Canyon Developer Distress? *Update 1*

Way back in April 2008 I featured 415 Upper Mesa Road which at the time was an almost finished new, custom built house which supposedly needed about $200k to be finished. Private remarks on the listing talked about the owner trying to get the bank to lend some more money...

That didn't work out so well.

The lot was bought for $1.085mm back in April 2003 and in December of 2007 this almost completed house was listed for sale at the hefty price of $3mm before being cut to $2.7mm in March 2008.

Looking on Property Shark, I see that there are multiple mechanics liens with the first one back in 2006! As for the bank, Indymac foreclosed for $2.3mm in June 2009.

REO Listing History: 10/14/09 - $2,650,000
Reduced down to - $2,146,500


SOLD: 5/17/11 - $1,821,000


I am not familiar with the way that liens get paid so I'm wondering if the bank had to pay them or if the new buyer here has to pay (could be why the price came down so much if so). Either way, this property was a complete mess for years and years and its nice to see it get taken care of finally.

$729,750 Mortgages Going Away In October

So I was meaning to do a post on the fact that the conforming jumbo mortgage limit is scheduled to go down from $729,750 to $625,500 when I ran across the following discussion on Piggington (a San Diego bubble blog).

The discussion on Piggington links to a NY Times article that you can view here.

There seemed to be a variety of opinions on the San Diego blog about how meaningful this change may be. I don't think it is that big of a deal but it is no doubt a negative on the margin. Conforming jumbo loans carry a decently lower interest rate than true jumbos...and a true jumbo lender may be marginally more stringent on income, down payment, and asset requirements.

Further, I think this change is just one of several potential headwinds for the housing market when it comes to potential policy changes. For a long time it seems that we have been artificially propping up the mortgage and housing markets in this country and it seems with all the budget battles that some sacred cows may be looked at a bit more closely. Reducing the government support via reducing the conforming jumbo limit makes sense in the long term. Along these lines, there has been a lot of talk about at least reducing (if not eliminating) the mortgage interest deduction. I think it would make sense to scale that back and put some restrictions on it, but I don't think it will go away completely any time soon. Finally, there is talk here in our state of proposition 13. Adjusting that would increase housing costs and make the prospect of long term ownership more expensive on the margin.

I guess the one thing I keep coming back to when I look at the entry level for Santa Monica (and other westside areas) is the fact that prices in the $750-$950k area seem so firm. It just seems so obvious that people are able to get government subsidized conforming jumbo mortgages of $729k and then throw down $100-$250k and boom, you get a big group of people trying to get in around that price range.

West of Lincoln 2005 Rollback

Address: 716 Navy - 90405

Details: 3 bed/2.5 bath 1,470 sq ft house, 2,000 sq ft lot, 1997 construction

Description: WOW! Move-in-ready, 3-bedroom, 2.5-bathroom Mediterranean home, located in the highly desirable Ocean Park neighborhood of Santa Monica, with easy access to beach, nearby park, Main Street, Sunday Farmers' Market, Whole Foods, Rose Avenue restaurants and coffee houses. Live the Southern California lifestyle with an open floor plan, great light and high ceilings, two patios plus a roof deck, a large two-car garage plus one uncovered parking spot, and plenty of storage. Terra-cotta-tiled floors in entry, dining and kitchen. Master-bedroom suite has vaulted ceiling, balcony, walk-in closet and spa tub. Central heat and air and laundry complete this home.

Previous Purchase: 12/17/04 - $870,000

Listing History: 3/9/11 - $929,000

SOLD: 5/3/11 - $907,000


I haven't featured a lot of properties west of Lincoln on this blog so I thought it might be nice to take a quick look at this one. Not much land to speak of so this is sort of like a free standing townhouse. Hell of a lot better than having to worry about a HOA though in my opinion.

This property sold quickly as it was only active for 9 days before going into escrow. It doesn't appear much work (if any) was done between the 2004 sale and the current one. So I'm treating this as pretty much apples to apples. We see once again that prices are holding in the early/mid 2005 rollback area without much movement. I will be surprised if they don't weaken a little bit through the rest of this year but I still don't really see a scenario where they drop by a large amount from here.

Back Out Of The Shadows *Update 1*

I last featured 843 25th as part of a trio of houses in my "Back Out Of The Shadows" post in February.

Previous Purchase: 1/12/07 - $2,100,000

Listed: 7/26/10 - $2,199,000
Reduced down to - $1,999,000


Re-Listed: 1/31/11 - $1,999,999

SOLD: 4/29/11 - $1,832,000


This leaves 942 26th and 2619 Washington still on the market and overpriced.