A quick review of some of the sales and pending sales in Santa Monica:
1352 Hill Street: Went into escrow on May 12th, just 11 days after it was listed with a list price of 1.595. It is a remodeled home that is 3 bed/2 bath, 1,940 sq. ft. on a 7,140 lot.
133 17th Street: A new construction home foused on being environmentally friendly that finally went into escrow on June 8th with a 3.695 list price. It will be intresting to see what the sale price ends up being. This 5 bed/6 bath, 4,700 sq. ft home on an 8,900 lot originally listed for 4.8 in November of last year.
2127 Marine Street: Went into escrow on May 23rd, within eight days of being listed for $1.699. This 3 bed/2.5 bath, 2,400 sq. ft. home on a 7,000 lot is remodeled and in great condition.
919 Centinela: This contemporary home that was updated in 2004 went into escrow just 12 days after being listed at 1.999. 4 bed/3/5 bath, 4,024 sq. ft, 9,000 lot but the back-yard is not usable.
1736 Oak Street: Sold for $885,000 on June 12th. Originally listed for 1.060 in February. *Remodel/tear-down candidate
1024 23rd Street: (New construction)Sold for 2.425 on May 22nd.
659 East Channel: Sold for 3.683 on June 9th. Originally listed for 4.495 on March 24th. No price reduction. 3 bed/3 bath, 3,000 sq. ft. on 3/4 acre lot (not all useable). Awkward floorplan.
Please contact me if you would like more detailed information. HAVE A HAPPY AND SAFE 4TH OF JULY WEEKEND!!
This information was gathered from the Multiple Listing Service “MLS” as of July 2, 2009.
Over the past eight months I have been closely monitoring the lack of sales activity in the Palisades Riviera. I am happy to report that over the past two months activity has finally picked up with 5 homes currently in escrow and 1 recorded sale. Quick review:
609 Amalfi: In Escrow as of 6/28/09 at a list price of 7.6. Originally listed at 9.5 and had been on the market for 250 days. Description: 8,065 sq. ft./18,325 Lot/6 bed/7 bath/Built in 2000.
1117 Napoli: In Escrow since 6/26/09 at a list price of 2.895. Originally listed at 3.7 and had been on the market for 136 days. Description: Tear-down or re-build. 3,945 sq. ft/13,119
965 Napoli: In Escrow since 6/22/09 at original list price of 6.495. Was on the market for 94 days. Description: 5,716 sq. ft./13,200 Lot/5 bed/5.5 bath/*New Construction (2009). Built simultaneously with 981 Napoli (see below) by developer.
1511 Amalfi: In Escrow since 5/6/09 at original list price of 2.995. Only on market for 26 days. Description: 3,300 sq. ft./21,175 Lot/4 bed/3.5 bath/*remodel candidate
972 Corsica: In Escrow since 5/21/09 at original list price of 2.995. Only on market for 15 days. Description: 12,998 Lot/4 bed/3.5 bath *remodel candidate
981 Napoli: SOLD for 6.744 on 5/22/09. Originally listed for 8.60 and on the market for 180 days. Description: 6,725 sq. ft./12,913 Lot/5 bed/6.5 bath/*New Construction (2008)
The Riviera has dropped about 20% in price over the past year and list prices are finally starting to reflect that correction which is leading to quicker sales.
Please contact me if you would like any additional information.
This graph provided by the calculated risk blog is a great visual representation of the gap between new and existing home sales since 1975. This is clearly the largest disconnect we have seen:
Los Angeles-Glendale-Long Beach: Peak: 2nd quarter 1989 Bottom: 2nd quarter 1997 Depreciation: 36.7% Full Recovery: 2nd quarter 2003
The California economy expanded rapidly in the 1980s. Gross state product grew at an annual rate of 5.1% from 1983 to 1989, well above the national growth rate of 3.6%. The state’s economic growth was accompanied by substantial population growth, which led to a construction boom and large increases in real-estate prices.
By 1989, a substantial decline in national defense spending seriously hurt California’s booming defense industry. In addition, the national recession of 1990-91 reduced the demand for goods and services produced in California. Unemployment increased, and the California real-estate market subsequently collapsed.
California’s downturn in the early 1990s had a speedy recovery of less than five years to its previous peak.
In the early 2000s, California experienced a particularly large home price boom fueled by a marked increase in the availability of mortgage credit. Home prices in California peaked in the first quarter of 2006. The ensuing subprime-mortgage crisis has hit California particularly hard. As of the first quarter of 2009, home prices have fallen almost 44%, adjusted for inflation, far more than the 32% drop from 1989 to 1997.
The Federal Housing Finance Agency last week released a study of real-estate downturns since 1975, tracking home prices from the quarter in which the declines began to the quarter in which inflation-adjusted prices returned to their previous highs.
Prices typically fell for three years and nine months, the agency said, but the average recovery took nearly twice that long: six years and eight months.
With such a quick and steep drop in the median Southern California home price since 2006, will a recovery be quicker than seven years?
A grim forecast for the U.S. office market was offered by a top analyst at Deutsche Bank, who predicted that urban business districts won’t recover until 2017.
“The froth is still working itself out,” Richard Parkus, the bank’s head of commercial securities research, said at a New York event hosted and reported by Reuters news service. “We are currently in something which is comparable to what we saw in the 1990s and potentially worse.”
Recovery is not imminent. The commercial market is getting worse, not better, he said. Demand for office space is falling, so rents and the income landlords receive from rents are also falling. That means many borrowers are now struggling to make mortgage payments on their properties
Real estate values could fall as much as 50% from their 2007 peak, Parkus said. “We are not only not approaching stability, we are at a period of maximum deterioration,” he said.
Source: Reuters News Service
It’s still rough going for developers who overestimated demand for urban condominiums.
The owners of the Lofts at Hollywood and Vine are cutting prices over 40% in some cases.
A 1,200-square-foot unit in the building is now listed for $549,000, down from an earlier list price of $979,000. Those are list prices, so the original figure isn’t a price someone actually ever paid.
This building opened in 2007 and is still about half-empty. It had been the Equitable office building.
A couple of months ago, developers of the Evo high rise in Downtown Los Angeles began cutting prices 15% to 20%. Units in the 24-story tower at 12th and Grand now sell from the mid-$300,000 range into the $800,000 zone, with some seven-figure penthouses.
The Evo development has been open for over 15 months and has 155 units sold or under contract. The building has 311 units. . .Lots of blood still in the water.