Foreclosure Infestation *Update 1*

We last featured 1012 17th #2 as a part of our "Foreclosure Infestation" post earlier this month. There is a fair amount of background that you should refresh yourself on with respect to this building so see the last post I did for details.

This unit is a 1 bed/1 bath 887 sq ft condo.

Previous Purchase: 8/13/04 - $445,000

Bank "Buyback" 12/16/08 - $337,500.

Listing History: 12/5/08 - $457,900
Reduced: 01/28/09 - to $449,000

SOLD: 2/24/09 - $435,000

Here we have a mid 2004 rollback. One bedroom units were the first to show the most weakness and they appear to continue to lead on the downside.

Also, it should be noted that Unit #3 which is also a 1/1 foreclosure in the same building and which was also featured in the last post is currently "Pending" after being on the market for only 8 days with an asking price of $414,900.

Looks like the banks (at least in these cases) are getting more serious about clearing inventory. That is exactly what we need to see happen.

New Blog Alert

I have received notice that a Distress Monitor reader (and frequent commenter) has branched out and made a new blog covering the West Hollywood region.

Check out http://wehohomes.blogspot.com/ for more.

Good luck and congrats to WeHo Homes!

Foreclosure - Before and After *Update 1*

We last featured 924 5th #10 back in November. This is a 3 bed/2.5 bath 1,254 sq ft foreclosure. Please see my previous post for more info and pictures (this picture to the left is a "before" picture which was taken before the foreclosure).

Previous Purchase: 3/8/07 - $1,054,000 (90% financing)

Listing History: 10/12/07 - $1,149,000
Reduced: 11/3/07 - to $1,075,000

REO Listing History: 11/18/08 - $684,900

SOLD: 2/13/09 - $715,000

Here we have a situation where this foreclosure listing went into escrow quickly and ended up selling for more than the list price. This is nice to see, as it shows that in at least some situations now (i.e. this one), banks are listing properties at realistic levels which are very much "market clearing".

This is how we get through this whole mess. Expectations need to be reset back to reality and losses must be taken. The backlog of foreclosures needs to be worked through and the weak hands need to be flushed out. Once we get back to more realistic and sustainable price levels, buyers will step in and more transactions will take place. This process is painful for many, but examples such as this one are a step in the right direction and are a step towards a healthier, more sustainable market down the road.

All this being said, I think it is important to note that I think there is still a good amount of decline to come in the SM real estate market and that it is going to take a fair amount of time to reach any sort of ultimate bottom.

"Wave of Rationality in Sea of Idiocracy" *Update 1*

We last featured 939 15th #5 back in December. This is a 2 bed/2.5 bath 1,419 sq ft townhouse.


Previous Purchase: 6/2/03 - $619,000

Listing History: 10/17/08 - $950,000
Reduced: 10/25/08 - to $879,000
Reduced: 11/01/08 - to $849,000
Reduced: 11/25/08 - to $819,000

SOLD: 2/20/09 - $785,000




Here is some commentary I made about this property when I first featured it in December:

If this seller remains rational and keeps up the aggressive cutting and/or accepts an offer well below current list price, I think this thing could sell somewhere in the 700 range. Again, I think the value of a unit like this will ultimately roll back to at least mid 2003 levels (and thus at least to the low 600s), but I still think that with realistic behavior on the part of the seller, we could see a transaction in the 700s.

I Want a Refund...And Some Profit *Update 4*

We last featured 517 14th back in September 2008. Looks like we have the re-list game being played here now.

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

Listing History: 5/1/08 - $2,388,000
Reduced: 06/11/08 - to $2,349,000
Reduced: 07/19/08 - to $2,250,000
Reduced: 09/05/08 - to $2,198,000

Re-Listed: 2/18/09 - 1,898,000


*Thank you very much to the reader who alerted me to this*

Note what I said about this property back in September:

The other interesting dynamic I see going on here is that this is a case of a seller really "chasing the market down". If they had listed at a realistic price and then did a big cut on the first try, they probably would have sold.

Now the market has declined further, financing has gotten tougher and more expensive, and....there is a bunch of additional inventory that just hit the market in 90402 (go check it out, a bunch just came onto market). I believe this house can sell for $2M, but not a ton more. This seller needs to get serious as the traditional selling season is now over.

So back in September I thought they could get $2M...but the seller was still too stubborn and/or delusional. Now here we are at a 2005 rollback and a six figure loss for the seller, and I think they will be lucky to get their $1.9M price. As we (and Westside Bubble) have recently shown, houses asking less than $2M aren't all that rare in 90402 anymore...

Address: 1128 Princeton #5 - 90403

Details: 3 bed/2.5 bath 1,604 sq ft townhouse, $394/month HOA

Description: Light & bright th. 3b/2.5b + loft. Lg roof top deck. 2 car pvt garage w/ direct access + 3rd designated pkg spot. Ample storage space. New hrdwd floors. New "dacor" kitchen ss appliances. Granite counter tops. Eat-in breakfast area w/ french doors that open to patio. Formal dr. 2 fireplaces in lr & mr. New shutters on all windows. Great light w/ many skylights. Quiet complex with $85k in reserves. Close to shops, cafes and douglas park.

Previous Purchase: 5/28/04 - $920,000* (*can anyone confirm this?)

Listing History: 2/2/09 - $1,044,000

You can compare this property to unit #3 from the same building which sold on 8/8/08 for $1,030,000.

I think the "previous purchase" info is correct, but if not, please feel free to provide accurate info if you have it.

Basically, I think it should be obvious that this unit should sell for less than unit #3. The market has fallen a lot between August and now. So what is this unit worth today?

I would say that a mid/late 2004 rollback would be fair. That would put you somewhere in the mid $900K range. So cut $100K and this thing probably sells...but to be fair, I didn't think unit #3 had a shot at getting over $1mm back before it closed. So maybe this thing can get a sale done around $1mm, but I would be pretty surprised if they can get more than $1mm.

And just for kicks, note that this unit sold on 7/28/00 for $599,000. So if you buy it now for $1mm, and you think that year 2000 prices will ultimately be reached, you are looking at a potential 40% downside. I don't have any idea if we will get to 2000 pricing, but I think it is useful to look at what prices were like back then.

By Popular Demand

Address: 415 17th Street - 90402

Details: 3 bed/3 bath 2,073 sq ft house, 8,940 sq ft lot

Description: New price $1,899,000! Priced to sell - offering endless potential to renovate and enjoy living in one of our premier neighborhoods - the gillette regent square tract north of montana and in the franklin school district. On a 60' wide lot approximately 8940 square feet ,within close proximity to the montana avenue shops, cafes, restaurants, the montana library, franklin elementary school and the country mart. Stop by at our sunday open house or call for a private showing.

Listing History: 12/4/08 - $2,245,000
Reduced: 02/10/09 - to $1,899,000

Thanks to those who e-mailed and commented about this property...our readers really have their eyes on the ball.

I don't know if this price is low enough to get the deal done. I suspect not, but it seems like they are signaling an intention to get a sale done eventually. Despite the fact that I think 17th deserves a slight discount due to the Montana light and San Vicente crossing, I think this location is better than 733 20th which is still asking a much too high $1.995mm.

Serious 90402 Mediterranean Delusion *Update 1*

We last featured 557 12th back in January.

This is a 6 bed/5.5 bath 4,183 sq ft house on a 7,500 sq ft lot. See the previous post for comments on condition, etc.

Previous Listing: Mid 2007 - $4,195,000
Reduced: 07/03/07 - to $3,995,000
Reduced: 09/05/07 - to $3,537,888

Relisted: 1/12/09 - $2,786,000

SOLD: 2/11/09 - $2,786,000

Thank you to the reader who e-mailed me about this.

I Told You We Were Close To 2003 Rollbacks...

Address: 901 10th Street #211 - 90403

Details: 2 bed/1.75 bath 1,380 sq ft condo, $353/month HOA, 1970 building

Description: Spacious and bright front-facing condo one block south of Montana Ave. Single level 2 Bed, 1 3/4 Bath + Den. Kitchen opens to both dining and living room with generous counter and storage space. Living room has a gas fireplace and newer bamboo floors. Master bedroom complete with walk-in closet. Master bath has separate tub and shower. Bedrooms are separated by an open den which could be closed off for 3rd BR. Laundry in the unit. Building has spa, gym, and sauna. Extra storage space included.

Previous Purchase: 3/5/04 - $650,000

Listing History: 10/21/08 - $698,000

SOLD: 12/30/08 - $565,000

Thank you very much to the reader who alerted me to this.

This is a 2003 rollback. I think this is where the market is headed as a whole. I have no idea how long it will take to get there or how much lower it may go after that, but I think 2003 rollbacks make sense...the bubble was already in full swing at that point, so rolling off all the false gains from 2003-2006/7 seems realistic.

$1M+ New Townhouses on Centinela *Update 1*

Back in August 2008, we featured 1311 Centinela #5 as an example of the group of newly built townhouses at this address.

This particular unit is a 2 bed/2.5 bath, 1,900 sq ft townhouse.

Listing History: 8/11/08 - $1,175,000
Reduced: 08/27/08 - to $1,049,000

Re-Listed: 1/30/09 - $889,000




This is what I had to say last time when only 3 of the 8 units were listed:

First off, we are looking at an eight unit building. I have no idea if any have sold already but I think it is highly unlikely. It looks like the developer is going with the typical approach and only listing a few units at a time (as to not "dilute" themselves too much). Of course the smart buyer isn't fooled and knows that ultimately there are 8 units for sale here and if you intend on being one of the first few buyers, you better be obtaining a damn good price as you know there is a bunch of inventory still to go.

It is interesting to note that 7 out of the 8 units appear to be on the market (#1-7 are listed). I have no idea what happened to unit#8, but it was listed last time we featured these properties (along with #1 and #5).

This is a whole lot of inventory all on the market at once. I don't like the location and I have not personally toured these units (so I can't speak for their quality/interior appeal). I would generally advise staying away from a situation like this...however, if this type of property works for you and you don't mind the location, then given how much power a qualified buyer has in this situation (or conversely, given how screwed the developer is), a strong willed buyer may be able to obtain a fair deal (if they exercise continued patience and stick to a much lower bid). Obviously, I think these are still overpriced and will go lower in value (and asking price), but I just don't see how the developer (or maybe the bank for that matter) will be able to stay delusional for much longer. They are going to be forced to take a hard look at ANY solid bid. This is the type of position you want to be in as a buyer.

2003 Rollbacks Are Getting Closer

Address: 2663 Centinela Ave #310 - 90405

Details: 2 bed/2.5 bath 1,249 sq ft condo, $315/month HOA dues

Description: AMAZING PRICE!! TOWNHOUSE STYLE CONDO W/BEDROOMS ON OPPOSITE ENDS. EXTREMELY QUIET REAR UNIT. LARGE TILED PRIVATE PATIO, HARDWOOD FLOORS, FIREPLACE, BALCONY OFF MAJOR SUITE, LAUNDRY IN UNIT, LOTS OF STORAGE, S X S PARKING AND GUEST SPOTS, POOL, SPA, GYM, GAME ROOM, EARTHQUAKE INSURANCE - OUTSTANDING VALUE!! (WCSM note: ALL CAPS IS REALLY UNPROFESSIONAL AND ANNOYING!)

Previous Purchase: 8/29/03 - $450,000

Listing History: 12/12/08 - $519,000

SOLD: 2/5/09 - $505,000

Our last post featured a house in a location which I would describe as "barely inhabitable". We are attempting to work our way back to more desirable properties, so I figured this one would be a step up. However, note that the location here is fairly poor as Centinela is a very busy street. However, this property is described as an "extremely quite rear unit" so maybe I'm being too harsh (and maybe you like having quick access to the 10 freeway...).

Here we had a seller who should be commended. They listed at a very rational price and quickly accepted a bid slightly lower than their asking price (I'm seeing the property was only "on market" for 19 days before entering escrow). This is a great example of a market clearing situation going smoothly.

So, as we have said all along, the properties in poor locations and condos would get hit first and be our "canaries in the coal mine". As we have already shown, condos in more prime areas such as 90403 have been in the late 2004/early 2005 range, and I expect with some more time will be joining properties like this one in the late 2003/early 2004 range.

A "Real Home of Genius" *Update 1*

We first featured 2376 Dewey back in October 2008 after being alerted to the fact that Dr. Housing Bubble featured our fine city via this property.


Previous Purchase: 11/22/06 - $1,100,000

Bank "Buyback": 5/15/08 - $677,844

Listing History: 709,900

SOLD: 12/24/08 - $675,000


This is a big rollback...but as I said last time, this location is about as bad as it gets. Still, look at that "previous purchase" price!!!

The sad thing is that even at a 39% rollback level, this thing is still likely very overpriced.

Too Expensive

Address: 1063 Harvard - 90403

Details: 2 bed/2 bath 1,250 sq ft house, 7,900 sq ft lot

Description: Charming 2bd, 2ba, spanish home with guest house on desirable street north of wilshire. Large living room with woodburning fireplace. Spacious formal dining room. Beautiful hardwood floors and upgraded new electrical re-wiring. Light and bright kitchen overlooks backyard and permitted guest house with kitchen and _ bathroom. Detached 2-car garage and large workshop. Large 7900 sqft. Lot size with new rolled sod and automatic sprinkler system. Great opportunity in the franklin school district.

Previous Purchase: 4/2/03 - $969,000

Listing History: 1/21/09 - $1,495,000

Looks like they did a re-wiring and put down some "rolled sod". Still looks a lot like a tear down trying to get too high of a price to me.

Your nearby, 7,900 sq ft lot value comp would be 1018 Yale which sold on 8/14/08 for $1,337,500

And while we have not seen anything near a 2003 rollback on SFRs in this area, I still think we will get there eventually. I think the current asking price is much too high and that they won't get anything near $1.5 million.

Examples like these do a good job of illustrating why inventory is climbing and so few transactions are taking place.

Foreclosure Infestation

Address: 1012 17th Street #3 - 90403

Details: 1 bed/1 bath 928 sq ft condo, $155/month HOA dues

Description: Reo/bank foreclosure. 1 bed/1ba. Torca - condo conversion. Nice small 6-unit bldg. Clean, end unit. Light and bright kitchen with granite counter tops and newer cabinets. Hardwood floors. Large bedroom with double closets. Bldg has some remodeling in 1996. French doors lead to private patio. 1-car carport.



Previous Purchase: 1/28/05 - $500,000

Bank "Buyback": 11/19/08 - $453,622

Listing History: 1/27/09 - $414,900

So at first, I figured this was just another standard foreclosure. Then, after looking at Property Shark, I see something about a "fictitious name" filing. Hmmm....

Then when I went to Zillow to check on some comps for this building, I found out that there is another unit in the building which recently got foreclosed on...And the kicker is that it was owned by the same person/entity as this one above!!!

Unit #2 (also a 1 bed/1 bath) was bought on 8/13/04 for $445,000

The bank "buyback" occurred on 12/16/08 for $337,500.

Listing History: 12/5/08 - $457,900
Reduced: 01/28/09 - to $449,000

BUT WAIT!!

The story gets even better.

The former owner of both units #2 and #3 which both just got foreclosed on in November and December of 2008 just happened to have been the owner of a THIRD unit in the same building!

Unit #1 (3 bed/2 bath) was purchased by the same former owner of #2 and #3 on 9/18/03 for $685,000. This unit was just recently SOLD on 12/16/08 for $728,000 to what looks like a legitimate buyer.

Holy cow, talk about a liquidation. One person owned three different units in this six unit building (50% control factor). Two of the units just got foreclosed upon and the third was exited with a small profit intact.

Also, note that the sale price of unit #1 represents an almost late 2003 rollback...and this is for a 3 bedroom unit (although 17th street deserves a location discount due to traffic).

So here it is folks. The tide has gone out and it turns out the bears were right. A whole lot of folks were swimming naked...even in our lovely city of Santa Monica. Hang on, because I think the liquification wave is still coming on strong. 2003 rollbacks here we come.