Archive for August, 2008
August 31, 2008
I have my favorite areas in the Valley. West Hills is one of them. Much of the area has unpretentious, tree-lined neighborhoods with single-family homes built in the 1950’s. Many of the schools are good. (At least at the elementary level grades.) And part of West Hills is even zoned for the Las Virgenes School District.
So for this weekend, I thought I could share some of the homes that are dropping down in price in the area. Redfin currently shows the median list price of a single-family home to be $454,500 with an average cost per square foot of $300. The sold median price is $442,300. And the average sold cost per square foot is $282.
7042 Semrad Rd./4bd, 3bth/$565,999 to $544,999
8346 Natalie Ln/4bd, 2bth/$689,000 to $620,000
8720 Moorcroft Pl./5bd, 5bth/$949,000 to $869,000
It’s true. The good deals will still go quickly. I originally noted 23442 Vanowen as a great deal from a purely cost per square footage standpoint ($264 per square feet). As I was reviewing this post, it was removed from the marketplace.
August 29, 2008
CNBC’s colorful financial guru Jim Cramer, who has a pretty good track 
record when it comes to housing-market predictions, made another one this week: The housing market will bottom out in the third quarter of 2009.
One reason for his prediction: The stock price of the nation’s top home-building companies, such as Pulte and KB Home, peaked one year before housing did, in July 2006. The charts say that those stocks hit bottom last month — three years after they peaked — so he thinks the overall market will do the same.
Cramer’s got street cred when making calls on housing. Remember when he told you last year that anyone who bought a home then would lose money on the purchase? They did. (Remember how the National Association of Realtors freaked out when he said that?)
Cramer lists a bunch of reasons why he thinks the market is bottoming out: inventories are getting lower; mortgage rates will come down when Fannie Mae and Freddie Mac are taken over by the government; most teaser-rate loans will reset this year; and demand for housing will continue to increase.
It’s important to keep in mind that Cramer is talking about the national market. Here in California, the outlying areas, such as the Inland Empire and Central Valley, likely have already hit bottom. But the higher-end areas, particularly Orange County, may still need to fall more. Prices are still out of reach for a great many buyers.
Furthermore, hitting bottom doesn’t mean we’ll bounce right back up, like a 
SuperBall. More likely, we’ll land with a thud and sit there for awhile, like a sunken ship, until incomes increase and the economy settles down and people become more comfortable buying.
Hope you all have an enjoyable and safe Labor Day weekend.
Recent Redfin posts:
Foreclosure Resales in Glendale/La Crescenta 91214
Architectural Homes in the Valley
Schools Shrink in Los Feliz
August 29, 2008
While home prices have definitely been coming down across the board—no surprise there—it’s interesting that the relative value of areas is maintaining the status quo. And it’s determined by how far east you are willing to look.
For example, a Silver Lake house is still more expensive than a similar home in Echo Park, which is still more expensive that its counterpart in Eagle Rock. Los Feliz still seems to outprice them all (except for select, resevoir-viewing pockets of Silver Lake). This is my own unscientific ranking system for neighborhoods, based on not a lot more than having lived in the area for a good while and seen how buyers (and those already living here) tend to think about the hierarchy of the area. In general, it seems like Los Feliz and Silver Lake are at the top of the heap: There are parts of Los Feliz that are downright swanky (like North of Los Feliz Blvd.), but other areas, like the Franklin Hills, are pretty much on par with most of Silver Lake. Echo Park comes in 3rd in desirability. Again, there are pockets of Echo Park that command more premium prices, but in general, its still a rougher-around-the-edges area where the homes are still being fixed up and some are on the smaller side. Eagle Rock makes it 4th on my list—I know a lot of people will disagree: This is an up-and-coming area with lots of charming houses and a neighborhood feel in some parts. But it’s where people started going when Echo Park prices went up, or when they were just looking for more for their money. Personally, I prefer Eagle Rock to Echo Park, but price-wise, Echo Park is still holding more value. So here’s an example at the $600,000-$700,000 price point:
- Los Feliz (90027): $675,000 will get you this Spanish fixer on a somewhat busy street (Talmadge). I actually like this house—it’s got potential, but it is in need of a lot of love. And although it’s on Talmadge, it’s above street level.
- Silver Lake (90039): This one is a short-sale, listed at $689,000. It’s a 3/2 with 1,500 square feet and is in the Silver Lake hills. Just by moving east a bit, your dollar now gets you a completely re-done, move-in ready home.
- Echo Park (90026): This beautiful house is listed at $759,000, but I picked it anyway because it’s been steadily dropping in price since its April/ $839,000 listing. It’s also on a very nice street, way, way up in the hills—it feels extremely secluded and private up here. It’s a 3/2 with 1,200 square-feet, but a lot of outdoor space. It’s actually expensive for the area, but when you compare this house to our Los Feliz pick, you can see how moving east buys you much, much more. But, let’s not forget Eagle Rock:
- Eagle Rock (90041): Here’s where your dollar goes the farthest. Check out this English Tudor 3/2 with 1,759 square-feet in a desirable neighborhood—for $699,000.
August 29, 2008
There’s a real estate company that specializes in a particular type of home – they call it “home as art”. Deasy Penner & Partners represents properties throughout Southern California. Granted, many of the homes on this real estate site aren’t affordable for most people (try 6.5 mil in the Palisades).
But surprisingly, there are a few more reasonably priced homes listed by Deasy Penner in the Valley (as well as some pricier ones.) Styles range from traditional to modern. Let’s take a look at what’s available. Any of these strike your interest?
Sherman Oaks: 13470 Margate Street/3bd, 1.75bth/$599,000
Valley Village: 11663 Margate Street/2bd, 1bth/$699,000
Woodland Hills: 4766 Natoma Avenue/5bd, 3bth/$1,075,000
Encino: 4310 Bergamo Drive/5bd, 4bth/$1,999,000
Incidentally, Curbed LA wrote about a mid-century Studio City architectural home. In case you wanted to know more about its history, this 1.65 million dollar home once went for $920,000 five years ago.
August 28, 2008
Four out of five July 2008 foreclosure resales in the La Crescenta area changed hands for less than the lender paid to buy them back. Two of the five were condominiums.
I gathered this data from a Property Shark Excel download covering all zip codes in Los Angeles County. I’ll post my findings on other Glendale and Pasadena zip codes next week; for today, I thought I’d focus on the hillside neighborhood I featured in my fire season post.
La Crescenta, the “balcony of Southern California,” is part unincorporated L.A. County and part city of Glendale. Most single-family residences here are modest older homes on sloping lots, and many small to large newer condominium and townhome developments line the main streets.
Redfin shows a $382 average sales price per square foot for the last three months in 91214. The neighborhood page shows that 37% of single-family home and 50% of condominium listings have had their prices reduced, with an average reduction of 6%.
Here are the 91214 foreclosure resales I found on Property Shark:
3305 Mills Avenue
$415,000 (7/24/08)
Purchased for $539,000 (7/1/05) and taken back by the lender for $449,650 (6/1/08)
3348 Community Avenue
$350,000
The previous sale price is $202,000 (1/22/1999); the lender bought this home for $352,981 (5/22/08)
3100 Santa Carlotta Street
$465,000 (7/25/08)
Purchased for $670,000 (10/13/05) and taken back by the lender for $514,266(5/16/08).
3075 Foothill Blvd, #115
$295,000 (7/21/08)
Purchased for $410,000 (6/30/05) and taken back by the lender for $303,645 (4/8/08).
3130 Montrose Avenue, #113
$330,000 (7/31/08)
Purchased for $440,000 (6/9/05) and taken back by the lender for $297,464 (1/16/08).
August 28, 2008
The Los Feliz Ledger has an interesting article in the September issue on the shrinking size of elementary enrollment in area schools. (The website still has up the August edition, so you’ll have to find a hard copy or wait a few days). But the gist of the article is that enrollment has plummeted since about 2000, when local schools were literally bursting at the seams and having to go to year-round schedules. The article points out that in the 2000-2001 school year, Los Feliz Elementary had 950 students. This year, it is expecting 475!
The article speculates that rising rents in the area are driving many people out. That also sounds like owners in the area are then choosing to send their kids elsewhere, although it doesn’t go into that.
On the surface, smaller schools sound great. But as any parent can tell you, shrinking classes also mean shrinking budgets. Unfortunately, fewer students doesn’t mean a lower student-to-teacher ratio, but instead, fewer teachers and possibly even bigger class sizes.
What does this have to do with real estate? If you’ve got kids, or think you might, a lot. Many of the local schools (with exceptions like Ivanhoe and Franklin Ave. Elementary) struggle to get by, and provide high-level education. The LAUSD is alreay in dire financial straits and most schools are operating on shoestring budgets—less state money based on fewer students is bound to hurt. So families may end up going the private school route—which can add $1,000 or more to your monthly bottom line. The question then becomes whether it’s wiser to put that money towards a house in a good-school neighborhood (which is why those houses in the Ivanhoe district are so desirable), tolerate a so-so education, or go private. Tough choices.
Want to know more about the school district of the houses you are looking at? Check out this great post by Christina.
August 28, 2008
Downtown loft prices seem to be in a free fall, but in a strange contrast, the area is still seeing a huge jump in trendy restaurants and services. It’s an interesting paradox–as more and more lofts come on the market, we’re seeing sales prices dropping on some by $50,000 or more, and they are still not moving in some cases! There is just too much inventory, and too much uncertainty about where the bottom will be for this area—but a general feeling that we aren’t there yet.
At the same time, people are investing in new restaurants and bars in the area like never before. Angelenic reports this week on the much-anticipated Nickel Diner on Main St. The blog also mentions that the Hayward Hotel at 6th and Spring is getting some new tenants, including a yogurt shop and a deli.
Here’s a couple examples of downtown places that are languishing on the market:
August 28, 2008
No doubt about it. In many areas (especially in the Valley), prices in real estate are still dropping. But when will it bounce back up? Back in June, I wrote a little blog referencing an article from Bloomberg.com. The article stated that we might not be at the bottom yet, but we may be seeing a shift in the real estate market in the near future.
Well now, the Daily News reports that due to the number of foreclosures in the San Fernando Valley (844 in July), home ownership has been changing hands at an increased rate from 2007. Below is an excerpt from the article:
It’s that kind of activity that resulted in 1,321 new and previously owned homes changing hands in July, up 5 percent from the 1,262 sales recorded a year earlier and 14 percent more than in June.
The July total is the first annual upswing since September 2005.
Daniel Blake, CSUN’s director at the San Fernando Valley Economic Research Center also had this to say:
“That march of increased sales means there is … mortgage market money to be had, and that’s an encouraging sign,” Blake said.
It may also indicate that the prices will bottom out later this year or early in 2009, he said.
Whoa! That fast? I’m rather skeptical. I do think prices will be bottoming out in the next few years, but as early as the end of this year or 2009? I will believe it when I see it. Take a look at the charts for Sherman Oaks, for instance. The sales prices show a steady downward decline, but no indication of leveling off yet. What do you all think? Please drop a line.
And now, I’ll leave you with a five properties under 500K in Sherman Oaks to consider.
14842 Hartsook St./2bd, 2bth/$460,000
14751 Killion St./3bd, 2bth/$470,000
4616 Norwich Ave./2bd, 1bth/$465,000
14335 Magnolia/2bd, 1.75bth/$490,500
4818 Noble Ave./2bd, 1bth/$499,000
August 27, 2008
City-hired crews show up periodically to trim tree branches in our back yard touching utility lines. We don’t pay directly for this service, and we can’t dictate the scheduling.
My last three posts warned first time home buyers about the hidden costs of landscape upkeep. I advised them to evaluate tree trimming costs, palm tree hazards, and brush clearance requirements. Clearance of utility lines isn’t a direct cost, but in my opinion the effort to size up anyone who wants to come onto my property and inspect it does impose some stress.
My Lesson 4 for L.A. area home buyers: If you enter into contract to buy property where utility lines or poles are located, expect periodic visits to your yard by city and utility employees and landscape crews. When you receive a preliminary title report, you’ll notice an easement for these activities. Unlike some other easements, this one will be used.
A Glendale Line Clearance Forestry Supervisor just knocked on our door last week to let me know he was going in our back yard. He looked at the large cypress tree in the corner of our lot. It towers in front of a tall utility pole, conveniently hiding it from our view.
While we can’t see the pole, I’m sure the neighbors behind us can see it perfectly. As soon as tree branches start growing toward it each year, the city sends out a crew to hack back any branches too close to the pole or its lines.
This is an annual event, and the city spends more than $500,000 annually on work like this on residential lots. Here is the city of Glendale web page on tree trimming and line clearance.
And below are more Redfin listings in the La Crescenta neighborhood, this time along its less expensive southwestern edge. The average asking price per square foot here is $397, and listings have been on Redfin an average of 99 days. The first two listings are among the lowest-priced; the third is close to average for the area since I skipped past short sales.
3702 1st Avenue
$499,000 (originally $649,000 and reduced twice)
3 bed/2 bath
1,800 sq.ft.
$277 per sq.ft.
On Redfin 116 days
3749 1st Avenue
$629,000
3 bed/3 bath
2,038 sq.ft.
$309 per sq.ft.
On Redfin 219 days
This is a bank-listed foreclosure; the listing does not contain prior sales history.
3932 Mayfield Avenue
$729,000
3 bed/1.75 bath
1,717 sq.ft.
$425 per sq.ft.
On Redfin 48 days
Photo above courtesy of jon360 at flickr.com.
August 27, 2008
Just when I was wondering what to write about today, Brian Scully, VP of Marketing for my favorite real-estate data site (besides Redfin, of course), Property Shark, sent a gift: a list of foreclosure resales for the month of July in Los Angeles County.
Note that these are foreclosure resales, meaning that they were sold to individuals by banks, lenders, or portfolio companies that buy REOs in bulk. Property Shark recorded 1,753 such sales in July in L.A. County. DataQuick reported that there were 6,592 home sales in L.A. County last month, so foreclosure resales represented 26.6% of total sales. (For those who have wondered, DataQuick does not include purchases by banks, lenders, and institutional investors in its monthly sales numbers.)
The median sales price of these foreclosure resales is $295,000 — considerably less than DataQuick’s July median of $400,000. That’s mainly because there are more foreclosures in the outlying areas; foreclosures increase in number and decrease in price the farther you get from the most desirable parts of L.A. In fact, 370 foreclosure resales were recorded in ZIPs whose first two numbers were 93, which includes Palmdale and Lancaster and surrounds.
But what about those Westside areas where many of us would love to live? Here are some noteworthy high-end foreclosure resales on the list.
Hancock Park area
533 S. St. Andrews Place, #308, 90020
Sold for $352,000 on 7/31/08
2BR/2B/1,112 square feet
History: Purchased in April 2006 for $450,000; foreclosed upon in October 2007.
Westwood
10633 Kinnard Ave., #16, 90024
Sold for $450,000 on 7/29/08
1BR/2B/1,304 square feet
History: Sold for $600,000 in July 2005; bought by lender in March 2008
10535 Wilshire Blvd., #1011, 90024
Sold for $625,000 on 7/11/08
3BR/2B/1,352 square feet
History: Sold for $784,000 in February ‘07; foreclosed upon one year later
Beverly Grove
501 N. Stanley Ave., 90036
Sold for $810,000 on 7/24/08
3BR/2B/1,906 square feet
History: Bought by the bank in February for $828,750
West Fairfax
1657 Point View St., 90035
Sold for $659,000 on 7/08/08
3BR/2B/1,356 square feet
History: Purchased for $890,000 in January 2007; bought by lender in March 2008
1562 Hi Point St., 90035
Sold for $641,000 on 7/31/08
3BR/3B/1,822 square feet
History: Bought in May 2004 for $725; foreclosed upon in March
Cheviot Hills
2834 Greenfield Ave., 90064
Sold for $745,000 on 7/21/08
3BR/2B/1,728 square feet
History: Sold for $1 million in October 2006; bought by lender for $848K in January 2008
Hollywood Hills
2431 San Marco Dr., 90068
Sold for $841,500 on 7/29/08
3BR/3B/2,255 square feet
History: Foreclosed upon in January for $932K and change
West Hollywood
8787 Shoreham Dr., #208, 90069
Sold for $370,000 on 7/11/08
0B/1B/537 square feet
History: Purchased for $535,000 in January 2007; foreclosed upon in February
Hermosa Beach
2411 Prospect Ave., #0304, 90254
Sold for $530,909 on 7/25/08
2BR/2B/865 square feet
History: Sold for $505,000 in September 2005; bought by lender in March
Manhattan Beach
1704 N. Meadows Ave., 90266
Sold for $880,000 on 7/25/08
3BR/3B/1,948 square feet
Rancho Palos Verdes
21 Mela Lane, 90275
Sold for $955,000 on 7/16/08
2BR/3B/2,836 square feet
History: Purchased for $725,000 in January 2002; foreclosed upon in December for $1,113,300
2032 Dorado Dr., 90275
Sold for $590,000 on 7/2/08
5BR/2B/2,198 square feet
5987 Peacock Ridge Rd., #206, 90275
Sold for $560,000 on 7/24/08
2BR/3B/2,100 square feet
3565 Starline Dr., 90275
Sold for $856,000 on 7/3/08
3BR/3B/2,160 square feet
History: Foreclosed upon for $969K in November
Santa Monica
2025 N. 4th St., #206A, 90405
Sold for $430,000 on 7/31/08
1BR/1B/615 square feet
History: Purchased in August 2006 for $535,000; foreclosed upon in January for $414,000
2025 4th St., #102A, 90405
Sold for $400,000 on 7/8/08
1BR/1B/699 square feet
History: Purchased for $480,000 in March 2005
Recent Redfin posts:
Five Steps to Home Shopping by Schools
Fire-Season Facts, Or Lesson 3 for L.A. Homebuyers: Clearing Hillsides is Not Optional
Angelino Heights: Beauty in the Beastly Neighborhood
