Monday, November 2, 2009

West Hollywood Single Family Market: October 2009

Five houses sold in the West Hollywood area in October 2009. As in previous months, the high end of the market is dominated by traditional sales, while the low end is dominated by distressed sales. There are currently 50 houses on the market in West Hollywood -- roughly a ten month supply of inventory.
934 Orlando West HollywoodThe highest priced sale was 934 Orlando Avenue, which sold for $1,512,500. This 3 bedroom, 2.5 bath house with 1,892 sq ft of living area in a prime West Hollywood location is sited on an exceptionally large 13,125 sq ft lot. Look for pool and improvements some time soon.
9002 Vista GrandeAnother traditional sale hit the million dollar mark -- exactly. 9002 Vista Grande Street sold for $1,000,000 -- 20% below its $1,249,000 asking price. This house in the desirable Norma Triangle neighborhood has 3 bedrooms, 2 baths, 1,416 sq ft of living area on a modest 3,864 sq ft lot.
8471 Waring West HollywoodThe three lowest priced sales give us insight into how frothy and over-heated the market was three years ago.

8471 Waring Avenue, with 2 bedrooms, 2 baths and 1,288 sq ft of living area on a 3,024 sq ft lot sold for $700,000 in a short sale. The previous sale was for $859,000 in October 2006 -- a decline of 19% from the height of the market three years ago.

155 Fuller Ave West Hollywood
1155 N Fuller Avenue closed at $610,000 in a short sale last month. The previous sale for this 3 bedroom, 1 bath house with 1,472 sq ft of living area was for $985,000 in October 2006 -- a decline of 38% in value. The hyper-inflated value in 2006 was partially due to the purchase for condo improvement.

901 Larrabee Street West HollywoodThe most astonishing example of value decline can be seen with 901 Larrabee Street, a modest 1 bedroom, 1 bath cottage with 565 sq ft of living area on a tiny 2,362 sq ft lot. This foreclosure sold for $475,000 last month -- down from $950,000 in November 2006 -- a decline of exactly 50%. As with 1155 N Fuller, this property was sold for redevelopment, not for habitation.

But how the mighty have fallen. Since redevelopment opportunities in West Hollywood at present are nearly non-existent, this property sold for exactly what it is -- a shack and condo alternative in a central West Hollywood location.

These distressed sales illustrate the churn in Los Angeles real estate sales where properties purchased at the height of the market are so far underwater that even if the owner can afford to make payments, they sometimes opt for strategic walk-aways and distressed sales. These properties exist at all ends of the price spectrum, and it may be years before this "upside down" inventory works it way through the system.