Skinny On Real Estate
The Westside/South Bay Market Is On Fire. . .Especially Under A Million
Realtors working with buyers looking for homes in the Westside/South Bay market that are listed for under a million dollars feel like they are in a time warp as today’s market is reminding many of us what the 2004-2005 market was like. Thanks to the $8,000 tax credit, FHA financing, low interest rates and limited inventory, buyers are constantly facing multiple offer situations on market priced homes and having to provide proof of funds to cover the down-payment, full loan approval and anything else they can do to garner favor with the seller.
In the past seven days I have written 6 offers for clients ranging from $400,000 to $950,000 and all of them ended up in multiple offer situations that went over the asking price. Despite FHA financing allowing for buyer’s to only have to put down as low as 3.5% of the asking price, most of the buyers seem to have at least 20% down which is a good sign for the economy and shows that buyers who were on the sideline during the dramatic rise of the market have decided its time to jump in.
The first time homebuyer market under $750,000 is absolutely packed with buyers. This past weekend, a 3-bedroom 1,069 square foot new listing for $589,000 in the South Kentwood area of Westchester had around 200 people attend the Sunday open house and received 12 offers as of Wednesday morning. Each market priced home seems to have at least 3 buyers vying for the property.
I was caught a little off guard by this activity and don’t think it will last when the stimulus is no longer in play. However, even if the market dips again in the less than million dollar Westside/South Bay market, the lows of 2009 will not be surpassed.
Though I don’t believe we have seen the absolute bottom in terms of prices in the market above a million dollars, activity is definitely heating up. A new listing last week in the 300 block of 11th street in Santa Monica, which is approximately 3,800 square feet on a 7,500 square foot lot, received 5 offers and is supposedly in escrow well above the $2.675M list price. Furthermore, during yesterday’s broker caravan a house on Terryhill Place in Brentwood listed for $1.795M had over 170 agents and buyers tour it in a three hour period. . .
**Please note this only pertains to single family homes and not condos. Some condos are moving fast but this segment of the market is not as strong as the single family market.
By John SkinnerFebruary Sales Data For Single Family Homes + Analysis
-click on the above image for an enlarged view.
Quick Analysis:
*The most expensive sale of the month 1141 Summit Drive in Beverly Hills sold for $16.5 million. The 16,800 sq. ft. home sitting on one acre debut on the market in September of last year for $23.5 million. . .a 30% hair-cut from the original listing price.
*The second most expensive purchase was made by Alethia Research and Management (high-net worth money management firm) founder Peter Eichler for $15,000,000. The Malibu Road home boasts 4,459 sq. ft. and is brand new construction. . .
*Other than the high-end sales above, activity above 5 million still remains light. No sales in the high-end neighborhoods of Manhattan Beach, Pacific Palisades, Brentwood and Santa Monica surpassed the $3.4 million mark according to the MLS.
*Most sales recorded under a million dollars were on the market for less than 30 days.
*With the exception of Cheviot Hills and Manhattan Beach most areas saw a healthy increase in sales compared to February of last year.
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Reat Time Market Data: Pacific Palisades and Brentwood
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*Data provided by Altos Research
Chase Bank By Far the Worst at Finalizing Loan Modifications
The nonprofit news group ProPublica reported yesterday that 97,000 homeowners have been stuck in trial loan modifications for more than six months under the government’s anti-foreclosure program, which was supposed to generate permanent modifications after three months.
60,000 of those 97,000 borrowers have their mortgages with JPMorgan Chase & Co. . .WOW. . .can you say extend and pretend. . .
Rents down about 9-13% in North Santa Monica Since 2008
With vacancy rates continuing to rise in Santa Moncia, rents in the 90402 and 90403 zip codes are down about 9-13% since 2008. According to Westside Rentals, around 280 1 bedroom apartments are for rent in these high priced zip codes.
After a slow three month period, local landlords have seen activity has pick-up dramatically the last few weeks and rental rates are expected to stabilize at the current rates through the spring and summer months.
Commercial Note: Cali Hotel Market Yet To Hit Bottom
California’s hotel market was late showing up to the foreclosure party but their arrival was inevitable. The median price per room is down 30% from 2008 and 38% from 2007. Most hotels presently on the market are still priced too high to sell and Atlas Hospitality Group another 10-20% drop in 2010.
Lenders in 2009 continued to delay processing the foreclosure of distressed hotels, opting instead to extend the forbear in order to defer the reporting of their losses. Although REO hotels made up 73% of the 2009 sales transactions, the majority of distressed hotels have still not been sold.
Foreclosures will dominate the market in 2010 and that is welcome news to developers who turn a profit by converting struggling hotels into condos and/or timeshares. Conversion happens to prime coastal hotels during every recession.
Sources: California Hotel Sales Survey Year-End 2009 and First Tuesday Journal
Westside Neighborhoods Based on Price Per Square Foot Since 2007: Between 15% to 30% in losses
Here’s an overall snapshot of Westside neighborhoods based on Single Family Residences and their performance over the last 2 years ranked from highest in decline to lowest decline based on price per square foot. These type of losses help explain why many buyers are out testing the market right now despite the fact that some of the losses are only 1/3 of the average for LA County…Is it too early to buy in some of these neighborhoods? The current activity of buyers would lead us to believe it is not…if only we had a crystal ball.
1) Malibu 90265 ($734/sqft) -29.7% (2008-2009)
2) Marina del Rey 90292 ($506/sqft) -28.9%
3) Pacific Palisades 90272 ($728/sqft) -22.5%
4) Venice 90291 ($712/sqft) -22.4%
5) Beverlywood 90034 ($456/sqft) -21.5%
6) Culver City 90230 ($467/sqft) -20.6%
7) Santa Monica 90405 ($676/sqft) -19.9%
8) Santa Monica 90403 ($811/sqft) -19.4% (2008-2009)
9) Santa Monica 90402 ($876/sqft) -19.3%
10) Westwood 90024 ($616/sqft) -18.8%
11) Brentwood 90049 ($654/sqft) -17.8%
12) Beverly Hills 90211 ($621/sqft) -17.6%
13) Rancho Park 90064 ($547/sqft) -17.2%
14) Mar Vista 90066 ($531/sqft) -16.2%
15) Bel Air 90077 ($572/sqft) -15.5% (2008-2009)
16) West LA 90025 ($599/sqft) -14.8%
Comparatively, the entire County of Los Angeles corrected over 41.3% in Price Per Square Foot since 2007. . .
*Sources: DataQuik, MLS, Westside RE Meltdown
Los Angeles Real Estate Blog
skinny on real estate
I help clients understand, navigate and negotiate the intricacies of Los Angeles residential real estate. My team makes a vigorous commitment to client satisfaction and understanding the extreme importance of taking care of all the details in what can be complicated transactions.
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