Rotten Wood Gaps Down

Back in September 2007 we first featured 1824 20th #E. This was a 900 square foot, 2 bed/1 bath condo with a rent controlled tenant inside. The important thing to note here is that the guy who bought #E also bought #G at about the same time for about the same price. Both units then went into foreclosure (in this case less than a year after being purchased) and finally hit the market when we started featuring them.

In our first update, we talked about how the rent on this unit (which can't be adjusted up to market until the tenant leaves or dies) was a paltry $474/month.

Today our update comes because we have a stunningly low (albeit appropriate for the situation) sale value.

Original Purchase: 4/28/06 - $512,300 (estimated using property tax records)

REO Listing Date: 5/11/07 - $399,900
Reduced: 06/21/07 - to $385,900
Reduced: 10/02/07 - to $250,000

SOLD: 5/29/08 - $100,000

This sale value is stunning. It represents a decline of over 80%. It would be great if someone with access to full records could double check it for us. Again, this unit is in a terrible location and the rent control issue is skewing things big time here. But it is a great example of how crazy lending standards (or lack thereof) were during the boom. The lenders should not have let the same guy buy 2 units for over $500K which were subject to rent control (and grossing less than $500/month each).

As we discussed last time, this whole situation reeks of fraud. Where is that FBI mortgage squad?

Lies or Half-Truths?

Back in March we featured 1254 24th #2 (and also #1).

Todays post will feature just unit #2. (MLS listing here). To refresh our memories, this is a 2 bed/3 bath unit which is 1,182 sq ft large. The building was built in 2005.

Previous Purchase: 1/6/06: $860,000

Old Listing History: 1/15/08 - $949,000
Reduced: 03/11/08 - to $899,000

Relist History: 6/24/08 - $879,000


Relist Description: New on the market! Priced to sell now! Bright,open ready for you to unpack and enjoy this unique, william brantley architecture! Skylights, solarium doors, hardwood floors, pro chef's ss kitchen - viking appliances wine rack, granite counters, enjoy calm on your zen patio with water treatment, stone bath/shower with bench to enjoy spa like amenities. Looks much larger than it is and you don't pay the cost for sq. Footage. Largest unit in the complex.

New on the market! - Well, since this was originally listed in January, I don't really see how you can honestly call this "new". Lie or half-truth?

Priced to sell now! - Since the relist price is only $20K (or 2.2%) lower than the last price, one would think it a bit unlikely that this is truly "priced to sell now!" especially give the fact that the market has fallen further and financing has gotten much tougher over the past 5 months. Lie or half-truth?

Looks much larger than it is... - I don't even know what to say here. Lie or half-truth?

Bottom line: Probably still overpriced and should ultimately sell below the original purchase price of $860,000 (and making this at least a 2005 rollback).

10th Street Townhouse

Address: 1111 10th #103 - 90403

Property Website

Details: 2 bed/2.5 bath 1,584 sq ft townhouse, $348/month HOA

Description: Stunning newer 2001 construction in santa monica. Impeccable 3-level townhouse offers gracious indoor/outdoor living & modern features. Stylish gourmet kitchen w/stainless appliances, custom cabinetry and stone counters. Hardwood and stone floors open to private patios & terraces. Two beautiful bedroom suites, including master, w/vaulted ceilings, terrace, walk-in closet & luxurious bath with dbl sinks, jet tub & sep shower. Plus loft w/ roof-deck & views. 2 car side-by-side w/direct access.

Previous Purchase: 5/15/07 - $1,288,000

Listing History: 6/23/08 - $1,195,000

This townhouse appears to have a lot of good things going for it. It is not some 50 year old converted apartment unit...instead it is pretty new construction, has its own direct parking access, has a rooftop view, a patio, etc. The location is also not bad either. So the real issue here is simply whether you want to pay $1.2M for just 2 bedrooms. Personally, I think this is a preposterous proposition; especially considering how much further this thing is likely to fall in price over the next few years.

I have a feeling that I toured this unit a while back so I don't know if they have had it on the market before or if I toured it in 2007 before the last purchase. If anyone knows something about listing history games being played here, please let us know.

As far as price goes, I don't think they will get their asking price (surprise, surprise). I think they will be lucky to get any offer meaningfully over $1M that can make it through escrow. Remember, you now need 20% down and have to actually document your income to get loans. So even with a sales price of $1.1M here, you would need at least $220K down and an income of $225K+...all for 2 bedrooms. Good luck.

High End Townhouse = Early 2005 Rollback ** UPDATE 2 **

1172 Centinela #4 was first featured here in October 2007. We then featured it once again after another price cut. I happened to be looking back at some older posts and saw that someone commented that it finally sold in December 2007, so today we are doing a quick (and belated) recap.

Also, note that the property website is still up if you want to see some more photos.

Purchase Info: 3/23/05 - $949,000

Listing Info: 7/12/07 - $989,000
Reduced 9/26/07 - $969,000
Reduced 10/10/07 - $945,000
Reduced: 11/01/07 - to $929,000

Sold: 12/5/07 - $900,000

In the comments section of the last post, anon wrote:

And what is this about 'rollback prices'???? I don't expect a new car to cost me the same as in the 1990's, or gas, or food, or luxury homes in a desirable area....You people watch too many Wal-Mart commercials.....

This looks like a late 2004/early 2005 rollback here...Better study up on those Wal-Mart commercials.

Bailing Speculators in 90403 *Update 1*

We previously featured 1018 Yale - 90403 a little over a month ago. Let's see what has changed.

Previous Purchase: 12/5/07 - $1,375,000

Listing History: 5/9/08 - $1,629,000
Reduced: 05/24/08 - to $1,599,000
Reduced: 06/17/08 - to $1,529,000

Ok, so we have a lower price...but remember, this is a bailing speculator and the market has gotten worse since his/her purchase. So I have a hard time believing that they will get a bid anywhere near $1.5M. For those who feel like I was too picky or tough on my location critique of the 90405 house in our last post, let me quickly explain why this location here is also "not great"...Yale is a busier street with a light on the end of it and the house here has the alley location (see previous post and info below).

Secondly, we noticed that a certain phrase was taken out of the description which we had previously been critical of.

From the original description: "The lot is in a rare, yet highly prized position of being on a double alley"

This phrase is now gone. Coincidence, or do we have more real estate agents reading this blog than previously imagined?

Sunset Park Buyers Want Refunds Too

Address: 2432 32nd Street - 90405

Details: 3 bed/1.5 bath 1,424 sq ft house, 9,000 sq ft lot

Description: Great 3 bedrooms house in an exceptionally large lot: 9,000 sq. Ft. Of prime santa monica! Enjoy summer evenings in the comfortable living room, or entertain guests in the elegant dining room. And even interview business acquanintances in the convenient office room. This house has it all! Unbelievably backyard, with room for pool. Bright and airy, it' probably one of the best investments in this world famous city!

Previous Purchase: 8/31/05 - $1,350,000

Listing History: 6/21/08 - $1,387,500

"acquanintances" - I guess the potential $70K commission isn't enough to justify using spell check...talk about professional.

Anyways, here is a 2005 rollback. Not a terrible location, but not great either (if you want to argue that further please go for it in the comments). Nice big lot...but is anyone really going to pay up nearly $1.4M for this?

To buy this, you need a down payment of roughly $300K (or more depending on how tight lending has gotten). You will also need to document your $250K+ income...

I have seen several 90405 houses back on market with statements to the effect of "buyer couldn't perform" or "buyer could not obtain financing".

But this house is probably a bargain because you can "even interview business acquanintances in the convenient office room". Huh? Good luck -- and if anyone can pull up financing info on this that would be great. I am only seeing a 75% variable rate mortgage from Countrywide but I would not be surprised to find out there is more...

90405 Developer Distress

Back in June 2007, Westside Bubble had a post up about Bear Stearns. More importantly, several folks talked about the new construction townhouses/condos at 417 Ocean Park.

From dwr: "Anyone else walking or driving on Ocean Park today? It was sign twirlers galore, all four of them for 417 Ocean Park, some decent looking townhouses in about the worst location possible. They also have the nerve to call the complex "OceanView" something or other. Maybe you can get a peek at the ocean- if you're on the roof. It seems like they've been trying to sell those units for at least six months."

From latesummer2008: "Tiny, Tiny, Tiny matchbox townhouses on a nice exit ramp up on to 4th street. I could only imagine a nice group of Harleys streaming by your quiet abode. Expensive to boot. INSANE.....But it's a co-op.."

From anonymous: "I haven't been inside one, but have been walking by them for a few months. They are the oddest color...you can't miss them. As for expensive, yes. But for Ocean Park condos, some of them are at the low end, believe it or not. I just think the location will negatively impact the final selling price. Ocean Park is loud and to be right above the underpass will only make it louder."

So here we have a case where back in June 2007 they had already been trying desperately to get rid of units (even employing multiple sign spinners at a time). So what happened? Did they get sold?

Address: 417 Ocean Park - 90405

Details: New (2007) construction townhouses...7 units total. Don't know how long they were previously on the market for sale.

Description: This is a class a asset within walking distance to main street and the santa monica beach. The property was built in 2007 and five of the units are currently operated as corporate housing under an eighteen month master lease. After the expiration of the leases, the property could potentially be self operated as corporate housing to gain substantially more income. In addition, the area captures some of the highest rents in los angeles county.

Listing History: 4/29/08 - $4,950,000
Reduced: 06/11/08 - to $4,495,000

For those of you out there who watched these units being marketed the first time around, how much were they asking for each, how long were they listed for, and how many were up for sale (was it all 7)?

**UPDATE** per anonymous in the comments section: "This is not developer distress. The developer died in a plan crash and the building was picked up at a good price $3 mil, now the new owner is trying to flip, I was told the new owner would let it go at $3.7. the units are leased out by lowes and one by google, they are corporate leased and they are paying a good price. this was a good buy at $3 and it may not be a bad buy at $3.7 either."

Life Outside California (or LA)

In "Tell Us About You" we had a lot of folks mention the idea of moving out of state as well as folks who have actually done it. Below are some quotes from people who posted about moving out of state. I think it would be interesting to hear more from people who are considering it or who have actually done it. Is it worth it? What is keeping you from doing it? Spill your guts.

"You could also do a post on out of staters that were driven away from LA by the prices. My wife and I fit that bill...both work (300k+) and live in TX now where that is a lot of money, unlike LA where we'd probably still be renting. Still keeping an eye on the market though and if things come back down to earth, who knows - maybe a reverse migration back LA could start?"

"We sold in 2005 for just north of $1 million. Now we monitor the Santa Monica market through your blog and enjoy our farm on the east coast."

"...may end up leaving LA if we can't find a place we like at a price we feel comfortable with..."

"Does anyone out there believe that the prices in Sunset or Ocean park will return to those of 2005? If not, I believe we are going to have to relocate."

"Our strategy has been to invest in some commercial properties and save, save, save. If things don't drastically change, we are looking at the pacific northwest."

"Its tiring and I'm with many of the other folks here- never, ever thought I'd say it, but the winters aren't looking so bad any longer and moving back to NY is definitely in our possible future plans."

"Made some low (not silly) offers, but prepared to wait up to two more years for a deal. If none appears, we will leave the state."

"I make 350K plus stock options, but like many of the other posters, I am seriously considering leaving the state."

New Description Strategy

Address: 2308 Schader Drive #308 - 90404

Details: 2 bed/1.5 bath condo, 828 sq ft, $266/month HOA, Short sale

Description: Fabulous schader dr.Complex .Top floor unit seller owes approx $600,000. Asking only $469,000. Short pay. Bldg re-built 94, all modern. No steps, elevator. Seperated bedrooms. Walk 1 block to st. John hosp. & yahoo business park. Call l. Bkr. For information, parking & combo #.

Previous Purchase: 11/27/06 - $574,000

Listing History: 5/11/08 - $469,000

First let's talk location. I don't know which side of the building this is on, but if it is on 23rd then then obviously there will be a bit of a discount over a unit which is on one of the other sides. Second, if you want to check out a comp in the area, have a look at 1440 23rd #209 which we recently featured. It is right across the street, is a similar unit, and recently closed for $445,000.

Now, let's talk about what is a very interesting description for this property. Apparently, the sellers out there are finally accepting reality and instead of denying the fact that prices have dropped, they are now advertising just how screwed and underwater they are.

And what is up with "short pay"? -- I believe the term is "short sale", and you bet your ass that this seller is "short" of "pay"; otherwise they might actually be paying their bills instead of dumping off the loss to the lender.

We have said many times here that many short sale attempts will end up as foreclosures. Given the amount owed on this, it previously would be difficult to convince a lender that the value had fallen so much. But given the nice, fresh comp right next door, maybe (but I still doubt) a short sale actually gets done here...assuming a buyer can be found. I still think this is too expensive given the location though.

I think a true floor gets put in at or below the previous sale:

10/24/03 - $380,000

Remember folks, there will be many more of these types of situations taking place over the next few years. Catching the knife now could very well cost you six figures.

Lofty Inventory In 90404

Here is our under $800K inventory chart (source: Zip Realty). 90404 has taken a big jump. Here is the reason why.
Address: 1912 Broadway Street (29 different units)

Property Website: Broadway Lofts

Details: There are 29 new lofts on the market. 18 appear to be 1 bed/1 bath. 10 appear to be 2 bed/2 bath, and there is one that appears to be 1 bed/2 baths (although this may be a typo and this may actually be a 2/2).

Of these 29 units, 28 of them are currently listed below $800K so they are being included in our inventory count.

Description (#208 - 1 bed/1bath): 29 loft condominiums for sale. New construction. Open floorplan with exposed steel, high ceilings, large windows and patio. Unit feature fine italian kitchens with caesar stone counter tops, limited stainless steel appliances, custom designed bathroom sink/cabinets with tile floor and bathtub surround. 2 side by side parking spaces. Security system, video intercom system, keyfob entry to building, hd directv and cable pre-wired. 712 interior s.F. And 112 exterior s.F.

All 29 of these new lofts have been on market for only 10 days...However, after just 5 days on market, every single one had price cuts of roughly $100-$150K. So either the developer is playing games and listed way too high on purpose just so that the price could be cut ("look what a great deal they are now!") -- or the developer got real nervous, real quick and cut the prices out of desperation. I would wager that it is a little of both.

I have not seen the inside of these units but from the outside they look kind of interesting. I'm sure they are kind of interesting inside too. But my problem with these units is mainly the location (of course the price is an issue as well but that is obvious).

The website for these lofts says: "Brand new loft condominiums in a location where you can enjoy all that Santa Monica has to offer!"

But I would say that Broadway is a busy street - with a decent amount of rush hour traffic. You are also just one short block from busy 20th. The area is one which has been transitioning from light industrial towards more mixed use and condo development. I have been in this area a lot as there are some auto shops which I have used over the years. Recently some of the guys started talking about how a bunch of the newer condos around in the area seemed to simply sit and sit without any sales...so you have a lot of additional inventory around you.

So all in all, kind of a cool concept, but for the zip code and the location, I think paying $700-$800K for a 2 bed/2 bath is a hard sell. I have a feeling many of these will not sell and end up having to get rented out. We will update you when the next round of price cuts come through.

Getting Lower...Still Not There Yet On 23rd *Update 1*

Back in January we featured 1440 23rd #209 - 90404. This was a 938 sq ft 2 bed/2 bath condo which "needed a little TLC".

Previous Purchase: 2/9/1990 - $212,000

Listing History: 1/7/08 - $438,980

*Update*
Sold: 2/27/08 - $445,000

We previously featured the property because a reader thought it was "incredibly low priced". With this sale, it turns out it was just about right - and it goes to show that if you put your property on the market at a realistic level, you will sell it quickly and potentially even get asking price or slightly above. Also, this shows once again that the long time owners who aren't delusional have the ability to truly "mark to market".

We presented the following comps in the building last time...looking at these we are looking at a decline of about $100K or 18% in about a year.

Recently Closed 2/2 Units In Same Building:
Unit #303 - 10/10/07 - $541,000
Unit#304 - 2/21/07 - $551,000

Finally, the new buyer appears to be an "out of towner" with a Carson address. Is this a case of an investor stepping in and buying this as an income property? If so, I believe that while they may have gotten a decent deal for the time being, given the location and the potential repairs needed here, this thing likely still has a ways to fall. But we can thank this buyer for setting a new, low comp in what will likely be a series of lower and lower comps for the area.

Check out the Zillow graph on this unit!!

I Want a Refund...And Some Profit *Update 1*

We recently featured 517 14th and today we have an update and a message for this seller.

Previous Purchase: 9/2/05 - $2,005,000

Listing History: 5/1/08 - $2,388,000
Reduced: 06/11/08 - to $2,349,000

This is a 1.6% price cut...I can't think of any good economic reason for choosing to cut by such a tiny amount. To me, this is an indication of an overly greedy and/or overly delusional seller...As a buyer, you need to look at this situation and see that this isn't the type of seller you want to be dealing with.

So for cutting by such a paltry amount,

Doing Your Own Homework

This is a post for those of you who want to know how to look at properties and for those of you who want to know how I come up with my material. I am hoping that some of these resources will help you become a better buyer (or seller). For those of you who are already pros, feel free to chime in with anything I may have forgotten.

Part 1 - Viewing Listings

1. Zip Realty - This is my preferred site which I use to browse listings. Registration is free and definitely worth it. This site allows you to do custom searches (by price range, zip code, etc). You can then sort your searches and save them so that you receive e-mails every time a new property is added. Also, my favorite thing about this web site is that it shows you the listing history with all of the price cuts. This is key, because as we have shown again and again on this blog, you need to really "know" your seller and see if they are being realistic or not and whether they really want to sell. A 1% price cut after 90 days on market is a big fat red flag...or no price cuts after 160 days is an even bigger red flag. Don't waste your time.

2. Redfin - Don't like this one as much as Zip Realty, but it has one cool feature that Zip doesn't have. It shows previous purchase price (when data is available). Also, you can look at a map and then quickly click on the different listings to see which ones are "rollbacks" and which ones might be flippers or dreamers.

3. MLS guest site - This is the version of the MLS for us non-"insiders". It has less info than Zip or Redfin and I only use it for reference purposes. On some rare occasions, it will have a property which is not featured on Zip or Redfin but again, those situations are rare or often just temporary. The one unique thing the MLS has is the "status" of the property. So if a seller accepts an offer, the property will be shown as "looking for backup" -- at this stage, the property is removed from Zip Realty (not sure about Redfin). So you can use the MLS to see how long something is in escrow.

4. I know that people use some other websites so if anyone really loves one of them then speak up. Personally, I pretty much exclusively use Zip Realty.

Part 2 - Getting Property History

5. Property Shark - I stumbled onto this website a while ago and I love it. Again, registration is free (they charge a monthly fee for a "full membership" -- but I have gotten by just fine with the free access). Property Shark often has some of the original loan info and even scanned copies of some of the documents. You will be able to get the full names of the property owners so if you are a big snooper you can do some additional work there. Property Shark will sometimes have construction permit info so you can see details on the big remodels or upgrades. It also gives square footage, previous sale info, etc, etc...Great tool to use.

6. Zillow - I use this a lot as well and I'm sure most of you do as well. It is probably the most frequently used tool to find out previous sales and other info on properties. It is a must use -- although as discussed often on many blogs, the estimated values they give for properties should not be relied on at all.

7. LA County parcel viewer - This will often times provide previous sale info but it is most valuable for looking up property tax info. Go ahead, snoop on your deadbeat neighbor...Also, I would certainly recommend using this to see if any properties you are thinking about buying have shown any signs of distress lately (late or unpaid property taxes are good initial distress indicators).

Part 3 - Miscellaneous

8. California DRE website - This website allows you to look up any person and see if they have a real estate license. The format is last name, first. I use Property Shark to get the name and then plug it in here for a quick check. As a potential buyer, I believe it would be wise to know ahead of time if you are dealing with someone who is licensed.

9. This blog and Westside Bubble - Duh, right? If you are looking at a specific property, it would make sense to see if either of these two blogs have done a post on it. Read the comments, sometimes people leave nuggets of info which would be very valuable as a buyer (i.e. building is due for a special assessment soon due to termite damage, etc). For Westside Bubble, you need to do a Google search of the address and then "Westside Bubble" since there is no Google search bar on his blog. On this blog, I have a bar up which makes it pretty straight forward. Just put in the address and search this blog!

Part 4 - Foreclosures

10. Foreclosure Radar and Foreclosure.com are the two which I have played with casually in the past. You need to pay and get a subscription to really get good info, but you can use them without paying to get some general info and then use Zillow to figure out which exact house or condo might be late on taxes or be in foreclosure. I don't use these services much though so I am not an expert on them.

Conclusion

Knowledge is power -- We have come a long way from the old days where the real estate agents controlled all the info. With all the tools available today, buyers (and sellers) would be wise to do a little work on their own and put themselves in a position where they can make informed decisions. I hope this helps some of you out there.

Let Me Dust Off My Crystal Ball...

We last used our crystal ball to help us spot this foreclosure on Idaho before it came to market as a REO. It was a situation where a seller had listed their condo as a short sale for a while but still couldn't sell it. So the bank took it back and we spotted the foreclosure before it hit the market.

This blog has maintained that most of the short sale attempts currently on the market will not succeed. And because the owners often put little money down and are now severely underwater, they will end up getting foreclosed on. This is another reason why the cycle takes so long...Underwater properties sit on the market for months and months as short sale attempts. Then, the borrowers stop paying the mortgage and can usually stay in the home for several months (often times, even longer due to the back up of foreclosure paperwork at all the lenders). Then the lender forecloses and it takes several months to get the property on the market...then the REO sits on the market for at least a few months. Needless to say, it often takes over a year for the whole process to play out. Since things have gotten much worse than before and we are only now seeing the foreclosures which started taking place a while ago, there is a good chance that things are going to be getting worse for a while.

Anyways, we have another case of a failed short sale and upcoming REO listing to tell you about today. Nobody else is posting this info online -- and certainly very few if any real estate agents would provide you with this info. So here you are loyal readers...
1021 12th Street #104 - 90403 is a 1/1 condo and it was last featured here in September 2007 as an attempted short sale.

Original Purchase: 4/7/06 - $530,000

Originally Listed: 7/30/07 - $585,000
Reduced: 08/21/07 - to $575,000
Reduced: 09/07/07 - to $500,000

So of course, the short sale didn't happen -- either because there were no fools willing to pay $500K for a crappy, old, 1 bedroom or because the lender wouldn't agree to do a short sale. We will likely never know. But what we do know is that no sale happened and now the bank has just foreclosed.

Trustee's Deed Upon Sale: 5/13/08 - $374,250 (Morgan Stanley Trust is the buyer)

Now, since we have seen a lot of lenders put their foreclosure on the market for more than the "buyback" amount, it would not be surprising to see this thing initially listed in the low $400K range. The only thing is, prices for units like this have rolled back to at least 2005 values...and here is the 2005 sale price.

9/1/05 - $340,000

Good luck...we will issue an update when this thing hits the market.

Bad Photo

Address: 2901 Kansas - 90404

Just a quick note here on what is described in the listing as the "lowest priced home in Santa Monica" (asking $699,000). Check out this photo. I am no marketing genius, but don't you think that it would have been a little more flattering to exclude the freeway offramp sign!

Thanks to our reader that tipped us off to this house.

Expired RE License Leads To Foreclosure

Address: 1419 15th Street #1 - 90404

Details: 1 bed/1 bath condo, 588 sq ft, $206/month HOA fees

Description: Bank owned foreclosure. Beautiful 1bd/1bath condo. Hardwood floors throughout! Tile counter tops. Updated bathroom. Light & bright! Information herein is not verified by agent. Buyer to verify all information & rely on their findings. All offers must be submitted on car form w/pre-approval (not pre-qual), copy of earnest money check +proof of funds (if cash offer) & agency disclosure. For a guarantee receipt of your offer check our private remarks for fax cover & faxing instructions.

Previous Sale: 1/31/06 - $431,000

Bank "buyback": 4/25/08 - $337,500

Listing History: 5/29/08 - $389,900

A few things to note here.

1. Check out the small square footage. 588 square feet is small...even if you have some sweet "tile counter tops". I guess granite is out of style now...

2. This thing was for sale FOREVER a while back. I don't have anything written down but I seem to remember this thing sitting on the market for something like a year.

3. The owner who got foreclosed on happened to be...a real estate "salesperson" (gasp - shocker!). His license expired on 4/5/08...just a few weeks before the foreclosure.

4. Here are the previous sales for this unit. Looking at them tells you that the bank is dreaming with their current price -- and it shows just how much more this could drop.

1/31/06 - $431,000 (unknown financing)
1/29/04 - $310,000 (95% financing)
6/16/03 - $265,000 (98% financing)
1/5/01 - $150,000 ($500 downpayment via FHA)

Hot potato - this thing just kept on getting flipped over and over! The current listing price represents a 2005 rollback...I think it will need at least a 2004 rollback to sell. Wonder if it will break below the 1/29/04 price?

Can I Get a Refund Please? *Update 1*

We recently featured 517 Euclid on this blog as the first house of our "refund" series.

Our update today comes thanks to some reader comments left in the last thread. Turns out this house isn't just awesome, it is BOMB! --> Back On Market, Baby! (...well sort of; it may never have actually left the market, but it was "looking for backup").

As detailed in the comments section by "anonymous":

I just saw that 517 is no longer Looking for Backup, AND did you notice the description change and small price drop? Orig descr starts with: "Enchanting 1920's Spanish fixer on a private lot with mature landscaping and a large backyard..." New descr starts with: "BEST VALUE NORTH OF MONTANA. Reduced. Needs work. ..." then goes into the above.

Previous Purchase: 6/7/07 - $2,250,000

Listing History: 5/16/08 - $2,195,000
New BOMB price: $2,139,000

Just a Few Blocks East In Brentwood

Address: 803 Wellesley Ave - Also being shown as 12506 Montana -- zip code 90049

Details: 2 bed/2 bath 1,097 sq ft house, 3,776 sq ft lot -- flipped condition

Description: Reduced $60,000 and priced to sell! Updated brentwood home with vaulted ceilings and open floor plan. European style cabinets, stainless appliances and granite counter tops including on center island. Hardwood floors, travertine work in both full bathrooms. Extra, finished space next to huge garage used as exercise room.

Previous Purchase: 3/7/07 - $1,071,500

Listing History: 11/6/07 - $1,175,000
Reduced: 11/27/07 - to $1,160,000
Reduced: 01/08/08 - to $1,150,000
Reduced: 02/06/08 - to $1,145,000
Reduced: 02/26/08 - to $1,135,000
Reduced: 04/23/08 - to $1,120,000

The address on the listing is 830 Wellesley but Zillow and Property Shark have it as 12506 Montana. This property is just east of Santa Monica (so it is technically Brentwood) and it is on Montana right across the street from Brentwood CC.

Here is the story. The owner is a real estate agent (gasp!) and she bought this property from what was likely a flipper. Property Shark even shows some records of the upgrades...

6/16/2006

Bldg-Alter/Repair

Remove & Relocate Interior Partition Wall, Relocate Kitchen

These upgrades were done BEFORE the last purchase so that is why we are speculating that all/most of the upgrades are not "new" and should therefor not be adding value to the initial purchase price. That means that at the very minimum, this property should be listed for LESS than the prior purchase. The location (right on Montana) is tough and the lot size is tiny...and you aren't in SM so you don't get the schools.

Examples like these show a few things. First, we see why real estate is sticky on the way down. This thing should be offered for much less but the seller is either delusional or they simply don't have any room to cut. I am guessing it may be a bit of both but likely is skewed toward the latter. We won't find a true bottom until the weak holders are shaken out. Markets need to clear. And if sellers don't have the ability to hold their properties for the long term, and don't have the cash to bring to the closing table, then we will only find true market values through either short sale or foreclosure. We are sitting here at 209 days on market...and it also appears we have some delinquent property taxes.

So lesson #1 for our potential buyers...KNOW YOUR SELLERS. If they don't have the ability to cut the price down to the true market value, don't waste your time...come back and try again when the bank has possession.

Seriously, Can I Get a Refund??

Address: 702 11th - 90402

Details: 3 bed/2 bath 1,700 sq ft house, 7,500 sq ft lot

Description: Enter an inviting courtyard to this charming 1920's spanish. Spacious bright dining room overlooks private yard with swimmers pool. Hardwood floors, arched doorways, den/nook off of spacious living room. Separate master with excellent closet/storage space & updated bath. A wonderful starter property, live in now and create your future dream home in one of la's most desirable neighborhoods!

Previous Purchase: 11/1/05 - $2,015,000

Listing History: 5/29/08 - $2,169,000

Seems like a lot of people want refunds these days.