Archive for October, 2008
October 28, 2008
Dear LA Sweet Digs Readers,
As part of changes already announced two weeks ago, Redfin is changing up Sweet Digs to focus the format on proprietary, leading-edge indicators of what is happening to home prices in LA.
We had initially tried to provide a personal review of individual homes for sale in the area, but as a broker and an MLS member, we were not in an ideal position to be objective about other brokers’ properties. Since Sweet Digs was so local, it was also hard to keep pace with Redfin’s growth across the U.S.
The new format will largely focus on what Redfin does best: hard data, delivered in a freakishly compelling way:
- Broker-only data on transaction-volume, median-price and inventory trends;
- Broker-only data on sale-to-list ratios by neighborhood;
- Redfin-only price-drop data, showing what neighborhoods have the highest fraction of price-reductions;
- Redfin-only reports on shifting search traffic patterns and price parameters;
- Local agent round-ups about how current-week offer dynamics anticipate pricing shifts;
- Analysis of Case-Schiller, Census and National Association of Realtor data.
It’s good stuff.
We’ve been preparing a change in format for several months, informed by a survey many of you completed earlier this summer, so we have reason to believe that you’ll like the new Sweet Digs.
For now, we just wanted to say thanks to the folks who helped us get Sweet Digs this far, for your dazzling wit and insight, your verve and dedication to your craft. And thanks to our readers for your steady support!
The new, more analytical blog posts start later this week. If there’s a particular type of analysis you’d like to see, just leave a comment to let us know. We’ll definitely be listening.
Regards, Glenn
Glenn Kelman, Redfin CEO
October 17, 2008
Peter Viles over at LA Land recently reported on an interesting item – it seems foreclosure rates in California are dropping rapidly because of a new law that requires lenders to actually contact homeowners before preceding with foreclosure filings. He cites data from another website, Foreclosure Radar, showing the effect this new law is having:
Foreclosure Radar reports that the number of notices of default filed in September dropped 61.8% from August levels, and the number of notices of trustee sale filings — which mark the end of the foreclosure process — dropped 47.3% in a month.
While it sounds like a good thing, Foreclosure Radars’ founder makes the case that requiring the notices just prolongs the inevitable, and thereby slows an overall recovery. He also says it makes foreclosures numbers a waste of time for those seeking to understanding the market.
Sean O’Toole, founder of ForeclosureRadar, says the new law has made month-to-month foreclosure statistics “useless in understanding market conditions.”
More, from O’Toole: “We expect SB 1137 to have no long term impact beyond delaying the foreclosure process for homeowners, and slowing the overall recovery.”
The new California law encourages loan modifications as an alternative to foreclosure, a common goal of various government programs. O’Toole, however, is doubtful that loans can be successfully modified on a broad scale in California:
Given the significant negative equity now occurring in most California foreclosures, modifying loans to affordable levels either requires large principal balance reductions or extending the unsustainable teaser rates that created the foreclosure crisis in the first place. Wide scale adoption of large principal balance reductions also pose significant risks, as they are likely to encourage non-defaulting homeowners to default in the hopes of securing similar reductions. As such, either type of loan modification is likely to result in increased default, and/or foreclosure activity in the future, a consequence clearly not intended.
So be warned: A drop in foreclosures doesn’t mean we’ve hit the bottom of the market…just that paperwork is backing things up.
October 16, 2008
The New York Times has a very depressing article today on the continuing fall of housing prices, and the very real possibility that we are nowhere near the bottom. The article predicts continued declines trhough next year, and maybe longer in places like LA where housing is still relatively expensive compared to rents and incomes.
The No. 1 thing that drives housing values is incomes,” said Todd Sinai, an associate professor of real estate at the Wharton School at the University of Pennsylvania. “When incomes fall, demand for housing falls.” ……One reliable proxy of housing values — the ratio of home prices to rents — indicates that in many cities prices are still too high relative to historical norms.
In Miami, for instance, home prices are about 22 times annual rents, according to analysis by Moody’s Economy.com. The average figure for the last 20 years is just 15 times annual rents. The difference between those two numbers suggests that a home valued at $500,000 today might be worth only $341,000 based on the long-term relationship between prices and rents.
The price-to-rent ratio, which provides one measure of how much of a premium home buyers place on owning rather than renting, spiked across the country earlier this decade.
It increased the most on the coasts and somewhat less in the middle of the country. Economy.com’s calculations show that while it remains elevated in many places, the ratio has fallen sharply to more normal levels in places like Sacramento, Dallas and Riverside, Calif.
The article also points out that mortgage rates have bounced back up (last week, they hit a low point, hovering around 6%). The average 30-year mortgage is hovering around 6.75% — and that’s for the lucky people who can qualify. Banks are so tight with lending rules right now that even those with excellent credit and big down payments are being denied.
In an effort to help drive down rates, the Treasury Department has announced plans to buy mortgage-backed securities issued by Fannie and Freddie. The government also recently increased the amount of loans the companies can buy and hold. That’s where government plans to buy mortgage-backed securities comes in, with the hope that will convince lenders to loosen the purse strings, but, as the article points out:
Still, those efforts will take time to have an impact and it is not clear whether they will be sufficient to get banks to lend more freely, especially in areas where jumbo loans make up a bigger percentage of lending, like New York and parts of California and Florida. Economists say that prices in those places will probably fall further.
October 16, 2008
The money-plagued Grand Avenue project in downtown LA, across from the Disney Concert Hall, just got a Korean fairy godmother…with $100 million dollars. The LA Times reports that the Honua Group will drop the cash into the project’s long-awaited first phase. As the real estate market has continued its downward slide, the project’s developers have had a hard time coming up with investors- despite another $100 million it received from Dubai’s royal family.
The project has been described as LA’s “most ambitious effort to create dense, high-rise residential developments next to rail lines, offices, cultural attractions and shopping.” The Times article describes it this way:
The $2-billion Grand Avenue plan, designed in part by Frank Gehry, calls for building shops, condo towers and a boutique hotel — as well as a civic park — on city and county land near the Walt Disney Concert Hall.
It’s definitely ambitious, but I really question more condos downtown right now. Clearly the current investors are taking a long-term view, but prices downtown have dropped so drastically and there is so much inventory on the market, I think it’s going to take a long time for values to climb back up. Especially since banks seem to be getting aggressive in this area with unloading their foreclosures. There are a lot of properties selling at a loss. But projects like this could be good for the overall picture, making the area more desirable. Still….glad it’s not my $100 million.
Here’s a few examples of bank-owned properties:
- Here’s a bank-owned unit in the Skyline on W. 9th for $360,500. It’s last sale price is listed in May 2007 for $434,788. There are about a half-dozen units for sale in the building, just from the listings I see.
- Another bank-owned unit going for $218,500 over on W. 5th. The price has been dropped from $230,000, and it sold in July 2006 for $460,000, then looks like the bank took it back in April 2008 for $357,256.
- And here’s one in the Little Tokyo Lofts for $239,000. It’s down from $249,000. It’s last sale was November 2006 for $400,000, then looks like the bank took it back in Feb. 2008 for $303,750.
October 15, 2008
Eliminating regular gardening bills was one reason I planted a California native garden, and overall I’ve succeeded. I tend the garden about once a month with no outside help. Today, though, I threw in the towel and asked a gardener to help me clear aggressive weeds threatening my plants at their bases where the drip system provides water, and along the edges of the ground near the driveway and sidewalk.
The gardener told me that more and more of his clients are converting lawns to low-water-use native plant designs. We are facing a worsening drought and our governor says that fire season is now “year-round.”
Sustainable choices like drought-tolerant landscapes, and mass transit, have become a lot more popular in these times, with real money at stake and few good investment options. In other times when real money was at stake, sustainable gardens and other green plots were bulldozed by real estate developers, as Sustainable Gardening blogger remembers here. Perhaps there are a few good things about the recent economic downturn.
By the way, I dug weeds out of this garden as thoroughly as possible several times, but they kept growing back wherever they found an opening. The gardener recommended pulling out the overgrowth and treating the lower stems with weed killer. Since my real time is at stake here, toxic chemicals win against sustainability.
Real money at stake, and sustainable prices, are both themes in my review of Glendale 91208 listings below. The average listing price for the zip code is $437 per square foot, and Redfin’s neighborhood pages show a median sale price of $377 per square foot.
2900 Canada Blvd has been on the market for 72 days, and was reduced last week by $30,000 to $649,000. That takes this 3 bed/2 bath home, with 1,950 square feet, to $333 per square foot.
1331 San Luis Rey Drive, now listed at $799,000 sold for $1,300,000 in August 2006, then was foreclosed for $1,101,657 in July 2007. The 3 bed/3 bath, 2,276 sq.ft. home now bank-owned and listed at $351 per square foot. It has been on Redfin 40 days.
3391 Oakmont View Drive, is priced at $1,699,900, and while the listing language states that the price has been reduced by $200,000, the current Redfin record shows no evidence of this. I checked my Redfin email updates and found the property originally listed in June 2008 at $2,079,000. This home sold for $1,500,000 in June 2005, and $1,600,000 in October 2007. I haven’t personally seen any homes support a price increase from 2007 to 2008. It is a spacious 5 bed/4.25 bath view home, at a modest $354 per sq.ft., with 4,802 square feet.
October 15, 2008
You might question the timing of this flip at 521 N. Poinsettia Ave., in the Beverly Grove area, but you’d be hard-pressed to quibble with the result. The house first surfaced in this post back in May. It had been purchased for $838,000 in January 2008 and was back on the market just a few short months later with an asking price of $1,249,000.
At the time I called it a “daring 2008 flip.” Unfortunately for the flippers, the market had flopped, and the financials didn’t fly. In September, the house came back on the market again, this time at $1,099,000. The price has inched down since, to its current $1,060,000.
The house has four bedrooms, two bathrooms and 2,004 square feet, and although it’s not a teardown, every inch has been redone, according to Adrian Torres, who was manning the open house on Sunday. Adrian said the property has received several offers, but the potential buyers have failed to secure financing – a theme repeated at every open house I visited this weekend.
Photos:
Nearby sales:
503 N. Alta Vista Blvd.
Sold for $800,000 on 5/16/2008
3BR/2B/1,999 square feet
429 N. Poinsettia Place
Sold for $950,000 on 5/20/2008
3BR/2B/2,319 square feet
327 N. Formosa Ave.
Sold for $1,057,000 on 7/8/08
2BR/2B/2,261 square feet
Notes: Once listed for $1,575,000!!
October 14, 2008
The Pasadena Symphony Orchestra has cancelled a November 15 concert because of stock market volatility and its uncertain effect on donors, as Pasadena: Center of the Universe reports. The blog also mentioned that the Pasadena Playhouse just received its largest single gift ever. I hope its board gets good advice about where to park this money.
A municipal crew installing speed humps is the subject of today’s Pasadena Daily Photo. The sight of yellow-reflective-vest-clad workers completing a real civic safety improvement is a cheerful one for me. This was a real job, with a real benefit. Whether we are driving on a residential side street, or managing a large performing arts organization, we all need to slow down and think.
The market has certainly slowed. LA Land charts an accelerated drop in median listing prices throughout the region, and a recent slowdown in inventory. Listings in Pasadena were on the market for an average of 88 days, according to Redfin’s neighborhood pages. Here are three of the most recent sales, along with three of the newest listings:
SALES
2221 Casa Grande Street, Pasadena 91104
$864,545 (10/6/08)
This was originally listed on July 19, 2008 at $910,000.
310 Malcolm Drive, Pasadena 91105
$885,000 (10/3/08)
Originally listed August 12, 2008 at $949,000.
3746 Mayfair Drive, Pasadena 91107
$630,000 (10/3/08)
On July 24, 2008, the list price on this property was reduced from $699,000 to $655,000.
LISTINGS
2037 Jefferson Drive, Pasadena 91104
$729,000
5 bed/2.25 bath
2,274 sq.ft.
$321 per sq.ft.
On Redfin 1 day
1431 Brixton Road, Pasadena 91105
$1,095,000
4 bed/2 bath
1,946 sq.ft.
$563 per sq.ft.
On Redfin 6 days
3510 Landfair Road, Pasadena 91107
$749,000
3 bed/1.75 bath
square footage not listed
On Redfin 1 day
October 14, 2008
Two-bedroom condos priced in the $650,000 range have been selling fairly briskly in Westwood. Maybe that’s why Kris Benveniste, the agent on this newly listed Westwood condo, at 1927 Glendon Ave., #301, is so confident. HIs listing description includes this bold statement: PRICED TO SELL & WILL NOT BE LOOKING AT ANY OFFERS BELOW ASKING UNTIL 11/3/2008 IF STILL AVAILABLE.
The asking price for this spacious (1,500 square feet) 2+2+den unit, in an eight-unit building, is $629,000.
Entry:
Den:
Kitchen:
Turns out Benveniste had a bit of an inside scoop on pricing: He was the agent on a similar condo a couple of doors down — 1917 Glendon Ave., #302 – that closed escrow on Oct. 3 for $639,000.
Other nearby recent sales:
1931 Glendon Ave., #301
Sold for $643,500 on 8/8/08
2BR/3B/1,582 square feet
1944 Glendon Ave., #210
Sold for $575,000 on 7/3/08
2BR/2B/1,470 square feet
1872 Midvale Ave., #105
Sold for $640,000 on 7/24/08
2BR/2B/1,563 square feet
So, what do you think? Will this sell at asking by Nov. 3?
October 13, 2008
I was out and about in Woodland Hills today and noticed a billowing cloud to the north. It had the faintest amber hue to it. The air felt murkier. And I’ve seen snippets of ash fly across the sky.
So I checked around the news for local fires and as of 10 a.m. this morning, the fires have been burning out by Porter Ranch. Porter Ranch is located in the northwestern part of the San Fernando Valley, a little over 10 miles north of my residence. The area is characterized by hilly terrain, winding streets, and tile roofed-homes circa the 1970′s. And if you’re living in Porter Ranch, your family is likely in the six-figure income bracket.
I hope the homes in the area are safe from the fires. If you’re just curious, take a look at the real estate below.
11487 Twin Hills Ave./4bd, 3bth/2,861 sq. ft./$680,000
11690 Seminole Circle/4bd, 3bth/2,552 sq. ft./$749,000
11743 Doral Ave./4bd, 3bth/2,276 sq. ft./$925,000
October 13, 2008
Almost anything in the path of a fast-moving wildfire will burn, but some plants are more fire-resistant than others, including some native plants that can be established on cleared hillsides. Last week I wrote about a landscaping project I completed using California native plants and listed three places to find them.
My garden project wasn’t in a fire danger zone, so I didn’t try to find fire-resistant plants. There are plenty of hillsides in Glendale and Pasadena with homes that need all the fire protection they can get, though, so today I found this list and discovered that I actually used two of the plants in my garden: Dwarf Coyote Bush (a fast-growing, LA County Fire Department approved groundcover), and Monkeyflower (a fast-growing shrub with bright green leaves and small orange or red flowers). Most of the plants are both drought-tolerant and fire-resistant. In my opinion, native plants with these qualities should be available at every nursery in Southern California.
My last “fire season”-themed post featured three hillside properties in La Crescenta. Almost two months have passed, and one home is still on the market, one is currently in escrow accepting backup offers, while the last (which looks like a foreclosure) has been taken off the market.
Here are the properties I featured on August 27, with their original listing prices:
2837 Pinelawn Drive
$869,000
4 bed/2.5 bath
2,376 sq.ft.
$366 per sq.ft.
On Redfin 44 days
2723 Pinelawn Drive
$899,000
4 bed/2.75 bath
2,292 sq.ft.
$392 per sq.ft.
Currently accepting backup offers.
3535 Paraiso Way
$679,900
3 bed/2 bath
1,702 sq.ft.
$399 per sq.ft.
The last sale shown on the record currently is June 2008, for $603,000. The property has been taken off the market.
