Tuesday, July 7, 2009

Silver Lake - Echo Park Market Round-Up: June 2009

Twenty houses sold in Silver Lake / Echo Park in June 2009 with a median sale price of $750,000. This is a huge departure from May 2009 when the median sale price was $499,000 and one-third of properties were foreclosures (REO) or short sales (vs. one-fifth of all properties this month.)

Most of the properties changing hands are traditional sales, elevating the median sale price by more than 50% from one month to the next. The median days on market was 42, well below the median of 68 days on market for all of 2008.

The reduced number of distressed sales shows a return, even if only temporarily, to a "normal" market.
2920 AngusTwo sales in June 2009 were for over $1 million. 2920 Angus Street, a 3 bedroom, 2.5 bath 2,558 sq ft house on an extra-large 14,157 sq ft lot sold for $1,246,000, $3,000 below its asking price. The house is in the Ivanhoe School District and was on the market for a brief eleven days.

2437 Moreno
2437 Moreno Drive, a 4 bedroom, 2.5 bath 2,548 sq ft house on a 7,927 sq ft lot sold for $1,239,000, below its $1,299,000 asking price, after 41 days on the market.

2674 Ivan Hill
2674 Ivan Hill Terrace is an example of how challenging a “flip” can be – to no fault of the flipper or agents – in a declining market. In April 15, 2008, the house was listed at $889,000 as a fixer, first time on the market in 52 years. On August 12, 2008, the house sold for $750,000. This is just weeks before September's financial meltdown.

Paint barely dry, on October 8, 2008 the flipped version of the house was listed at $1,198,000 – $448,000 above the purchase price. After two cancelled escrows and five price reductions – the lowest to $969,000 – the house finally sold on June 5, 2009 for $924,000. Gross profit: $174,000.

In a rising market, flipping is a no-brainer – the asset increases in value even if the owner does nothing. In a declining market, flipper beware. The flipper’s sweat equity – which is supposed to turn into equity – gets whittled away every day as prices go lower.