Archive for September, 2008
September 15, 2008
When I first moved to Southern California about 15 years ago, I had some issues with the air quality. I lived in downtown Los Angeles and was literally coughing and hacking for the first few nights because the polluted air did not agree with my respiratory system. (I used to live in the Bay Area).
Just having moved to the West Valley, I was curious about how the air quality was in my neck of the woods. Have you ever wondered how the air quality was in the neighborhood you’re living in or thinking about moving to? There’s an agency called the South Coast Air Quality Management District. They cover all of Orange County, Los Angeles County, and San Bernardino County. Their mission, says the site, is to “protect public health from air pollution.”
You can go to the site and find out exactly how good the air is or isn’t in your neighborhood. I’ll give you today’s snapshot of the Valley for starters. (The lower the AQI or Air Quality Index, the better.)
West Valley – Air Quality Index 13/Good Air Quality Conditions
East San Fernando Valley - Air Quality Index 113/Unhealthy For Sensitive Groups
And now, here are my real estate picks for Woodland Hills this week.
Reduced: 6145 Fallbrook Ave./3bd, 2bth/1,377 sq. ft./$565,000 to $495,000
Bang For The Buck: 5216 Sale Ave./4bd,4bth/$180 a square foot/3,666 square feet/$659,900
New On The Market: 23117 Hatteras St./4bd,3bth/3,322 sq. ft./$1,750,000
September 13, 2008
The LA Times Hot Property column reported recently that Bangkok Dangerous star Nicolas Cage has listed his Bel-Air house for nearly $30 million….and moved downtown to the Biscuit Lofts. That’s quite a change, even if he did take the penthouse. Here are the details:
Cage has leased a unit in the downtown Biscuit Co. Lofts with an option to buy. The building, in the hip-and-growing-hipper Arts District, was built in 1925 and adapted for residential use in 2006. The Biscuit has street-level restaurants, a gym and a market. The lobbies and corridors have ornamental concrete, sandblasted brick, copper doors and vintage lighting… Cage, who lived in the Bel-Air estate only part of the time, now may be parking his bedroom slippers in the 3,500-square-foot penthouse unit of the Biscuit Co. Lofts. That unit had been listed at $4.9 million and is no longer for sale, according to the Multiple Listing Service.The building, in the hip-and-growing-hipper Arts District, was built in 1925 and adapted for residential use in 2006. The Biscuit has street-level restaurants, a gym and a market. The lobbies and corridors have ornamental concrete, sandblasted brick, copper doors and vintage lighting — all very cool stuff.Cage’s lease-option penthouse has 28-foot ceilings, exposed brick walls, hardwood floors, industrial-scale windows, Wolf stainless-steel appliances and a wraparound deck. His foray into the neighborhood might make this the new “in” in-town location for celebrities and those who worship the hardwood floors they walk on.
Cage won’t be the only star wandering the hallways—the LA Times and Curbed LA also reported that actor Keven Spacey bought space for his production company at the lofts, and earlier reports had David Beckham looking at the loft Cage took. Here are some photos from Curbed LA of the interior.Want to be Nic’s neighbor? Here are some Biscuit/Toy Factory options:
- A 1/1 with 1,468 square feet for $639,000. On the market for 118 days.
- A 2/1 with 1,348 square feet for $569,000.
- Billed as the “final unit release” at the Biscuit Company, this 1/1 is a snug 605 square feet for $345,000.
- And here’s a Biscuit Company corner unit, 1.75 baths, bedrooms not listed, but 1,670 square feet for $1,25 million. It’s got views, so you must be up near that penthouse.
September 13, 2008
U.S. Treasury officials met with Federal Reserve and Securities and Exchange officials and the heads of Wall Street’s biggest firms yesterday night for another consecutive weekend seminar on the theme of the year, “How Did Things Get This Bad, and Is There Anything We Can Do About It?” Friday’s topic was Lehman Brothers imminent collapse, as reported on Bloomberg.com, the Washington Post, and the Wall Street Journal. Calculated Risk is host to at least 250 comments on this breaking story.
Stocks have gone up and down dramatically these past few weeks, bonds are tied to interest rates, and real estate prices are falling steadily – I see price reductions on most of my Redfin email updates (and I’ll list a few below).
I don’t give investment advice, but for anyone spooked by all the bad news in most investment sectors, with an appreciation for original art, and looking for something to do this Sunday afternoon, check out the the City of Glendale’s 5th Annual Open Studio Tour, September 14, noon-6 p.m. The opening reception will be held today at Brand Library Art Galleries from 3-5 p.m., and an exhibit with works of all the represented artists will be on display there through September 19. A total of 45 studios and businesses are participating in the tour – a list and the self-guided map is here. This colorful dragonfly photo is not part of the exhibit, but is very artistic – courtesy of ( Krikit ).
PRICE REDUCTIONS – PASADENA:
1939 Navarro Avenue
$485,000 (originally listed at $799,000)
4 bed/3 bath
3,056 sq.ft.
$159 per sq.ft.
On Redfin 213 days
Thursday’s post featured this large home with the lowest price per square foot in its Pasadena neighborhood. It was reduced in price on Friday, as I noted in the comment section, and my Redfin email update shows it reduced again today!
415 Avenue 64
$500,000
2 bed/1 bath
1,111 sq.ft.
$450 per sq.ft.
On Redfin 219 days
I featured this Pasadena 91105 property a few weeks ago. It was a short sale then, and the listing stated that the bank approved its sale at $550,000. The listing says nothing about last week’s $50K price reduction.
363 Montana Street
$574,900
1,971 sq.ft.
$292 per sq.ft.
On Redfin 172 days
This is all new construction, finished and placed on the market in March 2008. Originally listed at $650,000, this week it was reduced in price for the sixth time.
PRICE REDUCTIONS – GLENDALE:
3040 E. Chevy Chase Drive
$770,000
2 bed/1.75 bath
2,053 sq.ft.
$375 per sq.ft.
On Redfin 62 days
758 Omar Street
$569,000
1,810 sq.ft.
$314 per sq.ft.
On Redfin 29 days
After 29 days on the market, the listing price was reduced by $50,000 (originally $619,000).
1214 N. Everett Street
$769,000
1,928 sq.ft.
$399 per sq.ft.
On Redfin 53 days
The asking price was just lowered $60,000. The listing states that the price has been reduced for quick sale. This home is in the lower Rossmoyne area of central Glendale.
Check here for a complete list of Glendale area price reductions, and here for a complete list of Pasadena price reductions.
September 13, 2008
A few weeks ago, I wrote about the City Council’s mandate for low-income housing. This week, the Downtown News has a big piece on the Mayor’s Plan for requiring new developments to include affordable housing, and the uproar it’s causing with developers who say they are already suffering in the current housing/credit crunch:
Mayor Antonio Villaraigosa last month quietly released a proposal that would require nearly every new housing project in Los Angeles, including privately financed developments, to contain some affordable units. As the effort progresses, few outside city government are satisfied.
The so-called Mixed-Income Housing Policy is still a work in progress, but has already caused sharp division among the handful of business, development and housing advocates who have seen it. Some say it could further hamper an industry already suffering from the nationwide credit crunch, while others say the affordable housing moves do not go far enough.
But the Mayor can’t win, because on the other side, affordable-housing advocates say the plan isn’t bold enough:
Meanwhile, Paul Zimmerman, executive director of the Southern California Association of Nonprofit Housing, called the proposal “a bit timid” and said he hopes to see it strengthened in the coming months.
“Housing affordability is one of the top two or three major dilemmas we face in this city,” Zimmerman said, “and we need a really substantial ordinance to start tackling that issue.”
If it was ever implemented, the plan seems like it would have an impact on developments. Here’s what it calls for:
developers of rental projects would have to include some level of affordable housing. They could choose between reserving 12.5% of their units for very low income households earning up to 60% of the county’s area median income (less than $35,000 per year), 17.5% for low income households earning 60%-80% of the median income ($35,000-$47,000 per year) or 22.5% for moderate income households earning 80%-100% of the median income ($47,000-$60,000 per year).
Developers of for-sale projects could reserve 12.5% of their units for low income households making 50%-100% of the average median income ($29,000-$60,000 per year) or 22.5% for moderate income households earning 100%-180% of the average income ($60,000-$107,000 per year).
Interestingly, the low-income units wouldn’t have to be part of the actual project—developers could build them elsewhere in the neighborhood, or even just give the city land to build them.
But with downtown prices falling so hard so fast, it does seem like developers would be hard pressed in that area to make this work. Units in downtown are already selling in the $200,000 range in some cases—and there are a lot of empty, developer-owned units languishing out there, not to mention dozens of short sales and foreclosures. It can’t be a fun time to be in the loft-building business. Here are a few examples:
September 12, 2008
OK, all you downtown loft dwellers: Here’s your chance to do some good in your neighborhood without even expending that much effort. Anyone who lives in the area has probably seen how many homeless or very, very low income kids and families there are in the Skid Row area. Take a minute and imagine what a typical day is like for a kid without a house, a room, or even their own toy or two. A new program at the Huntington Hotel (a residential hotel at 752 South Main), home to about 20 families, is helping kids get toys and improve their reading skills at the same time—but they need books and volunteers.
The Downtown News has a great story about the Huntington program. Here’s some detail:
On a recent afternoon at Skid Row’s Huntington Hotel, about a dozen children raced around the lobby, playing tag and having a blast…
Amid the commotion, hotel manager Al Manning stood to the side of the room, calm and smiling. The mess, he knew, would be cleaned soon enough. More important to Manning was that these children, who in this neighborhood are short on recreational opportunities, had an outlet on that day to be, well, kids.
“Look,” Manning said, pointing to the group, which ranged in age from a few months to about 12. “They’re having fun.”
Though the group seemed content playing tag, the real excitement – and the reason for the get-together – was tied to the anticipation of getting a new toy. That came courtesy of the Los Angeles County Department of Social Services’ Toy Loan Program, which launched at the hotel last month.
The little-known program, which has 43 outposts throughout the county, invites children to borrow a toy and return it a week later. If the child returns the toy in good condition, they can get a new toy. Marcia Blachman-Benitez, director of the department’s toy loan and volunteer services sections, describes the program as a toy library…
At the Huntington, the organizers have put their own stamp on the program by adding in a reading element. Volunteers read books to the kids, who then write mini-reports on the stories. They get points for these reports, and when they earn enough points, they get a toy:
If the child returns a toy five consecutive times, he or she is rewarded with a new toy they get to keep…
By like all good causes, this one needs help:
He hopes that in the coming months, the program will attract the attention of Downtown Los Angeles residents interested in volunteering to read aloud at the twice-weekly sessions, or propel some book donations. The hotel’s library consists of two small boxes containing about 50 titles, most of which are tattered and worn.
So grab some old kids books if you’ve got them, or buy a couple and drop them off. If you want to volunteer to read, or have a larger donation, contact Marcia Blachman-Benitez, Director of the Toy Loan program, at marciabenitez@dpss.lacounty.gov
September 12, 2008
Some people who flocked to lenders this week hoping to snag a cheaper mortgage following the Fannie Mae/Freddie Mac takeover got an unpleasant surprise. Although interest rates had indeed fallen, fewer buyers could take advantage. From the L.A. Times:
Although the lower interest rates make it easier to get a mortgage, many lenders this week also raised the minimum down payment they’ll allow on a loan — making it impossible for some people to qualify for a mortgage.
How tough are the new standards?
Home purchasers must put down at least 15% of the purchase price, up from 10%. And if the owner of a rental home wants to refinance it and cash out some equity, the mortgage can now be for no more than 75% of the home’s value, compared with 90% during the housing boom. “No lender wants to make a 90% loan today, because we haven’t hit the bottom yet on prices. If they keep going down it could be a 100% loan next month,” said Jeff Lazerson, president of Mortgage Grader, a Web-based loan shopping service.
Of course, 20 percent down used to be the norm for home purchases. But that was before home prices got out of reach for first-time buyers. How is any first-time buyer supposed to buy a home in Southern California?
It’s no wonder that so many people are buying homes in the High Desert and the Inland Empire, where you can get a newish place for $300,000, sometimes less. Even then, a buyer putting down 15% has to come up with $45,000, plus closing costs. That’s not easy to do.
The only ones who can are the highest-earning couples or — more likely — people who get help from their parents. The rest are doomed to a life of renting in SoCal. They probably won’t stay here long.
On the other side of the equation are the folks with homes to sell. Higher down-payment requirements are bad news for people selling lower-priced properties, such as condos, that are affordable for first-time buyers. Their market just shrank considerably.
Los Angeles must come up with some kind of affordable housing for first-time buyers. A frighteningly small percentage of people and families can come up with $75,000 down to buy the median $500,000 L.A. County house.
Right now, the city is full of move-up housing. But if there are no first-time buyers, eventually there won’t be any move-up buyers, either. The first-timers will be forced into the suburbs, where they’ll commute to work and clog up the roads even more, which is hard to fathom, because they’re already practically gridlocked.
Recent Redfin posts:
Fixer Property Sold on Callicott
Pasadena 91103: Low Home Prices, High Foreclosure Numbers
A Couple of Eastside Foreclosure Sales
September 11, 2008
I’ve been following the properties around my new neighborhood in Woodland Hills. One home in particular interested me. It’s 6311 Callicott Avenue in Woodland Hills. It’s a three-bedroom, two-bathroom fixer with just 1,150 square feet of space. According to my records, it was on the market way back in March ’08 when it was reduced from $509,000 to $499,000. In May, it dropped again to $474,900. In July, the home made its final price reduction to $459,900. Well, recently the seller accepted an offer. I’m told it’s $435,000.
That would put this home at $378 a square foot. And that’s for a fixer. As far as I could tell, this home had no structural damage. It was clean, but not pretty. There was a lot of updating to be had – kitchen cabinets, bathroom fixtures, grass for the backyard, and the list goes on.
Taking a look at the current snapshot of the market, the average sold price per square foot is just $290 a square foot. Perhaps the difference in price is due to foreclosed homes? But this home had a number of things going for it.
1. A nice 7,500 square foot lot with plenty of room to expand.
2. Open floor plan, making the existing space seem a little larger than it was.
3. Mostly cosmetic type upgrades needed, bringing down updating costs.
4. Location on a good street – plenty of trees, no busy traffic.
5. Good schools – Welby Way and El Camino School District.
September 10, 2008
Foreclosures make up 10 percent of single-family home listings near Lincoln Avenue in Pasadena zip code 91103. In my narrowed search I found 15 foreclosures and 150 listings.
More than one Redfin forum user has asked about this area of Pasadena, wondering why its homes are much less expensive than in other areas. One reason is its reputation as a higher crime area in the city. A 17-year-old girl was shot to death here last August, and another homicide occurred several blocks to the north in May 2008.
Another is that while its location is central, many homes here are very small, of advanced age, or not well-maintained. A run up in prices during 2004-2006 occurred here as many homebuyers were priced out of other areas. The run back down in prices has been almost as dramatic as in outlying areas.
The average listing price per square foot for foreclosures here is $256, while the average for Pasadena is $330.
A few noteworthy foreclosures:
1467 N. Raymond Avenue
$299,900 (reduced from $389,900)
4 bed/2 bath
1,664 sq.ft.
$180 per sq.ft.
On Redfin 64 days
This is a bank REO that sold for $760,000 in September 2006.
236 Crystal Lane
$318,000
4 bed/2 bath
1,593 sq.ft.
$200 per sq.ft.
On Redfin 434 days
Sold before foreclosure for $595,000 in April 2005, this property has been reduced in price seven times since it first came on the market in July 2007.
1939 Navarro Avenue
$512,000 (originally $799,000)
4 bed/2 bath
3,056 sq.ft.
$168 per sq.ft.
On Redfin 211 days
This 1914 Craftsman sold for $684,500 in November 2005. It has been reduced in price 12 times since it came on the market in February and features the lowest price per square foot in the area.
Dramatically lower prices have attracted buyers to the neighborhood: 56 sales took place during the past three months, with an average $273 per square foot sales price, higher than the average foreclosure listing prices. See the complete Redfin list and link to neighborhood stats and trends here.
September 9, 2008
I downloaded Google Chrome and tried it out, right after I read on our Corporate Blog that it loads Redfin pages quickly (and on my computer, at least, Yahoo does not). Sure enough, the new browser loaded my Redfin favorites in half the time I’m accustomed to waiting, and it also quickly created a new tab for each favorite listing I selected.
TechCrunch affirmed Chrome as the fastest browser yet. I actually read through the terms of service before downloading, since random articles I’ve read about Google’s reach and business strategy have negatively impressed me, and apparently others as well. CNet investigated the terms of service, which were subsequently changed. I don’t usually follow Google’s latest business moves, but I also just read on LAist that NBC networks will now have ad placement by Google.
Back to real estate: sales of my favorite listings haven’t been brisk in Glendale. However, the reason a home is added to my Favorites list to begin with is usually because it represents a story about market dynamics, and that may have little to do with its salability.
Now for a quick look at all those Google Chrome tabs:
1643 Don Carlos Avenue
$1,425,000 (8/25/08)
This property was originally listed at $1,595,000 and reduced to $1,499,000.
2975 Santa Rosa Avenue
Taken off the market recently, this property was listed for sale at $689,000.
1650 Santa Maria Avenue
Also taken off the market, this property was listed for sale at $1,200,000, and later reduced to $999,000.
I searched on Redfin for a lower-priced and upper-range listing of interest in zip code 91208 (I got the message “We’re sorry but Redfin does not support your current browser.” I clicked on “Continue Anyway” and it worked just fine):
1760 Brook Lane
$399,000
2 bed/1 bath
765 sq.ft.
$522 per sq.ft.
On Redfin 225 days
This is listed as a fixer and a short sale, “reduced and needs to sell before it goes to REO.”
1405 Greenmont Drive
$1,018,500
3 bed/3 bath
2,775 sq.ft.
$367 per sq.ft.
On Redfin 5 days
This is a large one-story home, priced much lower than the average per square foot for the area, with a view of the Oakmont Golf Course and mountains on a “privately secluded lot.”
Photo courtesy of dannysullivan.
September 8, 2008
Ah, Sundays. A day that many people sleep in, read the paper over a cup of coffee, and hang out around the house all day. Especially this Sunday, with the long-awaited start of the NFL season. (FYI: Football Sundays are a great time to visit Home Depot.)
But Sunday was anything but relaxing for Treasury Secretary Henry Paulsen. Instead of watching his favorite team, he was announcing to the world that the U.S. government was taking over mortgage giants Fannie Mae and Freddie Mac. From the L.A. Times story:
At a news conference in Washington, [Paulson] laid out a plan to place the companies into conservatorship, under which the government will direct their operations from now on. The plan also calls for the Treasury to make capital injections into the companies, up to $100 billion each over time, and to lend them money as needed.
The move was made on Sunday so financial markets would have a chance to digest the news, with the hope of heading off panic when business resumes on Monday. The government did the same thing when it bailed out Bear Stearns, which, incidentally, was announced during another American sports obsession, March Madness. Coincidence?
Plummeting home prices and soaring mortgage defaults have ravaged the finances of Fannie Mae and Freddie Mac, which were created by the government decades ago to support the housing and mortgage markets by buying home loans from banks and thrifts.
Although they were chartered by the government, the companies are owned by investors, making for a strange hybrid that critics have long warned was fraught with peril.
Unfettered for years as they sought to boost earnings for their shareholders, the companies ballooned in size. Between them, Fannie Mae and Freddie Mac now own or guarantee $5.4 trillion of U.S. home mortgages, or about half the total outstanding.
By the way, it’s possible this takeover won’t prevent the economic meltdown everyone is fearing, says The Washington Post:
There is no guarantee that it will work, and it comes at a potentially massive cost to taxpayers. The government has pledged to inject money in the companies in any quarter in which they would otherwise be insolvent — up to $100 billion in total for each company.
“This is a shareholder bailout financed by the U.S. taxpayers,” said Armando Falcon Jr., formerly the chief regulator of Fannie Mae and Freddie Mac.
One analyst noted that the government’s intervention to date hasn’t achieved the desired effect.
“All of the things over the past year that the Fed and the Treasury have undertaken have been intended to stabilize the mortgage and the housing markets,” said Howard Shapiro, an analyst at Fox-Pitt Kelton. “What’s happened over time is that a lot of things they’ve done really aren’t working.”
“If this doesn’t work, there aren’t too many more arrows in the quiver,” he said.
Yikes. For those buying and selling homes, don’t expect credit to loosen up anytime soon, says CNN/Money.
Borrowers, however, shouldn’t expect the ever-tightening lending standards to ease. With defaults and delinquencies multiplying and home prices falling, Fannie and Freddie will likely keep a close eye on underwriting practices. Lenders are demanding credit scores above 700 these days, up from 620 in the past, and downpayments of 20%, up from zero in some cases, experts said.
The bigger picture, though, is whether this takeover will achieve its desired effect and calm the financial markets. Whether you or I can buy a house today isn’t quite as important as saving the financial system from collapse.
Recent Redfin posts:
Glendale, Pasadena Foreclosures Show Lower Percentage Drops
They’re Still Flipping in West Hills
A Couple of Eastside Foreclosure Sales
