Friday, February 29, 2008

Forget all about $400/sq.ft. -- those days are over.

So, remember a few weeks back when I was telling you that you had to price your house in the low $400/sq.ft. range if you hoped to sell? Well, you can forget all about that. Indeed, you've barely got a snowball's chance in hell of getting into the mid-300's per square foot these days. There are just too many REO's priced in the mid $200/sq.ft. range. And before you start with the whole "not in my neighborhood" and "that house is a dive" -- zip it. The houses I'm talking about are South of the Boulevard. As in: George Clooney and Brittney Spears both live in this neighborhood.

3191 LAUREL CANYON BOULEVARD, Studio City, CA 91604
MLS #: F1755087

Bedrooms: 3
Baths: 3
Square Feet: 2,842
Lot Size: 15,680 Sq. Ft.
Year Built: 1965
Listing Date: 02/20/08
List Price $745k
Last Sale: 02/27/07
Sales Price: $1,250,000

Per Sq. Ft.:
Based on List Price: $262
Based on Zestimate™: $480
Based on Cyberhomes estimate: $475
Sold Homes: $510


Tenlay said...
This comment has been removed by the author.
Chris said...

"-- zip it"

Thanks for the laugh Kate. Glad to see you haven’ t disappeared.

I think we are going to see our own before long. Really heady things happening in the markets lately. Hopefully one of the results is affordable housing in L.A..

BTW, I expect the "tone" of most S. Cal. RE blogs; LA Land, others, will turn increasingly negative as the realization dawns that THEY were the greatest fool.

kate said...


I use ZipRealty and you need to register (it's Free!) to see the listings so a link wouldn't work for everybody. However, you could go to Zip, register, and enter the address or you could go to Redfin (without registering) and enter the MLS number to see the listing.

Hope this helps!

Emil said...

The more expensive homes prices are coming down faster given there are less buyers at that price range...

Anonymous said...

I don't think it's necessarily an indication that you can't sell a house for $400 a sq ft, but you can't sell crap for $400 a sq ft. We sold a house in Sherman Oaks in December for $491 a sq ft but it's a great house on a big lot. I know of a new construction house in Colfax Meadows that sold a couple of weeks ago for over it's 2+ million asking price (which I would guess put it close to $500 a sq ft). And I myself just put an offer in for a house at $675 per sq ft in Studio City.

The point is houses are not commodities, these are not barrels of oil or ounces of gold. Each one is different and their value has to be judged on a case by case basis. Ultimately we're willing to pay $675 because it's a great house in a great neighborhood.

The 3191 Laurel Canyon house is clearly a tear down. Their problem is going to be that spec builders are going to be very reluctant to take on a new project in this climate due to market conditions and much tighter lending conditions.

Incidentally this is my favorite outrageous listing at the moment... 4647 Arcola. It was purchased for $2.8M in May 2006, and somehow became worth $7.9M in Feb 2008. They have since dropped the price to a much more reasonable $6.15M. There is no indication they put any substantial money into the property since owning it. WTF are they thinking?!

(sorry for the long post)

kate said...

$675 a square foot? Wow. You are very likely the only person in Los Angeles bidding in that range these days. But if you aren't looking for a return on your investment, I guess it doesn't matter.

I mean, I bought a Stella McCartney gym bag over the weekend. My boyfriend thinks it was a ridiculous price. But it's not like I'll need to sell it if I lose my job; the bag doesn't represent my life savings.

l.a.guy said...

Well believe it or not it's a great price for the house and I know for a fact the builder lost money even at that price.

I do think that while we're all obsessing over the market people tend to forget that these are houses, not stocks. Sure you should be smart to pay a sensible price, but ultimately the only reason you should buy any house is because you like it, can afford it and intend to live in it for at least 5 years. If it goes up great, but contrary to popular opinion for most people buying a house is not the best investment in the world. Historically houses appreciate at what, 5% annually (largely due to inflation)? You could certainly do better (historically) investing the money in a Dow or S&P 500 index fund.

People also seem to forget about the tax benefits of buying. In our case we're not going to keep the money anyway, it's just a matter of whether we're going to pay it as interest on a house or straight to the tax man. Personally I'd rather live in a nice house.

My wife and I are incredibly fortunate to make a good living and we're not in the same boat as a lot of people with kids to raise and sky rocketing cost of living expenses to cope with. I looked at a ton of houses and it's still depressing to see what $750K will get you in a good area (like North of Ventura to South of Magnolia in Sherman Oaks). For those people I think unless you're getting a bank owned fixer or finding the rare buyer who is pricing their house with some sense of reality, wait 6 months and check again. Eventually the cold hard truth will reach these people.

Anonymous said...

How about this one near Mulholland in Sherman Oaks, another REO at around 300 sq. foot. 5 bed, 5 bath, 3000 sq. feet.

3253 LONGRIDGE TER, Sherman Oaks, CA 91423

Anonymous said...

Can you tell me what you think of the following at a 730k buy price? Good deal or no? Bank REO

3622 Potosi Ave. Studio City 91604


Anonymous said...

I googled the address and found that the property sold on 2/8/08 for $1,064,000. Probably still in escrow but sounds like $375 sq ft is the reality.