the loan amount in upfront lender fees to obtain the rates, Freddie Mac said. Solid borrowers often can find slightly better rates by shopping around, and it's also possible to lower mortgage rates by paying more upfront.

The Freddie Mac survey asks lenders what terms they are offering to borrowers with good credit ratings who have 20% down payments or 20% equity in their homes.

Source: USA Today

Articles You Should Read

2011-08-05T13:24:00.000-07:00

More home buyers are walking away from signed contracts - According to the National Assn. of Realtors, 1 in 6 realty agents polled in June reported having signed contracts canceled before closing, up from just 1 in 25 the month before. The surging numbers of pending short sales clogging local markets are another cause of contract cancellations…

Debunking popular real estate myths - Read about popular misconceptions and myths

Home prices rise again, but experts are unimpressed - The Standard & Poor's/Case-Shiller index of home prices in 20 metropolitan areas rose 1% from April to May. Some economists dismiss the uptick as seasonal.

Homeowners who want to trade up are stuck waiting - Before the bust, rising prices fueled the housing market, enabling buyers to start small and climb the ladder. Now that promise of upward mobility is on shaky ground and many potential sellers are underwater and can’t afford to sell

Homeowners are Optimistic Amid Mixed Signals

2011-08-05T13:13:00.000-07:00

A recent survey conducted by the Home Buying Institute showed that homebuyers expected marked improvements in home prices over the next few years. Activity on the Westside is certainly showing optimism with open houses buzzing with people and multiple offers being the buzz phrase throughout the summer. At our first open house two weeks ago in Westwood on Fairburn Ave., we had over 60 parties attend and we were in escrow with multiple offers within a week of hitting the market.

The summer survey by HBI asked 25,000 consumers how they felt about the value of their homes, and an overwhelming 69 percent stated that they expected their home price to rise in the next 24 months. Some of this optimism could be due to a brighter Standard & Poor's Case/Shiller Home Price Index, according to HBI.

The most current S&P Home Index stated that home prices had risen for the second consecutive month in several cities.

"This is a seasonal period of stronger demand for houses, so monthly price increases are to be expected and were seen in 16 of the 20 cities," explained Index Committee chairman David Blitzer.

However, an abundance of foreclosure and shadow properties could curb rising home values. The vast number of bank-owned properties may continue to drag home prices down, as demand lags behind inventory in many regions.

Unsteady unemployment rates and increased difficulty qualifying for mortgages may also work against these positive housing market indicators, the source reports.

Source: Home Buying Institute

Buyers Should be Aware of Mortgage Fees

2011-08-05T13:06:00.000-07:00

Record low interest rates are helping to spur a little bit of a housing comeback. Who knows whether the comeback will last but one this is for sure: record low interest rates are helping create a ton of buzz in the residential market. However, consumers must be aware that what you see advertised may not necessarily be the case and buyers should be aware of mortgage fees that could bump up their monthly payments.

Those that provide homebuyer education stress that fees can make a considerable difference in the cost of a home loan, and that buyers should be educated on how they impact a sale. Savvy individuals should look not just at the interest rate, but also at the APR, or annual percentage rate.

Consumers should also be aware that many of these fees are negotiable. While closing procedures differ in every region, some fees can be paid by or split with the sellers, according to The Federal Reserve Board.

If you have any further questions about this topic, please feel free to call our office at 310-255-3447.

1910 Fairburn Avenue, Los Angeles 90025

2011-07-22T13:27:00.000-07:00

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In-Depth Look at Single Family Sales in June –Manhattan Beach Leads the Way

2011-07-14T11:17:00.000-07:00

Total Single Family Residence “SFR” sales on the Westside and Manhattan Beach were higher than May (258 vs. 225) but still trail last year’s June output (286). Though sales have slowed down we must remember that last summer buyer’s were incentivized with tax credits that are no longer in play. The average % difference between original list price “OLP” and sale price is still shrinking. In some areas such as Bel-Air and Malibu Beach where the difference was over 25%, quite a few homes that were on the market for over 9 months finally sold and were originally priced way too high. If you take those numbers out, the average difference ends up being around 6%.

Home sales under a million dollars are on fire right now and garnering a lot of attention. Buyers are taking advantage of record low interest rates and want to get into the market before the conforming loan limit of $729,000 is pushed back to $625,000 on October 1st. 2039 Linnington Ave. in Westwood came on the market late last week for $985,000 and reportedly had over 200 people at the Open House. An appropriately priced home that does not require a lot of work does not have much competition in the current marketplace and should sell quickly with favorable terms to the seller.

A quick glance at the numbers shows that Manhattan Beach had a phenomenal month in terms of sales volume and blew away all the other areas we cover with 45 sales! This is a higher number than the sales volume during the peak bubble year of 2005. 11 of the homes sold at asking or higher than the OLP. 19 sold for 1-7% below OLP and 14 sold 8%-16% above OLP.

Pacific Palisades had a very solid month selling 9 more homes than it did last month and the sales numbers were roughly the same as the peak bubble years. Six of the sales were above the OLP and 17 sold within 4% of the OLP.

Santa Monica is still dragging along in terms of sales volume with ½ as many sales as in 2010, 2007 and 2005. However, the average sales price is staying consistent and if you eliminate two homes that sold way below OLP, the difference between OLP and sales price is only 5%.

A look at a few individual sales:

1021 Wellesley and 1025 Wellesley- Brentwood- These two 10,130 sq. ft. lots were purchased together creating a once in a blue moon opportunity to have almost a ½ acre of flat land north of Wilshire. The properties were listed for $2.050M and sold for $2.510M, 23% above the list price. Over time this will be an incredible buy as flat lots like this are extremely rare. 10 to 15 years from now this buyer will look like a genius.

2317 Ocean Ave- Venice- A great case study in comparison to 2007 prices. This 2+2, 1,280 sq. ft. home on a 2,700 sq. ft. lot was built in 2007. It is situated just south of Venice is in a bit of a hectic location but the amenities of the beach and Abbot Kinney are a small walk away. This house sold for $1.033M after being on the market for 79 days. It was originally listed for $1.195M. In 2007 it was bought for $1.235M. Since 2007 the value for this home has dropped 19.5%.

3665 May Street- Mar Vista- Another good case study. This classic New England farmhouse is a 4+3, 2,467 sq. ft. home on a 5,850 sq. ft. lot just north of Venice Blvd. The house is in great condition and sold for the list price of $1.580M in just 9 days. The house was sold in 2006 for $1.512M showing that prices seem to be holding around 2007 prices for this type of home in Mar Vista.

32052 PCH & 20962 PCH- Malibu Beach- Oops! These two houses had seller’s and possibly agent’s who were out of touch with reality when originally listing these homes, especially 20962 PCH. This 2+1 is a tear-down located on Las Flores beach on a 7,928 lot. It took over 3 years to sell and was originally listed at $9.950M before finally selling on June 6th for $2.950M! 32052 PCH a 4+4 on a 18,300 sq. ft. beach situated on a private street above El Matador beach in very good condition was originally listed in 2009 for $4.0M and finally sold after 562 days for $2.1M!

Condo/Townhouse Sales Data for June

2011-07-14T11:14:00.000-07:00

23 more units were sold compared to last month with Mar Vista, Westchester and Westwood showing the most improvement over the previous month. The average loss from OLP for all areas combined was only 5.92%. This is further evidence the market is an even playing field as the difference between OLP and sales price was around 10% this time last year. Though sales were up over last month they are still off by 65% in comparison to 2005. For some perspective, Westwood had the most sales with 32 this month…in June 2007, Westwood had 95 sales!

Market Falling into Consistent Pattern

2011-07-14T11:10:00.000-07:00

According to Altos’ market action index we have multiple areas that show stability several years in a row. The # 30 is a representation of a baseline for equal supply and demand, based on the absorption rate of inventory. For purposes of this post we are using Pacific Palisades as an example. Most of the areas we cover on this blog are trending in the same manner.

Although this graph shows there is quite a bit more inventory than there are buyers, it also clearly shows (look at the darker line for the 90 day rolling average) that we have had very consistent activity for over 3 years! On the graph you will see where the MAI was in January, 2008. Take a line and draw it straight across to today’s MAI. The inventory has been stable for about three years. It may appear be a buyer’s market, but the inventory that is there, is steadily and consistently absorbed.

As of July 1st: California Law Requires Carbon Monoxide Detector

2011-07-14T11:05:00.000-07:00

California residents must have carbon monoxide detectors in their homes as of July 1, 2011. This timeline applies only to single-family homes that have appliances that burn fossil fuels or homes that have attached garages or fireplaces. For all other types of housing, such as apartments and hotels, detectors should be in place as of January 1, 2013. Types of fossil fuels include wood, gas and oil.

Detector
According to the senate bill, the detector must sound an audible warning once carbon monoxide is detected. It also must be powered by a battery, or if it is plugged in, have a battery for a backup. The detector also must be certified by national testing labs, such as the Underwriters Laboratories. The packaging on the carbon monoxide detector will state this. If the CO detector is also a smoke detector, it must still meet the above standards and must sound an alarm that is different than the smoke alarm. Carbon monoxide detectors typically can be purchased for about $20 and up.
Exemptions
Although the law targets units that are occupied by humans, the law exempts state and local government property, as well as property owned by the University of California Regents. The law requires local jurisdictions to comply; however, they may amend their current ordinances to fall more in line with the law.
Fines
California law states that anyone who does not comply with the law may face a $200 fine. However, residents will receive a notice of 30 days to correct any violations before they will be fined.

Links to Articles You Should Read

2011-07-14T10:41:00.000-07:00

Sales of $20-million-plus L.A. homes are rising
According to the LA Times a diamond-encrusted lining is emerging in Southern California's cloudy real estate market.

At least a half-dozen Westside mega-estates have sold for more than $20 million so far this year — creating a deafening buzz in local realty circles. Only a few home sales in other Southland counties have surpassed the $20-million mark.

Banks gearing up to fill looming gap in jumbo loans
Fannie Mae, Freddie Mac and the FHA are facing an upcoming cutback in mortgage limits, but banks say they're planning to expand their jumbo loan business in high-cost housing markets, according to the LA Times.

Pending Home Sales Turn Around in May
Pending home sales rose strongly in May with all regions experiencing gains from a year ago, pointing to higher housing activity in the second half of the year, according to the National Association of Realtors.

Obama administration boosts aid for unemployed homeowners
An interesting article from the LA Times on how unemployed homeowners with government-insured mortgages will be allowed to miss a year of payments while they try to find a job which is not only good for the economy but will help lower the number of foreclosures on the market.

A quick look at some recent Westside sales

2011-06-24T11:40:00.000-07:00

Brentwood
310 Avondale Ave. a 3+3, 2,927 sq. ft. fixer in Brentwood Park with a lot size of 2,927 square feet, listed on 5/25 at $2.99M and sold quickly for $3.15M. $155K above asking price

Santa Monica – only 7 homes have sold as of 6/23 – of those, 4 went for over asking!

560 16th St. a 4+4, 3,128 sq. ft. remodeled 1930’s Spanish style home on a large 11,670 lot, went on the market 4/8/11 for $3.798 and sold in 2 months above asking for $3.940M

740 21st Place- A rare foreclosure/bank owned property North of Montana. This 4+4, 2,913 sq. ft. Spanish house on a 8,940 sq. ft. lot with a pool in solid condition sold right away and over asking. The bank was smart to price this property attractively. It was listed for $2.299M and sold on 6/10 for $2.325M. The property was bought in 2004 by the foreclosed owner for $2.180M.

Pacific Palisades - in comparison with Santa Monica, a much busier month thus far with 26 homes selling since 6/23. Most homes sold near or over asking price.

733 El Medio Ave. a 2+2.5, 1,495 sq. ft. house on a 6,920 sq. ft. lot was put on the market on 4/25/11 and sold on 6/1/11 for $1.1M which was 16% above the original list price of $950K. This house was a fixer/teardown and sold for lot value.

Culver City-
11343 Utopia- PHENOMENAL BUY: A 2+1, 905 sq. ft. house on a 8,088 sq. ft. lot was originally listed for $629K in November 2010 and finally sold as a short sale for $300K. It was bought in 2003 for $449K. A great Culver City market as a whole has not dropped nearly that far.

South Bay Sales Trends Since March-May 2009

2011-06-24T11:34:00.000-07:00

Here is a chart that appeared in last week’s Daily Breeze comparing sales data in the South Bay between March 1st and May 31st over the past three years.

Looking only at the 3-month period, Manhattan Beach had a median price down 1% from 2009 while the whole of the Beach Cities region was down 5% from '09.
(*Source: Manhattan Beach Confidential, chart - Daily Breeze)

Mortgage Rates Hold Steady at 4.5%

2011-06-24T11:31:00.000-07:00

Mortgage rates changed little in the past week, snapping a streak of weekly declines that had taken fixed rates to the lowest points of 2011.

While the 30-year fixed-rate mortgage rate ticked up to 4.50% from 4.49% last week, still well below last year's 4.75% average. Rates on 15-year fixed-rate mortgages ticked down to 3.67% from 3.68% the previous week and 4.20% a year earlier. .

Meantime, the Mortgage Bankers Association on Wednesday said the volume of mortgage applications jumped a seasonally adjusted 13% last week from the previous week. Refinancing activity jumped nearly 17%, according to the weekly survey.

In the latest week, five-year Treasury-indexed hybrid adjustable-rate mortgages fell to 3.27% from 3.28% last week and 3.89% rate a year earlier.

To obtain the rates, fixed-rate borrowers required an average payment of 0.7 point. The five-year hybrid adjustable rate mortgages required a 0.6-point payment. A point is 1% of the mortgage amount, charged as prepaid interest.

Beware Loan-Modification, Foreclosure Scams

2011-06-24T11:23:00.000-07:00

One in nine homeowners nationwide are more than 90 days behind on their mortgage payments and fear of foreclosure has desperate homeowners turning to loan modifications or foreclosure rescue companies for help. But that may be a recipe to falling prey to a foreclosure scam.

Foreclosure scammers will promise you everything while using a wide variety of tactics and targets like asking for an upfront fee and then disappearing with your money. Since foreclosure laws can be complex and confusing, almost anyone can become a victim.

Here are some red flags to help you spot a scam:

They ask for an upfront fee to start work, which is illegal in California.

They'll promise, even guarantee, to secure a loan modification even before learning about the homeowner's financial limitations.

They'll tell you to stop making your mortgage payments, going as far as encouraging you to provide fraudulent information to your lender.
(*Source: KABC-7.com)

Articles you should Read

2011-06-24T11:06:00.000-07:00

How to Tell if Your House Market Has Hit Bottom: A good article by David Crook of the Wall Street Journal. The fundamentals of the Westside/South Bay markets are different than the examples they use but still a good educational piece.

California home sales extend their slide in May: An LA Times article about the overall California market and the struggles it continues to face amongst financial chaos.

In-Depth Look at May Single Family May Sales Data Westside/Manhattan Beach

2011-06-10T14:20:00.000-07:00

Though on a national level inventory is at an all-time high, the Westside has clearly bucked that trend. Inventory continues to decrease and homes that are priced appropriately are attracting a frenzy of buyers and leading to price stabilization. Due to the lack of inventory, sales volume has decreased month over month for the third straight month in the areas we track. Bel-Air, Pacific Palisades and Malibu Beach were the only areas to truly buck the trend of declining sales volume. Santa Monica (down almost 50%), Westchester and Brentwood fell off in sales volume significantly compared to last month.

Overall, sale volume is slightly off last year’s number’s (225 vs. 242) and 47% off the hey-day of 2005 and 2007.

The average difference between original list price and sale price continues to shrink back to normal levels (4-6%) in most areas. The pricey locales of Bel-Air and Malibu Beach had a large discrepancy but those can be attributed to a few high priced listings that were severely overpriced and finally sold for market value. If you take those out of the equation the average would drop in the 7-9% range.

A quick look at a few individual sales:

627 Grand View (Mar Vista)- This 6+6, 3,792 sq. ft. 3-story recently updated craftsman home on a 11,786 sq. ft. lot sold for $1.685M. At first glance one would think it sold for well over the asking price of $1.495M. However, it was originally listed under a different agent for $1.8M late last year and they did not find a buyer. The new list price created a buzz and helped the seller get market price with strong terms.

1105 Centinela Ave. (Santa Monica)- This 4+ 2, 2,111 sq. ft. house on a 9K sq. ft. lot sold for 8% higher than its list price at $1.623M. This ranch style home is a fixer and was priced around land value.

11434 Ayrshire Road (Brentwood)- This 4+4.5, 4,258 sq. ft. house on a sizable lot of 18,817 sq. ft. sold for $2.225M. The home is in need of cosmetic remodeling but does boast very good bones with sizable living areas and bedrooms. It was originally listed in September of last year for $3.195M which denotes a 30% loss in an 8 month period.

1056 Iliff Street (Pacific Palisades)- This 2+2, 1,641 sq. ft. house was a short sale that was listed at $1.2M in January, increased to $1.3928M in February and sold in probate court for $1.326M. This is a classic case of what can happen in probate and short sale situation. The listing agent prices the house below market value and gets an accepted offer. Since the offer has to be fully approved by the court or bank, it is still listed as active in the MLS but at the price of the accepted offer. 60% of the time the original offer falls out as was the case in this instance.
*Source: MLS

In-Depth look at May Condo sales data for Westside/Manhattan Beach

2011-06-10T14:12:00.000-07:00

Sales volume matched last month’s at 155. Compared to last year, sales volume is down 35% and good inventory is hard to find with many willing seller’s unable sell their place since they would be short to the bank.

To give you some perspective, sales volume for May is off 85% since 2007 when we saw record volume. With the market declining at least 20% since then and many people refinancing many people can’t afford to sell. The good news is a seller that is priced appropriately will attract a lot of attention and command a strong buyer.

Since inventory is declining, so is the gap between list price and sale price. The average difference is around 6% when you take into account areas with more than ten sales. This difference was over 12% a year ago.

Mortgage Rates Slide for a 7th Straight Week

2011-06-10T12:38:00.000-07:00

Home loan rates continue to fall as does mortgage demand

Responding to sluggish economic and housing data, mortgage rates have fallen for the seventh straight week, following the yield on Treasury bonds to new lows for the year.

But many people remain on the sidelines of the housing market, expecting further price declines or unable to refinance their existing home because they have little or no remaining home equity.

The yield on the 10-year Treasury note, a benchmark for home lending rates, dropped below 3% on Wednesday for the first time since early December and mortgage rates also fell to levels not seen since then, according to the widely watched Freddie Mac Survey of lender offering rates.

Freddie Mac said Thursday that the typical rate for a 30-year fixed-rate home loan declined to 4.55% this week from 4.60% a week earlier. Not since the week of Dec. 2, when the survey showed the 30-year mortgage at 4.46%, have rates in the survey been lower.

The 15-year fixed loan averaged 3.74% in the latest survey, down from 3.78% a week ago and the lowest since Nov. 11, when it was at 3.57%.

Borrowers in the survey would have needed good credit and 20% down payments or 20% home equity in the case of refinancing to obtain the rates. They would have paid 0.6% of the loan amount on average in upfront lender fees to obtain the 30-year loan and 0.7% for the 15-year loan, Freddie Mac said.

A weekly survey by the Mortgage Bankers Assn., released Wednesday, found that applications for new mortgages decreased by 4% during the week that ended May 27, compared with the previous week. Refinance applications were down by 5.7%.

"The last time mortgage rates were this low, refinance volume was more than 20% higher," said Mike Fratantoni, the mortgage trade group's vice president of research and economics. "It is likely that many borrowers still cannot qualify to refinance given the lack of equity in their homes."
Source: LA TIMES, CNN

Wall Street Journal: Why It’s Time to Buy?

2011-06-10T12:30:00.000-07:00

A great article appeared in the Wall Street Journal this past Saturday that everyone with any interest in purchasing or selling real estate should read. It provides a balanced look and some great tips on how market dynamics lead to a great time to buy.

Here is a quick intro and the link is at the bottom: There are growing indications that it is a good time to buy. Mortgage rates, which fell to 4.55% for the week ending June 2, according to Freddie Mac, are near 50-year lows. Homes have become more affordable than they have been in years: According to Moody's Analytics, the ratio of home prices to income is now 20.9% lower than the 15-year average through 2010, and 12.5% lower than the 1989-2004 average.

A historic glut of homes, meanwhile, has created a buyer's market: There were about 15 million vacant homes in the U.S. last year, according to John Burns Real Estate ConsultingInc.—some 3.1 million more than normal.

Article: Why It’s time To Buy

Why Buyer’s Need Reputable Representation

2011-06-10T12:13:00.000-07:00

It seems like it would be a simple thing to do – look at a house on the internet, go and see it and enlist that agent to make a deal and represent both sides. Let’s look at this more closely.

In an analysis of homes that were bought between 2003 and 2006 in Manhattan Beach and then sold again in the past year, we generally see that prices are back to 2004 levels or are very close to those numbers. The good news for seller’s is the market has firmed up quite a bit around mid to late 2004 prices after trending toward 2003 numbers. Now, you will always have exceptions to the rule in either direction but one particular sale caught the attention of the Manhattan Beach Confidential blog.

Look at 319 S. Poinsettia in the Hill Section, a big (6br/6ba, 4825 sq. ft.) Craftsman that is positioned as far south as you can get – it borders Boundary Place, the alley/street that divides Manhattan Beach from Hermosa. The home has no views, is positioned on an odd slanted lot and hasn’t been improved from its 2004 condition.

In 0ctober 2004 it sold for $2.137M and in the past week it sold for $2.495M, a 17% mark-up from late 2004 levels. This mark-up is a bit alarming and one thing that can be noted right away is the buyer used the listing agent on the deal. Some buyers will go through a listing agent to try and make sure they get the deal and possibly save a little money.

***However, buyers that go through the listing agent need to clearly understand the listing agent’s fiduciary responsibility is to the seller! Had the buyers on this particular property used a reputable local agent, they possibly could have saved themselves $130-200K on this transaction. Plus, a buyer’s agent acting in the best interest of their client is invaluable when it comes to the request for repairs process and having a strong pulse on the trend of that particular market. Local areas such as Manhattan Beach and Santa Monica operate on a micro level and could be trending far differently than what people read about nationally or regionally in the newspaper.

Another area where it is important to work with a reputable agent is internet errors and wading through the misinformation that can be found online regarding comparable properties. Around 21% of the data realtors individually submit for posting on real estate web sites is not updated or erroneous when changes are made to the price or when the property is sold, according to a report released last month by Trulia. Though the data available online is undoubtedly helpful, misinformation and properties that are listed on the web but aren't actually for sale can add up to a handicap for buyers. "You're probably going to get exposed to inaccurate information," says H. Pike Oliver, executive director for industry outreach at Cornell University's Program in Real Estate. "There's no real assurance."

Always make sure you consult with a reputable agent before making any major decisions.
Source: Manhattan Beach Confidential, Smart Money

Hillside Ordinance Will Have Major Impact on Hillside Areas of the Westside

2011-05-20T11:37:00.000-07:00

The landmark Baseline Hillside Ordinance, approved by the City Council, was signed by Mayor Villaraigosa on March 25 and went into effect May 9. This ordinance will have a major impact on future single family building projects in hillside locations much like the approval of the Baseline Mansionization Ordinance that was past a few years ago limiting the size of a home that can be built based on a calculation involving the size and width of the lot. Hillside properties were previously exempt from the Baseline Mansionization Ordinance.

This is the third step in the City's attempt to prevent out-of-scale single-family development in the city of Los Angeles. The ordinance will apply to approximately 133,000 lots.

The Baseline Hillside Ordinance will reduce the allowable area for a site, change the way in which area is calculated, change the height limits and how they are calculated, and create limits on the amount of grading that can be done to a site. Like the Baseline Mansionization Ordinance, this ordinance will allow individual neighborhoods to adjust the baseline limits to better fit their community's character and scale through an overlay option.

The ordinance's proposed FAR (building size to lot size ratio) is based on lot size, zone, and steepness of slopes on the property.

A survey is currently required for a hillside lot. The new ordinance requires that the surveyor prepare a Slope Analysis Map that delineates the portions of the property which fall under each Slope Band (interval) and include a tabulation of the total area of the lot (in square feet) within each interval.

To determine the Maximum Residential Floor Area, one must multiply the area of each Slope Band times the percentage allowed for that slope. Then, add up all the amounts to get the total area allowed for the site. Residential Floor Area bonuses are also provided for (as in the Baseline Mansionization Ordinance), with additional options related to hillside massing and grading.
Important exemptions and criteria have been established but they are difficult to explain. You are strongly encouraged to an architect who specializes in the Los Angeles area and you can also visit the City of Los Angles City Planning Web-site.

(Source: Palisades Post, LA Times)

Friendly Reminder: Get your Air Conditioner Maintenance and Sewer Line Snaked and while you are at it…

2011-05-20T11:24:00.000-07:00

While June gloom hangs around LA, it is a great time to get maintenance done on some key systems in your house.

Air Conditioner- Prepare early for summer heat waves and call your local licensed Air Conditioning professional to make sure your system is operating properly. Yearly maintenance cuts down on future expensive repairs and also helps you avoid the untimely breakdown during a heat wave. While they are out checking the Air Conditioner, kill two birds with one stone and have them check the heater as well if you don’t have a combo unit.

Clean out the Sewer Line- An item that is often forgotten about after purchasing a property is the sewer line which can become a very costly problem if a blockage pops up and a section needs to be replaced. Having the sewer line snaked every 1 to 2 years at a fairly negligible cost ($100-$200) will help you avoid a $3k-7k problem.

Check Fire Extinguishers- Every house should have a fire extinguisher, especially in the kitchen area. Check the date and make sure it is not time to get a new one.

Test the Smoke Alarms in your house to make sure they are operating properly.

Clean out Gutters- Make sure your gutters are free of any major build-up of leaves and dirt that would lead to a blockage during a rain storm.

Protect your house from unwanted moisture- Check to make sure sprinklers aren’t spraying up against the house, especially those with wood siding as this leads to dry rot and potential moisture intrusion into the foundation.

Clean your Refrigerator Coils- Dirty coils (usually on the back of a refrig), which easily attract dust, hair, etc. is the #1 cause of refrigerator malfunctions. This only takes a few minutes with a handheld vacuum and will extend the life of the unit.

If you have any questions or need a referral for any work that needs to be done around the house, please feel free to contact us and will be happy to line you up with someone who has been highly recommended.

Mortgage Rates Fall to Lowest Level of 2011

2011-05-20T11:22:00.000-07:00

Fixed-rate mortgages are at their lowest point of the year, declining for the fifth consecutive week amid mixed economic and housing data.

The 30-year fixed-rate loans averaged 4.61% and the 15-year, 3.80%. Borrowers would have paid 0.7% of the loan amount in upfront lender fees to obtain the rate, Freddie Mac said.

Last year at this time, the 30-year fixed-rate mortgage averaged 4.84%, according to Freddie Mac, which surveys rates lenders are offering to well-qualified borrowers who make down payments of at least 20% or have that much equity in their homes if they are refinancing.

As rates fall, applications for home loans have risen. The Mortgage Bankers Assn. said Wednesday that applications for new loans last week were 7.8% higher than in the previous week.
Source: LA Times

PLAN AHEAD: 405 Closed July 16th thru early morning of the 18th!!

2011-05-20T11:16:00.000-07:00

Starting just after midnight July 15, the San Diego (405) Freeway will be shut down in both directions from Getty Center Drive to the 101 Freeway for 53 hours, so that the south side of the Mulholland Bridge can be demolished.

The freeway section is expected to reopen at 5 a.m. July 18, according to Metro officials.

An estimated half-million cars, trucks and buses use this freeway on a typical summer weekend. The closure is part of the ongoing freeway-widening project, which will create a 10-mile northbound carpool lane on the 405 between the Westside and the San Fernando Valley.

Supervisor Zev Yaroslavsky's refers to this planned shutdown as a "midsummer night's nightmare for motorists heading to LAX, the beach, or other destinations."

Two Articles Worth Checking Out

2011-05-20T11:05:00.000-07:00

Here are two articles that we felt were particularly good reads from the LA Times:

April home sales prove lackluster in Southern California: This article discusses the current “macro” market situation as increasingly dire with sales falling 5.5% from March to April. This is obviously not the case in higher end areas where activity has picked up.

Foreclosure rate slows as repossession timeline lengthens: This article discusses the length of time it is taking for borrowers to be pushed into foreclosures, resulting in fewer bank-owned properties being released into the market

Pacific Palisades Full of Multiple Offer Activity

2011-05-06T12:13:00.000-07:00

This past week has felt like a trip back to 2004-2007 for many realtors that work the Pacific Palisades market. Four homes hit the market and all have multiple offers with rumors having at least three of the four going for over asking. Here is a look.

555 Muskingum- Major Fixer/Tear Down on a 8,799 sq. ft. lot hit the market for $1.295M and immediately received multiple offers and is currently in escrow at over asking.

527 Muskingum- 3+2, approx. 2K sq. ft. on a 7,870 sq. ft. lot with ocean views. $1.849M list price. Cute beach cottage home in very good condition with strong emotional appeal. Word on the street is this property received four offers and they accepted an offer yesterday. We do not know the price range.

737 Almar- 4+4, 2,954 sq. ft. on a 5,837 sq. ft. lot located in the El Medio bluffs. $1.949M list price. Cute Mediterranean style home that has a nice lay-out and needs a little bit of updating but something someone can easily move into. Limited yard space but good appeal. They received two offers right after the broker caravan on Tuesday and are rumored to be in escrow at asking or above.

878 Galloway- 4+3.5, 2,958 sq. ft. on a 5,867 sq. ft. lot located in the Alphabet streets in a prime walking location. Beautiful East Coast traditional with a ton of emotional appeal. It was bought in 2007 for $2.725 and was listed at $2.295M. Apparently they received 5 offers and are in counters above the asking price…

SFR Sales Data for April

2011-05-06T12:03:00.000-07:00

*click graph to enlarge
Unlike the Condo market, sales volume increased in April compared to last month and was stronger than April 2010 in the areas we track. With inventory decreasing and demand continuing to pick up, the market is definitely the hottest it has been in the last 4 years. Homes in good condition that are priced anywhere from 17-20% off the market heights of 2006-2007 are usually garnering multiple offers. The difference between original list price and sale price continues to decrease though Beverly Hills and Marina Del Rey increased in the discrepancy. Sales volume has increased % over April of last year while still % behind sales volume in 2007.

In looking at the broad picture the graph presents, Pacific Palisades, Westchester and Venice doubled its sales volume compared to last April while Cuvler City, Marina Del Rey and Bel-Air doubled sales volume compared to last month.

A quick look at a few individual sales:

Brentwood-510 North Kenter, a 4+3, 2,150 sq. ft. house on a 20,298 size lot sold for $1.775M – 7% above the asking price and went out in multiple offers after being on the market in twelve days. This was a very stylish contemporary home with a pool and open kitchen.

Pacific Palisades- 15976 Alcima Ave- 5 +3.5, 2,982 sq. ft. house on a 18,300 size lot. This was a tear down and sold for $1.90M, 21% below the original list price .

Down the street, 15920 Alcima, a 4+4, 5,241 sq. ft. house on a 20,470 lot sold for $3.185M, just below the $3.195 M list price and was only on the market for 5 days. This was a well-maintained home with great ocean views and only needed a little cosmetic work.

The bottom line is that people are paying a premium to move into homes that don’t require much work while the better deals are falling into the hands of those willing to remodel.

Condo Sales Data for April

2011-05-06T11:20:00.000-07:00

*click graph to enlarge
According to the MLS, overall sales volume for condos in the areas we cover decreased in April and was lower than sales in April of last year by 5.5%. However, this is not surprising since we have been writing about decreasing inventory. In fact, the market has heated up with the spring and summer selling season and that is evident with the average days on market and % difference between original list price “OLP” and sales price is decreasing significantly. For example, the % difference between OLP and sales price in March had 3 areas in the double digit range and many hovering around 7-9%. April only had one area in double digit % (Westwood/Century City 11%) and most were around 4-6%. Earlier in the year, the majority of the areas we cover had a double digit discrepancy.

As many of you know from reading this blog, the recent surge in buyer demand has been fueled by low interest rates, an influx of buyer’s from tech companies relocating office space to the Westside and a general feeling that the economy seems to be on solid ground. The frustrating thing for buyer’s is that inventory is artificially low because so many people have a loan that is higher than what the property is worth and the bank’s continue to unload properties at a snail’s pace.

A quick look at the overall volume of sales shows that Beverly Hills and Mar Vista saw a drastic reduction in sales compared to last month and only Westwood and Brentwood showed an increase in sales volume over last month. In comparison to April 2007, sales are off 88%.

Mortgage Rates Drift Lower

2011-05-06T11:18:00.000-07:00

Freddie Mac reported on Thursday the lenders it surveys were offering 30-year fixed-rate mortgages at an average rate of 4.71% early this week, compared with 4.78% the week before.
Rates for 15-year fixed loans, a popular option for homeowners looking to refinance mortgages, averaged 3.89%, down from 3.97%.

Buyers would have paid 0.7% of the loan amount upfront to the lenders to obtain the rates, according to Freddie Mac.

The initial rates for floating-rate mortgages fell as well, Freddie Mac said.

WSJ: Buyer’s Market? Stressed Sellers Say Not So Fast

2011-05-06T11:10:00.000-07:00

This article that appeared in Monday’s Wall Street Journal is in line with articles that we have been writing lately in regards to the difficulty buyer’s are currently having. Though this article paints a broader stroke and touches on some issues that are not impacting the Westside market, it is a good read - Article

Lack of Inventory Causing Headache for Buyers in Westside/South Bay Markets

2011-04-22T12:59:00.000-07:00

Usually when one picks up the LA Times and reads about a fledgling housing market or tunes to the business networks on TV and sees signs of national distress, they naturally believe a buyer in this market would have all of the leverage. Unfortunately for buyers searching for phenomenal deals on the Westside and Manhattan Beach deals are extremely hard to come by thanks to a severe lack of inventory.

Westside prices which in our estimation are higher than they should in the grand scheme of things have stabilized and even gone up in some areas this year. Our recent Townhouse listing at 2922 Montana Ave. Unit B recently sold in three weeks for $1.1M, 70K higher than a similar unit in the building sold four months prior. Though we would love to take all of the credit for the uptick as the agent (will take some along with the stellar job of staging by our client), the reality is we were helped by the fact that we did not have much competition for a stylish unit in a great location.

In the 90402 zip there are only 15 new listings since March 1st. Of those, 3 are already in escrow. Areas like Mar Vista have seen 30% of new listings sell within 20 days of coming on the market and we can give you individual examples of clients recently losing out in multiple offer situations to bids that appeared to be above market. Multiple offer situations have been feverishly popping up in all price ranges as long as the property is priced at market.

This has been frustrating many buyers who have recently moved to the area or have been waiting for an opportunity to buy prime real estate. It doesn’t make logical sense in comparison to the economy as a whole and here are the reasons as to why this is happening.

Massive amount of purchases during the bubble peak: Most high priced areas like the Westside and Manhattan Beach saw historical sales volume between 2004 and 2007, at or near the top of the peak. Many of these purchases were done with less than 20% down (many at 5-10% even in the jumbo markets) and buyers were turning around and refinancing if prices trended upward after they bought. These purchasers now owe quite a bit more than the home is worth and are simply not in position where they can afford to sell. They also refinanced at historically low rates and if they are in a similar position from a job standpoint they are simply stuck and “hanging on” until a significant jump in the market happens. Short sales and foreclosures are happening but only with people in dire financial straits and many on the Westside tend to have jobs or family money to help them. Speaking of foreclosures and short sales…

Shadow inventory has not appeared: Bank owned homes and short sales have been slow to hit prominent markets like the Westside. Banks are incentivized to slowly release high priced assets. Until they lose a loan valued at $2.5M, the banks can report it as an asset at that value even though it may only be worth $1.8M. Once that asset sells for $1.8M, the bank not only loses a $2.5M asset but also reports a loss of $700K. Legislation slowing down foreclosures in California has also hurt this pipeline. I am currently working on one short sale where the seller has been in default for over 15 months and we have yet to reach an auction date. The short sale process has also contributed to this mess with some taking over a year to close from beginning to end. Expect the shadow inventory to continue to hit the market at a snail’s pace.

Buyers are anxious: Due to the lack of opportunity for purchasers cited above the leverage they enjoyed in 2009 and the first part of 2010 is dissipating for now. Many purchasers have been waiting for the right opportunity to buy on the Westside and feel now is the time with interest rates at or near record lows with the looming threat of rates going higher as the economy seems to recover.

When you couple this mentality with a strong pool of international buyers (most notably all cash buyers China and Europe taking advantage of the weak dollar) and tech companies like Google and Facebook strategically opening offices on the Westside, you end up with a strong pool of purchasers competing for a limited product causing quite a bit of frustration.

Another factor pushing buyers valued in the $800K-$1M range is the conforming loan rate of $729,500 is expiring October 1st and being replaced by a rate limit of only $625,000. Loans above $625K will be a a higher rate and that $100K+ difference will definitely impact the market and what one can afford to buy.

For now, purchasers have to understand what they are dealing with due to the circumstances above. The days of trying to “steal” a property have been suspended for the time being and replaced with patience and knowing they are not the only ones out there. It is a good time for a seller to list a home and get good terms from a buyer if they are willing to acknowledge about a 20% cut from bubble prices.

1st Quarter Sales trends compare favorably to 2010 in Manhattan Beach

2011-04-22T11:12:00.000-07:00

*Note on graph: WoS only stands for West of Sepulveda

There were more closed sales in the first quarter of 2011 than in any year since 2007,when the bubble was starting to super inflate and get ready to pop, which is extremely apparent when examining the above graphic.

The boost in sales was +9 for Manhattan Beach as a whole and when you look at the micro market West of Sepulveda. Though sales increased, the median price of sales West of Sepulveda dropped 7% from $1.607M in the first quarter of last year to $1.50M this year.

Overall, the whole city of Manhattan Beach saw an increase in sale price from $1.430M in the 1st quarter of 2010 to $1.5M this year. Though prices declined West of Sepulveda, the increase in overall price is directly related in the increase in sales in the higher priced area.

Please note that tracking sales on a quarterly basis can skew the numbers especially when sales volume is relatively low. For example, the 4th quarter of 2010 median price was $1.362M west of Sepulveda, and $1.252M for all of MB. If you were to compare the most recent quarters to quarters, you would think Manhattan Beach prices went up 20% at the snap of a finger. Obviously that is not the case.

Another interesting and important thing to look at is how the % of Single Family Residences selling above $1M has changed dramatically since 2008 when the bubble started to officially burst.

In the first quarter of 2006, just 6% of all homes sold in Manhattan Beach sold for less than $1M. This year 27% of homes sold for less than $1M, statistically, that is a 450% increase in homes selling below $1M.

In terms of sales above $2M, during the late-boom year of 2006, almost half the homes sold in Q1 went for $2M oe more (44%). The median price that quarter was $1,972,500.

This year 83% of the homes sold in Manhattan Beach in Q1 sold for less than $2M.

Manhattan Beach West of Sepulveda fared about the same over this 6-year period. Sales above $2M were 22% of the sales in the first part of 2011, down from 48% in 2006. Sales above $2M are at a six year low.

(*Source: Manhattan Beach Confidential - article and graph)

Articles You Should Read

2011-04-22T11:04:00.000-07:00

1- So Cal rents are likely to remain flat according to USC study: The steep declines in rent that were seen the past few years are beginning to ebb and places to rent on the Westside are becoming difficult to find. We believe renters on the Westside and in areas like Manhattan Beach should expect a 1-3% increase over the next 12 months. Here is an article about the broad So Cal rental market from the LA Times: Southern California rents are likely to remain flat, study says

2- Changes in mortgage finance rules will hurt housing recovery: Some of the requirements that federal agencies and the Obama administration are proposing will prove troublesome for consumers as you would need to spend no more than 28% of your gross monthly income on housing-related expenses, and you couldn't have total monthly household debt that exceeds 36% of your income. There would be not flexibility beyond these ceilings. This is just one of the myriad of changes proposed that you can read about in this article from the LA Times.

3- Experienced appraisers getting priced out by banks: Accurate appraisals are extremely important in the current market and can be deal breakers when inexperienced appraisers get assigned to areas they do not know how to valuate. Lenders are not paying experienced appraisers enough ($200-$250) to cover their overhead costs yet they are charging the consumer $450. Less-experienced appraisers who sometimes have to travel long distances from their home markets tend to be more willing to work for the lower amounts and can create nightmare scenarios for transactions on the Westside and Manhattan Beach where the sale price can change 150-300K one street over. LA Times article: Are you getting your money's worth with appraisal?

New Legislation Would Make Short Sale Process Quicker

2011-04-22T10:56:00.000-07:00

Legislation proposed last week in the House of Representatives would make short sales faster.

The bill, with bipartisan backing would require banks and mortgage servicers to respond to requests for a short sale within 45 days of the request. This would be great news as getting negotiators on short sales to call back in this time frame is a nightmare even with daily phone calls to them.

A short sale is when a bank allows a borrower with negative equity to sell their home for less than is owed on the mortgage. The difference between the sale price and what is owed on the mortgage is usually then forgiven by the lender. They are most common in markets such as California where home prices have declined dramatically since the market peaked.

The problem is that in the era of mortgage securitization, multiple parties (investors, servicers, insurers, etc.) need to acquiesce to a short sale in order to complete the deal.

It can take an extremely long time for all involved parties to get back to the buyer and seller with an answer. It was recently found that in California, 4 out of 10 short sales that go under contract end up falling through. This is a direct result of the lengthy short sale process.

In-Depth Look at Single Family Sales in March for the Westside/Manhattan Beach

2011-04-08T14:40:00.000-07:00

Sales volume increased 57% in March compared to February but only increased 4.2% over last March and down 33% and 60% when compared with the Wild West days of 2007 and 2005.

The difference between the average original list price and sales price also improved dramatically compared to February. With the exception of February, the recent trend shows Seller’s are being more realistic with their initial sales price and due to a lack of inventory we are seeing quite few multiple offer situations. Like the condo market, the buyer still has the leverage but it is not nearly as lopsided as previous years.

Every area saw an increase in sales except Culver City and Bel-Air.

Manhattan Beach increased in sales 4x’s with 34 in March compared to 11 in February. Most of these sales were on the lower end for Manhattan Beach. This past March was also 36% better than March 2010. They still fall short of the robust 50 sales in March of 2007 but definitely showing signs of life especially with first time homebuyers itching to enjoy that unparalleled Manhattan Beach lifestyle.

Beverly Hills Post Office popped with 14 sales, almost doubling last month’s output and beating March 2010 by about 40%. Sales ranged from $500k to 7M.

A look at a few individual sales that stood out:

12218 Octagon St- Brentwood: This North of Sunset home in need of major remodeling sold 10% above the original list price at $1.302M. It sold in 7 days and is a 3+2, 1,688 sq. ft. on a 9,583 sq. ft. lot. The low list price created an auction like atmosphere with multiple all cash buyers vying for the property.

11930 Currituck Dr- Brentwood: In between Montana and Sunset, this woodsy 2+1.75, 1,218 sq. ft. home on a 5,488 sq. ft. lot sold for $1.01M, 26% below its original list price! However, most would make you believe it sold for over asking with a last list price of $999K. This could may have been a short sale as it was bought in 2005 for $1,275,000.

2425 Frey Ave- Venice: Bank owned sale ends up going for 31% below ($895K) the original list price of $1.3M. This contemporary and recently updated 3+2, 2,640 sq. ft. home ended up being a terrific buy.

746 26th street- Santa Monica- This frantic auction brought out the builders looking for a deal. Despite being on a busy street, the 8,700 sq. ft. lot is coveted and the “auction” list price of $799K brought buyers in by the droves. It ended up selling for $1.1M, 38% above asking. . .

616 25th Street- Santa Monica- Lot values North of Montana still trending lower. In our estimation, this tear down approximately sold for $1.684M even though they only reported a $1 sale price (shame on them). The most important info…8,700 sq. lot near Franklin Schol…

7049 Birdview- Malibu- After being on the market for close to three years, 7049 Birdview finally sold for $9.045M, less than half its original asking price in 2008 of $19,950,000. How the mighty have fallen. This 6,397 sq. ft. home sits on an acre of land and boasts endless coastline and ocean views…

In-Depth Look at Condo/Townhouse Sales in March for the Westside and Manhattan Beach

2011-04-08T14:34:00.000-07:00

Overall, we saw a solid increase in sales volume over February, which was expected. However, the increase in sales of 62% over last month was unexpected and the 12% growth in sales over March 2010 continues to show the market is growing steadily out of the Great Recession. Though the numbers look good, we are still off nearly 63% from sales volume 2007 and 73% from the Wild West days of 2005.

In looking at particular areas, Santa Monica had a great month of sales with 38 compared to a dismal February of 17. Santa Monica is up 40% in sales volume compared to March 2010. Most of the seller’s did a good job of pricing the property with the difference in Original List Price to Sale Price at -7% and the difference in List Price to Sale price being around -5%.

Marina Del Rey had a phenomenal month with increasing sales over February by 73% and having a better month than March 2007 which is very rare. Some of this can be attributed to quite a few short sales going through in some of the mid 2005 constructed towers that were flooded with liar loans.

Both Santa Monica and Marina Del Rey are being aided by an influx of buyers thanks to the multitude of tech companies opening offices in the area. It is still considered a buyer’s market but the leverage buyer’s have enjoyed over the past few years is receding somewhat. The good news for sellers is that if they price the unit at or around market value they should be able to sell quickly with good terms.

A look at a few individual sales in Santa Monica:

914 14th Street #101- Built in 2008 along with 4 other units, this 2+2.5, 1,580 sq. ft. unit sold for above asking at $1.150M and was on the market for just 11 days. The asking price was $1.125M. This is the fourth unit to sell in the building with two others selling in 2010 for $687 and $677 per sq. ft. This was the front unit and it sold for $727.85 a square foot. This unit debut on the market for $1.299M in 2008 before being rented out.

1033 Ocean Ave.#401- After being on the market for 304 days, this luxurious 2+2, 1,396 sq. ft. unit with amazing ocean views finally sold for $1.550M. It was originally listed at $1.850M and went for $1,110 per sq. ft.

Little Change in Mortgage Rates

2011-04-08T12:44:00.000-07:00

The average mortgage rates available to borrowers with good credit and 20% down payments or home equity rose a notch.

Freddie Mac said the typical rate for a 30-year fixed loan was 4.87% this week, up from 4.86% last week. The average offering rate for 15-year fixed mortgages was 4.10% compared to 4.09% a week ago.

The lenders were requiring well-qualified borrowers to pay an average of 0.7% of the loan amount in "points" to obtain those rates. Additional third-party charges such as appraisal and title insurance fees are also often added to borrowers' upfront costs.

Jumbo loans have been running about six-tenths of a percentage point higher than Freddie and Fannie loans in private surveys of the market.

The limit for Freddie and Fannie loans in high-cost areas such as Los Angeles and Orange counties is scheduled to drop on Oct. 1 to $625,500 from the current level of $729,750.

Variable loans with a fixed rate for the first five years were starting at an average 3.72% and 0.6 points, compared to 3.70% a week earlier.
*Source: LA Times

Another tech giant moves to the Westside

2011-04-08T12:40:00.000-07:00

With Google creating an office campus in Venice, Facebook has now signed a lease to occupy anywhere between 8,000 and 15,000 square feet in Playa Vista. Over the past year, Venice, Santa Monica and Playa Vista have become quite popular destinations for these Silicon Valley companies and it is great news for our local real estate market and helps partially explain the influx of buyers we have seen.

Here is an article from the Los Angeles Business Journal: Another Tech Giant Moves to the Westside

Proposal would force banks to allow short sales for delinquent homeowners

2011-04-08T12:22:00.001-07:00

Major banks may be forced to let severely delinquent homeowners sell their houses for less than the loan amounts owed as part of a broad settlement of federal and state investigations into botched foreclosure paperwork, according to government officials involved in the negotiations.

The requirement to allow so-called short sales would be in addition to forcing mortgage servicers to reduce the amount some homeowners owe on their loans, said two officials, who spoke on the condition of anonymity because negotiations are ongoing.

In Southern California, short sales made up an estimated 19.8% of the market for previously owned homes last month.

Though struggling homeowners escape weighty mortgage debts quickly under a short sale, they don't get away unscathed.

Their credit scores are damaged enough to limit their borrowing capability for years, though the damage is perhaps less severe than in foreclosure. Money for down payments and renovations would be lost, and there may be tax consequences.

The California Assn. of Realtors has been pushing for short sales to be made simpler. Earlier this month, in an open letter in the Los Angeles Times and six other California newspapers, the group called on banks to approve more short sales and for regulators to streamline the process.

For the complete LA Times article: Proposal would force banks to allow short sales

443 14th sells for $3.1M…230K less than 2005 purchase price…Hockey Star takes 400K+ hit in Manhattan Beach

2011-03-25T13:31:00.000-07:00

In Santa Monica, 443 14th Street a 4+5.5 bath, 4,071 sq. ft. house on a 7,550 lot constructed in 2002 sold for $3.1M, an 18% drop from the original list price. The home was featured in the LA Times Home Section and Domino Magazine.

This seller finally realized they wouldn’t get close to the original listing price of $3.795M in September 2010 and within a month reduced to $3.475 and again to $3.295M. It seems like a quick drop of the price but more research shows they have been trying to market the property off and on since 2008 with the astronomical list price of $4,250,000…

In Manhattan Beach, The Calgary Flames Craig Conroy sold his Manhattan Beach home located at 1221 6th street for $1,965,000($464 per sq. ft.) on March 23rd. He bought the home in 2005 for $2,495,000, representing about a 23% drop in value. The Craftsman-style house, built in 2005, is a 5+5 with 4,230 sq. ft. of living space. Conroy and family were smart sellers that understood the market. They listed the home at $1,999,000 and were in escrow with a strong buyer immediately. According to Lauren Beale of the LA Times, Conroy retired earlier this year to become a special assistant to the Flames' general manager. The center had played since 1994 including a stint with the Los Angeles Kings.

Earthquake insurance worth the cost?

2011-03-25T13:18:00.000-07:00

Japan's massive earthquake has created a surge of interest in quake insurance in a place more than 5,000 miles away — California.

Only about 12% of Californians with home insurance have quake coverage. And the percentage of people who buy quake insurance in other states — including those with active faults — is far lower.

Should you buy quake coverage?

There's no clear answer. The problem is that quake coverage is costly and limited. Experts say that it takes careful analysis to decide whether the expense is worth the potential benefits.

Here is a good article from the LA Times exploring the cost and feasibility: Is quake insurace worth the cost?

National Note:New Home Sales drop 82% since 2005...Worse than Great Depression

2011-03-25T13:09:00.000-07:00

New home sales fell Eighty percent from 1929 to 1932, an infamous time in US history where the economy imploded in spectacular fashion thanks to Wall Street speculation and massive debt leverage.

In comparison, during the recent Great Recession, new home sales have fallen an astonishing Eighty Two percent from there 2005 peak. See the graph below regarding new home sales since 1960 and the free-fall ride since 2006.

*source: doctor housing bubble

Mortgage rates creep higher this week

2011-03-25T13:04:00.000-07:00

Freddie Mace said Thursday that the average rate on 30-year fixed mortgages rose to 4.81% from 4.76% the previous week. It hit a 40-year low 4.17% in November.

The average rate on 15-year fixed mortgages increased to 4.04% from 3.97%. It reached 3.57% in November, the lowest level on records dating back to 1991.

The rates do not include add-on fees, known as points. One point is equal to 1% of the total loan amount. The average fee for 30-year fixed loans and 15-year fixed loans in Freddie Mac’s survey was 0.7 point. The average fee for five-year ARMs and 1-year ARMs was 0.6 point.
*source: Associated Press

Lots of Cash Buyers on the Westside

2011-03-11T12:56:00.000-08:00

*click piture to see larger view

Approximately 25% of the purchases on the Westside above $900,000 are all cash buyers. Unfortunately, they almost have to be. As you can see from the above graph, 24.1% is the average down payment for a home in Los Angeles. It’s a shame the banks were stupid enough (how bankers have not gone to jail for it is disgusting) to allow the average down payment to literally drop to almost 0% in 2006-2007. Are you kidding me? We are going to pay for this insanity for a long time with over 670,000 California homeowners underwater by more than 50% according to Mooney’s analytics.

If people actually have the financial discipline to save 20 percent then it is likely they have more of a buffer to ride out any storms in housing. Plus it is a lot harder to walk away from that type of savings.

REO in Manhattan Beach sells for almost 300K over asking…

2011-03-11T12:48:00.000-08:00

3121 Alma (3br/3ba, 2600 sq. ft.), an REO that came on the market just after Christmas created a storm of interest with over 20 offers at the “let’s auction it off” list price of $1.147.

The sale closed on Feb. 23rd for $1.425m which still was not a bad buy considering the size, views and condition. However, the home was stripped of all appliances and though the bank did some “cheap” work to it, the new buyer will need to fix some things up. When you take that into account the house ultimately sold for around what it should have.

In July 2006, Alma sold for $650k more at $2.075m in July 2006 – before a remodel was undertaken …down about 20% since 2005…sounds about right.
(*sources: MLS, Manhattan Beach Confidential)

Notes on a Realtor’s Scorecard

2011-03-11T12:45:00.000-08:00

Median LA County home price down 10% since September: In September of 2010 the median LA home was going for $340,000 so we are now down over 10 percent in a matter of four months.

Case and Shiller disagree about the future: The widely followed Standard & Poor's/Case-Shiller Index, which tracks the real estate market in 20 major U.S. cities, has differing opinions. According to a recent New York Times piece, Case calls the current state of the market a "rocky bottom with a down trend," but doesn't seem to think the sky will fall. Shiller, on the other hand, sees "'a substantial risk' of declines of '15 percent, 20 percent, 25 percent'" from here.

Standards for loans will continue to rise and create negative issues: A wind-down of government-controlled Fannie Mae and Freddie Mac, as proposed by the Obama administration in February will make home buying more difficult and add pressure to the real estate market. It won’t have as dramatic of an effect on the Westside as it will in less well-to-do areas like the Inland Empire but you can definitely expect a jump in interest rates and even tighter lending standards which will cut down on what Westside buyers can afford. This coinciding with the conforming high limit loan balance dropping from $729,500 to $625,000 at the end of October is not a good recipe for homes worth around a million dollars.

Market anxiety subsides: While 53 percent of Americans said they are “very concerned” or “somewhat concerned” about having the money to make their monthly mortgage or rent payment, according to a recent Washington Post poll, 61 percent believe it is a good time to buy a house…

California Realtors: Only three out of five short sale transactions close

2011-03-11T12:42:00.000-08:00

by CalculatedRisk on 3/09/2011 11:35:00 PM
After contacting a bank on a daily basis to get a short sale approved and getting no response, I thought I would update our readers on the continued difficulty of getting a short sale approved in a timely fashion. The frustrating thing is in the initial stages the banks are very responsive but once the file is forwarded to a negotiator the process becomes a nightmare since the banks are completely understaffed and short sale negotiators receive over 300-400 e-mails a day from agents like me wondering what is going on with a file.
Unfortunately, many homeowners are unable to successfully negotiate a short sale. According to a recent survey of 2,150 California REALTORS® who have assisted clients with a short sale, only three out of five transactions closed – even with an interested and qualified buyer.

Here are the reasons besides the banks being overwhelmed: For one, no two mortgage agreements are the same, so it can be difficult to standardize short sale processes and procedures. Many homeowners have second mortgages, which further complicate matters. Then there’s the challenge of convincing multiple parties to take a financial loss or, in the case of loan servicers, to forego fees they otherwise might earn during the course of the foreclosure process.
Poor and slow service by many banks and servicers has only exacerbated the problem. Horror stories abound from potential homebuyers and REALTORS® forced to wait 90 or more days for a response to a purchase offer or being required to fax short sale applications or other paperwork as many as 50 times. These delays discourage potential homebuyers and sales agents.

Buyers Turn Fussy…Underwater Mortgages rise

2011-03-11T12:32:00.000-08:00

Buyers are becoming fussier and fussier. A new report found that 87% of first time houme-buyers said “finding a move-in ready home is important.”
Check out this informative article about what the majority of buyer’s are looking for:
LA Times Article First-time buyers turn fussy about ‘move-in ready’ homes

Underwater mortgages rise: We still have quite a few issues to work out even though we have seen some signs of stability: LA Times Article Underwater mortgages rose at end of 2010 as home prices fell

In Depth Look at February Sales Data

2011-03-04T12:54:00.000-08:00

*click on image to enlarge

As reported in a few weeks ago in the Skinny, the gap between Original List Price (“OLP”) and the eventual sales price seemed to be closing according to January sales data for the Westside and Manhattan Beach.

However, we see a strong reversal of that trend with the February sales numbers for Single Family Homes. Every area with the exception of Mar Vista (7%) had a double digit difference between OLP and sale price. We like to use the OLP number because when homes are re-listed or taken off the market and then re-introduced the MLS, will only use the new list price and it skews the reality of the market.

The bottom line is that sellers and buyers are still distant in terms of where the market is functioning.

The good news is that February sales were stronger this year than last by about 12% but still quite a bit below the sales numbers of 2007 and 2005.

A quick glance at some selected recent sales and a few examples of re-sales from 2008 and 2005:

Brentwood: 2618 Westridge Road, a 3,675 sq. ft., 5 bed/4 bath home with lot size of 12,744 sold on 2/22/11 for $1.788M 5% above the list price…In 2005, the house sold for $2.316M – constituting a 23% drop…

Pacific Palisades: 545 Amalfi Dr., 5 bed/5.5 bath, 4,900 sq. ft. with a lot size 14,980, originally listed at $3.795M and sold for $2.95M, 22% below list price. It was on the market 8 months and ended up being a short sale that garnered multiple offers. This was a solid buy.

Santa Monica: 135 Palisades Ave., 6 bed/7.5 bath, 4,099 sq. ft. home with a lot size of 17,498, sold for $5.48M, 21% below it’s original price of $6.95M. It was only on the market for four months and kudos to the seller for recognizing that trying to chase a falling knife doesn’t work.

Rare sale in Beverly Park: 14 Beverly Park a 13,638 sq. ft, 7 bdrm/7bath home with a lot size of 13,638 sold for $12.9M which was 18% below it’s original asking price of $15.9M. It was on the market for 5 months. Beverly Park is one of the most exclusive places to live in the world.

Manhattan Beach: 2 homes recently closed in Manhattan Beach (West of Sepulveda) that sold three years ago. In both cases, sellers lost 12-16% of their homes' value after about 3 years.
742 33rd (5br/5ba, 3975 sq. ft.) a nice Cape Cod sold for $2.275m, down $425k (-16%) from 2008 sale price of $2.7M.

473 31st (4br/5ba, 4000 sq. ft.) custom modern home sold for $2.450M, down $350k (-12.5%) from the 2008 sale price of $2.8M.

Open This Sunday 1-4!

2011-03-04T12:38:00.000-08:00

2922 Montana Unit B
$1,149,000

View Property Web-Site

Designer perfect 2 bed/2.5 bath tri-level townhouse across from the Brentwood Country Club and steps to the best the Westside has to offer. One of only 5 units, you will be immediately drawn to the soaring ceiling and amazing natural light. Phenomenal roof-top deck with views of Catalina Island.

2808 Arizona #3
$749,000

View Property Web-Site

Stunning Townhouse located in a prime Santa Monica location just south of Wilshire. One of only four units, this hard to find 3 bed/2.5 bath features many upgrades and should not be missed!

Notes on a Realtor’s Scorecard

2011-03-04T12:32:00.000-08:00

Westside beat…thank you Google: Ever since Google has announced they will be opening an office campus in Venice, other tech companies are following suit and providing a set of new buyers for the Westside market. When you combine that with quite a few foreigners looking to invest in Westside real estate, a strong crop of buyers is coming out of the woodwork. Activity at our open houses has been strong and we have noticed quite a few people coming in from San Francisco, New York, China and Japan.

Another good thing for current seller is that inventory, especially in the single family market, is not very good on the local level. The market does not have a lot of well priced properties in move-in condition. A savvy seller who prices their home at true market value will move a property quickly and also get a very important thing in this market: strong escrow terms! Strong escrow terms are often forgotten but very important during a bumpy economic time.

Sellers need to beware though! The current crop of buyers is picky and will not jump on something unless they feel they are getting a strong value. When the market was on fire in 2005, buyers had absolutely no patience…now, we are on the other end of the pendulum and they will wait a seller out if they have to. The practice of pricing a property is vitally crucial in these uncertain times. Buyers are more than willing to wait and let an overpriced seller try and catch a falling knife with no handle and it can get nasty…

Oops…those damn realtor groups: The National Association of Realtors (NAR) is working on a benchmark revision for existing home sales numbers. This benchmarking is expected to result in significant downward revisions to sales estimates for the last few years - perhaps as much as 10% to 15% for 2009 and 2010. I am a member of NAR and appreciate the lobbying they do for those of us in our profession but I am usually very skeptical of numbers they put out. Of course, they want everyone to think all is okay in the world of real estate but you should never believe a specific trade group’s numbers. Plus, a serious real estate aficionado rarely looks at national numbers when you deal with the micro markets of the Westside and South Bay…at least NAR is trying to get it right and not playing the game of charades.

Million Dollar home sales in California increase: Sales in homes costing more than $1 million increased last year for the first time since 2005, reports DataQuick Information Systems. 22,529 homes sold for $1 million or more in 2010, up 21 percent from 2009. Million-dollar home sales peaked in 2005 at 54,773, but have steadily declined every year through 2009.

Mortgage Rates Drop for Third Straight Week

2011-03-04T12:29:00.000-08:00

Average mortgage rates have fallen for the third straight week, with 30-year fixed loans at 4.87% and 15-year loans at 4.15%, Freddie Mac said.

That's about a fifth of a percentage point lower than three weeks ago, trimming payments by $526 a year on a $400,000 30-year fixed-rate loan, Freddie said Thursday.

The rates were for loans up to $417,000 for well-qualified borrowers with 20% down payments or 20% equity if they are refinancing, and paying 0.7% of the loan amount in upfront lender fees. (*Source: LA Times)

Condo/Townhome Sales for February

2011-03-04T12:16:00.000-08:00

Like Single family homes, sales have increased over last year by more than 12% but still well off sales numbers in 2007 and 2005. Westwood had the highest number of sales with 26 total. Santa Monica sales dropped by about 50% compared to last month with the difference in original list price to sales price about 6%.

There was one sale in particular that stood out like a sore thumb. 2214 Century Hill, a 3 bed/6 bath, 3,652 sq. ft. condo originally listed at 2.9M and sold for $1.6M, constituting a 45% drop.

The majority of Westside units sold for around 9% less than original asking price.

*click on picture to enlarge

New Listing: Designer Perfect Townhouse- 2922 Montana Ave.

2011-02-19T12:46:00.000-08:00

OPEN SUNDAY 2/27/11 1pm to 4pm

Property Web-Site: http://www.2922MontanaAve.com/

List Price: $1,149,000

Designer perfect 2 bed/2.5 bath tri-level townhouse across from the Brentwood Country Club and steps to the best the Westside has to offer. One of only 5 units, you will be immediately drawn to the soaring ceiling and amazing natural light.

Features include gourmet kitchen, exotic wood floors, wrought iron banisters & railings, double sided fireplace, phenomenal loft space perfect for a home office, luxurious master bath, outdoor space on every level and a private two car garage with room for storage.

This is all topped off with a stunning and spacious rooftop deck that provides ocean and city light views. Come by and check it out. Please call us (310) 255-3447 for more information or to schedule a showing.

OFF THE BEATEN PATH - Top 3 Deli’s in Santa Monica

2011-02-19T12:44:00.000-08:00

Every so often we are going to include a non real estate related item in the blog that we thought you might enjoy…Here are our picks for the top 3 deli’s in Santa Monica.

#1- Bay Cities Italian Deli (www.baycitiesitaliandeli.com/) 1517 Lincoln Blvd. Santa Monica, CA (310) 395-8279: Simply put the best subs around and that is why they are getting the #1 ranking. The line can sometimes go 50 deep at lunch for their famous subs. They also provide great pasta, an outstanding selection of olive oils, 20 different brands of hot sauce and delicious baked breads to go with top of the line meat selections.

#2- Izzy’s Deli (www.izzysdeli.com)- 1433 Wilshire Blvd., Santa Monica, CA (310) 394-1131: About 10% more expensive than Fromin’s but you get a better overall scene and comfort to go along with slightly better food in our opinion. The expansive menu features overstuffed sandwiches and features most traditional Jewish foods. Good kids menu. They do a great job with breakfast items and it is known as the deli to the stars so who knows who you might run into. Open 24 hours.

#3- Fromin’s Deli– 1832 Wilshire Blvd. Santa Monica, CA (310) 829-5443: Similar menu to Izzy’s but Fromin’s has a wider selection of products in the take-out section and it is known for being more traditionally Jewish. They have a well known fish platter and the steak sandwich is delicious and easily serves two people. For $12 it is a great meal for two…

In-depth look at January Sales Data

2011-02-18T17:22:00.000-08:00

*Click graph to enlarge

It was chilly month for sales volume in January on the Westside and in Manhattan Beach compared to the previous few months of sales. This can be attributed to the holiday slow-down with people waiting to start really looking for a home in January and February and the inventory of available homes not being very strong.

Sales in January are definitely quite a bit stronger than during the start of the Great Recession with a solid 39% increase over January 2009 sales. However, sales are still down 32% compared to 2007 and 43% compared to the market hay-day of 2005.

When analyzing the sales data for the month and eliminate extremes in Original List Price vs. Sales Price, we find the gap is shrinking to 5 to 7%, whereas the difference was about 10% in mid 2010.

A few notes on areas and individual sales:

Santa Monica – As I mentioned in a previous blog post, 848 23rd St. a tear-down on an 8K lot was listed at an auction price and received over 20 offers and ended up selling 40% higher at $1,385,000.

On the flip side, 22 Latimer Road a 4 bed/4 bath, 2,800 sq. ft. home was originally on the market for $2.99M and sold 30% lower then asking price after being on the market for a year and having several price reductions.

The majority of homes in Santa Monica sold for 7% below list price to 3% above list price. 720 Georgina a 5 bed/3 bath sold slightly over asking price at $3.009M and was only on the market for 2 weeks before going into escrow.

Pacific Palisades- 387 Arno Way a 2400 sq. ft. 4 bed/ 2.75 bath home was listed at $1.485M in July and sold 2% above listing price at $1.513M.

621 Amalfi Dr., 4 bed/4 bath, 4,094 sq. ft. with a lot size 14,240 sq. ft. was originally listed at $3.995M and sold for 2.6M, 28% below list price. It was on the market 9 months.

**The low-end 150K sale price for the Palisades was for the sale of an attached mobile home off PCH.

Manhattan Beach- 3116 Manhattan Beach Ave. a 3,293 sq. ft., 3bed/3 bath home was originally listed at $3.1M and eventually sold for $2.0M, 35% below the original list price. The majority of single family residences sold for 7% less than the original list price.

Opportunity Knocks - 2808 Arizona Ave., Santa Monica

2011-02-18T16:08:00.000-08:00

Open Sunday 2/27/11 1pm to 4pm

Property Web-Site: http://www.2808arizona.com/

List Price: $749,000

Stunning Tri-level Townhouse located in a prime Santa Monica location just south of Wilshire. One of only four units, this hard to find 3 bed/2.5 bath with soaring ceilings captures a ton of natural light.

Features include a remodeled kitchen with granite counters, Indonesian oak hardwood floors, fireplace in the living room and master, plantation shutters, spacious loft perfect for a home office, private roof top deck, side by side parking in gated garage, security system, wetbar with wine frig and indoor laundry. Please contact us if you would like more information (310) 255-3447.

IMPORTANT ALERT:

2011-02-07T13:11:00.000-08:00

Conforming Loan Limit to drop from $729,500 to $625,000 or possibly $417,000…not good news for mid-level Westside and South Bay housing.

According to an article in this last week’s Washington Post and confirmed by California Association of Realtors President Leslie-Appleton Young, the Obama administration will suggest the higher conforming loan rate that Fannie Mae and Freddie Mac has of $729,500 (referred to as high balance conforming loans) be lowered to $625,000 and possibly even all the way down to $417,000. The current limits are set to expire at the end of September.

At a meeting with Westside Prudential Real Estate agents this week, Young was adamant the current high balance conforming loan limit will be lowered to start weaning the housing market off of government support. The National Association of Realtors will fight this tooth and nail but it sounds like they will not be able to drum up enough support to win the fight.

Presently, the government backs about 95 percent of all new mortgage originations in one way or another. By letting the high balance conforming limit fall the administration hopes it will entice private investors to fund these larger loans again.

There are strong concerns that withdrawing government support too quickly could destabilize the already weak housing market, especially in areas like the Westside and South Bay where these loans are used a majority of the time. This will also potentially eliminate many FHA buyers in the $750K price range who only have to put 3.5% down to purchase an approved property.

Currently there are few private investors in the high balance conforming sector because they are either unwilling or unable to match the mortgage rates that Government backed securities are able to provide.

It is going to be interesting to see what ultimately happens with a sharp divide between Democrats and Republicans on the issue. Both Buyers and Sellers need to be aware that this is a strong possibility and reality for this market. Homes and condos in the $800K to $1.3M price range will be impacted and the impacted price range will grow if the loan limit is cut all the way back to $417K. Young is fearful the compromise to $625K could be passed up.

Those that are on the fence to either buy or sell in this price range might want to think long and hard about getting into the game with interest rates still bouncing around historically low numbers. A change like this will lead to higher rates…potentially quite a bit higher.

Westside and South Bay price per square foot analysis: 2007 vs. 2010

2011-02-07T12:53:00.000-08:00

Check out the graph below which provides the price per square foot in 2007 vs. 2010 in most Westside and South Bay zip codes. Overall, we see about a 20% drop over the three year period. Most of these zip codes hit their peak in 2006/2007 so this is a good indicator of how far these areas have fallen from the inflated peak. Zeroing in on specific zip codes is also very important since most Westside/South Bay markets operate in a “micro” fashion. For instance, the 90402 zip code in Santa Monica (North of Montana) is down 22% while 90403 (South of Montana) is only down 10%. Please note these numbers are a combination of Single Family Homes and Condominiums and price per square foot is only one of quite a few ways to value a property.

*click on image for larger view

Brentwood Glen – short sale – bank wants to move it!

2011-02-07T12:41:00.001-08:00

11344 Albata Street now offered @ $1,069,000…Take advantage of the situation. Feel the character and warmth of this 3 bed/1.75 bath Spanish style home while enjoying modern day amenities such as a recently remodeled kitchen, remodeled bathroom, air conditioning and updated electrical system. The home boasts sizable bedrooms, tons of storage and a walk-in closet in the master bedroom. It is further enhanced by newer hardwood floors and desirable features such as a living room w/fireplace, formal dining room, spacious breakfast area, custom wrought iron work, coved ceilings, private front porch and a backyard shaded by a prolific avocado tree. Great home for a young family and close to everything the Westisde has to offer.

*Please note the home is tenant occupied through June 30th, 2011. However, with the amount of time it will probably take in dealing with the bank the tenancy should not be much of an issue.

Please contact us for more information and to set up an appointment

Shadiness at 525 25th Street?...Multiple offer hysteria hits 848 23rd Street

2011-02-07T12:28:00.000-08:00

Something isn’t right…or is it? 522 25th Street, SM, CA 90402- You gotta love the people who try and cash in on a difficult situation. With short sales and REO’s in full swing, shady activities by potential buyer’s and agents seem to be in vogue. Now, I have absolutely NO EVIDENCE that is the case with this North of Montana property but it is fishy that this property was never active on the Multiple Listing Service. The listing went into effect on the 19th but was not posted until the 27th shielding it from the market at large. It was listed at the bargain-basement price of $2,995,000 which would have commanded a ton of interest for a home built in 2006 featuring 5 bed+7 bath 6,397 sq. ft. on a 8,700 sq ft lot.

This is troubling as an impartial observer. You would think this type of square footage built in 2006 would be north of $3.5 million. However, it is important to note the house has had previous mold issues, needs landscaping and has some construction defects that need to be addressed. It will be interesting to track what happens with this property. . .

Multiple Offer Hysteria Hits for 848 23rd Street, SM, CA 90403- Listed at an unbelievably low price in Late December, this tear-down attracted a ton of offers with a $989,000 list price.

Essentially, the goal of the seller was to make it a bidding process with the hope the psychology of winning the bid would overcome the rationality of the lot’s true value. The tactic worked for the most part. We felt the price of this lot was worth around $1.285-1.315 and it sold for $1.385. Probably would have been better off pricing it around $1.2 and not wasting time with a segment of buyers who really had no chance…but congratulations to the seller’s for moving the property quickly at a slightly above market price during the holiday season.

The fascinating life of 720 Almar takes another turn

2011-02-07T12:19:00.000-08:00

The fascinating life of 720 Almar in the El Medio area of the Palisades has written yet another chapter. One of the investors who was fortunate to purchase the home from the bank at the bargain basement price of $2.150M has decided to move-in to the property after it didn’t sell in an ill-fated flip attempt at $2.695, $500K more than what it was purchased for in August. The roller coaster ride for this property is finally slowing down for the time being.

The current owner made a very good buy at $2.150M but in a market where the only word that seems to come out of a buyer’s mouth is “Value” it is extremely difficult to flip home for such a substantial profit especially when the perception of the home has been slanted due to water intrusion issues it faced while being on the market for such a long period of time.

Quick recap: Built in 2008, the home first appeared on the market in late 2008 for $3.749M. The house spent all of 2009 on a rather steep decline in asking price to $2.995M as rumors began to perculate about some construction issues with the home. Once the builder saw the writing on the wall, the house was essentially stripped of most appliances and fixtures and the house went back to the bank in 2010. It appeared back on the market as an REO for $2.345 which seemed like a great deal. However, the bank put in some cheap appliances, negative rumors persisted about the house and the listing agent was known for being unwilling to work with other real estate agents. Eventually the home sold to the current owner at $2.150 in all cash offer.

A quick look at Manhattan Beach sales in 2010

2011-02-07T11:44:00.000-08:00

2010 was a rebound year in Manhattan Beach with more sales and a slightly higher median price than 2009.

The sales activity citywide in Manhattan Beach was up 15% for the year and the median price, at $1.525m, was up 4% over 2009. Manhattan Beach is down 14% from the full-year median-price peak in 2006.

Please see the graph below that was published in the Daily Breeze a few weeks ago.

(*Sources: Daily Breeze, Manhattan Beach Confidential)

Interest Rates still low vs. beginning of 2010…but climbing

2011-02-07T11:39:00.000-08:00

The average rate on a 30-year fixed-rate mortgage was 4.81 percent this week, with an average of .8 points. The average rate for the same product one year ago was 5.01 percent. The record low, from November, 2010, was 4.17 percent.

Although mortgage rates are up significantly from November, they are still considerably lower than February, 2010. If rates are still lower today when compared to this time last year, why is the number of mortgage applications down so appreciably?

Mortgage experts believe the drastic reduction in the number of Americans purchasing or refinancing is twofold; Most homeowners who are eligible to refinance have already done so and Mortgage rates have increased rather sharply in a very short period of time.

The average mortgage rate on a 30-year fixed-rate mortgage jumped by .64 percent in a two-month span.

As the economy continues to improve, mortgage rates typically rise. With such little movement on the mortgage rate front this week, this event is an exception rather than the rule. Mortgage professionals are anxiously waiting for spring with optimistic anticipation that the floodgates will open on existing foreclosed properties.

(*Source: Housing Wire)

1341 Duende Lane: Available for both Lease or Sale is Open Sunday 1-4

2010-11-12T07:19:00.000-08:00

Our listing at 1341 Duende Lane is now offered for sale at $1,299,000 and for lease at $4,700.00 per month. Come by and check out the best view property available in the Palisades for this price range on Sunday from 1-4 pm. City light and mountain views from every bedroom! This 3 bed/2.5 bath home with hardwood floors, fireplace and balconies on both levels sits on almost a 1/2 acre of land creating tons of privacy and potential for yard or home expansion. Check out the virtual tour here: 1341 Duende Lane Virtual Tour

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For another great value, check out 12679 Promontory in the exclusive Mountaingate community. At $2,289,000, this 5,050 sq. ft. home has too many wonderful features to list including superior built-ins, picture windows, high ceilings, a chefs kitchen and great views. This 4 bedrooms and 4.5 bathrooms is located in a resort like setting with 24 hour guard gated security and a community pool and spa. This home is truly exceptional. Easy to show. Please contact my office to set up and appointment. Check out the virtual tour: 12679 Promontory

Home Prices Fall In October: The First Since The End Of The Tax Credit

2010-11-12T02:49:00.000-08:00

Home sales rose slightly and prices slid in October compared with the prior month as the Los Angeles real estate market searched for a bottom now that federal home buying tax credits have expired.

The median price fell 3.6 percent versus September to $346,000. It was the first drop on a month-to-month basis since the credits expired in April.

At the same time, sales rose 1.6 percent to 3,760 homes.

However, Paul Habibi, a professor of real estate at the UCLA Anderson School of Management, considers the market to be still artificially stimulated by the government, including higher Federal Housing Administration mortgage loan guarantees.

“The government stimuluses, in a sense, have created this artificial bridge under housing prices so that they can’t reach their equilibrium,” said Habibi. “A lot of what we’re seeing is bouncing along the bottom.”

Year over year, the median home price countywide was up 2 percent, while sales were off 14 percent.

As indication that the market has yet to reach an equilibrium, the supply in Los Angeles County rose to 6.2 months, a significant jump from the 4.3 months of inventory tallied in August. The number has now slightly crept ahead of the five- to six-month level considered healthy.

A quick look at sales prices vs. original list prices shows that Westside properties are selling around 90-93% of their list price which is still below the typical 95 to 97% range.

Sources: MLS Data and Los Angeles Business Journal

A Look at Sales Volume in Manhattan Beach for October from 2000-2010

2010-11-12T02:46:00.000-08:00

Thanks to the Manhattan Beach Confidential blog, they have provided a look at October's sales pace among Single Family Residences west of Sepulveda and it shows that the past two years are back in line with the pre-bubble volume in 2005.

Both Oct. 2009 and 2010 outperformed the 3 slump years of 2006-2008. That's in line with the general sense that a local Real Estate recovery of sorts began in Q3 2009.

The question now becomes whether this is a true recovery or the start of a potential double dip. The current economic recovery tells us we may avoid a dip but quite a few developers and higher end property owners are struggling with the reality of the market and will eventually have to throw in the towel and sell for a realistic price.

Source: Manhattan Beach Confidential

Looking at Price per Square Foot for the Westside, Manhattan Beach and Hermosa Beach

2010-11-12T02:42:00.000-08:00

If you cannot do a comparable where you can find the sales history of the same house over a period of time, then price per square foot is usually your best indicator of value. It usually gives you a good range for what you can afford in certain areas especially if the zip code has at least nine sales for the month.

As I have stated many times on this blog, The median price numbers usually stated in the mainstream media can be useless when comparing numbers month to month. A small sample of sales or type of sales can completely skew the numbers. However, they are fine when looking at data over a six to twelve month period.

You do have to be careful when comparing price per square foot. Smaller houses normally go for a higher square footage value than larger homes in the same area unless it is a tear down or new construction.

Here is a look at the September Dataquick SFR sales report for the Westside and Manhattan and Hermosa. Please note that some of the more affluent zip codes were in the high $900 price per square foot range in 2005-2006:

Beverly Hills 90210 18 sales $584/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/Westwood 90024 12 sales $622/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/sqf
Santa Monica 90405 12 sales $648/sqft
LA/Westchester 90045 20 sales $451/sqft
Hermosa Beach 90254 8 sales $692/sqft
Manhattan Beach 90266 27 sales $625/sqft

Sources: Dataquick, Westside Bubble

Property Lists for $75 million in Malibu

2010-11-12T02:39:00.000-08:00

Real estate developer Richard Weintraub has listed his Malibu home for about $35 million. If you add in the four adjacent lots and guest homes that sit on them, the price leaps to $75 million, making it the highest-priced listing in Malibu and one of the top properties listed in greater Los Angeles.

The property has been featured in the movies “Funny People” and “I Love You Man,” and is also available for lease at $87,500 or $250,000 per month, depending on how much is needed.

The property is an 8-acre estate featuring a three-story home of 12,500 square feet with four bedrooms and eight baths. There are three swimming pools, including one in Greek revival style with walls lined with more than 500,000 seashells and a glass ceiling. The resort-style property includes a north-south tennis court and parking for up to 10 cars.

Sources: MLS and Los Angeles Business Journal

$30 Million Dollar Price Reduction and 9.5 Million Listing in Palisades

2010-11-12T02:34:00.000-08:00

Investment banker William Chadwick has listed his 10,500-square-foot Carbon Beach home in Malibu at $35 million. Two years ago, it had a price tag of $65 million, which was unrealistic but it is now priced to sell. Yes, despite the $35 million price tag, it is well priced compared to comparables in the area.
The property has 150 feet of beachfront and a 75-foot oceanfront swimming pool. There is a 16-seat home theater, an aquarium that takes up one full wall, a wine cellar, a home gym and a pub.

Ursitti Lists for 9.5 Million in Palisades

Chris Ursitti, the chief executive of GreenHouse Holdings, has come on the market at $9.5 million.

The home is a gated estate with unobstructed canyon views. The traditional-style home has an open floor plan, formal living and dining rooms, a kitchen with attached great room, a wine-tasting room and a media room. There is a pool, spa, waterfall and terraces for dining. The property is next to hiking trails at Will Rogers State Park.

Sources: MLS and Los Angeles Business Journal

Mortgage Rates Sink to Record Lows Again

2010-11-12T02:31:00.000-08:00

Home loan rates set record lows yet again this week in response to the Federal Reserve's plan to buy $600 billion in Treasury bonds, mortgage finance giant Freddie Mac said in its weekly report on rates.

Freddie Mac said Thursday that the lenders it surveyed were offering 30-year fixed-rate loans at an average of 4.17% with 0.8% in upfront lender fees, down from 4.24% last week and the survey's previous record of 4.19%, set on Oct. 14. Freddie Mac has been tracking the 30-year loan since 1971.

The lenders were offering 15-year fixed-rate loans at 3.57% with 0.8% in lender fees, down from 3.63% a week earlier and the previous record of 3.62% in the Oct. 14 survey. Freddie Mac began tracking 15-year loans in 1991.

For adjustable mortgages with rates fixed for the first five years, the average start rate was 3.25% with 0.7% in lenders fees, also a record for the survey.
Mortgage rates have been bumping around near historic lows since April, tracking a decline in the yields on U.S. Treasury bonds. Formally confirming an expected program aimed at stimulating the economy, the Fed said last week that it would buy $600 billion in Treasuries. That additional demand is expected to continue exerting downward pressure on Treasury yields, presumably keeping rates low on private debt such as corporate bonds and mortgages as well.

Freddie Mac surveys lenders across the nation each week. The rates aren't available to all borrowers, just those with solid credit, enough verifiable income to support payments and 20% down payments for purchases.

Well-qualified borrowers who shop around often obtain slightly better rates, and it's possible to lower the rates further by paying additional amounts known as discount points when the loan is originated.

Source: LA Times

Coveted North Santa Monica 8,900 Sq. Ft. Lot Sells For 1.9 Million

2010-11-12T02:29:00.000-08:00

365 24th street, located on one of the nicest north-south streets in the prestigious 90402 zip code, sold for $1,900,000 on November 4th. It was originally bought for $2,337,500 in May of 2006.

Sunday's Open House and the Best Value in Brentwood

2010-10-21T10:23:00.000-07:00

Our listing in the Palisades at 1341 Duende Lane is now offered at $1,299,000 and is Open this Sunday 10/24 from 2-5pm. Come by and check out this great value, 3bed/2.5bath home with great views, a landscaped backyard that's perfect for entertaining and huge patios on both levels.

For another great value listing, check out 12679 Promontory. Up in the exclusive Mountaingate community, at only $2,289,000 this home has too many great features to list. Including superior built-ins, picture windows, high ceilings, a chefs kitchen, great views, 4 bedrooms and 4.5 bathrooms, this home is truly exceptional. Easy to show and so worth checking out. Please contact my office to set up and appointment.

$13M Bank Owned Property in Brentwood

2010-10-21T10:01:00.000-07:00

12759 Chalon Rd. Los Angeles, CA 90049.

This listing proves that bank owned properties come in all shapes and sizes and at all sorts of prices. In the past week, a Brentwood Estates, bank owned home hit the market with the tiny price tag of $13.4M... no sweat right?

Whats kinda ironic and owing to the state of the property market is that the current price tag is rather cheap for this property... yes, cheap. How is that? Well... about a year and a half ago, it was listed at around $20M. So from $19.9 to $13.4 is a $6.5M or a 33% decline in list price.

What do you get for $13.4M? Well for one thing 8 Bedrooms, 9.5 Bathrooms, a Cigar room, a wine room and wine tasting area (that's wine tasting, not wine drinking), and celebrity neighbors like Tom Brady and Giselle, and the Governator. Not too shabby.

The Importance of Setting a Realistic List Price

2010-10-21T09:58:00.000-07:00

According to studies performed by Realestate.co.nz, a New Zealand housing web-site and popular American online property web-site Redfin.com, properties receive four times as many views in the first week of being on the market than it does a week later.

“The most important people in the market are serious buyers who are searching online every day and they’re fully aware when a home that might meet their needs becomes available.” Said Alistair Helm, chief executive of Realestate.co.nz whose study looked at 1,100 New Zealand properties during a six-week period in July and August.

The bottom line: If you're considering listing your house and you're serious about selling, you're better off being realistic right from the get-go. Otherwise, you are blowing it, especially in a market facing continuing downward pressure.

Source: LA Times: Set a realistic price from the start when you list your home online

The Mess Regarding Foreclosures

2010-10-21T09:49:00.000-07:00

Foreclosures in all 50 states are now being called on for complete reviews. Banks could have been fraudulently throwing people out of their homes, without the legal authority to do so thanks to a break in the chain of title since the mortgages were bundled into securitized products, nobody really knows, who is actually able to foreclose.

With foreclosures making up 1/3 of the home purchases in California, this could cause some serious issues regarding title insurance in the future since banks were signing off on foreclosure paperwork without the legal authority to do so. I am sure this will all get figured out appropriately but it just another way for the banks to extend things further out and pushing a recovery even further into the future. I still find it absolutely amazing that banks, which we bailed out, are able to tell Wall Street the value of a loan is its original value as opposed to what it would be on the secondary market. A bank can tell Wall Street a loan that originated in 2004 at a value of $1.5 million is still worth 1.5 million even though we all know it is probably worth more like $900K in today’s environment. Wouldn’t it be great to be able to tell people that your stock portfolio is worth the same amount it was before the stock market crash?

If you have a few minutes, watch this funny video regarding the foreclosure crisis from Jon Stewart.

Mid-October Update: Mortgage Rates Increase Slightly

2010-10-21T09:25:00.000-07:00

Freddie Mac said in its latest survey that fixed rates on home loans increased this week after declining for the past 3 consecutive weeks. For well-qualified borrowers who paid 0.8% of the loan amount in upfront lender fees and discount points, 30-year fixed rate mortgages were offered at an average of 4.21%, up from 4.19% the previous week.

Full Article from the LA Times Money and Company Blog: Mortgage rates edge higher after 3 weeks of declines

Mortgage Rates Drop to 1951 Levels

2010-10-14T11:42:00.000-07:00

The LA Times: Money & Company Blog is reporting that mortgage rates have continued their decline to record lows according to Freddie Mac's survey of lender offering rates.

The 30-year fixed-rate loan dropped to an average of 4.19% this week from 4.27% in the previous week.

Link to the full article: Freddie Mac: Mortgage rates drop again, now at 1951 levels

Foreclosures - Record High Numbers and CA Investigation of Practices

2010-10-14T11:31:00.000-07:00

This September saw a record number of homes being foreclosed upon as lenders carry on working through the distressed properties in their inventory. September foreclosures increased 3% from August and reached a high of 347,420 properties.

Arguably in response to the increasing number of homes in foreclosure and the spike in foreclosure fraud that has occurred during this real estate bust, California has joined 48 other states who are investigating foreclosure practices. California's non-judicial foreclosure process may be to blame for lenders not complying with the law to contact homeowners to discuss other options before foreclosing. California Atty. Gen. Jerry Brown announced the investigation and explained that he wants it to be determined if lenders are in compliance.

Links to full articles from HousingWire and the LA Times: Money & Company Blog are below:
Housing Wire: Foreclosures reach record high in 3Q
Money & Company: California among 49 states to jointly investigate foreclosure practices

Latest Real-Time Market Data - Westside and Manhattan Beach

2010-10-14T10:18:00.000-07:00

**Click on charts to enlarge

Palisades Home - New Reduction! Under $1.3M and Open this Sunday!

2010-10-08T16:10:00.000-07:00

Our featured listing at 1341 Duende in the Palisades has just been reduced and is newly staged!

Now $1,299,000!

This home, only minutes from Sunset, the village, and the beach, makes you feel like you’re living above it all. With city views and all the Palisades has to offer, this home is not to be missed.
Check out the Virtual Tour Here. Open Sunday from 2-5pm.

Other Featured Listings:
12679 Promontory Only $2,289,000.
This superbly designed and elegantly remodeled 4 bed/4.5 bath view home is a great opportunity and the best price per square foot in Brentwood for a home recently remodeled.
Take a look at the Virtual Tour Here and as usual, please contact our office for any more information or to schedule a viewing.

September 2010 Sales Data

2010-10-08T16:08:00.001-07:00

In comparison the last three years, September sales activity was strong on the Westside and in Manhattan Beach. Though it trails the scorching 2005 sales numbers (it will be a very long time before we see those numbers again), these numbers are starting to show the market balancing out and finding a bit of a normal pattern. In terms of activity, Westwood/Century City saw a solid jump in sales in comparison to last month and Manhattan Beach and Santa Monica led the way with the total # of sales this month. In fact, Manhattan Beach almost doubled the amount of sales it had in September of 09.

High-end sellers are still having a difficult time coming to grips with the reality of the market. The % difference between the average list to sale price is between 10%-22% in most high-end markets while it is usually between 3-6% in mid-level markets. The struggle between buyer’s and seller’s on the high end will continue but some seller’s are starting to wise up with quite a few properties priced above 1.5 million going into escrow in a fairly quick manner. The smart seller is turning back the clock and pricing in the 2003-2004 range.

OUCH! A Few Recent Sales Discounted over 40% from the Original List Price

2010-10-08T15:58:00.000-07:00

Two homes in the Palisades, one home in Malibu and another in Santa Monica take some big hits in comparison to the original list price. The seller’s left a lot of money on the table by not pricing correctly right away…it is tough to catch a falling knife. ..

554 Almar, Pacific Palisades (Left) - This 6 bed/5.5 bath, nearly 5,900 sq. ft. home built in 2008 was originally listed for $5.395M almost two years and ago and just sold for only $3.175M…a 41% difference between list price and final sales price. The home is very nice with a finished basement, home theater, wine cellar and parking for three cars.

17832 Tramonto, Pacific Palisades - This 4 bed/3.5 bath , 4,273 sq. ft. home featuring ocean views from every room originally listed for 3.825M in March of this year before finally selling on September 27th for only $2.250M. The house was updated but did have floor plan issues and appealed to a very limited number of buyers.

23816 Malibu Road, Malibu Beach (Right) - This 6 bed/5.5 bath on 17K of beachfront land was recently completely remodeled and features a 3 bedroom guest house, pool and ocean front master suite. It was originally listed for $23.5M and finally sold for $15.3M after being on the market for over 400 days!

560 Latimer Road, Santa Monica Canyon - This 3 bed/3 bath, 2,607 sq. ft. home on a 17K sq. ft. lot across from Rustic Canyon park provides a good floor plan but definitely is in need of remodeling. It was on the market for 118 days and debut with a list of price of 2.795M before finally selling for 1.975M, a 28% drop from the original list price.

On the flip side…

3701 Grand View, Mar Vista (Right) - This 4 bed/4 bath, 3,263 sq. ft. home situated on a very large lot (15K)for the area, sold in multiple offers and 7% over the asking price. It was listed at $1.468M and sold for $1.575M. The house has a wonderful vintage feel and is in solid condition. You can’t go wrong with the Mar Vista hill location.

September 2010 - New and Pended Listings

2010-10-05T11:44:00.000-07:00

JD Power & Associates: Prudential Ranked Highest Among Home Sellers

2010-09-30T11:37:00.000-07:00

From J.D. Power and Associates:

Prudential Real Estate ranks highest among home sellers that use full service real estate firms according to the J.D. Power and Associates 2010 Home Buyer/Seller Satisfaction Study^SM.

Check out the Special Power Report: Prudential Real Estate.

Got a First and Second Mortgage?

2010-09-30T11:26:00.000-07:00

Rebel Cole, a finance and real estate professor from DePaul University has some controversial advice for you if you are delinquent on your first mortgage but still making monthly payments on your home equity credit line or second mortgage.

Article: An iffy strategy for borrowers with first and second mortgages.

405 Bridge Change to Come

2010-09-30T11:18:00.000-07:00

Neighborhood traffic concerns—and the potential for saving millions in construction costs—have prompted a radical rethinking of plans to bring down the Mulholland Bridge over the 405 Freeway.

Instead of demolishing and rebuilding the 1959 structure—one of three bridges targeted in the 405 Sepulveda Pass project—workers instead would construct an entirely new Mulholland overpass just south of the current bridge. Coming from the west, drivers would enter the new bridge in the same place they do now, then angle slightly south across the freeway before ending up on Skirball Center Drive. Only after the new span was completed would the old one come down, thus reducing traffic-related inconvenience during construction.

Mike Barbour, who is heading up the project for the Metropolitan Transportation Authority estimates the new method would save between $4 million and $10 million.