Archive for June, 2008
June 30, 2008
Redfin’s email update for Glendale 91205 shows 513 E. Maple Street, #1, first listed at $300,000 in May, now priced at $149,000 after three price drops.
It is probably a short sale (it last sold in 2005 for around $300,000), although the listing does not state this. The unit is 1 bed/1 bath and 1 level on the ground floor of an older courtyard-style complex which must have been an apartment building in the last century.
Structures of this style strike me as more open and neighborly than newer condominium projects with imposing frontages and elevations. The older lots often have a generous amount of green space (the listing above mentions a large setback, green lawn, and shade trees).
At $149,000, this condo could actually be a better deal than renting a similar apartment after a few years (I’m skipping consideration of homeowner association fees, since none are disclosed in the listing). Its price per square foot, $241, is just at the average for condominiums sold in this neighborhood over the past three months. If it is a short sale, it is actually priced right at the market.
91205 Condominium Averages:
SALES (Past 3 months)
Number sold: 7
Price: $325,000
Price per square foot: $242
LISTINGS
On the market: 31
Price: $340,000
Price per square foot: $376
On Redfin: 107 days
Here are a few 91205 condominiums listed on Redfin close to the average sale price per square foot:
1124 E. Chestnut Street, #41 $430,000
2 bed/3 bath
1,755 sq.ft.
$245 per sq.ft.
On Redfin 55 days
The listing states that there is a third bedroom with no closet. Last sold for $435,000 in 2005.
1517 E. Garfield Avenue, #93 $209,999
1 bed/1 bath
708 sq.ft.
$297 per sq.ft.
On Redfin 12 days
Last sold in 2005 for $319,000
501 E. Palmer Avenue, #A5 $369,000 (originally $399,000)
3 bed/2.5 bath
1,199 sq.ft.
$308 per sq.ft.
On Redfin 212 days
Last sold for $230,000 in 2004. Homeowners’ association dues are $164.
Two recent condo sales from my Redfin search in this neighborhood (each of these were sold for less than their previous sale price):
1124 E. Chestnut Street, #38 $303,900
2 bed/2 bath
1,212 sq.ft.
$251 per sq.ft.
701 E. Acacia Avenue, #E $310,000
2 bed/3 bath
1,313 sq.ft.
$236 per sq.ft.
June 30, 2008
Here’s a disturbing story from MarketWatch about the wealth of baby boomers plummeting as a result of the housing downturn.
The collapse of the housing bubble will likely have drastic implications on the wealth and retirement of certain baby boomers, according to a report Tuesday by the Center for Economic and Policy Research.
The median household headed by those between 45 and 54 in 2009 will have about 25% less wealth than the median household of that age in 2004, according to the report. That household’s wealth will decline to $113,268 in 2009, from $150,113 in 2004.
What’s shocking is not so much that people’s net worth (defined as assets minus liabilities) has declined because of the downturn. It’s how precious little people in their 40s and 50s have saved for retirement, and how dependent they are on their homes for their net worth. (Here’s the link to the entire report.) How can people who’ve worked for 30 years have only $113,000 in net worth?
Because boomers have counted on their homes to provide wealth for them in old age, their net worth will continue to worsen if housing continues its slide, the report said. Some, in fact, will end up with negative net worth.
The authors noted that many boomers will be facing mortgage payments well into retirement — a change from previous generations, when homes were largely paid off by age 65. Instead of being able to downshift, downsize, travel, and enjoy the grandkids, these boomers may be forced to work well past age 65.
Investment advisers tell you to never put all of your financial eggs in one basket. Well, that’s what people who thought their homes would carry them into retirement did. Believing their homes would go up and up, they decided they didn’t need to save. Wrong.
I worked for 15 years for a newspaper that had a 401(k) plan. Just about everyone I knew who was in it ended up borrowing against it or cashing out of it and taking the penalty. They were missing the whole point of the 401(k).
I don’t know where people got the idea that it was OK to not save money for retirement and that the house would provide. It’s certainly not what they learned from previous generations. Maybe what’s needed is another Great Depression to teach people some hard lessons — wait, aren’t we in one now?
It’s probably too late for these people, but I hope younger people somehow gain the wisdom to realize that the key to financial freedom is living within one’s means, saving money and investing it wisely, and using debt conservatively if at all.
Recent Redfin posts:
New on the MLS: 24 Hours on the Market
Found Space: Unneeded Parking
Modern Pre-Fab Pretty Quick
June 30, 2008
As you’re all very aware, the real estate market has taken a nosedive in many areas of Los Angeles. Well, out of the current state of the real estate economy, comes the latest in housing transactions.
According to the Los Angeles Times, there are online sites which let homeowners list their homes not for a sale, but for a swap.
For years people have been swapping homes for vacations. Today, the idea of permanent exchanges is gaining support among disillusioned property owners struggling to sell in a glacial real estate market.
Although the number of completed trades isn’t being tracked, interest is such that several home-swap websites have sprung up in the last year and now claim close to 40,000 combined swap listings nationwide. Others appear regularly on Craigslist.org.
Fees run from free to a monthly fee. And you can also trade up or down by adding a little cash into the mix. Sounds like one way for folks looking to relocate to unload their homes and find the one of their dreams. What do you think?
On another note, here are some homes that have just been added to the market in the LAX area.
Playa Del Rey
8135 Redlands St., #107/2bd, 3bth/1,246 sq. ft./$609,000
Playa Vista
5721 S. Crescent Park W., #107/2bd, 2.5bth/1,808 sq. ft./$765,000
Westchester
6516 W. 84th Pl./3bd, 1bth/998 sq. ft./$625,000
June 28, 2008
There are a lot of houses out there that have been sitting on the market for months and months. I can name a few in my own little neighborhood—in fact, there is one just two doors down. It’s actually a cute place, but was overpriced from the get-go, and despite price cuts, it’s still sitting. I actually think this is in part a factor of the bad up-front pricing. It was clearly overreaching, so no buyers came…now that it has been sitting so long, I get the sense people are waiting to see just how far it will drop before they try to swoop in for a deal. I think it’s a common problem. Despite that, I’ve also noticed that there has been an uptick in sales in the area. I think houses that are well-maintained and desirable—and are priced right—are selling. I also think there are a few brave souls out there who are putting their houses up for sale without being under duress. I’ve noticed a handful of new listings lately that look interesting. Here are a few that have just hit the MLS:
- This 3/2 on Silver Lea Terrace is billed as a “stunning 50’s modern,” but with 1,580 square feet, it comes in at a hefty $630 a square foot.
- Over in Los Feliz, this 4/6 has more than 4,000 square feet and has only been on the market for 24 hours. It’s in a good neighborhood and it’s listed for $1,199—which brings it in at $282 a square foot. That’s pretty low, so I’m curious to check this one out and see what the story is.
- In a different part of Los Feliz—but a very charming little enclave—is this pretty 4/2.75. On the market for one day at $1,199. That seems to be the new magic number in Los Feliz, we’ll have to see if it holds. In March, a Spanish 3/2 sold on the same street for $1,169.
- This cheery 4/3 just hit the market at $1,129. It’s in the Franklin Hills, but looks like it has a nice flat backyard.
- In Echo Park, this one has technically been on the market 48 hours, but it’s interesting—it’s a classic Bunker Hill Victorian that was moved. It’s a 3/2 for $649,000 and was last sold in 2005 for $689,000. It’s got competition, though. Just down the street is this redone 2/2 that’s listed at $675,000 and has been on the market 165 days.
June 27, 2008
Yesterday’s announcement that free transit service could run to Dodger Stadium after July 25th inspired me to try it out. I hope others will as well. If high gas prices get people to leave their cars at home more often, perhaps the demand for parking lots, the symbol of our suburban car culture, will eventually shrink. They may shrink anyway, if cities like Pasadena change their parking policies as described in my last post.
I don’t live far from Dodger Stadium, but I have never found a way to get there that doesn’t involve driving all the way, inching towards the entrance, and winding slowly around the circular lot to park our car. At the end of the game, I’ve been part of the throng of people threading their way through lines of slow moving vehicles, then joining those lines and emitting fumes the remaining pedestrians breathe while getting to their own cars.
Our suburban culture has trained us to accept dealing with large numbers of cars, and inhaling their exhaust in close proximity, as we go to and from public events. We are accustomed to seeing rows and rows of cars parked on asphalt paving above or below ground.
It does look strange to the untrained eye, though. I remember arriving at Disneyland as a child and feeling overwhelmed by the rows and rows of cars parked in its vast single-level parking lot. Parking lots of that style in Southern California have disappeared, one by one, usually to be replaced by denser development (and multi-level parking structures). That particular parking lot became California Adventure and Downtown Disney in addition to the required multi-level structure.
For the average resident, low-mileage, low-exhaust, low-parking alternatives haven’t been attractive enough in the past. Streetsblog LA noted that it has been 15 years since regular public transit service was available to Dodger Stadium. It was discontinued because of poor demand. The Foothill Cities Blog just asked readers to comment on whether gas prices have recently pushed them to reduce driving in favor of public transit. One comment noted that limited schedules for public transit service still makes driving a more convenient option. What is the tipping point for the demand that would sustain public transit investment? For Dodger fans, is it $15 parking and $4+ per gallon gas?
June 27, 2008
Two posts this week (here and here) about renting vs. owning have generated lots of lively commentary on the blog. Many commenters agreed that renting is wise in a down market, but not in the long run. I was struck by what commenter Ron had to say: “I do think in the majority of situations, buying a home is the wiser financial decision.”
I think it’s in our heads that buying a home is a good investment. But is it possible that homes were a good investment for our parents and grandparents, but for us, not so much?
Back then, homes were cheaper, and people tended to stay in them for their entire adult lives. Today, homes are much more expensive, and we move around a lot more, making homeowning riskier and more costly.
The New York Times has a handy buy. vs. rent calculator to help you figure out whether you should rent or buy in a given situation. It’s not perfect, of course: It requires you to make some predictions, such as how much homes will appreciate, how much rents will rise, and how long you expect to stay put. However, if you’re living in Los Angeles or another similarly pricey locale, the calculator will probably tell you: “Buying is never better than renting over 30 years.”
But no matter where you live, buying and owning a home is costly. Let’s say you’re buying a $300,000 home. The down payment and closing costs will run you $65,000. For a 30-year fixed-rate loan at 7 percent, your monthly payment is $1,596.73 per month. If you stay in the house until the mortgage is paid off, you’ll have paid $574,821.36 for your house in principal and interest alone. And we haven’t even talked about taxes, insurance, homeowners’ associations, maintenance, repairs, and upgrades — and the weekends and vacations you will have to devote to taking care of your home. (And lots of homes cost more than $300,000.)
I came across this great blog by a woman calling herself the Millionaire Mommy Next Door. She’s a self-made financial whiz who accumulated most of her wealth after she gave up her house and began renting. Here’s one of her posts that contains links to articles that challenge the notion that homeowning is a great investment.
Her point is that a home should be “a nest, not a nest egg” — in other words, a place to live, but not an investment, like stocks or mutual funds. The financials just don’t hold up. (She does, however, think that buying positive-cash-flow income property can be a good idea.)
I’m the first to say that there are lots of nice things about owning a home. You can fix it up any way you like; you can have as many pets as you like; you can provide stability for yourself and your children and put down roots in the community. I’m just saying that perhaps we should buy for those reasons, and not with the hope of making money. Once you’ve accepted that a home is, in fact, a money pit and not a money maker, it makes rent vs. buy decisions a whole lot more rational.
Recent Redfin posts:
Two Price Drops and Two Offers Later…
Echo Park Gentrification Causes Political Uproar
Low-Mileage Tip from Pasadena’s Sister City: If They Can’t Park, They Won’t Drive!
June 27, 2008
OK, I’m poaching on other territory here, since the house I’m talking about is in Venice - but it’s pretty interesting for anyone who has ever considered building their own home. This video and story from the LA Times shows a prefab house going up in 2 days. For lovers of modern design, this looks like a great option for building. Basically, while a contractor is putting the foundation on the lot, the house is being constructed in large modules in a factory - complete with electrical, plumbing, and all those other important details that seem to take contractors months and months to finish up normally. Then the whole thing is trucked to your site and set up with cranes.
For those of you not quite ready to take on a project, here are a couple of modern houses in Los Feliz/ Silver Lake I’ve been checking out. This first one is gorgeous:
- It’s a 3/3 for $1.149 on a 12,0000 square foot lot. It’s in an area of Los Feliz near the 5 - sort of the backside close to Silver Lake. It’s been on the market 93 days.
- Over at the “Auburn Hills” as the developer has named his 7 new constructions, you can check out this 3/2 with more than 1,900 square feet for $835,472. It’s been on the market 141 days, and promises it’s an “architectural delight.”
- This 2/1.75 is really a beautifully redone place North of Los Feliz Boulevard. The owner is upside down on it (I think it’s a short sale), and its been on the market a really long time - 240 days. But the price has dropped to $899,000 from $1.225. It’s really worth looking at, though not a great house for kids. The backyard has a steep set of stairs that leads to a flat pad, but it’s a little sketchy getting up there.
June 27, 2008
The LA Times has a great article today on how the gentrification of Echo Park is playing out among the residents. It focuses on the chaos of the Greater Echo Park Elysian Neighborhood Council, which has divided itself along racial lines, its seems - the long-time Latino area residents on one side, and the newer, “whiter” residents on the other.
While the article makes for entertaining reading, I also think it’s a bit short-sighted to boil the area down to such a simplistic stance over race. Without a doubt, a younger, non-Latino crowd has been moving into the area over the past decade, opening shops, upscale restaurants, and building the modern condos the article talks about. But it’s also in my opinion much more of an economic status issue. There are lots of middle and upper class Latino families all over Echo Park that fix up their houses, eat at the nice restaurants, etc…..and there are lots of economically-challenged “white” singles who don’t fix up their houses or eat at nice restaurants. Point being, not everything is about race. As the article also points out, only 2% of residents turned out to vote in the bickering council - that leaves a lot of locals who probably are too busy living their lives to worry so much about what their neighbors are up to.
In the meantime, Echo Park has a lovely mix of houses - from new modern structures to old Victorians. It’s got hillside communities and neighborhoods with sidewalks and trees. Here’s a couple worth checking out:
- Here’s a new one on the market (10 days) that looks like a very charming (if still expensive) condo alternative - it’s only 732 square feet, but it’s a Victorian-style hillside home. It looks like the owner is upside-down on it. It last sold in 2006 for $675,000.
- This lovely 3/2 is on Cerro Gordo - a quiet street high up in the hills near Elysian Park. It’s been given a stylish modern makeover…but it’s been on the market 78 days and had it’s price drop almost$100,000 from $839,000 to $759,000.
- On the other end of the spectrum, here is a serious short sale in the flats. The asking price for this 3/1 is $397,000 with 64 days on the market. But the owner paid $615,000 in May 2007.
- And here is a bank-owned foreclosure that looks like it might be a good deal for an intrepid buyer that doesn’t mind dealing with bank red tape: It’s a 2/1 on Lake Shore for $379,900. It’s only been listed 2 days….It last sold in 2004 for $401,000.
June 27, 2008
I’m still selling my home. This is starting to feel like an awful version of a “Never Ever Ending Story”.
For those of you who don’t know, my home has been on the market since February. At the time, I fully expected to sell my house in about three months. Well, alas, I’ve gotten some nibbles but no bites.
Here’s a summary of what has been going on so far.
In the last two weeks, I actually had a multiple bid situation soon after the first price drop. But, one was a lowballer (in my opinion). And the second bid came awfully close to making a deal. But there was one little glitch. The agent promised (verbally) to make good on a higher offer to my agent by phone. And then he wasn’t able to make good on his word.
Well, I called the deal off, but they still wanted to wrestle with the numbers. Or at least make it seem like they would. They offered another deal “over the phone”. This time, it was slightly less than the previous offer. The agent claimed all kinds of reasons on why he couldn’t make good on his previous offer. The interest rates have gone up. The clients are being difficult. At this point, I just balked. If you can’t make good on your verbal offer the first time, what makes me believe you could make good on your offer a second time?
My message? Show it in writing and the offer may be considered. Apparently, a written offer isn’t happening anytime soon. And quite frankly, I’m relieved.
So now, I’ve dropped the price a second time and the calls for showings are once again coming in. Thank goodness! (Note to self: Don’t ever drop incrementally. Drop it down to the next price point so that you show up in more client/realtor searches.)
And now, I’m hopeful that soon, I will be selling my home!
June 26, 2008
At the end of a long commute and with little time to spare, drivers searching for a parking space have not yet arrived in any sense. Their cars literally hold them as prisoners.
Turning parking supply and demand upside down was the theme of Pasadena Public Information Officer Ann Erdman’s blog post written upon her return this week from a trip to sister city Jarvenpaa, Finland. Exerpt:
Pasadena’s General Plan goal of getting around town without a car may well have been inspired by Järvenpää. Here there are big incentives for not driving a car — there are only a few parking lots, and those only hold a handful of cars each; plus the cost to park is huge — the average is about $20 an hour.
So people rely on bicycles, walking, buses and light rail.
Make the price high enough and supply low enough and the majority of people will find alternatives. This sounds reasonable, but we need studies to prove it, right? Luckily there are several, including this 2006 Traffic Reduction Strategies Study commissioned by the city of Pasadena, which states:
Dozens of studies have now demonstrated that when parking is given away free of charge, people drive more. … removing or reducing parking subsidies - subsidies that have been in good part created by minimum parking requirements - reduced vehicle trips by an average of 27%, in the mostly Southern California case studies shown here. Given Pasadena’s goal for this study - figuring out how to reduce traffic by 25% - the role played by parking requirements cannot be overlooked.
Seven of the 12 recommendations in the traffic reduction study dealt directly with parking, a surprising majority if you consider that when a car is parked it is not in moving traffic! These two recommendations are noteworthy:
- Remove minimum parking requirements
- Establish maximum parking requirements
Pasadena is serious about making the city a place where people don’t need cars to get around. In the near future, residents in Pasadena neighborhoods close to intersecting transit routes may find it easier to adjust to this noble goal.
Today I looked at Redfin data on sales and listings in and around Pasadena’s Daisy-Villa neighborhood, which is close to the Area Rapid Transit System 31, 40, and 60 routes. The past three months of sales for this area show:
Number sold: 13
Average sale price: $565,000
Square feet: 1,623
Price per square foot: $388
Here are the data for listings, which show seller’s higher expectations:
Number of listings: 43
Average price: $640,000
Square feet: 1,616
Price per square foot: $432
On Redfin 75 days
A few listings at the low, mid and high end are below:
428 Del Rey Avenue
$430,000 (Originally priced at $475,000)
2 bed/1 bath
858 sq. ft.
$501 per sq. ft.
This is a short sale and last sold for $472,500 in January 2007
2435 E. Villa Street
$475,000 (originally priced at $670,000 in April)
3 bed/2 bath
1,475 sq. ft.
$322 per sq. ft.
This is a probate sale subject to court confirmation, but will probably be much easier to obtain than the short sale above, which has “lender permitting” in its listing language.
591 N. Daisy Avenue
$595,000
3 bed/1.5 bath
1,352 sq.ft.
$440 per sq.ft.
On Redfin 18 days
This home is right in the middle of Daisy Villa. The listing says that this home has not been on the market in 50 years.
620 Mercedes Avenue
$620,000
2 bed/1 bath
1,254 sq.ft.
$494 per sq.ft.
On Redfin 20 days
This home is an FSBO. Its only prior sale on public records was in 1968.
430 Bella Vista Avenue
$709,000 (originally priced at $729,999)
3 bed/2 bath
1,328 sq.ft.
$534 per sq.ft.
On Redfin 140 days
Last sold for $633,000 in 2006.
2935 Hermanos Street
$799,000 (originally $829,000)
3 bed/1.75 baths
1,911 sq.ft.
$418 per sq.ft.
On Redfin 116 days
