Details: 3 bed/3 bath 1,774 sq ft house, 5,060 sq ft lot, "updated"
Previous Purchase: 10/28/03 - $1,400,000
Reduced down to - $1,429,000
SOLD: 8/26/10 - $1,395,000
This is a late 2003 rollback and represents about the deepest rollback on a SFR in this area that I can recall seeing (at least recently). I would treat this sale as an outlier and I am guessing that there is something else going on here which would help explain why this rollback is so deep compared with other sales which have recently taken place in the area.
From the photos of the listing it appears that this house is a little more unique but I can't see any glaring flaws. The unique factor should not account for such a deep rollback. Maybe there was some issue uncovered during inspection. The other thing I can think of is that maybe the price they paid in 2003 was really high in comparison to other things so this is a bit of a mean reversion...
Or, there is still the argument to be made that this is the level that simply was market clearing for a seller who really wanted or needed to sell and that prices as a whole should be drifting down. I think prices should be coming down and could be in this territory on a wide scale basis, but I still have a hard time explaining why this late 2003 rollback is deeper by over a year compared with other stuff selling right now...I would like to hear from someone who knows this house well or has better details of the transaction. This type of sale is bad for other people with homes on the market because buyers might take a look at this and think twice about paying 2005 prices (as they should think twice!).
One is an outlier.
ReplyDeleteTwo is a coincidence.
Three is a trend.
Recall that 2215 California was reviewed by this blog when it went on the market in April 2010 (see April 28 blog entry). At that time, WarChest characterized this property as, "a mid 2004 asking price (or maybe even a touch better). I would imagine that this will attract a fair amount of interest and I would expect this to sell fairly quickly near the asking price." Based on the length of time it took to sell, as well as the significant reduction in price, the market didn't support this analysis.
ReplyDeleteIn terms of value, it's noteworthy to compare 2215 California to an April 2010 home sale in 90403, 838 25th, a property twice reviewed on this blog in the spring of 2004 (March 1 and April 7). That property, an 8,000 sq. ft. lot with a well kept/finished conventionally styled 2 BR/1.5 1550 sq. ft. home, sold for $1.385 m in what appeared to be a multiple offer situation. WarChest's critical analysis of this sale price is worth reviewing in its own right (as well as the mixed reviews given in the comments section).
Comparing these two properties (sales price, house size, lot size, desirability of location, length of time on market), one could speculate that there was greater demand for the 25th Street property due to the relative upside of its lot size and location (being further north from Wilshire trumps its proximity to Franklin Elementary School). As such, the sale price for 838 25th Street may be more understandable in retrospect, and the sale price for 2215 California should not be considered an outlier (perhaps the seller did pay too much for it in 2003?).
Another possible difference between April and August 2010 is that there's a shrinking pool of buyers ready or able to pony up the dough for homes like these. As WarChest has previously speculated, maybe there's something better to do with your money than to rock a $1.4 m home in the 90403 like either of these properties.
At the end of the day, it's a mystery to me how to measure value in Santa Monica (especially 90402 and 90403), a market that to date has largely withstood the intense downward pressure in real estate values seen elsewhere. Do we really live in a bubble?
Yes, I thought it would sell fast because it was priced at a level which appeared to be very much "market leading" at the time. Given what happened, I think there must be something else going on to explain why this rollback is so deep while other properties seem to sell at prices which represent much less deep rollbacks.
ReplyDelete