Thursday, February 5, 2009

West Hollywood Market Round-Up: January 2009

8723 Rosewood Avenue West Hollywood California
West Hollywood Vicinity (Area 10):

Single Family Market. In a dramatic illustration of how slow the market truly is, only two (!) houses sold in January 2009 in West Hollywood. One sale was 8723 Rosewood Avenue (see photo above) – new construction, contemporary design, with pool – 2,780 sq ft on a 5,175 sq ft lot –selling for $2,375,000 in only 17 days ($120,000 less than the asking price). The other was a bank-owned property (no surprise) – a 5 br, 4 ba house at 927 N Vista Street that sold for $775,000.

In stark contrast, the number of single family homes that sold in January in West Hollywood during the previous four years was: 4 (2008), 12 (2007), 11 (2006) and 12 (2005). Again, the unavailability of loans over $625,000 is causing the West Hollywood single family market to go into a virtual freeze. Unless loans become more available, prices will inevitably have to fall further.

Condo Market. The West Hollywood condo market did not fare much better. 13 condos sold in West Hollywood in January 2009, a significant decline from the sales volume in January during the four previous years: 28 (2007), 16 (2006), 30 (2005) and 39 (2004). The median price of sales in January 2009 was an astonishingly low $425,000. Consider that for the past two years, the median sale price for a condo in West Hollywood has been $620,000.

The highest priced sale was 1050 N Edinburgh, a 2,411 sq ft 3 br, 3 ba penthouse – with an original list price of $1,350,000 – closing at $950,000 after 321 agonizing days on the market. Six out of 13 of the condo sales for West Hollywood in January were for less than $400,000, again illustrating that the bulk of all activity is at the low end of the market.

What is alarming is that new construction of all stripes is not selling. The Milano (1248 N. Laurel Ave.) still has six out of 16 units, including two penthouses, still on the market after more than 18 months. Ditto for 721 Westmount Drive, that has 11 out of 16 units still on the market after 11 months on the market. For new construction in West Hollywood, developers do not seem to be dropping their prices below the $800,000 threshold – and prefer to let the units languish as the economy deteriorates. Look for prices on the chopping block in the upcoming months.

Jamie Adner