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


Walt's Father is Ben's "man on the freighter"

If you don't watch 'Lost' this is meaningless to you. Sorry.

Recall that when Walt and Michael are permitted to leave the island they are told "sail that way and a freighter [boat?] will pick you up."

Thursday, February 28, 2008

$248/sq. ft. South of the Boulevard? You betcha!

4062 WITZEL DRIVE, Sherman Oaks, CA 91423
MLS #: F1752934



Bedrooms: 4
Full Baths: 3
Partial Baths: 0
Square Feet: 3,220
Lot Size: 7,988 Sq. Ft.
Year Built: 1977
Listing Date: 02/01/08
On Market: 27 days
List Price: $799k
Last Sale: 01/12/07
Sales Price: $1,450,000


PER SQ.FT.:
Based on List Price: $248
Based on Zestimate™: $434
Based on Cyberhomes estimate: $461
Sold Homes: $417


Granted, this wasn't a gorgeous home. But it's big and it's in a good location. You never would've seen anything selling in this price range last year. And I'm a little surprised to see it this low, this soon, in the hills.

Tuesday, February 19, 2008

Comment that deserves a post...

This comment was posted by an anonymous reader this morning:



"Kate--what's your sense of when the market will bottom out? Like anonymous above, we are waiting things out, but friends (who mostly already own, please note) keep saying this is the trench. I doubt it, but wondered what your thoughts are as a savvy trend-watcher?"



Well, in my humble opinion, we are nowhere near the bottom. I think the big drop in listing prices that we are hearing so much about is all phantom losses . . . mainly a factor of the purely delusional listings falling off the MLS. This happened when the last boom busted too. Agents can't afford to market listings that they know aren't going to move and so they drop the crazy pie-in-the-sky listings. But the rest of the listings have stayed pretty firm (for Sherman Oaks: South of the Boulevard we're still seeing the low $1M on average; North of Ventura we're looking at three-quarters of a million, and North of the 101 we're looking at mid-600s.).



We still aren't seeing houses move. Sure, once in a while you'll see an excited agent-blogger chirping about how such-and-such listing flew off the market in just days! "Could the market be turning up?" she blathers. The answer is: "No." Because the truth is, those houses that are "flying" off the market aren't closing. They fall out of escrow because the would-be buyers are either not qualified or simply figure out that it's not a good deal.



And, until houses start to really move, we will keep sliding downhill. There *may* be a slight uptick this Spring (just like there is every year) but that will just mean that the fall will be more dramatic this holiday season. That's just simple statistics. When you have only a very small sample of housings reporting statistics, they will jump up and down a bit more wildly.



In short, there's no rush. You won't miss the bottom. It's not like on Wednesday we're bottoming out and by Thursday there'll be a 150% increase. When the time comes, you'll have months and months to decide on a home.



But don't take my word for it. Visit some of the other fine blogs out there. Notably: LA Land and Westside Bubble (both are linked at the right). You'll find a wealth of links on Westside Bubble in particular.



And don't be shy! If you'd like to offer your two cents the comments are wide open, Peeps. Go ahead and record your predictions for posterity and for Anon

It's Ba-aaaaack! (On Noble)

RELISTED 02/16/08 AT $740k



Price Reduced: 07/10/07 -- $849,900 to $824,900
Price Reduced: 07/17/07 -- $824,900 to $799,900
Price Reduced: 07/28/07 -- $799,900 to $769,900

Original blog post from last July: "These people bought this house in November for $705k. They have not increased the square footage at all but they think the house is now worth $850k. What could they have done to the house to justify that increase? Let me tell ya, for the additional $145k I could've put in a whole new kitchen, two new baths, a brand new jacuzzi out back, central air, a new electrical panel and all new windows in this 1,385 square foot house."

ORIGINAL MLS DESCRIPTION:

"This charming home is just steps from the blvd. With easy access to 101, 405 & pub trans. Harwood floors, smooth ceilings, crown molding, whitewashed wood plantation shutters, french doors, kit with custom cabinets w/glass fronts, bathrooms, eating in kitchen indoor laundry area, light fixtures and recessed lighting. The beautifully landscaped and lighted back yard has a covered brick porch and plenty of room for entertaining."

NEW MLS DESCRIPTION:

"South of the blvd.- incredible steal! Located in prestigious sherman oaks neighborhood of multi-million dollar homes! Charming traditional full of warmth & character. Features include hardwood floors, french doors, crown moldings, 2 fireplaces & plantation shutters! Lr with hw floors and fireplace. Gracious formality defines the dining room enhanced with chair rail & crown moldings. Beautiful sun-filled kitchen includes breakfast area, walk-in pantry & custom cabinets w/glass fronts & pot rack. Separate laundry room with extra refrigerator. Tranquil bedrooms have been tastefully designed. 3rd br/convertible den features fireplace, custom built-ins and french doors leading to gorgeous rear yard. Updated baths in neutral decor. Beautiful & serene rear yard is very secluded & features custom landscaping, covered brick patio & lawn. Perfect for entertaining or morning coffee. "

These were the pictures I posted to highlight the original MLS descriptions. I figured I'd trot them out again:







This house will not be selling for over $700k. The end.

Sunday, February 17, 2008

Avg. List Prices -- What does it all mean?

I've received about a dozen emails asking why real estate listings for Sherman Oaks don't feel that different despite the fact that the newspapers are reporting dramatic drops in average listing prices over the past five months.

The short answer is that list prices don't tell you much about home values. You need to look at local sales prices per square foot if you want to see the change in home values over time.

Basically, if I wanted to totally skew the list-price statistics, I could get all my friends in Sherman Oaks to list their houses for sale at $5M (even though the homes are each worth $1M). Suddenly, the average list price for Sherman Oaks would skyrocket. Yay! Listing prices are going up! Houses are worth more! Or are they? Not if my friends can't sell their houses for that price. And they can't.

So now all my friends lower their price by $2M. Their homes are for sale at $3M each and the average list prices for Sherman Oaks falls 40%! WOW! Have values dropped 40%? Nope. If nobody was buying at $5M, they were never worth $5M to begin with. It's a phantom loss.

And that's exactly what happened. Let's look at this real life example:


4702 HALBRENT AVENUE, Sherman Oaks, CA 91403
MLS #: F1735558



Bedrooms: 3
Baths: 2
Square Feet: 1,967
Lot Size: 7,800 Sq. Ft.
Year Built: 1941
Listing Date: 09/17/07
On Market: 153 days
Last Sale: 04/23/86
Sales Price: $226,000
Zestimate $924,000
Price Reduced: 10/05/07 -- $959k to $899k
Price Reduced: 10/30/07 -- $899k to $875k
Price Reduced: 11/26/07 -- $875k to $849k
Price Reduced: 01/03/08 -- $849k to $799k
Price Reduced: 02/16/08 -- $799k to $775k

As an initial matter, shame on the agent for letting this homeowner list at $959k in September '07. Seriously. Let me tell you how egregious this is. Just a few doors down at 4706 Halbrent a very similar house sat on the market for almost a year before it finally sold in April '07 at $810k (we don't know how much of that sales price was "cash back at close" so the true sales price could've been lower). And that was BEFORE the mortgage meltdown . How does anybody in their right mind think a similar sized house, on the same street, on a virtually identical lot, will sell for $149k more in the wake of the mortgage meltdown? Ridiculous.

So there's our first problem: figuring out what the real value of this home was when it was listed. Based on comps, and having viewed all the homes for sale in the area at that time, this house could have fetched maybe $430/sq.ft. (about $850k, and I'm being generous) when it was listed in September '07. Sure, it's in a great little neighborhood, but it's right on the border. It's just around the corner from busy Sepulveda. Also, the house doesn't have a lot of emotional appeal. It's a bland house that's had obvious after-thought additions slapped on haphazardly. (See image at right that illustrates the various roof lines as you proceed through the home).

Next, we need to figure out how much of a decrease in demand/value there's been in the past five months. In the wake of the mortgage meltdown, speculation completely dried up. I figure that speculators were willing to spend 10 to 15% more than real buyers (i.e. people who were looking for a primary residence to actually live in). So, let's figure this house dropped about 13% -- just from the speculators closing up shop -- which takes this house from $850k to about $740k over the last five months. Don't get me wrong, 13% is still a heck of a lot -- but it's a material difference from the 20% drop you would calculate based on the original list price of $959k.

But is $740k even the value of this house? The current owner paid $226k back in 1986. Adjusted for inflation, that would be approximately $450k today. Let's not forget that $450k still a lot of money. You'd need a household income between $150k and $200k, and a $90k down payment in the bank, to afford that. All things considered, I'd say this house should sell for about $350/sq.ft. (or $689k).

  • List price: $775k
  • There's no way it's worth less than $725k
  • I'm with Kate: $689k
  • The adjusted for inflation price: $450k
  • What the owner paid in 1986: $226k

Tuesday, February 12, 2008

$325/sq.ft. in Sherman Oaks, South of the 101

This is truly newsworthy stuff, Peeps. You can now buy a house in Sherman Oaks -- SOUTH OF THE 101 -- for $325/sq.ft. Yes. You. Can. Behold:
4700 NAGLE AVENUE, Sherman Oaks, CA 91423
MLS #: F1752937


Bedrooms: 3
Baths: 2.5
Square Feet: 2,015
Lot Size: 6,290 Sq. Ft.
Year Built: 1951
Listing Date: 02/01/08
Price Reduced: 02/11/08 -- $704,900 to $654,900
Last Sale: 06/14/06
Sales Price: $950,000

Zestimate™ $877,500

Based on List Price: $325
Based on Zestimate™: $435
Sold Homes: $500

Thursday, February 07, 2008

More in the $700s in Sherman Oaks...

Apparently $700k is the magic number in the flats of Sherman Oaks these days. Nevertheless, this house is wildly overpriced at $685/sq.ft. (I will pause while you snort Diet Coke out your nose.)

By my calculation, this house is currently worth about $425k. Which is approximately what the current owner paid back on 04/25/2003 ($435k). And frankly, that's still way too much for a tiny house on a tiny lot like this.

4247 SUNNYSLOPE, Sherman Oaks, CA 91423
MLS #: 08_253105




Bedrooms: 3
Baths: 1.5
Square Feet: 1,021
Lot Size: 5,066 Sq. Ft.
Year Built: 1944
Listing Date: 02/06/08
List Price: $699,000
Zestimate $666,500


Wednesday, February 06, 2008

Low $700s in Sherman Oaks Today

What's for sale in Sherman Oaks in the low $700s? Well, last year this time there was pretty much nothing below $750k. This year, there's quite a few choices. Let's look at two intersting listings that came up recently.

Listing the First: These people got to the party on time but are trying to leave a wee bit late. Their house is currently worth just a smidgeon more than what the paid for it back in late 2004. They'd like about $575/sq.ft. but that just aint gonna happen (especially North of the 101).


5528 BUFFALO AVENUE, Sherman Oaks, CA 91401
MLS #: F1749621



Bedrooms: 3
Baths: 1.5
Square Feet: 1,250
Lot Size: 6,750 Sq. Ft.
Year Built: 1951
Listing Date: 01/14/08
Price Reduced: 02/05/08 -- $735k to $719k
Last Sale:09/15/04
Sales Price:$575,000

Zestimate™ $596,500

Based on List Price: $575/sq.ft.
Based on Zestimate™: $477/sq.ft.
Sold Homes: $404/sq.ft.

Listing the Second: These people got to the party way too late. They paid $950k ($471/sq.ft.) in the Summer of '06 and then got foreclosed. The bank is only asking for $350/sq.ft. today.


4700 NAGLE AVENUE, Sherman Oaks, CA 91423
MLS #: F1752937


Bedrooms: 3
Baths: 2.5
Square Feet: 2,015
Lot Size: 6,290 Sq. Ft.
Year Built: 1951
Listing Date: 02/01/08
List Price $704k
Last Sale: 06/14/06
Sales Price: $950,000

Zestimate™ $878,000


Tuesday, February 05, 2008

Latest from Property Shark

Yo yo yiggity yo! (Sorry, ever since I saw Juno I can't stop doing that). Anyhoodle, here's the latest foreclosure images from Property Shark (god bless that site!). I'm running out the door so there may be more later but I didn't want to delay in getting you this stuff pronto. Click any image to enlarge. Cheers.






Monday, February 04, 2008

Kate's Lost Theory

I'm still working on this theory but wanted to jot down a few notes before I forget them. My apologies to those of you who were looking for another real estate post (which I will return to shortly).

The central premise of “Lost” is transcending birth and extinction. As, apparently, only Richard Alpert has been able to accomplish. Recall that Richard does not appear to age and Ben asks Richard if Richard even remembers what birthdays are. Further, Richard tells Locke that Ben is wasting his time with the fertility research. Also, the dead are frequently seen on the island (e.g. Christian Sheppard).

Ben's last name is Linus and Linus is the son of Apollo. When Hera discovered that Leto was pregnant with Apollo, she banned Leto from giving birth on "terra firma", or the mainland, or any island. In her wanderings, Leto found the newly created floating island of Delos, which was neither mainland nor a real island, and she gave birth there. The island was surrounded by swans. Afterwards, Zeus secured Delos to the bottom of the ocean. This island later became sacred to Apollo.


On the philosopher, John Locke: "Locke posits an “empty” mind—a tabula rasa—that is shaped by experience; sensations and reflection being the two sources of all our ideas. See also social contract theory. Social contract theory provides the rationale behind the historically important notion that legitimate state authority must be derived from the consent of the governed.

Richard Alpert is based on the actual Richard Alpert (a/k/a Baba Ram Dass) author of “Be Here Now.” Somewhat confirmed by Damon & Carlton in podcast.

“Be Here Now” continues to be an influential spiritual catalyst, and has inspired many to follow their own path with renewed faith and passion.

Ram Dass was also active in the Seva Foundation an organization devoted to restoring vision through affordable eye surgeries (see Lostpedia for eye symbolism).

The Dharma Initiative is based on the Lama Foundation. The DeGroots (who founded Dharma) are based on Barbara and Steven Durkee.

Locke is a tribute to Lawrence Ferlinghetti, founder of City Lights Bookstore and publisher of Ram Dass’s “Be Here Now.” Note that as commander of the subchaser USS SC1308, Ferlinghetti was at the Normandy invasion as part of the anti-submarine screen around the beaches. Two weeks after the atomic bomb fell on Nagasaki, he visited the ruins of the city, an experience that turned Ferlinghetti into a life-long pacifist." It’s not a mere coincidence that Locke blew up the submarine on the island, his gun is never loaded, and he can’t bring himself to kill anybody.

The ship Black Rock appears to be named after the Black Rock Desert, home of the Burning Man Festival. “The Black Rock Desert region has vast areas of land where travelers who experience a breakdown might not be found by others. The ease with which a visitor can drive onto the playa allows newcomers to take risks that they may not realize.”

The wild boars on the island may be a tribute to the Hog Farm commune and Wavy Gravy's
pig, “Nobody.”

Walt may be based on Charles Manson, member of The Family, founder of Spahn Ranch, who professed to have powers to stop watches with his mind. The Family was a notorious cult that engaged in child abductions and recruitment by use of sexuality.

Friday, February 01, 2008

Wow. Low prices in Toluca Lake.

4446 PLACIDIA AVENUE, Toluca Lake, CA 91602
(Photo not yet available)



Bedrooms: 3
Full Baths: 3
Square Feet: 2,115
Lot Size: 7,616 Sq. Ft.
Year Built: 1936
Listing Date: 01/30/08
List Price: $849,900

Last Sale: 04/26/06
Sales Price: $1,475,000

(but the bank got it for $1,179,421)

Zestimate™ $1,258,000


"Foreclosure - lender owned! Updated / upgraded pool home in the heart of toluca lake. Hardwood floors - granite counter tops. House appears to be in good condition. Pool - seperate grassy yard area. Detached garage. "

But note that this house is across an alley from some commercial properties which no doubt affects the price.

Another lower than '05 listing...

I found another home that was purchased in '05 that is currently listed below it's prior sale price. This one has an odd record (see below).

11600 KLING STREET, Valley Village, CA 91602
MLS #: F1748846



Bedrooms: 2
Full Baths: 1.5
Square Feet: 1,466
Lot Size: 8,202 Sq. Ft.
Year Built: 1949
Listing Date: 01/08/08
Price Reduced: 01/31/08 -- $799k to $789k
Last Sale: 08/19/05
Sales Price: $800k

Zestimate™ $766,500

So, check out the bizarre records for this home. Same buyer, two different sellers. Odd, no?

12/27/2005 Resale
Sale price $0
Buyer: Cohen Investments I
Seller: Cohen,Yafa

8/19/2005: Resale
Sale price: $800,000
Buyer :Cohen Investments I
Seller: Atkinson,Dean
First mortgage $640,000Variable Rate (Countrywide Bank )