Listing History: 2/5/12 - $1,295,000
SOLD: 3/23/12 - $1,420,000
Here's what I said when I first featured this property:
Any way you slice it, the current asking price of $1.3mm would represent a rollback well into 2003. That is much deeper than almost any rollback I have seen in this area. And this property is in a prime location on a nice big lot, just begging for someone to develop it or come do a major remodel. Remember, the actual house here is basically worthless, its the land that matters...I will be very surprised if this sells for asking or below. I think the sellers are being smart and listing at a very attractive price and I'm sure they will have a number of bidders who will have to pay well above list price to get this property. Let the multiple offers fly!
About what I expected. Although I wonder if a spec will go up...There are already two zombies on that side of the 900 block. Here's hoping a real person was the buyer.
Thanks for keeping the updates rolling War Chest
ReplyDeleteAnother sign of strength. This needs major work--compare to 838 25th, which sold in March 2010 for $1,385,000, also a multiple offer situation. That had arguably a worse location--Franklin right behind it--but had been substantially remodeled, and was 300 sq. ft. bigger.
ReplyDeleteThat does represent a 2003 rollback. This property sold for $1,485,000 in February of 2004. Your website will obviously be skewed now that you have purchased. Hardly a sign of strength since the much heralded land of the Franklin School District has dipped into 2003 pricing.
ReplyDeleteIf one lives on a block of "zombies" "spec/ way oversized houses" or as I call them "abandoned monster mansions"..which are priced for 3 to 4 million dollars...and they sit abandoned for years, is that good or bad for me and the value of my home? I am a homeowner on that block.
ReplyDeleteWas $1.485 million within range in 2004 or did they overpay then? If it was within range then I agree with anonymous, 2003 pricing on this, which is interesting given the 2004 pricing on other properties....
ReplyDeleteUgh, I guess people don't want to read my original post and get more info before spouting off...The sellers of this property owned 3 lots in a row, this one being in the middle and next to their redone house which they were/are living in. They were even using a bunch of the backyard (screw the renters...) for themselves as they combined some of this lot with theirs temporarily. So ultimately, they were probably willing to attach a premium to this lot when they bought it so they could have 3 lots in a row. Here's what I said before:
ReplyDeleteBefore we go into anything, it is probably worth knowing that this house is the middle house of three consecutive properties which were all owned by one family. The house to the north of this one was rebuilt and is still owned by the family. This middle one has been rented out over the years. The one just south of this one is 933 25th which is the ugly spec house that has been in some stage of foreclosure for some time. The owners of these three properties sold the lot at 933 25th for $1.52mm back in March 2006. So as of right now, the sellers of this house own this one and the one to the north.
All that is important because we can look at this family's original purchase of 933 25th as a good comp. They bought 933 25th in December 2003 for $1,385,000. I am not sure, but you might be able to argue that since it was the same buyer for all three of these houses, they may have been willing to pay more than market price to secure three consecutive lots.
Elena, who cares? Live in your house and enjoy it. As long as you aren't trying to sell your place right now and it isn't the same type of house (large spec new or somewhat newly built) then you aren't really competing with them directly.
ReplyDeleteSorry but a resale on the same house is much better than comparing a different house. You are dead wrong on this one. A comp is a comp is a comp. If the exact same house sold for less than was paid previously, the price obviously has to be rolled back during previous boom years of the original sale. $65,000 in a couple months is a nice chunk of change on $1,485,000 (4%). Your losing credibility Warchest.
ReplyDeleteBy the way, you generally get a better price on SFR lots if they are contiguous. You obviously have never bought them before, and shouldn't be advising others about buying land.
ReplyDeleteGood conversation over at Curbed LA about rent vs. buy ...
ReplyDeletehttp://la.curbed.com/archives/2012/03/where_its_cheaper_to_buy_where_its_cheaper_to_rent_in_socal.php
This blog is dead. One new homeowner talking to a couple other homeowners and realtors, trying to justify homes not losing value. Sad.
ReplyDeleteWow -- it that an April Fool's Joke or just bitterness Anonymous on April 1, 2012 11:51 AM? I, for one, appreciate that WarChest has created this blog focused on a region of real estate I am interested in and continues to maintain it. I find the ongoing discussion it sparks, for the most part, to be helpful as I assess the market. If this blog was truly 'dead,' I don't think Anonymous would feel the need to continue to not only read it, but post comments to it.
ReplyDeleteYes, I have to agree that this blog is not dead.
ReplyDeleteI for one value the discussion here of the Santa Monica micro market
bordered by 26th, 15th, Wilshire and San Vicente.
This is a market I am trying to follow closely, and discussions of values in the market are welcome.
This site can welcome bulls and bears. We just all need to be civil
Warchest,
ReplyDeleteWe read your writing carefully, it doesn't necessarily mean we agree.
If you adjust the selling price from 2004 to 2012 using inflation adjusted dollars, the BLS calculator gives a price of $1,790,000 vs the selling price of $1,420,000. Therefore, if you consider sales in real, not nominal dollars, this is a further rollback than 2004. You would have to assign a very substantial premium to continguous lots to say otherwise.
"By the way, you generally get a better price on SFR lots if they are contiguous. You obviously have never bought them before, and shouldn't be advising others about buying land."
ReplyDeleteWhat are you talking about? If the house next door to me goes on the market and I've always wanted to own it, I'm going to outbid someone else who just sees it as another house.
Yeah I don't see a seller being willing to sell you the lot for less than market just because you own the lots next door. Am I missing something? Like said above, if anything a smart seller would know that you'd be willing to pay slightly above market. Maybe if all 3 lots went from one owner to another in one transaction then I could see a buy three get one at 10% off deal but pretty sure that wasn't the case here.
ReplyDeleteHow do you know they weren't all bought together? That makes more sense than buying them 1 at a time, if your smart.
Delete"This blog is dead. One new homeowner talking to a couple other homeowners and realtors, trying to justify homes not losing value. Sad."
ReplyDeleteThis blog should be just about dead, as the distress in the Santa Monica market is just about gone.
Elian makes a very good point.
ReplyDeleteAdjusting for inflation, prices have rolled all the way back 22 years.
Look at the actual sale prices in 1990. Raw dirt in the Franklin 90402 (7500 square foot lots) was selling for $900k
Fast forward to today - the same raw dirt in the Franklin 90402 (7500 square foot lots) sells for 1.7 million
The increase in the price of the dirt has been the SAME as general inflation in the economy.
So prices in real terms are back at 1990 levels
Look at the math
All this 'adjusting for inflation' nonsense tells me....
ReplyDeleteI should of bought NoMo in 1990...
sheesh.
"So prices in real terms are back at 1990 levels
ReplyDeleteLook at the math"
And the point is what exactly? That it's an even better time to buy than warchest has proposed?
Elian and Anonymous 4/2 make good points. Keep in mind that 1990 was at or near the peak of that cycle, and when you take into account prevailing interest rates, most desirable places in Santa Monica were more expensive then as opposed to now. If you believe that interest rates impact the nominal value of houses (as I do), and want a real apples-to-apples comparison, I think you need to factor in both inflation and interest rates. If you do that, the real (inflation and interest rate adjusted) value of reasonably desirable places in Santa Monica is closer to 1982 levels -- the peak of the early-1980's bubble. Viewed differently, stripping out inflation and the tail wind from declining interest rates, house prices in most of Santa Monica had no real growth over the last 30 years.
ReplyDeleteWas 1982 really a peak? I heard 1983 was a bottom. Franklin 90402 dirt was 300 k in 1982.
ReplyDeleteActually, you're right, the peak was more like 1980 or 1981. The trough was 1985. The payment on a $300k loan at 1983 rates (13.5%) works out to be about $3400, equivalent to about $7800 today, which is the payment on a nearly $1.5m loan. Not quite enough for 90402 dirt, but if the $300k number was really $325k or $350k, then you're pretty close.
ReplyDeleteI know that dirt was 300k in 1983. May i ask what dirt cost at the peak in 1980. I am trying to figure out how much the dirt fell from peak to bottom
ReplyDelete