South of Montana New Construction *Update 3*

We last featured 1024 23rd earlier this month.

It was recently listed as "looking for backup" for a while but it is now listed as "active". Looks like another escrow fell through. This property needs another price cut.

Previous Purchase: 8/8/07 - $1,445,000

Listing History: 10/8/07 - $2,975,000
Reduced: 11/11/08 - to $2,795,000
Reduced: 01/06/09 - to $2,695,000
Reduced: 04/01/09 - to $2,595,000

90402 - Kingman Ave - NOD *Update 4*

710 Kingman is yet another property that we have tracked for a long time. This canyon house was first featured back in September 2007 when it had recently received a notice of default (NOD) and was on the market asking $3.2M (then reduced down to $3.0M).

We had our first update in February 2008 when the property was being advertised as "going to auction".


Our second update came in August when we learned that what appears to be the lender took the property back at auction for the amount owed on it ($2,209,214).

The property was then listed as a foreclosure.

REO Listing History: 10/3/08 - $2,395,000

The very best part of all this is that when this house was first listed (before being foreclosed on), the listing description said the following: "Must be sold immediately. Priced under market for immediate sale"

Well, we went from a $3.2mm asking price and had to come down by over $1mm to get the sale done.

SOLD: 4/29/09 - $2,043,000

Uh Oh...Here Comes a 90405 SFR Foreclosure *Update 1*

We last featured 2432 21st back in September 2008 after seeing the bank buyback go through (and after having featured it previously as a short sale and "for rent" property).

Previous Purchase: 4/4/07 - $1,100,000

Listing History: 2/21/08 - $990,000

Bank Buyback: 8/8/08 - $811,750

REO Listing History: 3/28/09 - $824,900



New Description: Great opportunity to own in santa monica- reo priced to sell. 3 bedroom 1.5 baths on tree lined street. Wood floors, new paint, tons of light. This is a must see!! Buyer to verify all information. Offers must be presented with 3% earnest money deposit, proof of funds and pre-approval from countrywide. Agent's see private remarks for more details.

You can find the listing of this 3 bed/1.5 bath 1,202 sq ft house on a 6,750 sq ft lot HERE.

Note that the picture above is from the last listing (when it was being marketed as a short sale).

I Want a Refund...And Some Profit *Update 5*

We have been following 517 14th for a long time now. Previous post is here.

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

SOLD: 4/16/09 - $1,775,000


Here we have what I would guesstimate is a solid 2004 rollback. As I tried to say all along, if the seller had been more aggressive, they certainly could have gotten a higher price...but instead, we played the "chase the market down" game and they decided to get real after the market had fallen by a good amount. I will continue to emphasize the point that it isn't that hard to sell in today's market. You just have to be realistic and be a price LEADER and you will likely get a bid that sticks. Fail to do this and you can chase the market down like the rest of the rotten zombie listings on the MLS.

720 17th -- $1.4mm?

I just got an e-mail from a reader and it looks like 720 17th is "looking for backup" with its most recent asking price cut down to $1,399,000.

What is going on here?

I don't want to get into a debate about the planned senior living center on 17th and Montana, but certainly that would likely be having an impact on valuation...

Princeton Surprise

We last featured 1128 Princeton #5 back in February.

Previous Purchase: 5/28/04 - $920,000

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

SOLD: 4/15/09 - $1,030,000

As I said last time, you can compare this unit with #3 from the same building which sold on 8/8/08 for $1,030,000.

Also, when I featured this unit last time, I was fairly confident that it would fetch a price which would be below the $1.03mm that #3 got back in August 2008. I said the following:

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.

So here we've got a surprise. I don't think this is indicative of any real trend or anything. This "greater than expected" sales price just means that the new buyer has that much more downside to come over the next year or two.

$1M+ New Townhouses on Centinela *Update 2*

We last featured 1311 Centinela #5 in February.

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

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

SOLD: 4/17/09 - $820,000

Just a mere 30% off the original delusional price

Behind The Curve *Update 1*

We last featured 210 21st back in January.

Listing History: 11/6/08 - $2,249,000
Reduced: 12/02/08 - to $2,095,000
Reduced: 01/07/09 - to $1,995,000

Re-Listed: 3/12/09 - $1,840,000

SOLD: 4/14/09 - $1,700,000

8,940 sq ft lot, some location discount likely applicable since it is one house off of San Vicente.

Extreme 90405 Delusion

Address: 711 Pine - 90405

Details: 3 bed/2 bath 1,467 sq ft house, 6,003 sq ft lot, 1946 construction

Description: : : open sun 4/19 2-5pm : : enchanting private oasis of a home, 7 blocks from the beach. Enter into this sanctuary through its hedged front garden. Open floor plan greets you surrounded w windows opening to verdant bamboo. Large lush backyard w incredible deck designed for entertaining. Generously-sized master suite w walk-in closet, spa tub & vaulted ceilings. Central a/c, attached 2-car garage. French doors from each room sweeping in the ocean breezes. Quintessential ca indoor/outdoor living.

Previous Purchase: 8/24/07 - $1,495,000

Listing History: 4/6/09 - $1,475,000

Here we've got a near peak market purchase by our seller who now thinks they can basically break even at a ginormously bloated $1,005/sq ft asking price. Is this a joke? I haven't seen a listing this delusional in quite a while.

Examples like these show us once again why inventory is climbing and why sales have slowed so dramatically. Nobody is going to buy this anywhere near this price. Nobody is even going to waste their time trying to lowball. Shave 30% off this price and I still think it is relatively expensive and will rollback much further. At this point, we have to wonder if the sellers could even "afford" to mark to market and sell...do they have the money needed to bring to the closing table?

Finally, let's take a quick peek at previous selling prices for this very same house. It looks like the house was quickly flipped for a small loss right before the current owner purchased it. However, more importantly, look at the 2002 sales prices.

8/24/07 - $1,495,000
6/1/07 - $1,595,000
8/26/02 - $545,000
1/15/02 - $455,000

It looks like some upgrades were probably made to this property over this time period. However, we are still looking at a price that tripled thanks to the bubble. I have a hard time believing that this thing won't be back (well) under $1mm by the end of this mess...

Fishing For a Fool *Update 1*

We last featured 628 24th back in July 2008.

Previous Purchase: 9/9/05 - $4,200,000

Listing History: 7/21/08 - $4,295,000

Re-listed: 4/9/09 - $3,688,000

This property sat on the market for 183 days at its bloated $4.3mm asking price...If they had simply been more realistic and aggressive with their asking price, they might have had a shot at getting a higher selling price. Instead, they did nothing. I don't understand how they could just sit there and not cut the price even one time...all the while, banks were failing, the stock market was crashing, and the economy fell off a cliff.

Well, now they are back with an asking price that is much lower and while I think it is getting closer to a realistic "market" level, that doesn't mean this is a great deal by any means. The competition in 90402 is getting stiff as more sellers are listing at lower prices. I think there is likely still a good amount of downside left on this (and pretty much all the other overpriced properties out there). This asking price is somewhere in the late 2004 rollback range. That isn't where bottom or near bottom pricing is going to be.

High End "Green" Apples to Apples Decline

Address: 133 17th - 90402

Details: 5 bed/6.5 bath "green" spec house, 8,928 sq ft house

Description: Brand-new 2008 "LEED Green" house. Gorgeous Pacific Plantation-style 5BD, 6.5BA. Smart landscape w/native & kitchen gardens. Detached "casita" w/fireplace & bath is 6th bedroom/ofc. Living rm w/fireplace & French drs to patio. Family rm & dining area/den/ofc w/fireplace. Kitchen w/GE monogram & Energy Star appliances + coffee center. Exquisite master suite w/walk-in closet, vaulted ceilings, balcony, fireplace & bath w/fireplace & rain shower.

Listing History: 10/30/08 - $4,800,000
Reduced: 02/21/09 - to $4,495,000
Reduced: 03/04/09 - to $4,199,000

At over 160 days on market, more than a month since the last price cut, and additional spec house competition now on the rapidly declining market, I think it should be pretty obvious that this property needs another good price cut and that they won't get any bids that start with the number "4".

Further, this is a great situation to track because the same builder also built what appears to be a very similar "green" house back in 2007. Seriously, doesn't this look really similar?!

533 23rd is a 5 bed/6 bath "green" house done by the same builder on a 8,700 sq ft lot.

Listed on 9/25/07 for $4,790,000

SOLD: 11/21/07 - $4,745,000

So here we are almost a year and a half later, and I think that 133 17th is likely worth roughly $1mm less than what 533 sold for. Roughly a 20% decline.

Also, in case you were wondering, this is also the same "green" builder who did the first green house in PP which I featured here.

Because "financing" is such a hot topic these days, it is probably worth mentioning that the buyer of this property appears to have put down only 20%...good luck getting 80% financing on this large of a loan these days.

Also, it looks like the builder took a good sized "construction loan"...good luck getting one of those these days.

This is all part of the cycle.

90403 Townhouse - 2004 Rollback

Address: 1107 Princeton #103 - 90403

Details: 2 bed/2.5 bath 1,967 sq ft townhouse, $420/month HOA, 2001 building

Description: LOCATED ON A TREE LINED STREET IN PRIME SANTA MONICA, THIS 2001 TOWNHOME OFFERS SOARING CEILINGS, GOURMET KITCHEN, WOOD FLOORS, A SPACIOUS LOFT/OFFICE/DEN, TWO PATIO/GARDENS AND A ROOF TOP DECK. ALSO FOR LEASE $4,750

Previous Purchase: 1/13/05 - $1,076,000

Listing History: 1/9/09 - $1,050,000

SOLD: 4/3/09 - $1,000,000

Here we have what looks like a pretty nice townhouse in a relatively new building (2001) selling at a 2004 rollback price. On a $/sq ft basis we are at $508.

This property was on the market for a total of 19 days before entering escrow. For all the bitching and moaning about "lack of financing", buyer fear, etc, we see time and again that when you price your property to market you will get bids that can close the sale.

I think the days of getting mid 2005 pricing are over for condos and townhouses (even in 90403). I think that at best you might be able to squeeze out early 2005 prices, but for the most part, 2004 pricing is now going to be baseline going forward and I think that lower end stuff is going to be in 2003 range soon (if it isn't already), with higher end stuff following with a lag (as has been the case the whole time).

Finally, the sale on this unit before 2005 was on 12/7/01 for $711,000. Could we eventually see a late 2001/early 2002 rollback on something like this? I think it is possible but not this year. I will reiterate my view that 2009 is not going to be bringing about bottom or near-bottom pricing.

Face Lift on 25th *Update 2*

We have been following 1015 25th for a long time now. We last featured it in August 2008 after it had undergone a face lift and was back on Westside Rentals after failing to sell or rent over the course of many months on market...Now it is back on market (for sale) and is inhabited by month-to-month tenants.

Previous Purchase: 1/12/07 - $1,200,000

2007 Rental Ask: $4,500/month

Listing History: 1/8/08 - $1,475,000

Re-Listed: 4/3/09 - $1,299,000

When this property was last featured, I said "I don't believe this sold, so I wouldn't be surprised to find this thing back on market at some point as the negative cash flow game isn't all that fun to play for extended periods of time."

Well, here we are with the property back on market and once again it is priced much too high. Remember, this property is owned by a developer/real estate licensed individual who really should know better...The face lift appears to have been pretty much just cosmetic (see old posts), so in reality this is a major fixer/teardown with a slight location discount (traffic noise from 26th may be in range).

Seeing as how we had a Chelsea teardown sell last year for $1.2mm, we know this place needs to cut its price by several hundred thousand to get in the ballpark of market clearing. I don't know if this place should really be worth much more than $1mm...thoughts?

Thanks to the reader who alerted me to this.

Speaking of Poorly Located 90402 Specs...

Address: 607 26th Street - 90402

Details: 6 bed/5 bath ~6,000 sq ft house, 9,896 sq ft lot, new construction, bank owned/distressed

Description: Brand new tuscan mediterranean just completed. Approx 6,000 sq ft with dramatic 2 story entry, 10' ceilings with stone and hardwood floors. Huge living with fireplace, fabulous gourmet kitchen with custom cabinets opens to family room w/ fireplace and french doors to large yard with pool. 2 bedroom suites plus game room down, 4 bedrooms up incl master w/ sensational bath and walk-in closet. Light and open with wonderful quality throughout. Bank owned...Motivated seller!

Listing History: 3/20/09 - $4,750,000

Westside Bubble featured this property while it was stuck in the middle of construction and presumably the investor/builder had money issues.

Property Shark is showing a few things that might be helpful in putting together the financial picture but I can't quite figure it out. Did some vulture group come in and pay pennies on the dollar for the work in progress and then finish it and then claim "bank owned"? Or is this really lender owned? (I am suspicious that it is not). It would be great if someone could chime in and give us the story (or e-mail me if you want to be totally anonymous).

Anyway, I figured I would feature this property because it is an interesting situation and also because it is yet another spec house in a very poor location (but I will argue not as poor as the last one on 20th and Montana).

Finally, this price is completely outside any sort of realistic range...I think this is at least $1mm overpriced. Go check out all the other new and almost new houses in 90402 on real streets without massive location discounts and see how much cheaper they are than this place. We need huge price cuts in a hurry if this thing has a shot at selling.

What Is This Thing?

Address: 2009 Montana - 90402

Details: 5 bed/6.5 bath 4,380 sq ft house, 3,838 sq ft lot, new construction

Description: Sophisticated, sustainable & meticulously designed for comfortable, eco-conscious living, this home offers dramatic natural light via sound defying glass walls/skylights/doors. High ceilings, polished concrete/hardwood floors, exposed steel & custom finishes. Gourmet kitchen, bonus rooms, lofts & private access office/guest suite create a home ideal for every lifestyle. Outdoor spaces include courtyard/rooftop decks & balconies for entertaining/relaxing. Request our "green building" overview.

Previous (lot) Purchase: 10/6/06 - $969,500

Listing History: 3/4/09 - $2,798,000
Reduced: 04/01/09 - to $2,598,000

When this house was being built I thought that there were going to be condos in this location...but turns out that someone thinks that a "green" house was more appropriate. Does this scream bubble or what?

I have no problem with the house, but this thing seriously violates the three rules of real estate. LOCATION, LOCATION, LOCATION. This property is literally right at the intersection of 20th and Montana...I can just imagine being inside the house at night and having all the damn headlights from the cars coming up 20th inside the living room. Ugh. Also, the lot is absolutely tiny...the interior square footage is greater than the land square footage. What is this, Manhattan Beach?

At least they realize their initial asking price was totally delusional and have begun the inevitable price cutting process. Let's hope that glass they have really is "sound defying. Still, who in their right mind is going to pay anywhere near $2.6mm for this?

South of Montana New Construction *Update 2*

We last featured 1024 23rd back in January. This is a spec house which has been chasing the market down.

Previous Purchase: 8/8/07 - $1,445,000

Listing History: 10/8/07 - $2,975,000
Reduced: 11/11/08 - to $2,795,000
Reduced: 01/06/09 - to $2,695,000
Reduced: 04/01/09 - to $2,595,000

This type of pricing behavior doesn't show that we have an aggressive seller...and guess what type of sellers are getting deals done these days.

90405 House - Escrow Fails, Short Sale Status Ensues *Update 1*

We last featured 1213 Oak in January after escrow failed and the property was listed as a short sale.

Previous Purchase: 11/19/02 - $585,000

Listing History: 9/17/08 - $895,000
Reduced: 01/14/09 - to $795,000

SOLD: 3/27/09 - $800,000

I still think there is a pretty good chance that 20%+ downside exists here with this $800K price...

Foreclosure Infestation *Update 2*

We last featured this building at 1012 17th back in February when unit #2 sold. To see the full story of this situation, see the original post here.

Our update today comes because unit #3 sold.

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

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

Listing History: 1/27/09 - $414,900
SOLD: 3/25/09 - $415,000



As a comp, unit #2 (which we featured last time as was also a 1 bedroom foreclosure) sold on 2/24/09 for $435,000.

These represent early to mid 2004 rollbacks.