2004 Rollback in 90405

Address: 1008 Bay Street - 90405

Details: 2 bed/1 bay 1,000 sq ft house, 6,499 sq ft lot

Description: Charming Spanish style house in an excellent Ocean Park location. Hardwood floors, wood burning fireplace and an accomodating floorplan. Formal dining room opens to outdoor patio and beautiful yard. Large approximately 6500sf lot with an outdoor fireplace, mature fruit trees and lots of green grass. Long driveway with detached garage.


Previous Purchase: 10/13/04 - $850,000

Listing History: 1/5/09 - $895,000
Reduced at some point to - $849,000

SOLD: 3/26/09 - $825,00

Nothing too exciting here (aside from the fact that yet again we have an agent who was too lazy to spell check their description of the property)...this little shack sold for a mid 2004 price and I believe it will continue to drop in value as this cycle plays out. As I have said before, I don't cover 90405 as much as other zip codes because I don't know it as well as the others. Lucky for us, Westside Bubble is doing a great job picking up the slack with posts like these.

Overpriced on Princeton *Update 1*

We last featured 1024 Princeton back in October 2008.

This (tear down) property sat on the market for 220 days with NO PRICE REDUCTIONS before expiring and is now playing the re-list game...

Previous Purchase: 1/30/04 - $1,020,000

Listing History: 8/13/08 - $1,499,000

Re-Listed: 3/26/09 - $1,385,000



This property might have been able to get a bid near the current asking price if they had been aggressive last year when they first listed it. Now, the market has declined further AND there is competition in exactly the same price range (see Tuesday's post).

Again, notice the early 2004 sales price on this being right around $1mm. I still think that they might be able to get more than that amount today, but I think their current asking price is much too high (again by at least $100K). Ultimately, I think it is very likely that these properties will be worth less than $1mm in the intermediate term, but I don't think we are quite there yet.

Sellers that want to sell in this market need to price their properties BELOW the competition and below recent comps...this seller had a chance to go below the competition on Harvard but they have blown their chance. Selling property is easy in this market, but these sellers (and/or their agents) somehow just don't seem to get it.

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

Too Expensive *Update 1*

We previously featured 1063 Harvard back in February when I said that this 2 bedroom house on a 7,900 sq ft lot was "much too high".

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

Listing History: 1/21/09 - $1,495,000
Reduced: 03/22/09 - to $1,389,000

I think that this "reduced" price is still at least $100K too high...especially since we now have competition...




Address: 1126 Harvard

Details: 3 bed/1.75 bath 1,777 sq ft house, 7,900 sq ft lot

Description: Huge $150,000 reduction & ready to sell! Sweet and charming 1930's spanish on a large lot with a meandering backyard. Hard to find 3 bds + office. Lots of light, hardwood and beautiful terra cotta flooring. Spacious live rm is accentuated by expansive windows and a high coved ceiling. A nostalgic feeling kitchen and breakfast room, adjacent to a generous sized frml din rm, flooded w/sunlight.

Previous Purchase: 8/24/02 - $1,041,000

Listing History: 1/26/09 - $1,645,000
Reduced: 03/19/09 - to $1,495,000

Adjusting for the time period difference between the original purchases, it looks like 1126 deserves a roughly $150K premium. This would likely be due to the larger square footage and one extra bedroom. They are both on 7,900 sq ft lots and they are both on Harvard but I think a very slight location discount would go to 1126 because it is closer to Wilshire. We discussed the minor upgrades to 1063 in our last post and I don't think much if anything was done to 1126. So all around a pretty good apples to apples situation with mid 2002-2003 pricing to compare current list prices to.

Both sellers here should have equity in these property and should be able to cut prices to market. I don't think either of these current asking prices are "market". Both houses have been on the market long enough that every buyer out there who would be interested in these properties already knows about them. If either of these sellers want to sell, they need to get real. 1063 needs to get under $1.3mm quickly, and I think 1126 needs another good sized cut as well.

I think market clearing prices for both these properties are currently materially higher than the original purchase prices. However, prices have really been falling quickly as of late and there have been so few transactions that most sellers (and maybe even buyers) don't realize how far we have fallen. I have no problem seeing both of these properties near their original purchase prices at some point in the future, but for now, these should still be a little higher than that. Potential buyers should go into any transaction with their eyes wide open with respect to the likelihood of near $1mm values on these types of properties in the intermediate term.

WTF Santa Monica?

The photo to the left is of 1773 Dewey and comes from the latest post on "Under Culver".

I don't know why this happened, and while I really hate graffiti, I think its sort of hilarious...

Also, I personally was not aware of the "Under Culver" blog, and while it isn't exactly similar to this blog, I think it would be a good resource for any of you interested in the Culver City area.

I figured Westside Bubble might have received an e-mail or two about this...indeed he did. See his latest post as well.



The photo on the right is one that I took recently as I noticed the sign in the window. It is also notable because this just so happens to be 1308 26th which we just featured as a short sale a few posts ago.

Come on guys, you can't break into the place just because you are so excited about the listing...you gotta wait til the open house.

But on a more serious note, WTF Santa Monica? Is all this wind making people crazy or what?

And what's up with the terrible grammar in both situations?

I Want a Refund - 90405

Address: 2208 Ashland - 90405

Details: 2 bed/2 bath 1,254 sq ft house, 7,000 sq ft lot, "upgrades and improvements"

Description: Stunningly beautiful designer's masterpiece. Must see to believe the beauty and tranquility of this ocean park gem. Too many upgrades and improvements to list since last time on market. One of a kind quality. Gorgeous pool, yard and mature foliage. Don't miss seeing this in person. Open house 3/1, sunday 1-4 pm. Listing agent's cell only.


Previous Purchase: 11/16/07 - $1,449,000

Listing History: 2/4/09 - $1,449,000

Judging from the description, we don't have an apples to apples situation here...however it doesn't appear that any MAJOR remodeling was done (adding sq footage, etc), so I am not giving much value to the "improvements".

This means that a late 2007 rollback certainly isn't going to cut it. I think there needs to be some significant price cutting here...the question appears to be whether the seller can handle that though as the property tax situation is throwing off some distress signals. Maybe we will see this thing languish for a while and then get re-listed as a short sale...that appears the be the trend these days.

Back On Market Again!?

Address: 1524 Franklin #D - 90404

Details: 2 bed/1.5 bath 867 sq ft condo, $230/month HOA, "newly remodeled", 1970 building

Description: Bright unit Recently remodeled rear top unit Kitchen with granite counter top, new appliances. Newly remodeled bathrooms. Washer/Dryer hookups in unit. Smooth ceilings with recessed lighting, new light fixtures and laminate flooring. Very large balcony


This unit has been featured on this blog multiple times...it was last featured in August 2008 when it finally sold (after being marketed as a foreclosure). Here is the history:

Previous Purchase: 8/29/06 - $640,000

Listing History: 12/17/07 - $463,500

Two further price cuts later - $405,500

Sold: 4/29/08 - $405,500

And now its back again with some new appliances, granite, cabinets, etc...

Listing History: 2/21/09 - $489,000

At first I thought that this had to be a flipper in action...but I don't think this is a true flipper because they took so long to get it on the market from the time they bought it and because looking at the pictures, it clearly is being lived in and isn't staged at all. So I don't really know what is going on here. What I do know is that they are dreaming with their asking price. The market has deteriorated significantly from the time that it was bought in April 2008 and their upgrades really aren't worth much. I think it will take a big price drop to move this thing...

The photo on the right is from the foreclosure listing last time.

Escrow Fails, Short Sale Status Ensues - 2003 Rollback

Address: 1308 26th - 90404

Details: 2 bed/1 bath 855 sq ft house, 4,948 sq ft lot, "tastefully remodeled in 2006"

Description: Beautiful fenced in home,expansive ~ huge sunny private back yard ~ sunny throughout the day in the entire house.Tastefully remodeled in 2006.Great home to entertain.Walk distance to many shops and parks.Love where you live! Love where you go!Short sale,subject to lenders approval.Lenders APPROVED for $680.000.00

Previous Purchase: 4/15/04 - $698,000 (100% financing)

History (much from comments made on this blog):

--"In 2005 it was listed at 969,000. The listing was worded as such:

"Beautiful home on north of santa monica,spacious,huge private back yard,new pluming,new electrical,bright,sunny new bathroom,space for a private sunny large pool."

At that time the property didn't sell. I believe the listing agent actually leased it from the owner and moved in (though I may be wrong... it could have been one of his friends."

--Listed in May 2008 for $899,000 as "DEVELOPMENT OPPORTUNITY. ZONED R2 NORTH OF SANTA MONICA. PLEASE DO NOT DISTURB THE TENANTS. SHOWINGS WITH ACCEPTED OFFERS ONLY. PRICED FOR LOT VALUE"

--Listed: 12/9/08 - $745,000

--Reduced: 12/17/08 - $699,000

--Goes into escrow sometime after this and is listed as "pending" until mid-March 2009

--Property status is changed to "active" as escrow fails and "short sale" language is first added to the description. Price is now $680,000.

This whole situation is a great illustration of the bubble. The location for this property is really bad -- tons of rush hour (and non-rush hour) traffic on 26th street. However, "location, location, location" was thrown out the window during the bubble and thus this owner thought they could get nearly $1mm for this property in 2005...yikes.

Ok so this property was purchased, "remodeled" (no square footage added or anything major like that), and then when the flipper couldn't get their obscene asking price, rented out. The seller then tried to get rid of the property again in 2008 but by that time, the market had moved much lower and properties with "location discounts" were leading the rollback charge (and they still are).

After chasing the market down for a while, a bid is finally accepted but no sale is able to go through...now we have word that the lender will accept $680,000. To that I say "yeah right, good luck getting that"...This property was 100% financed by a now defunct lender. If you are bidder, the ball is in your court. No way should you pay $680,000. At $680,000 you are at a late 2003 rollback (especially after adjusting for any "remodel" money put into the house). I think this place is destined to continue falling for a while. Be careful out there.

Finally, because I still believe it is a great "distress" indicator, I had to check up on the property taxes...wanna guess if they are "defaulted" or not?

This is one of our first 2003 rollbacks...as we have stated all along, poorly located properties will lead the charge down. So while we aren't at 2003 prices on better quality and better located properties yet, it doesn't mean we won't get there eventually. At a "bottom", I would expect poorly located properties to ultimately have rolled back further than better locations, but I think for now there is still a fair amount of room left for both classes to continue rolling back.

Near 2004 Rollback Pricing

Address: 449 Euclid - 90402

Details: 3 bed/2.5 bath 2,968 sq ft house, 7,500 sq ft lot

Description: Charming move-in condition single level traditional. Featuring 3 bedrooms, 2.5 baths, remodeled open gourmet kitchen / family room, formal living and dinning rooms, large master with walk-in closet, hardwood floors, wainscoting, custom cabinetry, french doors, enchanting gardens, 3 car garage.

Previous Purchase: 12/15/04 - $2,200,000

Listing History: 3/13/09 - $2,295,000

So I was going to do a post on some lot value situations in 90402 but Westside Bubble took on the task instead (thank you).

However here we have what looks to be a pretty decent and livable house. It looks like an apples to apples situation with the late 2004 purchase...so while I don't necessarily want to argue that this house is wildly overpriced, I think they will need to reduce the price to get a sale.

Ocean Ave 2005 Rollback

Address: 801 Ocean Ave #503 - 90403

Details: 2 bed/2 bath 1,491 sq ft condo, $800/month HOA fee

Description: Awe-inspiring, stunning, spectacular sunset, ocean and whitewater head-on views to take your breath away! Exquisite, completely and professionally designed and remodeled. Gorgeous dark cherry wood cabinets in kitchen and bathrooms. Maplewood floors, stainless steel appliances, fireplace and balcony. Pool and spa. Washer and dryer. Zen-like. Location! Location! Location!

Previous Purchase: 9/7/05 - $1,625,000

Listing History: 1/20/09 - $1,595,000

SOLD: 3/10/09 - $1,540,000

This should not be much of a surprise to anyone...2005 rollbacks have been common for a while, and high-end stuff is certainly not immune. As I have been saying since for a long time, we were really just lagging the cycle in SM.

There are a couple things to note about this property. First, the description talks about how the unit is "professionally designed and remodeled". I have no idea if the recent seller was the one who put money into the unit, but if so, it makes the rollback slightly bigger.

Second, note the full sale history:

9/7/05 - $1,625,000
5/3/02 - $927,500
4/14/00 - $675,000

I would say that there is something wrong with you if you see this type of history and it doesn't scream bubble to you. The ocean was just as pretty back in 2002 and 2000...I think that ultimately there is a ton of risk for the recent buyer. I mean, being conservative, if you think we get another year or two worth of rollback pricing, you are looking at hundreds of thousands of dollars in losses accruing in a very short time period...

Finally, I don't follow the Ocean Ave property market all that closely, but I have noticed that there seem to be a ton of units available for lease (and purchase). If you are in the market for a unit in this area, I think you need to be really careful.

Easily $200K+ Overpriced

Address: 1025 25th - 90403

Details: 3 bed/2.75 bath 1,900 sq ft house, 6,072 sq ft lot

Description: This one story spanish hacienda is in the most sought after location. It has a remodeled gourmet kitchen with granite countertops, breakfast area and top of the line appliances. There are coved ceilings in the living room and hardwood floors throughout. The three bedrooms are sunny and spacious. Located adjacent to the large formal dining room is an outdoor eating space. The master suite has an extra large dramatic bath that overlooks the rear yard. Close to schools, shops and the park.

Previous Purchase: 9/13/05 - $1,720,000

Listing History: 2/27/09 - $1,895,000

I have heard that the small addition/upgrades were done BEFORE the purchase made back in 2005...so basically this is an apples to apples situation now. It would be great if someone could confirm that though, so please speak up if you know details here.

Anyhow, I don't see where all these sellers (and their agents) get off thinking that they are entitled to hundreds of thousands of dollars MORE than what they paid on their already wildly overpriced, approaching bubble peak purchases....

This house was built in 1930. It has (I believe) an extra bath added on and a "remodeled kitchen" (oohhh...some granite and stainless steel...must be worth at least a few hundred grand).

I mean...the lot here is arguably worth LESS than the $1.2mm which was fetched in November of last year for a comparable lot value situation just one block west.

So I think this thing should be a late 2005 rollback at a minimum. I would suggest the sellers quickly cut their price by 10% if they want to sell...otherwise, I think you will rot on the MLS like all the other delusional 90403 sellers...

This is why houses aren't selling in this area and inventory is rising (see Westside Bubble). Wake up sellers (and agents) - listings like this are repulsive to buyers...The bubble has been exposed and we are living in the age of the rollback.

Apples to Apples -- $800K Overpriced

Address: 229 22nd - 90402

Details: 4 bed/4.5 bath 4,227 sq ft house, 7,550 sq ft lot, 2003 construction

Description: 2 master suites w/walk-in closets, private balconies, & temp controlled steam showers. Travertine floor, berber carpeting, soapstone counters. Large great room combined w/stunning kitchen. Private office, full dining room and formal living room. Multi-room, indoor/outdoor, surround sound. 4 built-in tvs. Move right in. Magnificent. May be purchased furnished.

Previous Purchase: 5/19/05 - $3,200,000

Listing History: 2/17/09 - $3,999,999

First off, the photos for this listing are terrible. You're trying to sell a house for $4mm and you can't get any light in your interior photos and you can give any real exterior shots??! Ughh.

Second, this is a nice apples to apples situation where we don't have any "remodeling" nonsense getting in the way of our valuation. I think it is fair to say that this thing is wildly overpriced. I don't think they will get a bid anywhere near $4mm and I think they need to lower the price dramatically. Get it down $800K to your mid 2005 purchase price and I think you start getting serious interest.

Thanks to the reader who sent this in.

P.S. Thank you to all the readers who have been sending e-mails about all the (near) lot value situations in 90402...prices definitely coming down there...I will likely do some posts on those a little later on.

90404 - Short Sale/2005 Rollback/Tax Default *Update 1*

We last featured the tiny SFR located at 3218 Arizona back in October.

Previous Purchase: 9/23/05 - $490,000

Listing History: 6/20/08 - $639,000
Increased: 06/24/08 - to $659,000
Reduced: 07/18/08 - to $629,000
Reduced: 08/06/08 - to $599,000
Reduced: 08/21/08 - to $575,000
Reduced: 09/04/08 - to $525,000
Reduced: 09/18/08 - to $499,000


Re-Listed: 3/3/09 - $410,000

This is still being listed as a "short sale" and the property taxes appear to still be delinquent by almost $20,000...and I still recommend staying away from short sales in general.

I think all these short sale attempts are indicative of the fact that we aren't all that far through the cycle...we will be closer to the end when all these short sales fail to go through and the banks take them back and market them as foreclosures.

Remember, this cycle doesn't end until things get washed out.

$1,000/Sq Ft , One Bedroom Flip...Will A Greater Fool Appear?? *Update 3*

We last featured 911 21st #A back in November.

Just a quick update here on this short sale attempt.

Previous Purchase: 10/10/06 - $599,000

Listing History: 8/10/07 - $749,000
Reduced: 9/28/07 - to $719,000

Relist History: 7/1/08 - $699,000
Reduced: 08/12/08 - to $669,000
Reduced: 11/18/08 - to $635,000


Re-Listed: 3/4/09 - $599,000

I think this is still much too expensive. I also will continue to recommend that readers generally avoid "short sales" and wait for situations where you can buy directly from the bank (wait for the bank to list it as a foreclosure).

Property taxes still appear to be delinquent as well.

"The 90402" - Part 6 (Canyon) *Update 3*

We last featured 333 East Rustic Road back in May 2008. See the last post on it for links to the earlier posts as well as more of the background story (Beck, Scientology, etc).

One interesting thing to note here is that Beck (as in the singer "Beck") appears to have been the owner a few owners ago...

The house is now a foreclosure...

Previous Purchase: 7/26/06 - $1,500,000



Listing History: 10/10/07 - $1,659,000

*UPDATE 1*
Reduced: 01/12/08 - to $1,599,000
Reduced: 03/14/08 - to $1,549,500

*UPDATE 2*
Reduced: (date unknown) - to $1,350,000

Re-Listed as REO: 1/14/09 - $949,900

Swimming Naked (on the 10 freeway) *Update 1*

Very quick update here. We last featured 2234 Delaware back in April 2008. To refresh, this is a bank owned triplex with "city violations" in a horrible location. See my previous post for more info.

Purchase History:
12/8/05 - $860,000
6/23/06 - $1,190,000 (sucker/fraudster?)
5/9/07 - $942,821 (lender buy back - also the amount of "unpaid debt")

Listing History: 4/18/08 - $769,900
Reduced to:$469,900

SOLD: 3/6/09 - $460,000

Canyon Rollbacks Continue

Address: 428 Sycamore - 90402 (Canyon)

Details: 3 bed/3 bath 1,723 sq ft house, 4,650 sq ft lot

Description: Beachy contemporary home in the heart of the canyon, close to the sand & great restaurants. The pitched beam ceilings and skylights allow for a dramatic infusion of light throughout the day. Downstairs bedroom & bath could be a home office w/. sep. entrance. Upstairs 2 bedrooms, 2 baths, Liv. Rm. w/ Fr. Drs. to front balcony. Spacious and open kitchen/Fam. Rm. w/ French Drs. to private entertaining patio and yard area. A great value in an amazing setting.

Previous Purchase: 3/14/07 - $1,735,000

Listing History: 10/13/08 - $1,850,000
Reduced to: $1,650,000

SOLD: 2/26/09 - $1,579,000

Ocean View Won't Save You

Address: 2106 Neilson Way - 90405

Details: 2 bed/2.5 bath 1,678 sq ft townhouse, $300/month HOA, 1979 building

Description: Beautiful and Spacious Contemporary Townhome at the beach. Vaulted Ceilings with Skylights Bring Natural Sunlight to the Dramatic 2 Story Living Space. Tastefully Remodeled Kitchen and Bathroom. Extra Spacious Loft with Direct Access to Private Roof Deck with Ocean/Beach View. Near beach and Shops on Main St.

Previous Purchase: 10/13/06 - $1,100,000

Listing History: 5/28/08 - $1,295,000
Reduced ?? number of times - $988,500

SOLD: 2/26/09 - $950,000

This looks like yet another case where the seller was chasing the market down. I won't lecture on that point again...

It's hard to know when the kitchen and bathroom remodel was done, but if the seller was the one to do those upgrades, it makes the loss bigger and the rollback then goes further.

Finally, in case you think this was any sort of deal or we are anywhere near a potential "fair value" or bottom, check out the previous 2 sales before the last one:

1/28/03 - $625,500
4/20/99 - $375,000

I don't see why we can't get to a 2003 rollback, even with the "remodel". Seems like a lot of downside left here.

Remodeled Loss

Address: 1732 Bryn Mawr - 90405

Details: 4 bed/3 bath 2,473 sq ft house, 5,467 sq ft lot, "Remodeled/expanded in 2007"

Description: Remodeled/expanded in '07, this home offers expansive views of the city, golf course and the Ocean. Kitchen - CaesarStone® countertop, European style cabinetry & stnls-steel appliances. Bamboo hrdwd flrs on top level and carpet on the lwr level. Extend your lvng rm outside on to a large deck. 1 bedroom up 3 down. Exquisitely landscaped terraced yard. Newer double paned wndws, plmbng, elec, etc. It is a house to work in, entertain or simply relax & enjoy life. Pls inqr about priv. rmrks.

Previous Purchase: 4/25/06 - $1,101,500

Listing History: 1/22/09 - $1,199,999

SOLD: 2/12/09 - $1,100,000

When first looking at this sale, I thought it was nice to see an example where a seller was rational and able to get a sale done quickly.

...But that was before I did a quick search on my blog to see if anyone had commented about this property in the past...

From a comment left from an anonymous reader back in June 2008:

I'd like to point out that 1732 Bryan Mawr 90405 was listed about a year ago, I believe somewhere between 1.6-1.9 mil, just showed up today on mls at 1.5 mil.

Indeed, at the time when that comment was posted, the house had just re-listed itself on the MLS on 6/5/08 for $1,500,000 and was described as "Newly Remodeled with no surface left untouched". It then cut its price down to $1.349 before expiring almost 4 months later.

So with these details it appears that the house could have been an attempted flip -- purchased near the peak of the market. It's of course hard to say how much money was spent on the "remodel", but when looking at the remodeling costs as well as the holding costs, transaction costs, taxes, etc, the loss here was probably fairly large.

Ultimately, the seller should have listed it for less money when first listing and they should have aggressively cut the price in order to sell the thing...if they had done that, they probably would have gotten a much better price.

Instead, here we have what amounts to an early/mid 2006 rollback without incorporating the upgrade costs. Throw those in and you are surely into at least 2005.