Wednesday, April 1, 2009

West Hollywood Market Round-Up -- March 2009

8902 Dorrington West Hollywood

8902 Dorrington Avenue

Single Family Home Market. Only two houses closed in West Hollywood in March 2009. As it has for months, the single family market in West Hollywood remains at a virtual standstill.

New construction at 8847 Rosewood Avenue sold for $1,320,000 after 98 days on the market. This 3 br, 3 ba home has 1,850 sq ft – very large by West Hollywood standards – and was originally listed for $1,589,000.

8902 Dorrington Avenue, a turnkey bungalow with a modest 1,080 sq ft of living area, sold for $951,000, after 69 days on the market.

Currently, there is 14.2 months supply of single family home inventory in West Hollywood. Sellers will have no choice but to slash prices to make a sale.

Condo Market. 14 condos sold in West Hollywood in March 2009, the same number of sales as in February 2009. On a positive note, the median sale price was $567,500, well above the $392,500 median sale price in February 2009.

The increase in median sale price is due to the fact that only one of the sales in March was a bank-owned property and four of the sales are new construction at high (albeit deeply discounted) sale prices.

Recent sales of new construction reveal that developers are marketing their units at prices approximately 25 – 30% above the final selling price. 1248 Laurel Avenue #103 was initially offered at $949,000 – and sold years later for $650,000 – a 31% reduction. 1351 N Havenhurst Avenue #301 was first listed at $1,128,000, and ultimately sold for $800,000 – a 29% reduction. 1152 N La Cienega Boulevard #201 was listed at $949,000 and sold for $710,000 – a 25% reduction.

It is a mystery why developers continue to price their units far above market value. Of course, they don’t want to alienate owners who purchased units at far higher prices. But if they want to sell out the building, it’s time they “get real” and reduce their asking prices.