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It’s still rough going for developers who overestimated demand for urban condominiums.

The owners of the Lofts at Hollywood and Vine are cutting prices over 40% in some cases.

A 1,200-square-foot unit in the building is now listed for $549,000, down from an earlier list price of $979,000. Those are list prices, so the original figure isn’t a price someone actually ever paid.

This building opened in 2007 and is still about half-empty. It had been the Equitable office building.

A couple of months ago, developers of the Evo high rise in Downtown Los Angeles began cutting prices 15% to 20%. Units in the 24-story tower at 12th and Grand now sell from the mid-$300,000 range into the $800,000 zone, with some seven-figure penthouses.

The Evo development has been open for over 15 months and has 155 units sold or under contract. The building has 311 units. . .Lots of blood still in the water.

California’s median home sales price rose 4% in May, nudged up by an increase in sales volume (still mediocre) of higher-priced homes. The statewide median sale price was $230,000 in May, up from $221,000 in April. That’s a 52% drop from the state’s peak median price of $484,000 in 2007.

Despite the momentary pick up in higher-priced homes, foreclosures still comprised 51% of May sales and 1 out of every 5 homes sold was from the foreclosure ridden Inland Empire.

The high end momentarily picked up due to the typical spring selling season and seller’s realizing the reality of the market. After six months of very little activity, it is nice to see a faint heartbeat in this market.

Prices for the most expensive U.S. homes may not reach bottom through 2012, according to JPMorgan Chase & Co. analysts. Compelling data backs up these claims even if most of it is not included in the Bloomberg article.

Besides some of the salient points the article makes, check out the graph posted above from the Bloomberg article that shows the months needed to clear inventory in each price range in Southern California in comparison to last year. The inventory levels for homes valued for more than $1 million dollars continues to escalate towards 20 months while homes worth $750,000 or less have shown a solid decrease in inventory levels. This is further evidence that the high end market is hit last in the cycle. It is safe to say the high end is 1.5 to 2 years behind the lower priced markets.

Furthermore, history seems to have away of repeating itself. In the late 1980s, the market was going strong before it started a downward trend and values dropped 40% on the high-end over a seven-year period. It was about 10 year period before prices got back to 1989 levels.

The average Westside home has declined approximately 20-25% since 2007, only 2 years into what is historically a 7-8 year cycle. With Financial, Insurance and Real Estate sectors losing many high paying jobs and the entertainment market slowing down, where will the new high paying jobs come from?

Couple this with the shift in lending practices back to fundamentals such as verifiable income and sales/price/rent ratios and the bevy of ALT-A and Prime loans set to reset after this summer and it looks like more of a fall will come in the millionaire home market.

With market activity showing signs of life on the high-end and the financial markets up over 30% from recent lows, this summer is the best time to sell your home if you are looking to move in the next 2 to 3 years. Selling at a realistic price this summer will leave more money in your pocket.

Please contact me if you would like to discuss your current situation and what your best options are.

If homeowners did not use their homes as an ATM machine between 2002-2006 the American economy would not have had positive growth. The economy would not have prospered like it did during that stretch but the economy would not be in the mess it is right now. Question: How are we going to replace the borrow against your home ATM and spur economic growth in the near future?

Since the market peaked in 2006, a steady decline in sales volume and increase in housing inventory is substantially apparent. You can see through a small representative sample of three entry level zip codes on the Westside, [Mar Vista (90066), Culver City (90232) and Santa Monica (90405)], exactly how much the market has slowed in May (year over year) the past four years.

Mar Vista 90066
(2006) 49 sales x $782K = $38,318K
(2007) 34 sales x $824K = $28, 016K (-26.9%)
(2008) 13 sales x $843K = $10,959K (-71.4%)
(2009) 11 sales x $569K = $6,259K (-83.7%)

Culver City 90232
(2006) 14 sales x $795K = $11,305K
(2007) 4 sales x $676K = $2,704K (-75.7%)
(2008) 5 sales x $805K = $4,025K (-63.9%)
(2009) 1 sale x $675K = $675K (-93.9%)

Santa Monica 90405
(2006) 26 sales x $1,178K = $30,628K
(2007) 17 sales x $1,020K = $17,340K (-43.4%)
(2008) 15 sales x $789K = $11,835K (-61.4%)
(2009) 8 sales x $734K = $5,872K (-81.8%)

With the last real estate recession continuing for 7 years, how long will this last?

(*Sources: Melissa Data and Westside Meltdown)

Because of cost cutting in the Manhattan Beach Unified School District, Athletic Director Bob Fish has been reassigned to teach full time, leaving Paula Spence, Vice Principal to coordinate Mira Costa High School’s 64 teams and 1,200 athletes.

The reassignment of athletic director duties is only one of sweeping changes approved by the district’s board of trustees, who voted to eliminate all of the school’s coaching stipends and its athletic trainer beginning next school year.

To pay for the $180,000 in coaching stipends and more than $60,000 for a trainer, plus other costs, the school’s booster clubs have joined forces with the Manhattan Beach Athletic Foundation to ask parents for a donation of $325 per athlete for the first sport he or she participates in and $200 for each additional sport.

*Source: LA Times: For the full article plus more information on budget cuts regarding athletic programs across the region, please read: Budget cuts affecting athletic department funding

After making some administrative upgrades and getting some new systems in place to improve client satisfaction, the Skinny on Real Estate is back and will be consistently updated at least two times a week with pertinent news impacting the Westside/South Bay Southern California real estate market. The Skinny on Real Estate E-Newsletter will also go out every two to three weeks. We hope you find the information we provide to be very informative and that you will think of us whenever you require assistance with your real estate needs.

-Skinner Estates

The average rent in Los Angeles County fell almost 4% in 2008 as apartment occupancy rates dropped and new units came online. According to the annual USC Casden Forecast, the decline should continue this year as more renters lose their jobs.

“In L.A. County alone, 41,000 people moved out of apartments last year compared to the 29,000 people who moved in during the last five years,” said forecast director Delores Conway.

To keep their units occupied, some landlords are lowering rents or offering concessions for signing a lease, such as a month of free rent or a reduced deposit, she said.

Rents should level out in 2010 as the economy recovers, the report said. The average one-bedroom apartment in Los Angeles rented for $1,397 a month at the end of last year.

The Westside remains the priciest, while Pasadena and Burbank are stable with little change in occupancy or rents. Rents in Hollywood and central neighborhoods such as downtown Los Angeles are being weakened by new condominiums that are being leased rather than occupied by owners.

(*Source: LA Times)

The number of homes and condos sold and in escrow throughout March is higher than January and February combined. . FHA financing helps buyers get off the sidelines. .

After a brutal start to 2009, the housing market has finally sprung into action, especially in the home and condo market under $850,000. Besides the typical spring time activity surge, the market has been aided by record low interest rates and the availability of FHA financing (up to $729,000 in California) requiring borrowers to only put 3 to 5% down for a purchase. FHA loans also allow buyers without superior credit to still qualify for competitive mortgage rates.

I have represented clients in five deals in over the past three weeks. Each property ended up getting multiple offers and they were located in Mar Vista, Culver City and Westchester. All of these situations involved a seller that priced the home at or below the true market value. Buyers in this market must perceive a good value in the property for them to write an offer within the first two weeks.

The majority of the offers being submitted are through FHA financing. In fact, the deal in Westchester initially wanted to only accept offers from buyers qualified with conforming loans. They did not receive any offers. Once they lifted that requirement they promptly received three offers and are in escrow at very close to the asking price.

Overall activity has picked up substantially in March compared to the previous four months. However, it is still below normal volume levels.

Please see the statistics of single family residences (SFR) and condos (CC) for selected areas below from March 1st thru March 26th. This information was gathered from the Multiple Listing Service (MLS)

Pacific Palisades: 20 In Escrow; 11 Sold (25 SFR and 6 CC)
Manhattan Beach: 27 In Escrow; 16 Sold (34 SFR and 9 CC)
Santa Monica: 42 In Escrow; 22 Sold (15 SFR and 49 CC)
Mar Vista: 16 In Escrow; 20 Sold (24 SFR and 12 CC)
West Hollywood Hills/Sunset Strip: 30 In Escrow: 10 Sold (38 SFR and 2 CC)
Brentwood: 25 In Escrow: 14 Sold (20 SFR and 19 CC)
Culver City: 30 In Escrow: 18 Sold (26 SFR and 22 CC)
Westchester: 19 In Escrow: 12 Sold (26 SFR and 5 CC)
Marina Del Rey: 18 In Escrow: 13 Sold (2 SFR and 29 CC)
Beverly Hills: 13 In Escrow: 7 Sold (13 SFR and 7 CC)
Beverly Hills Post Office: 5 In Escrow: 10 Sold (15 SFR)
Playa Vista: 5 In Escrow: 3 Sold (8 CC)
Hermosa Beach: 13 In Escrow: 6 Sold (13 SFR and 6 CC)
North Redondo: 22 In Escrow: 26 Sold (11 SFR and 37 CC)

* One glaring exception is Malibu Beach. According to the MLS the area has only 1 deal in escrow and zero sales for March!