The Bermuda Triangle of 90403 *Update 1*

I last featured 937 23rd back in January 2010.

Previous Purchase: 1/6/06 - $1,560,000

Listing History: 7/13/09 - $1,899,000
Reduced down to - $1,600,000
...then it expired

Re-Listed: 6/23/10 - $1,499,000
...and after just 4 days on market it is "looking for backup"


The description says the house was updated in 2005. But if the upgrades were done in 2005 then there haven't been any since the early 2006 purchase and we can look at this on an apples to apples basis. The current $1.5mm price tag suggests an earlier 2005 rollback which is about where the market is but I would consider late 2004 prices to also be in the range of current market prices (and I believe prices will fall later this year). We'll have to stay alert and see where this sells.

As for the other two "Bermuda Triangle" properties...907 22nd is still choosing to ignore reality and is now at 166 DOM with no price cuts on its re-list. I believe the pending sale of 937 23rd will illustrate just how overpriced that listing is.

Finally, 2320 Idaho is still a "pending" short sale...Shit or get off the pot already! This thing has been sitting forever in short sale purgatory.

Late 2003/Early 2004 Rollback

Address: 718 Marine - 90405

Details: 1 bed/1 bath 427 sq ft house, 2,496 sq ft lot, foreclosure

Description: Cute little Ocean Park Home, Original bungalow house of 427 sq ft built in 1918 on a Level lot of 2498 sq ft. Many new homes on this street and this lot is just screaming to be built on. Current home is in good shape with copper plumbing, newer windows, remodeled kitchen and bath. There is Alley access to the rear yard for additional parking. Just a few blocks from the beach and a stones throw to everything hip and cool in Santa Monica and Venice.

Previous Purchase: 3/23/05 - $615,000

Bank "buyback": 12/3/09 - $528,750

Listing History: 2/18/10 - $559,900

SOLD: 6/18/10 - $535,000

This is a very small one bedroom west of Lincoln Blvd. Property Shark shows a 0% down purchase and then a refinance to $630,000 in October 2006. Wow...all the signs of the bubble in one example.

This rollback is NOT representative of where the market is as a whole right now. What it does show is that if you are interested in more oddball properties (especially of the foreclosed variety) then you may want to try to get a deeper rollback.

What Do You Think??

Address: 205 19th - 90402

Details: 4 bed/4.5 bath 4,148 sq ft house, 12,516 sq ft lot, "needs work and updating", "newer kitchen"

Description: Desirable Gilletes Regent Square 12,500+ lot with a 4,000 square foot+/- Two story Spanish with pool and spa. Good bones, needs work & updating. Great curb appeal. Original Malibu tile entry, Hardwood floors throughout. Newer Kitchen with Subzero & Wolf range, Cesar stone counters & French white cabinets. Open kitchen/family room with fireplace & French doors to yard. Large step down living room with picture window & adjoining music room with surrounding floor to ceiling windows. Formal dining room. Upstairs is Master suite with his & her water closets & his and hers wardrobe closets. Outdoor side courtyard with firepit & fountain. 2 zone HVAC. Professionally landscaped front & back lighting Classic Santa Monica home. Enjoy Franklin elem & BW country mart. Seller motivated! 24 HOUR NOTICE TO SHOW!

Listing History: 1/26/10 - $3,195,000
Reduced down to - $2,595,000

SOLD: 6/24/10 - $2,282,500

This situation looks interesting to me. I would suggest you all take a look at the photos by clicking on the "SOLD" link and then selecting "Add'l Photos". From these photos you will see that the kitchen looks to be in pretty good shape. The overall interior doesn't look all that bad and some parts of the house actually look really neat and more unique than much of the newer construction out there. However, the description clearly states that it needs updating...but really, the photos don't make it look that bad and I kinda dig the original designs of the place.

Now that aside, the location is most certainly deserving of a discount. This is right on the corner of 19th and San Vicente. That means you are getting traffic noise. 19th is also a street that goes through on San Vicente so it may be even more traffic. The plus here is that the lot is massive. It is over 12.5k feet in size. That would normally command a large premium but the location discount offsets it here. Too bad.

Also notice that this is a 4 bedroom house with over 4,100 sq ft of space.

All this for under $2.3mm seems pretty interesting unless I am missing something. Maybe the interior was way worse than the photos make it look. Maybe there is some other massive issue.

Zillow shows that they were trying to sell this place for over $4.3mm back in 2008. HA!...but at under $2.3mm I think it is pretty attractive. What say you?

Extreme 90405 Delusion *Update 1*

I last featured 711 Pine back in April 2009

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

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

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

Re-Listed: 2/22/10 - $1,295,000

SOLD: 6/21/10 - $1,200,000


This is 20% off of the 2007 price. I think that probably represents something in mid or early 2005 territory which is a bit higher than the late 2004 territory we have been seeing on other transactions.

Delusion Never Dies...(on 25th street) *Update 1*

I recently featured 839 25th in May.

Previous Purchase: 12/27/06 - $2,128,000

Listing History: 5/7/10 - $2,875,000

Reduced: 06/16/10 - to $2,725,000

Remember, there was a lot of upgrading done as described in the last post. However, I still think they are too high and need to be more aggressive in cutting.

Zombie Needs More Cuts *Update 1*

I last featured 528 Ocean Park back in July 2009.

Details: 3 bed/3 bath 2,948 sq ft house, 4,090 sq ft lot, 2006 construction

Previous Purchase: 1/17/07 - $2,550,000

Listing History: 10/15/08 - $3,500,000
Reduced: 02/12/09 - to $2,995,000
Reduced: 06/24/09 - to $2,500,000

SOLD: 6/15/10 - $2,000,000

This price likely represents a late 2004 or early 2005 rollback so it seems roughly in line with where the market is but it may be a touch high.

Maybe a Better 90402 Example

Address: 610 24th - 90402

Details: 4 bed/3 bath 3,116 sq ft house, 8,700 sq ft lot, "recently remodeled"

Description: Beautiful East Coast Traditional on tree lined street in Santa Monica. 4 Bedrooms, 3 Bathrooms all recently remodeled. Hardwood floors throughout. Kitchen is a chefs dream with granite counter-tops and stainless steel appliances. First floor also offers living room, dining room, family room, powder room and one of the bedrooms/an office. Upstairs you'll find two additional bedrooms and a bathroom and the master suite with it's own spa like bathroom. Great back yard. This house is a must see!

Previous Purchase: 12/12/02 - $2,106,000

Listing History: 3/3/10 - $2,695,000

SOLD: 6/15/10 - $2,675,000

Great location and lot size. Interior photos look nice and according to the description the upgrades were completed recently so we need to think about that when figuring out the rollback on this.

Starting from the late 2002 price and using a 12.5% compound growth rate we get an unadjusted current sales price in the early 2005 price range or so.

If you want to be more conservative and use a 10% growth rate, you get later into 2005.

We then have to adjust out the upgrade costs. I think no matter how you cut it, this thing is into 2004 territory which is a better representation of where the market is.

The one thing I don't understand is why someone on this blog left a comment back on March 17th saying that they thought this place was way overpriced. Am I missing something?

2008 Spec House Rollback

Address: 421 23rd - 90402

Details: 5 bed/6.5 bath 6,556 sq ft house, 8,700 sq ft lot, 2008 construction, all the bells and whistles

Description: 3-story East Coast Traditional, apprx 6,556 sqft with 5bd, 6.5 baths+office+2 family rooms. Brand new 2008- featuring dark oak hardwood floors, wainscoting, vaulted ceilings, skylights, custom cabinetry & chandeliers, crown moldings and top-of-line hardware . Bright step-down living rm w/fireplace opening to courtyard. Formal dining room flows into family room. Huge chef’s kitchen with all Viking appliances, dbl farmhouse sinks, 2 dishwashers, full size fridge & freezer. Lower level w/media room, game room, wine fridge and separate gym w/steam shower. Master suite with vaulted ceilings, balcony and walk-in closet. Enormous master bath- soaking tub, steam shower. State-of-the-art sound system. Totally private backyard. Franklin school district.

Previous Purchase: 1/9/08 - $4,700,000

Listing History: 3/17/10 - $4,395,000

SOLD: 6/4/10 - $4,190,000

If I recall, this house was originally listed for $5mm back in 2007 while still under construction. It then sold in early 2008 for $4.7mm. With it coming back on market this year we can get a good apples to apples comparison on price.

The loss in this case is $510,000. While that may seem like a lot, it is actually just 11% lower than the early 2008 price. At best you might be able to call it a very late 2006 rollback. I would say as a result of this small rollback that the sellers here did very well.

2004 Rollback Foreclosure on Adelaide

Address: 237 Adelaide - 90402

Details: 2 bed/2 bath 1,093 sq ft house, 3,927 sq ft lot, "remodel(ed)", REO

Description: A GREAT HOME IN SANTA MONICA CANYON! THIS REMODEL FEATURES 2 BDRS AND 2 BATHS, LIVING ROOM WITH 2 STORY CEILINGS, FIREPLACE AND WALL OF GLASS LOOKING OUT TO SPECTACULAR HILLSIDE, OCEAN AND WHITE WATER VIEWS. THE LIVING AREA IS SPLIT LEVEL WITH A AN ALL STAINLESS STEEL COMMERCIAL KTCHEN CONNECTING TO AN ADJACENT DINING ROOM. THE LIVING AREA IS SEPARATED FROM THE BEDROOM WING BY A SPACIOUS PATIO WITH A FIREPLACE. THE MASTER BEDROOM ALSO HAS FABULOUS OCEAN VIEWS WITH A LARGE MASTER BATH. THIS IS AN INCREDIBLE LOCATION THAT WON'T LAST. THE PROPERTY IS BANK OWNED AND PRICED FOR A QUICK SALE!

Previous Purchase: 12/21/05 - $1,870,000

Bank "buyback": 1/28/10 - $1,606,000

REO Listing History: 4/2/10 - $1,499,000

SOLD: 6/7/10 - $1,500,000

Many agents state in the description for their listings that the property is priced for a quick sale...That generally means it is overpriced and will sit on the market for a long time. However, this time it was actually correct as this house went into escrow after 11 days on market.

Property Shark shows a refinance in August 2006 for $1.72mm with the first mortgage being $1.5mm. Add up any late fees and potential negative amortization and the first lien foreclosed in January this year for the $1.606mm you see above as the bank "buyback".

Adelaide is a premier street in Santa Monica. This example here should remind us that the bubble was pervasive across all property types. Also, as we keep seeing 2004 rollbacks I continue to wonder if we might be getting a glimpse of the post tax credit, European debt crisis, second half economic slowdown type market where 2005 rollbacks will be more rare and we might start seeing declines into 2003 territory.

"ideal condo alternative" ROLLBACK

Address: 1321 Chelsea - 90404

Details: 2 bed/2.5 bath 1,602 sq ft "condo alternative", 1,642 sq ft lot, "updated"

Description: Updated New York-style city house has a classy, contemporary flair, an ideal condo alternative. The first floor has an open floor plan, wood floors, high ceilings & living area centered on a cool pot-bellied stove. A nice-sized kitchen, dining area, powder rm & laundry room finish this level. Upstairs is a loft-like, open media/family room, two bedrooms incl. a master, two baths & office space. Very private & large roof deck where treetop to city lights views can be enjoyed. Great location.

Previous Purchase: 1/4/05 - $840,000

Listing History: 1/7/10 - $939,000
Reduced down to - $795,000

SOLD: 6/11/10 - $750,000

This sales price is 11% lower than the very early 2005 sales price. So in rollback terms we have to say that this is maybe in the mid or early 2004 range or so (prices were rising really fast back then and I'm assuming they were going up at a rate greater than 11%/year for this property back then).

I'm very interested to see if we will start to observe some more downward price momentum in the near future.

Roll Back That Shack

Address: 3024 Arizona - 90404

Details: 2 bed/1 bath 952 sq ft house, 2,871 sq ft lot, "updated", short sale

Description: ADORABLE restored 2 BED, 1 BA bungalow. Updated kitchen and bathroom. Kitchen with beach wood cabinets and tiled floor. Inviting living room and dining room with brick fireplace, custom cabinetry, wall scones, period hardware crown moldings, and hardwood floors. Charming front porch and white picket fenced garden. Detached garage used as an office. Much loved home is waiting for new family. Close prox to Douglas Park, Whole Foods, restaurants, & stores. Easy freeway access.

Previous Purchase: 6/1/06 - $970,000

Listing History: 1/5/10 - $699,000

SOLD: 6/9/10 - $735,000

This short sale was only active on the market for 14 days before going into escrow. It is not surprising to see that escrow took a long time since this was a short sale. Buyer paid over list. Good job by the bank/lender to list it at an attractive list price and sell it quickly.

The previous sale was just stupidly high. This is a decline of about 24% which seems somewhat in line with where declines are right now.

Fishing For a Fool *Update 2*

I last featured 628 24th back in April 2009.

It is a big, 2002 construction house in a great location.

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

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

Re-Listed: 4/9/09 - $3,688,000
Price raised to: $3,795,000

Re-Listed #2: 3/24/10 - $3,795,000

SOLD: 5/28/10 - $3,517,000*

*According to the info in the listing sale notice, THIS RECORDED SALES PRICE WAS NET OF ALL SELLERS EXPENSES. BUYER PAID ALL SELLERS EXPENSES.

So that means we need to add back in any seller expenses to get the real sales price. Now, we all know the largest sales expense by far is the real estate agent commission you have to pay. I think any other expenses are going to be somewhat trivial in comparison. So, I'm going to assume all expenses together came to about 6%...

So that gives us a real sales price of: $3,741,000

That is about 11% off of the September 2005 price which means this is likely in the late 2004 rollback area. I think this is about where the market is so it seems like a fair transaction for both sides of the deal.

Adjustment Needed?

Address: 548 15th - 90402

Details: 3 bed/2 bath 2,104 sq ft house, 7,500 sq ft lot

Description: MODERN CRAFTSMAN 3BD + 2BA. SKYLIGHTS, FRENCH DOORS & LOTS OF WINDOWS ALLOW FOR GREAT LIGHT AND VIEWS OF THE BEAUTIFUL LANDSCAPING. EAT-IN KITCHEN/GREAT ROOM LOOKS OUT TO A PICTURESQUE SIDE PATIO WITH OUTDOOR FIREPLACE & WATER FOUNTAIN. MASTER SUITE HAS AN OFFICE/BONUS ROOM. DETACHED GARAGE IS A FUN, CONVERTED STUDIO WITH STORAGE. MANY GREEN IMPROVEMENTS. WALK TO ALL OF THE GREAT SHOPS AND RESTAURANTS ON MONTANA.

Previous Purchase: 1/25/07 - $2,385,000

Listing History: 4/7/10 - $2,250,000

SOLD: 5/27/10 - $2,250,000

This house went into escrow after being active for just 10 days. The price that it sold for looks like a mid 2006 price or so. That is substantially above what I would call market value as we have been seeing most properties in late 2004-mid 2005 range. The description mentions "green improvements", a detached garage which is a "converted studio", and "landscaping". To really get a true picture here, we would need to find out if any upgrades were made after the 2007 sale date and then adjust them out.