Address: 2912 11th #3 - 90405Details: 2 bed/1.5 bath 900 sq ft townhouse, 1963 building, $210/month HOA
Description: Wonderful contemporary 2-sty townhouse (no one above) in great ocean park neighborhood. Open living area, great patio with gas line for BBQ, plantation shutters, skylight, Casablanca ceiling fans in each room. Custom closets in both bedrooms, spa tub, laundry inside unit, one garage space with lots of extra storage. Easy street parking. Quiet Ocean Park neighborhood, walk to Whole Foods, Main St., Beach. Must see!
Previous Purchase: 4/21/06 - $579,000
Listing History: 10/16/09 - $549,000
SOLD: 12/15/09 - $525,000
This unit went into escrow after being active for just 22 days. I would call this an early/mid 2005 rollback price.
Address: 415 Marine - 90405
Details: 3 bed/2 bath 1,654 sq ft house on a 5,993 sq ft lot + guesthouse, 1955 construction
Description: Ready to Move! Modern beach property on large lush landscaped lot. Super privacy and charm. 2 car detached garage/storage at Marine Street. Stairs to level new bermuda lawn, mature trees, roof deck over garage with filtered SouthEast views. Sharp Main House has 3 bedrooms, 2 full baths, fireplace, skylights, Sub Zero/Dacor/GE appliances, central heating, W/D. Vast private level backyard with new lawn and bonus detached Guest House + 3/4 bath. 6 blocks to sand! Zoned OP2; big upside, check w/city
Purchase History:
12/8/06 - $1,400,000
4/9/03 - $848,000
Listing History: 8/19/09 - $1,488,000
Reduced down to $1,398,000
SOLD: 12/8/09 - $1,332,000
This house took a while to sell and was active for 75 days before going into escrow. This sale price looks like an early 2006 rollback.
Address: 520 Montana #301 - 90403
Details: 2 bed/2 bath 1,372 sq ft condo, 1964 building, $353/month HOA
Description: Beautiful top floor, corner unit steps away from Montana shops/restaurants, 3rd Street Promenade, and the ocean. Walls of glass provide beautiful street and treetop views and lots of light. Large, open living room and dining area with hardwood floors. Large balcony provides a perfect spot to sip your morning coffee. 2 spacious bedrooms. Gas fireplace in living room. Laundry hookups in unit. 2 separate parking spaces.
Purchase History:
6/16/03 - $555,000
10/20/99 - $398,000
Listing History: 11/18/09 - $765,000
SOLD: 12/22/09 - $775,000
This condo went into escrow for above list price after being active for just 5 days. I think this type of example speaks to the froth of the market currently. Giving 12% annual appreciation, this is roughly a mid 2006 price that someone just paid.
Address: 1447 Stanford #D - 90404
Details: 2 bed/1.75 bath 1,030 sq ft condo, 1967 building, $244/month HOA
Description: Spacious 2-Bdrm 1 ¾ bath turnkey condo. Open, well laid out flr plan w/ natural light & courtyard views. A cook's kitchen featuring stainless appliances, granite counters, & tons of cabinetry and tile floors. Bthrms are beautifully tiled & have tasteful finishes. Bamboo floors in large living room. Laundry in unit plus ample storage & closet space. . Beautiful Plantation shutters throughout. Large patio & prvt 1-car garage w/extra storage. Close to beach, shops, & Farmers Market.
Previous Purchase: 7/6/05 - $589,000
Listing History: 9/8/09 - $549,000
SOLD: 12/23/09 - $508,000
This condo took 84 days to go into escrow and represents a far superior rollback to the examples above. I would have to guess that this is somewhere in the early 2004 rollback range.
We are now entering the "2010-2012" time period where I have been thinking that buying property is going to make sense in Santa Monica. The trick of course is to do your homework and not overpay like the people currently buying 2006 priced merchandise. I think prices will generally stay flat at best over the next few years but most likely decline somewhat...so there is no rush to buy something that isn't priced attractively.
These still aren't very attractive prices. I think the real deals are still a couple years away, when stimulus runs out and interest rates eventually go back up... these prices only look reasonable because of the huge amount of federal money subsidizing housing. If we have 30 year mortgage rates around 8% in a few years, in line with historical averages, these prices will be obscene in comparison to rents. Suddenly payments on a $500,000 2 bedroom condo will be around $4000/month.
ReplyDeleteAnd on the rent-to-buy calculation, rents have been falling faster than prices...
I agree with Epsilon. You're too bullish Warchest, West LA properties in the sub-$800k range are actually still in a Bubble due to the factors I've listed in previous posts.
ReplyDeleteThis temporary West LA $800k Bubble will deflate once the torrent of government manipulation peters out later this year. The Fed mortgage purchase program ends by Q2, the IRS tax credit by end summer, the foreclosure moratoria imposed by Treasury and the states end by mid-year, the GAAP accounting change that incentivized banks to not foreclose and recognize losses will likely end some time this year after the FASB board meets, and interest rates are going up.
This is a perfect storm in the brewing, combined with public fatigue with all these bailouts of reckless deadbeat home buyers. No way, no how, will I consider buying a home in West LA before this storm hits and prices correct to where incomes and rents are in the area.
My guess is that we've got a 20% correction coming when the Bubble bursts for sub-$800k condos in West LA. For the rest of West LA above $1 million, they have actually been correcting quite a bit and there's probably less downside to go (plus unlike condos there is not a glut of them), so maybe 10% and up correction to go.
You guys aren't really reading my commentary. I said I thought prices would stay flat at best but most likely continue to decline and that there is no rush to buy.
ReplyDeleteWe are at the very beginning of the time period where I have thought you can start to pick out potentially satisfactory deals. Unfortunately, as I keep showing on this blog, there seems to be too much irrational buying (i.e. 2006 rollback) at the moment to produce many deals.
Arti you seem like a sky is falling kind of guy. I've been reading these comments and you have been calling for a 20% decline in places like 90402 or 90403 for over a year. In the past year 90402/90403 has actually ticked up slightly in prices. You really missed that one.
ReplyDeleteYou give what could be rational excuses like the end of fed programs or whatever your excuse for the -20% prediction last year.
What you fail to take in account is the location and there are buyers that desire to live in certain areas of LA. For every dollar a place drops a whole new set of buyers gets in line to buy in places like 90402.
I'm not saying things can't decline a little in desirable zip codes. We will see ups and downs but basically flat for a while in the good areas. Your -20% prediction for over the last year seems really big when you look at the last 18 months of data on the good zip codes in LA.
Arti may be bearish, but the FHA caps and programs he is citing are very real. If they did not exist, I think there would be no buying at the magic $800K point. Look at how little activity there is above that price point. It will be very telling to see what the market does in 2nd half of 2010 when the incentives are phased out.
ReplyDeleteWe have already seen a 30%+ decline from the peak, even in desirable zip codes. When this blog started we were talking about lot value at $2 million in 90402. Now there are sales below $1.4 million, and even a listing at $1.3M.
ReplyDeleteI also don't think you need to be a bear to notice that there is still massive government support for housing prices, beginning (but far from ending) with the lowest interest rates in history. I think it's also safe to conclude that these won't last much longer, although for the moment they make it very easy to overpay.
Also, for Santa Monica in particular, I think it should be stressed again, as Arti does, that a lot of other segments of the West LA housing market have seen a much better correction. If you're in the townhouse/condo market, and you need to buy now, there are better places to sink your money, as the premium for Santa Monica schools isn't worth it if you're buying a 2 bedroom condo you'll be selling as soon as you have kids...