Mar Vista- 68% of sales in September at asking or higher..prices surpass 2006 peak levels

Mar Vista had 25 single family sales in the month of September which is way down from the 43 that sold in September last year, according to the MLS (this does not include off-market activity).  The lack of inventory in the area is one of the main reasons for the drop off in sales and increase in sale prices.  The average median sale price was $972,500 and the average days on market was 40 with the sale price coming in at 104% of the list price.  

 Most of Mar Vista has surpassed 2006 peak prices and we are seeing quite a bit of remodeling and building in the area which will lead to increase inventory in 2014 which should slow things down a bit from an appreciation standpoint.

A quick look at a few sales:

Oops- 3717 Ocean View- This 4 bed/3 bath, 3,128 sq. ft. house on a 10,599 sq. ft. lot is a prime example of deceptive marketing and not pricing your home appropriately when listing. The selling agent wants you to believe the house only sold for slightly less than the $1.299M list price at $1.275M. However, a closer look will show the house was on the market for over 328 days with an original list price of $1.699M. In fact, it was originally listed all the way back in 2012 for $2.299M.  Other factors may have been in play with this home such as the seller pricing high on purpose while going through a loan modification or frankly just not being a real seller until they had to.  That said, the worst way to sell a home especially in a hot market is to unrealistically price it and lose a multiple offer opportunity that will lead to the highest price and favorable contract terms which in some cases can be just as important as the price. 

Multiples on Midvale- 3132 Midvale- This 3 bed/2 bath, 1,664 sq. ft. home on a 5,960 sq. ft. lot created quite a stir when it hit the market in late July.   Located just south of National, the house was listed at $869K and immediately garnered multiple offers and sold for $920K with a 45 day escrow period.  This traditional home featured remodeled bathrooms, upgraded systems (plumbing, insulation, etc) and a sizable backyard for the area.  The home is also located in the Clover Avenue School District…Clover is one of the highest rated LAUSD elementary school’s on the Westside. 

Buyers go nutty for 3480 Wade Street- This 3 bed/2 bath, 1,830 sq. ft. home on a 6,605 sq. ft. lot was listed for $849K and reportedly received over 15 offers and sold for $1.030M. The home was marketed as a fixer/tear down and we have heard a builder had the winning bid. The house is just north of Palms and west of Centinela in a prime Mar Vista location.  Two years ago you would not think we would see a fixer/tear down  go for over a million dollars this quickly. 

Pacific Palisades Update- House on Las Lomas lists at $1.375M and sells for $1.750M

The Palisades had 27 single family sales in the month of September which beat out last year’s sales for the month by one according to MLS statistics (this does not include off-market activity).  Of the 27 sales, 37% (10) sold for above the original asking price.  The median sale price was $2.590M and the average days on market was 59 with the sale price coming in at 99.68% of the list price.  Let’s take a quick look at a few sales:

Craziest Sale of the Month- 646 Las Lomas- Tear-down on a 8,698 sq. ft. lot: Listed at $1,375M and sold for $375K over asking at $1.750M.  The minute this extra-large lot hit the market it created quite a stir with builders and principles looking to build a dream home.  An out of area realtor represented the seller and the original list price is evidence of that.  The property had over 20 offers with the listing agent ending up representing both sides and angering quite a few local agents and principles.  The accepted offer is rumored to have no contingencies and it closed within three weeks.  The buyer was probably a builder/contractor with institutional money behind them.  The Palisades has been a hotbed of builder activity the past 18 months.   
 
Highlands isn’t just hot from a temperature standpoint- 16617 Calle Brittany, a 5 bed/5 bath, 4,583 sq. ft.on a 7,678 sq. ft. lot had a list price of $1.875M and sold for $1.950M in multiple offers.  The house went into escrow in late June and had what appears to be a three month escrow on top of of a leaseback thru October 31^st.  The Mediterranean style home features a cook's kitchen, 4 car garage, ocean/mountain vistas and a lush backyard.  

17211 Avenida De La Herradura- This 4 bed/3 bath, 3,083 sq. ft. home on a 7,921 sq. ft. lot situated at the end of a cul de sac created quite a buzz when it hit the market with a $1.585M list price.  The sophisticated and upgraded family home made its debut on a Tuesday broker caravan and immediately drew over a half a dozen offers over the list price and it didn’t even make it to the first Sunday public open house.  The final sale price was $1.775M, almost $200K over the original asking price.  The house was bought in 2010 for $1.450M and the seller put in another 100K+ of additional upgrades.  We represented the buyer.

The odyssey of 1239 Las Pulgas -  At first glance you would think people would want to live here for a long time.  Completely remodeled down to the studs in 2007, this 4 bed/3.5 bath, 3,600 sq. ft. contemporary home with panoramic views goes through homeowners like most celebrities go through marriages.   From a realtor’s perspective it provides the perfect example that sale prices in the area have surpassed those in 2007.  The house was sold in 2008 for $3.2M and then sold in 2012 for $2.650M. Eight months later it was back on the market and sold in February of this year for $3.1M before being sold again this September for $3.315M, $165K over the asking price.  Despite the rapid turnover the home is still attracting buyers at higher prices so the inspections are checking out well.

Santa Monica Update- only 18 sales in September

 It was a very slow month of closings in Santa Monica last month.  The 18 sales is 9 fewer than last year in September, according to MLS statistics.  Six of the sales went for over the asking price with the average sale price coming in at $2.431M and the average days on market being 56. The average sale price was slightly above the average list price by .5%.  We will have a more in-depth look at Santa Monica in our next blog postings at the end of October.

Want to put 10% down on a loan? It is available

We just closed a deal in the Palisades in which the buyer put only 10% down for an interest only loan.  The deal closed in thirty days with a very competitive interest rate and the process was very smooth.  The deal is offered through a wealth management bank but the buyer is not required to place assets with them. They offer 10% down with all of their products if you are not an interest only fan. You must have a FICO score of 760 to qualify. If you are interested in learning more about this feel free to contact me at john.skinner@thepartnerstrust.com.

Interest Rate Chart Since 2008 and some thoughts on the future

Without the major drop in interest rates where would the real estate market be today? We definitely would not have seen the amazing housing comeback of the past two years.  What will happen when rates eventually get back to 6 or 7%...will we see another drop in prices or will the economy be strong enough to handle it? One major concern is that while housing values are rising post-great recession, most people in the workforce are not seeing increases in pay and/or working frantic hours to make what they need.  Also, the super wealthy are now the strongest they have ever been while the masses struggle.  Some of these issues will not impact the westside nearly as much as other areas but I do think we may reach a point in the next few years where housing values may dip a little and stay flat for a very long time.

On the other hand, I cautiously say that as inventory numbers will continue to stay tight on the Westside thanks to Proposition 13 and many homeowners being locked in at historically low interest rates it will make it difficult to find an upleg property that is affordable.

Many Westside retirees have either paid off their home or owe very little and have no incentive to move out of the area since prop 13 protects their tax basis.  They do have an exemption over the age of 55 to move and keep the tax basis, but it is tough to leave Westside living. 

The Westside is land locked and with tight inventory you would think prices will constantly rise.  However, with higher interest rates looming and the overall economy being held together by a string it may not work out that way...ahhh, if only I had a crystal ball.

The Success of Partners Trust

Despite only having 84 producing agents located in four Southern California offices (Brentwood, Santa Monica (2) and Pasadena), Partners Trust ranked 5th in total market share in Southern California through the first half of 2013.

Partners Trust is on track to close over $2.1 billion in sales this year and was named by the Los Angeles Business Journal as one of the top ten places to work in Los Angeles...for the fourth year in a row! The company currently ranks second in average days on market and average price sold.

It is very exciting to be a partner at such a thriving and empowering company.  My team is having one of our most productive year's ever and appreciate having such a wonderful group of clients and referral sources.

*Click on image to enlarge

Mortgage rates level off, 30-year loan averages 4.23%

Mortgage interest rates have leveled off at their lowest levels since June, with 30-year fixed-rate loans averaging 4.23%.

The average rate for solid borrowers with a 15-year fixed mortgage is 3.31%.Freddie Mac pegged the 30-year average at 3.35% in early May. It shot up to 4.58% in August on widespread belief the Federal Reserve would taper off its efforts to keep interest rates low, then fell again when the Fed decided in September that the economy wasn't strong enough for it to do so.

Borrowers would have paid lenders an average of 0.7% of the loan amount in fees and discount points to obtain the rate, according to the latest report, issued Thursday morning.  Appraisal costs and other third-party charges that borrowers often pay are not figured into the survey. 

(Source: LA Times)

Articles you should read

LA Times: Southern California housing market slows after torrid rebound

For the third straight month, the median home price across the Southland stayed essentially flat, at $382,000. The September data confirmed expert predictions that waning demand would throw a wet blanket over the white-hot market.  

Link to article: Southern California housing market slows
 
LA Times: Realtors group expects more homes to go on the market,  moderating prices

California home sales will increase next year and price gains will moderate as an inventory crunch loosens with more homes on the market, according to an industry forecast.  

The California Assn. of Realtors forecasts sales to climb 3.2% in 2014, after falling 2.1% this year amid tight inventory that has helped drive prices rapidly higher. 

Link to Article:  Realtors group expects more homes to go on market 

LA Times: Wealthy Californians have recovered from the recession
 
About two-thirds of Californians with assets of $1 million or more actually feel better off now than before the 2008 financial crisis, a report from BMO Private Bank said.  And roughly the same portion, say they expect the economy to continue its recovery in the next year. 

Link to Article: Wealthy Californians have recovered from the recession 

New Home Sales Climb in August

Sales of newly built homes climbed 7.9% from July to a seasonally adjusted annual rate of 421,000, the Commerce Department said Wednesday. That rate is a 12.6% increase from August 2012.

Amid the housing recovery, developers this year have increased construction of new homes, but the pace has yet to return to historically normal levels. Builders cite the lack of suitable building lots and tough access to credit among their concerns.

Builders also said that some buyers had pulled back on new home purchases recently because of higher mortgage interest rates, which have risen more than one percentage point since early May.

Sales of newly constructed homes rose in all regions expect the West, where sales dropped 14.6% from July.

The median sale price for a new home in August was $254,600 nationally and there was a five-month supply of homes for sale at the current sales pace.

 (Source: LA Times)