Address: 2304 Cloverfield - 90405Details: 2 bed/1 bath 1,100 sq ft house, 6,750 sq ft lot, 1939 construction
Description: Warm and cozy traditional on large lot with mature landscaping and Koi Pond. This is a two bedroom, one and one half bath, with large living room with fireplace and coved ceiling and beautiful hardwood floors throughout the house. Garage is finished with plenty of floor to ceiling cabinet storage. Kitchen has a six burner vintage Wedgewood stove. A beautiful back yard is great for entertaining or letting your kids run wild. Great layout in this wonderful and charming Sunset Park home in the Grant Elementary School District.
Previous Purchase: 12/3/04 - $849,000
Listing History: 11/4/09 - $899,000
SOLD: 12/31/09 - $850,000
Not sure why this popped up so late, but I thought it was a good rollback example.
Address: 2618 Montana #3 - 90403
Details: 2 bed/2 bath 1,150 sq ft condo, "remodeled kitchen", 1985 building, $225/month HOA
Description: Ideally located beautiful light filled 2 bedroom 2 bathroom private residence . Features include remodeled kitchen w SS appliances and marble counter tops, hardwood floors, cathedral ceilings, custom shutters, French doors from living and dining rooms opening onto large patio, ample storage, steps from fashionable Montana Ave.
Previous Purchase: 8/18/04 - $850,000
Listing History: 2/9/10 - $849,000
SOLD: 3/1/10 - $850,000
The interior looks nice and so does the building. The downside is that it is on Montana and near 26th street...but if it is set back enough then maybe noise isn't too bad?
Like the house featured above, this sold quickly at its exact late 2004 price. It seems that sellers don't like taking losses and it seems that buyers are happy to pay late 2004 prices. I still think there may be some subtle pressure on prices here and there for a while but it seems more and more likely that we are in the "long, boring period where prices are flat to slightly down". That doesn't mean there won't still be a ton of delusional sellers...but I like to see examples like these where quick sales are taking place as a market clearing level is becoming more defined.
I'm very curious to see what happens when the Fed stops its MBS purchase program this month. What happens if the bears are right and mortgage rates jump almost a point?
ReplyDeleteI think the next big shoe to drop is the first time buyer incentives - when those expire, a lot of the activity at the $800K mark will go away. I wonder if they will change the conforming loan size down?
ReplyDeleteAll those things don't matter when you are a fence sitter.....
ReplyDeleteEpsilon, that is a fair thing to worry about but from what I have seen discussed the thinking is more like a 30-50 bps jump in rates; a full point would be pretty material...then again if actual interest rates start moving then its a whole different story. I have been wrong in thinking rates overall would rise, so I don't want to try and guess at that anymore.
ReplyDeleteThere are a host of other ways the government is helping support the housing market as a whole (first time buyer credit as Mamsterla points out is one of them)...My guess is that support will always be there one way or another but that the size and degree will be scaled down as things become strong enough to support themselves. There are a lot of ways gov influences things that are less visable -- FNM and FRE rules, FHA, etc, etc.
Agreed... there's a lot of government support; the MBS purchase program is just the first to be pulled away. A lot of government programs are coming off the books in the next 12 months, though, and other than the general "it's 1937 again" posts from Krugman, Calculated Risk, etc., there's not a ton to use to get a grasp of how it will effect the SM and Westside RE market.
ReplyDeleteExcept that it does make me see "fence sitter" as a badge of honor. Committing huge amounts of capital in the face of an enormous question mark whose risks are almost entirely on the downside seems... rash.
"My guess is that support will always be there one way or another but that the size and degree will be scaled down as things become strong enough to support themselves."
ReplyDeleteI couldn't agree more.
Some of the government programs may be going away but new ones continue to be put in place. Arizona, California, Florida, Michigan and Nevada are sharing $1.5 billion in aide to stop foreclosures. Obama is trying to make a program where a home cannot be foreclosed until it has been reviewed by a Making Home Affordable panel. Basically the government may start to force banks to use the making home affordable program instead of foreclosing.
I think the extension of programs and addition of new ones shows the government is willing to keep throwing money & regulation at the real estate problem until it stops being a problem. If Warren Buffett is right in his prediction stability (he actually said growth but I'm being conservative) in the RE market will come in about a year. The government can slow foreclosures in CA with the making home affordable panel plus a share of the $1.5 billion in aide and other programs. CA real estate may be artificially propped up until all real estate stabilizes. If that's true anyone still sitting on the fence in 2011 will have missed the bottom. Although prices shouldn't skyrocket so they can still buy something affordable.
Then again LA is a crazy place full of crazy people so maybe we will see prices go up for no apparent reason when they should be flat.