Month: May 2012

As I reported in the Skinny last year the real estate market was showing signs of strength thanks to low interest rates, tightening inventory and an influx of new wealth into the area thanks to the Silicon Beach phenomenon and the Westside always being an attractive second home destination for the international elite. In late 2011 many well respected financial analysts were touting this as a strong buying opportunity calculating that if you take the current interest rates combined with the drop in value of the past five years in actuality you have more like a 40-45% drop in Westside real estate value from the market heights.

Even knowing all of this, it would have been difficult to predict what the Westside market has experienced this year despite all of the worldwide economic turmoil. With inventory getting even tighter and interest rates continuing to drop to new lows the market flipped in almost overnight fashion and we are seeing double digit appreciation in many areas and price points over last year with multiple offers being presented on the majority of properties priced at market value. Make sure you read the Multiple Offer Mayhem posts below providing you with the inside scoop of what is going on.

Why so few properties? 

 Despite this strong value increase, many Westside owners are still underwater thanks to buying at the peak and then refinancing themselves to an even greater debt before the nation’s economic collapse. Many seller’s who are not in economic trouble are unwilling to take a significant loss to the property they currently occupy and even if they wanted to sell the tight inventory has left those looking for a home at a higher price point with very few options.

Standing out in a crowded pack of buyers

Agents are back to advising clients looking to purchase to do anything they can to create attention to their offers in a positive way. Ideas that were employed at the height of the market (personal notes written with flowers or baked goods, removing financing and physical inspection contingencies, picking up seller’s costs) are back in vogue as desperate buyers do whatever they can to get their hands on a property. Furthermore, agents must also present a clean and professional offer package with all the documentation along with having a solid reputation for the offer to be taken seriously.

Numbers tell the Story

In the highly coveted North of Montana market (90402) in Santa Monica, the number of days on market has dramatically shortened from 85 to 38 days and median sales has climbed to $2.694M compared to $2.441M in 2011. Further supporting the Seller’s market is the high listing to sales price ratio for the area – currently 97% and climbing higher. In a Seller’s market, this ratio hovers close to 100% and in a declining or Buyer’s market, the ratio can drop below 90%.

Patience is Key

Frustrated buyers need to stay patient and be ready to move on a property right away. The non-existent inventory should improve in the coming months with seller’s seeing this as a potential opportunity to get a price they didn’t think possible a year ago along with a presidential election looming. Though the Westside does not have nearly the amount of bank owned properties as other areas that are still struggling mightily, the banks still have properties they need to unload and that should provide a little relief as well.

Per my recent post about the Westside real estate market in general, Santa Monica is red hot and here are some prime examples. Enjoy some of the behind the scenes info and chatter:

534 10th Street- 4 bed/2.5 bath, 3,554 sq. ft. Mediterranean on a 7,500 sq. ft. lot – This beautiful Mediterranean revival earned rave reviews when it was on caravan and the rumored sales price of almost $300K over the $3.288M List price confirms that. The property received 9 offers within the first week of showings and word on the street is it went to an all cash buyer. The list price sq. ft. was $925.15 and a sales price of around $3.550M lifts that # to around $1,000 per sq. ft!

709 10th Street- 4 bed/3.5 bath, 3,326 sq. ft. Craftsman on a 7,500 sq. ft. lot – Just like 534 10th, this contemporary craftsman with a stunning second story with a beautiful great room across from a sizable master suite hit the market with a $2.495M list price. They received 9 offers and sold for $2.6M on May 18th.

339 20th Street- 4 bed, 3.5 bath, 2,760 sq. ft. Spanish on a 8,940 sq. ft. lot – At first glance this home felt like a tear down and immediately went into escrow as such well over the $2.095M list price which surprised some of us who didn’t see the market turning so quickly. However, it was listed on the City of Santa Monica historic inventory list immediately turning it into a major revitalization project. Usually this can hurt the value of a property in the eyes of a developer which might have been why it originally fell out of escrow. However, another buyer quickly stepped in and paid 200K over the ask price and it closed at $2.320M. Congrats to fellow Partner John Hathorn for orchestrating the deal at this price point.

 2418 Washington- 4 bed/2 bath, 1,716 sq. ft. Traditional on a 5,060 sq. ft. lot – The caravan and 1st open house combined for over 200 visitors thanks to a great North of Wilshire location and a floor plan that could easily work for a young family seeking Franklin Elementary school. The house definitely needs some work done in the coming years but that did not keep at least five people from offering and bidding up the house to around a rumored $1.35M sale price over the $1.298M list price.

 2401 31st Street- 3 bed/2.75 bath, 2,116 sq. ft. remodeled traditional on a 6,000 sq. ft. lot – A beautiful Sunset Park house that definitely is the jewel of the street apparently received upwards of 7 offers with a $1.299M list price and went out somewhere in the mid to high $1.3 range. The quality of the remodel appears top notch and appealed to the fussiest of buyers.

One of the best kept secrets in Los Angeles, located just south of Santa Monica and east of Venice, Mar Vista has been a multiple offer factory lately:

12425 Indianapolis Street- 3 bed/2 bath, 1,487 sq. ft. Mid-Century modern on a 5,700 sq. ft. lot – Listed for $799K and received 6 offers right away and it is rumored to have sold for $860K. The home was remodeled in the past year and had a nice feel to it appealing to buyers who do not want to deal with a project.

Down the street and a few weeks later… 

12624 Indianapolis Street – 4 bed/3 bath, 2,391 sq. ft. Contemporary on a 7,150 sq. ft. With a list price of $1.179M they received 4 offers with the accepted price coming in around $1.240M.  The final price will probably come in lower due to the request for repairs and other reasons. The house was completely remodeled and expanded on in 2006 and has some very nice architectural features.

3631 Barry Avenue- 3 bed/2 bath, 1,853 sq. ft. California Bungalow on a 7,800 sq. ft. lot – Listed at $1.050M and received a ton of interest right away. The spacious and open floorplan appealed to a wide range of buyers and the word on the street had this receiving 5 offers and going well over asking.

3437 Halderman- 4 bed/3 bath, 1,882 sq. ft. Contemporary on a 7,323 sq. ft. lot – The disappointed bidders on 12624 Indianapolis immediately flocked to this property with a similar lot size and in great condition with a phenomenal indoor/outdoor flow. With a $1.199M list price they apparently received five offers and went out around $1.240M.

 3664 Boise- 3 bed/2 bath, 1,534 sq. ft. Traditional on a 5,767 sq. ft. lot – Despite the house needing some updating that didn’t keep buyers away thanks to the great lay-out and location. With a list price of $799K they received multiple offers and are reportedly in escrow above the list price.

The LA Times reports that “30-year mortgage rates have fallen below 3.8% for the first time to average 3.79%, down from a then-record 3.83% a week ago.

The 15-year fixed loan also hit another new low, falling from 3.05% last week to 3.04% this week.

The start rates on adjustable mortgages rose slightly in the survey. Quotes are for solid borrowers with 20% down payments or equivalent equity in their homes if they are refinancing.

The borrowers would have paid 0.7% of the loan amount on average in upfront fees and discount points to obtain the fixed-rate loans, and slightly less for adjustable-rate loans.”

A few weeks ago I officially became an associate partner at The Partners Trust real estate brokerage & acquisitions group based out of Brentwood which also has offices in Beverly Hills and Santa Monica.  I am extremely excited to be with Partners Trust and believe the collaborative environment and level of service is unmatched in the industry.  As I get situated and familiar with the technological and statistical advancements, clients will see positive advancements with the Skinny on Real Estate blog and continued advancement with customer service.

At Partners Trust, the objective is to present clients with the most professional, successful and ethical real estate associates in the business and represent clients with care, confidentiality and the utmost attention to service. 
Since the company’s inception three years ago they have experienced exponential growth and are on pace to do over $1 billion dollars in sales in 2012 with just 80 agents.  In the past year, almost 40% of the sales at Partners Trust were “off the market” (meaning not on the MLS) which is another testament to the tremendous collaborative environment.   According to the MLS numbers, our company’s sales volume is up 144% since this time last year, making us the fastest growing independent real estate company on the Westside.  Needless to say I am very excited about being part of this success!

If you are not familar with the Partners Trust web-site, I invite you to visit www.thepartnerstrust.com and please feel free to e-mail me at john.skinner@thepartnerstrust.com

That’s down from 3.88% last week and a previous record low of 3.87% in February. All of the rates would have seemed unimaginable as recently as 2008, when the 30-year rate averaged more than 6%, or 2009, when the typical rate exceeded 5%.

The 15-year fixed mortgage also dropped to a new record, showing the typical lender offering rate was 3.07% this week, down from 3.12% last week and its previous low point of 3.11%, set April 12.

Interest rates are at rock bottom because of the state of the economy and the inflation outlook.

The widely watched Freddie Mac survey, which has tracked 30-year rates for more than 40 years, presumes the borrowers have solid credit and 20% down payments or equity in their homes. It asks lenders what rates they are offering on loans of up to $417,000 to these borrowers assuming they pay less than 1% of the loan amount upfront in lender fees and points.

Borrowers with good credit who shop around frequently obtain slightly better rates than those in the survey. They also can obtain lower rates by paying additional discount points to their lender upfront.
Source: LA Times

Even though trampolines can be a great source of exercise and fun for children and adults a like, if you Google the words “trampoline” and “liability,” you’ll see that not only are trampoline injuries a very common cause of severe injuries, they are also the source of a full-blown body of law around homeowners being responsible to cover the costs and other damages related to those injuries.

In fact, just last month, New York Yankees pitcher Joba Chamberlain suffered a career-pausing ankle dislocation while jumping on a trampoline.
Many homeowners insurance and hazard insurance policies are actually voided by the installation of a trampoline on the home.

I strongly suggest that if your are thinking of getting a trampoline that you reach out to your insurance representative to fully understand the impact of having one and whether they will cover it and what the increase in your insurance will be.

Info source: www.inman.com