There are listings … and then there are listings. Candy Spelling, wife of deceased uber-producer, Aaron Spelling, is putting “The Manor” -- her French chateau inspired residence -- on the market for $150 million, the most expensive residential listing in the United States.
The property -- which looks like a French chateau and is slightly larger than the White House -- is the largest home in Los Angeles County. Spelling, the mother of actress Tori Spelling, describes it as the "greatest entertainment house ever" with a "kitchen where you can cook for two or 800." The parking lot, dubbed the "motor court," can accommodate 100 vehicles, with 16 carports to boot.
Built in 1991, the three-story house has many rooms customized for specific purposes. There's Aaron Spelling's automated projection room (one of Candy Spelling's favorites), a bowling alley, a flower-cutting room, a wine cellar/tasting room, even a silver storage room with humidity control. Outside there is a swimming pool with pool house, tennis court, a koi pond, gardens and a citrus orchard.
To house the staff, a service wing has five maids' bedrooms and two butlers' suites, one of which has a kitchenette. The house is believed to have more than 100 rooms. Spelling said she isn't sure, because she's never counted them. [Source]
Much speculation remains whether they can get $150 million in today’s tepid market.
"Once a decade one of the trophy properties in Los Angeles becomes available. Certainly it's a lot of money, but it's not like there's another one around the corner for sale." Says Realtor Kurt Rappaport.
Candy Spelling bought the top two floors of a Century City condo building last summer for $47 million. The purchase set a record price paid of $2,848 per square foot for an L.A. condo. The "apartment," as the understated Spelling called it, is going to be ready at the end of the year, and she hopes to move in by March or April of 2010.”
Despite her move, Candy will remain “on top of the world.”
Monday, March 30, 2009
There are listings … and then there are listings. Candy Spelling, wife of deceased uber-producer, Aaron Spelling, is putting “The Manor” -- her French chateau inspired residence -- on the market for $150 million, the most expensive residential listing in the United States.
Friday, March 27, 2009
The demographic patterns in this and next decade dictate that there will be strong demand for apartments that will outstrip supply.
The number of new renters will exceed the supply of apartments by as much as two times.
The homeownership rate is about 65 percent currently, and the total number of households in the US is about 120 million. “If 35 percent of the population rents, we are talking about 40 million households that are renters.”
According to the census bureau, there will be 15 million new households over the next 10 years, translating to about 1.5 million new households per year. If only 30 percent of these households rent, this will mean there will be 450,000 new rental households per year in the next 10 years.
However, apartment starts have been hovering at around only 200,000 units from the supply standpoint. “We know there is no overbuilding if this pattern holds, In fact, there will be half as many new apartments built as new renters coming into the market.” [Source]
Multi-family fundamentals are looking excellent in 2009 – for those who can afford to purchase properties.
Investors should see solid, long-term returns as household formation drives the demand for rental property. The percentage of Americans owning homes will continue to fall as downpayment requirements and lending underwriting guidelines limit the pool of homebuyers.
In the current market, buyers of apartment buildings small and large will benefit from historically low interest rate and prices that have fallen dramatically since peaking in 2007. Investors can expect price appreciation of their investments, and also increases in income as the rental market tightens and demand forces up rents.
Wednesday, March 25, 2009
The UCLA Anderson Forecast reports that California – and the US – are in for some hard times. But the economists acknowledge there are so many variables coming into play, their prognostications are at best “hunches.”
Some highlights of the report:
- Nationwide, the unemployment rate will peak late next year at 10.5%
- Jobless rate in California will soar to 11.9% by mid-2010
- In California, the economy will stop shrinking by the fourth quarter 2009
- Hikes in the state's sales and income taxes will also erase some of the gains from the federal stimulus package
Tuesday, March 24, 2009
Foment is brewing in West Hollywood where real estate agents are challenging a Draconian West Hollywood sign ordinance which prohibits agents from placing signs on public ways.
Some residents may welcome the clutter-free on Sundays. Agents contend that West Hollywood applies a dual standard, since the city has opened its streets and walls to advertisers, becoming the virtual billboard capital of North America, yet prohibits business-tax paying vendors from marketing their wares.
Cooling prices have led to heated arguments between agents and city officials: the fee for non-compliance is $195. [Source]
The pundits at Deutsche Bank forecast that 2009 will be a transitional year for the commercial real estate market.
Along with the overall economy, the real estate investment market experienced a dramatic fall in the past year.
Following several years of outsized double-digit annual returns, pricing for real estate achieved unsustainably high pricing levels in 2007, ruled by highly available and inexpensive debt. Research estimates that values have fallen by 30 percent or more since the 2007 peak.
There is a silver lining to this dark cloud: outstanding properties at low prices.
Exceptionally high quality properties are expected to be available at historically low pricing.
Acquisitions in the coming year would be in advance of an economic and property market recovery, providing the potential for attractive long-term returns.
Apartment and Industrial property fundamentals are superior to office and retail investments.
Apartments, particularly in supply-constrained long-term growth markets, should be favored in the medium-term given a relatively early forecast recovery.
[Apartment] markets with the strongest prospects, in spite of some near-term pain, are Washington, DC, Baltimore, San Francisco, Seattle, San Jose, New York, San Diego and Los Angeles.
Research projects a remarkably strong recovery for the apartments between 2011 and 2015, possibly with the strongest effective rent gains in history.
In spite of near-term declines, [industrial] markets with the most favorable outlook include Los Angeles, San Jose, Seattle, Austin, Miami, Portland, New York and Orange County.
As Los Angeles emerges from the economic doldrums, investors in apartment and industrial properties should see attractive returns. The current environment, though credit may be tight and uncertainty hangs in the air, should present the best commercial buying climate in years.
[Source, RREEF Research “2009 U.S. Real Estate Investment Outlook and Market Perspective]
Monday, March 23, 2009
Just as a flood of new condominiums are scheduled to hit the housing market this year, Fannie Mae has added restrictions making it more difficult for developers to sell their units.
The government-backed mortgage-finance company stopped guaranteeing mortgages in condo buildings where fewer than 70% of the units have been sold, up from 51%. In addition, the company won't back loans for sales in buildings where 15% of current owners are delinquent on association fees or where more than 10% of units are owned by a single-entity.
The new policy became effective March 1.
Condo developers say the rules may hasten the failure of countless buildings across the country and seem to be at odds with federal efforts designed to speed along a housing-market recovery.
Moreover, Fannie and Freddie are both set to increase fees on condo buyers next month. Buyers without at least a 25% down payment will have to pay closing-cost fees equal to 0.75% of their loan, regardless of the borrower's credit score. The companies say these fees are necessary to protect against higher default rates.
The changes come as cities brace for a new flood of condo supply. Reis Inc. estimates that 93,000 new condo units will be completed this year, a 28% increase in new inventory from last year. Los Angeles is readying 2,600 units, according to estimates. [Source]
Condo buyers should be aware of add-on fees from Fannie Mae that will increase the cost of their mortgage.
Any buyer considering the purchase of new condo construction should inquire how the initial 70% of units will be financed since Fannie Mae will not guarantee mortgages if fewer units are sold.
Buyers of new construction should also take measures to protect their Initial Deposit in the event: 1) the buyer is unable to obtain acceptable financing; and, 2) the developer goes into default.
Low interest rates will moderate some of the effect of the add-ons. But in this market where developers and buyers may not perform, condo buyers get sucker-punched with extra fees.
Sunday, March 22, 2009
1200 N Sweetzer Avenue, West Hollywood, CA 90069
Asking price: Not announced
Number of units in development: +/- 11 (?)
Days on Market: Coming some time soon
A boxy condo block painted brown and chartreuse has arisen where two small bungalows were once located at the corners of Sweetzer and Norton Avenues.
Not a lot of information is available about the project. The land was originally listed at $2,700,000 and sold for $2,200,000 in November 2005.
Three and one-half years later the condo project has arrived, in times as depressed as they were heady back in ’05.
The building has potential. The upper floors will have excellent, unobstructed views. The doors and windows are snazzy and modern. The building is sited nicely at a corner. The units are steps away from restaurants and retail.
The brown and chartreuse exterior is strange – something between “New Wave” and West Elm – that could risk looking drab after a few years sun and rain.
Prices have not been announced.
Bottom line: this dense West Hollywood neighborhood – which appeals to newcomers and long-time Angelenos alike – gets an upscale new arrival.
New money is about to flow into an area of the real estate market that has been hardest squeezed by the credit crisis: …jumbo mortgages.
Major banks are heading into the jumbo segment, originating big loans at affordable rates. Bank of America is rolling out a large program to finance loans between about $730,000 and $1.5 million, with fixed 30-year rates starting in the upper 5% range.
The bank's head of consumer real estate operations, said there's "a real need" for capital in the jumbo arena, where interest rates last fall sometimes exceeded conventional loan rates by three to five percentage points -- if financing was available at all.
Bank of America's new program requires hefty liquid resources -- six months of principal, interest, property tax and insurance payments in reserve -- plus fully documented income, solid credit scores and a full appraisal. Bank of America quotes a minimum of 20% [downpayment requirement]. [Source]
The decrease in interest rates on jumbo loans is a life-line to the Los Angeles real estate market. The current perniciously high jumbo-loan rates in the high 6% range (when available) have brought the high-end market to a virtual standstill.
In addition to Bank of America, ING Group is offering jumbos loans, some as large as $2 million with a minimum down payment of 25%. Current rates start around 5%. ING's jumbos are 5/1 and 7/1 hybrids, with a fixed interest rate for the first five or seven years, adjusting each year thereafter.
The difference in monthly payment on a $1 million loan at 5.0% and 6.75% is $1,118. Homeowners on the Westside and in other high-end Los Angeles areas are going to benefit from these lower rates.
Wednesday, March 18, 2009
While Los Angeles deals with eternal gridlock, eternal the City of Lights is doing some bold imagining for its future.
Hand it to the French. Who else would pick an economic collapse as a time to unveil one of the most audacious urban plans in recent memory?
Yet the 10 proposals for a new master plan for metropolitan Paris, which were unveiled last week, may just be the kind of brazen idealism the world needs right now.
Among the most audacious is Mr. de Portzamparc's plan, which proposes demolishing both the Gare du Nord and the Gare de l'Est and replacing them with a single massive European train station just outside the city center.
Other plans are more poetic. Jean Nouvel proposes creating a green belt that would circle the entire city. All future construction would be concentrated inside this belt, adding density to what are now sprawling, isolated communities. [Source]
When will the subway to the sea be built? 2032?
The Federal Reserve announced Wednesday it will spend up to $300 billion over the next six months to buy long-term government bonds, a new step aimed at lifting the country out of recession by lowering rates on mortgages and other consumer debt.
"This is not only going to keep mortgage rates low for a long period of time," said Greg McBride, a senior financial analyst at Bankrate.com. "The mere announcement may produce a honeymoon effect and bring mortgage rates down to even lower levels in the coming days." [Source]
Recovery may not be far away if interest rates fall from their current levels around 5.25% for a jumbo-conforming loan, a 37-year low. In Los Angeles, loans between $417,000 and $729,750 are characterized as jumbo-conforming for a single family home or condo.
The current flurry of sales activity on the low end, where sales are rising dramatically, will then move up the real estate ladder and prevent prices from cascading downward.
With the Fed's increased purchases of mortgages sold on the secondary market, interest rates for jumbo loans (over $729,750 in Los Angeles) should also come down. In this (hopeful) scenario, the Los Angeles real estate market, from Westside to Eastside, would get some legs.
# of Sales, Los Angeles Southwest, Metropolitan Southwest Neighborhoods
(click chart for more detail)
Experts say it's not clear whether prices have hit bottom, but they are now low enough that thousands of buyers are emerging as the traditional spring home-buying season begins.
Prices fell so far that median-priced houses in Southern California are selling for half of what buyers were paying at the market's peak in 2007. Those low prices, along with low interest rates, have boosted sales. [Source]
Droves of buyers are celebrating the low-price, low-interest rate environment by purchasing homes on the best terms in years. Finally, affordability has returned (in some areas), and the rent vs. own equation falls into balance.
The example above is the aggregated Los Angeles Southwest and Metropolitan South areas, where median sale price has fallen (an unfathomable) 62% in the past two years, from $430,000 to $167,000. Not surprisingly, sales activity is way up as these foreclosed homes change hands.
A note of caution should be given -- the high-end Westside market is still slow.
Home sales are still frozen in high-priced areas. Beverly Hills, Santa Monica, Brentwood, La Cañada Flintridge, Rancho Palos Verdes and Redondo Beach were among the areas posting far-below-average home sales totals in February. [Source]
# of Sales, Westside Neighborhoods
(click chart for more detail)
This chart illustrates how the combined sales in seven high-end markets (Beverly Hills, Beverly Hills Post Office, Brentwood, West Hollywood, Santa Monica, Beverly Center Area, Sunset Strip/Hollywood Hills West and Pacific Palisades) have trended down for two years.
It is noteworthy that in these markets there was a 17% uptick in sales in February 2009 vs. Janaury 2009. Perhaps the "capitulation" that is taking place on the low end will also spill over to Los Angeles' Westside.
Monday, March 16, 2009
The food-financial metaphor-of-the-week award goes to Gregory Hess, a professor of public finance at Claremont McKenna College, who waxed poetic about collateralized debt obligations -- the toxic loan product that's felling the banks.
Hess noted that the bad securities are composed largely of the mortgages of millions of Americans, only some of whom have defaulted. The problem is that the mortgages were chopped up and mixed together and can't be put back the way they were.
"If you've made sausage, can you put the meat back together again? But even if there's only one small bit of the sausage that's bad, you're not going to want to eat the sausage," Hess said. "You can't undo it. So what you have to do is create a new market for questionable sausage. And in the end, everyone is going to have to hold their nose and eat some of it." [Source]
The Wurst financial disaster since the Great Depression.
Posted by Jamie Adner at 6:47 PM
Sunday, March 15, 2009
Fannie Mae and Freddie Mac have published the rules governing their upcoming mass refinancing campaigns, and they're more favorable -- especially for owners of second homes and small investment properties -- than indicated by the White House and Treasury last month.
Although initial reports suggested that the refis would be for owner-occupied primary residences, the information sent to lenders March 4 by Fannie and Freddie says second homes and small rental properties are eligible, provided their mortgages already are in the companies' portfolios or securitizations and have been paid on time. [Source]
This is great news for those who own "underwater" vacation homes or 2 -4 unit rental properties. In easing underwriting requirements, Freddie and Fannie will also:
- waive their minimum FICO scores for re-fis
- allow 2nd mortgages or credit lines of any amount as long as the 2nd is willing to subordinate to the new first loan
- suspend requirement for Private Mortgage Insurance (PMI) if there was no PMI on the financing at purchase or previous re-fi
- cap closing costs
The nation's financing gurus have approached this program with a sensible requirement -- it is only available to borrowers who haven't been late on their payments for 30 days during the most recent 12 months.
Saturday, March 14, 2009
The Obama administration's budget threatens to cut a benefit many Americans view as practically a right -- the mortgage interest tax deduction -- and powerful real estate interests are fighting back.
The move would affect only households earning $250,000 or more, but opponents say it could prolong the housing crisis by slowing already torpid home sales and deal another blow to home values ravaged by the market crash.
Under the budget plan, households now subject to 33% and 35% rates would be able to claim deductions only at a 28% rate. So for every $1,000 in deductions, a top-bracket household would save $280 in taxes, down from $350.
If approved by Congress, the new rules would go into effect in 2011.
A Realtors association analysis of Internal Revenue Service data found high-income taxpayers who claim the mortgage interest deduction comprise about 2% of tax filers. But a disproportionate number – about one sixth – are in California.
The half-million Californians who would be affected by the Obama tax change are by far the largest total of any state. [Source]
The Obama Administration’s plan to increase revenue by taxing top earners takes shape in this proposed reduction in the mortgage interest deductions for the “top 2%”.
Although this amounts to a reduction and not an elimination of the tax break, the proposed measure comes at a time when the upper brackets are feeling the pinch of reduced wages, higher health care costs and plummeting net worth. Not surprisingly, it's being received like a bucket of cold water.
Until now, the mortgage interest tax deduction – the pillar in the cult of homeownership in America – had been untouchable. However, someone has to pay for the wealth destroyed in the recent housing and banking debacles. Legislators have determined these funds will come from the only ones who have money left in their pockets, those at the top of the economic ladder.
Friday, March 13, 2009
In a time of economic malaise, this week was a ray of hopefulness in an otherwise dark landscape.
Lots of great things happened. Bucking long-term trends, the Dow Jones Industrial Average rose 9.3% and the S & P 500 rose 9.0%. Lawrence Summers, President Obama’s top economic advisor said that there are early signs that this economic crisis is beginning to ease. And 30-year fixed mortgages rates fell to 5.12%, nearing their 37-year low hit in January.
On top it, Bernie Madoff is headed to jail!
Even the foreclosure crisis is getting a shimmery spin. No longer do reports concern only heartbroken, evicted homeowners, blighted neighborhoods, and banks holding toxic mortgages. There’s a sunnier side to all this mess.
The new wave of reporting is about how buyers of bank-owned properties are getting bargains. We're on the speculative rebound!
There are heart-warming stories about families buying their (foreclosed) dream home – one they can afford – and the nervousness and jubilation that goes along with it.
In Detroit, outside investors are scooping up homes – the city has over 1,800 homes priced under $10,000. (“They're coming to us, saying ‘Look, I want to buy 50, 100, 1,000.' They want to own every decent and cheap house they can find.”)
We’ve gone from the Tiffany days of real estate when every property was a gem to the Costco days in which consumers are buying in bulk.
There are even stories about foreigners buying American foreclosures – which seems to be a lot more fun than a trip to Disneyland!
So, enough of the bad news. For at least one week, let’s celebrate a little economic cheer.
Thursday, March 12, 2009
Investors of all stripes have been whipsawed by two bubbles that emerged this decade: the Tech Stock bubble that peaked in 2000 and the housing bubble that burst in 2006 - 8. Stocks, bonds, homes and commercial property, seemingly in lock step, all declined in value.
After the current rout, investors are left scratching their heads wondering how to move forward in this uncertain environment. Should they dollar-cost-average into mutual funds? Buy stock indexes? Buy a home? Invest in a multi-unit property?
The daily news reminds us of the bleak stock market. The Dow Jones Industrial Average and the S & P 500 have fallen more than 50% in less than two years and are now at levels not seen since 1997.
But how has a home in Los Angeles performed as an asset? What types of yearly returns are homeowners getting on their investment?
This analysis looks at five neighborhoods – Venice, Pacific Palisades, Beverly Hills, West Hollywood and Los Feliz – a little bit of the Westside, a little bit of the East Side. The trend is uniform across these neighborhoods – outsized price increases over time.
Here we see the median sale price of homes in Venice, Los Feliz and West Hollywood from 1996 to 2008. In 1996 in these neighborhoods, the average home was $250,000 – 325,000. Twelve years later, the median sale price in these neighborhoods had risen to $900,000 - $1,150,000.
Home values began a slow, steady climb in the late 1990s and then began to accelerate, rising rapidly in 2003 and finally cresting in 2006, and then ebbing and declining in 2007 to 2008 (although the Venice median sale price was unchanged from 2007 to 2008.)
The net returns are remarkable. In this twelve-year period, Venice prices increased 365%, Los Feliz values increased 175%, and West Hollywood prices increased 311%.
Two Westside neighborhoods show similar trends. The Beverly Hills median home price nearly quadrupled from $909,000 to $3,495,000 from 1996 to 2008. The median Pacific Palisades home price rose from $640,000 in 1996 to $2,225,000 in 2008, a 247% increase.
In spite of the recent market gyrations, long-term returns are impressive by any measure.
Over a twelve-year period from 1996 - 2008, while the S & P 500 sputtered along recording 2.7% appreciation per year, an investment in a Los Angeles home in these neighborhoods (without even considering leverage), was providing returns three and four times greater.
There has been much ballyhooing about the woes of owning real estate. What gets lost in the argument is that for those who “buy and hold” in Los Angeles – and who ride out the inevitable real estate cycles – returns can be impressive. Those renting should view the current downturn as an opportunity to buy what has proven in recent times to be a solid investment: a little piece of LA.
Wednesday, March 11, 2009
9421 Lloydcrest Drive, an “immaculate” 2 bedroom, 2.5 bath 1959 Mid-Century home with pool that was originally listed for $1,850,000, closed for $1,499,000 nearly four months later.
1739 De Camp Drive, a beautiful 2 bedroom, 1.75 bath Vintage Spanish house with a separate 1 bedroom, 1 bath maid’s unit located on a short street off Benedict Canyon sold for $731,000. A steal!
Like in the Hollywood Hills, Los Feliz and other neighborhoods of multi-million dollar homes, the number of sales in Beverly Hills Post Office has trended down. Two years ago one in eight homes was in contract in this neighborhood; in 2009, it is more like one in 25 or 30 homes is in contract.
Currently, there are 150 properties on the market in Beverly Hills Post Office – with a median list price of $3,210,000. 18 properties are listed for more than $10,000,000. These trophy estates, many in the Beverly Park neighborhood, are some of the most expensive properties in the Los Angeles area. The reality is, for now, they are not selling.
Six of the eight most expensive homes were put on the market in the past two months. These properties range in price from $20 – 49 million. Just when money is tightest, owners may be forced to sell. That’s why, just like in the lofty world of Manhattan real estate, in a downmarket, the high end falls the farthest.
Tuesday, March 10, 2009
Only one of the sales was over $1 million. 2464 Walnut Avenue, a “new” Craftsman with 4 bedrooms, 3.5 bath and 3,150 sq ft of living area, was originally listed for $2,050,000 and sold 123 days later for $1,692,000. This home, like other sales of this month, are all located East of Lincoln Boulevard.
The two lowest priced sales were a bank-owned property – 1023 Marco Place, 1,848 sq ft house on a 4,000 sq ft lot just east of Lincoln Boulevard that sold for $739,000 – and a short sale, 2320 Glyndon Avenue -- 1,850 sq ft on a 4,680 sq ft lot, that sold for $775,000.
In this fragile real estate environment, even the blistering Venice market has cooled. The four sales of February 2009 is a big drop-off from the number of sales in February in the four previous years: 6 (2008), 12 (2007), 16 (2006) and 11 (2005).
Only two condos sold in Venice in February, for $680,000 and $725,000.
As of today’s writing, there are 93 houses on the market in Venice priced $1 – 2 million, 23 priced $2 – 3 million, and 7 houses priced over $3 million, including an “architectural icon” at 418 Westminster Avenue that tips the scales at $6.9 million. It would literally take years – perhaps a decade – to sell off this inventory at the current sales rate.
What is remarkable is the increase in median sale price of a single family home in Venice, which rose from $247,000 to $1,150,000 between 1996 and 2008 – a whopping 365% rise over 13 years. This is the prime example of how a “fringe” neighborhood becomes a mainstream neighborhood and sees stratospheric increases in pricing.
Savvy real estate investors today should tune into which neighborhoods have the potential to be the Venice of tomorrow. Hefty returns will follow. (This Broker bets on East Hollywood and Echo Park – but check in with me about this in 2022.)
Venice, like in the old world, has proven itself to be a city of gold. For those buyers coveting a toe-hold in Venice, 2009 is proving the year when the under $1 million home is a reality.
Monday, March 9, 2009
Updated 4/26/10 -- 15 units are available - see a complete profile of the building with interior and exterior views
One of the most exciting condo developments in West Hollywood is emerging from its scaffolding and is sure to cause a stir with the buying public – the Hancock Lofts – at the corner of Hancock Avenue and Santa Monica Boulevard.
Developed by the CIM Group of Los Angeles, and designed by the Koning Eizenberg Architecture of Santa Monica (that designed The Biscuit Lofts downtown, among many other projects), these 31 units are nicely integrated into the urban fabric of this central West Hollywood locale.
The building’s one- and two-bedroom units range in size from 1,000 – 1,800 sq ft. Seven affordable rental units and three retail spaces are built into street level. Tender Greens of Culver City occupies one of the retail spaces. And the food is amazing.
The building is an appealing amalgam of metal, glass and steel, and has a snazzy rooftop pool. The luxurious units are outfitted with Miele and Jenn-Air appliances and other high-end touches including “expansive, anodized aluminum windows with clear, dual-glazed, low-e glass” and “European walnut cabinetry with concealed, self-closing hinges, adjustable shelf supports and drawer slides” (sure to be a major attraction!)
Throw in central AC and a couple of walk-in closets, and you’ve got contemporary, pampered living at its best.
In the past few years, West Hollywood has finally gained some contemporary residential buildings of architectural significance. The Hancock Lofts characterizes this “new” West Hollywood and should engender strong buyer interest. Sold by Lee Homes.
901 Hancock Avenue, West Hollywood, CA 90069
Friday, March 6, 2009
Single Family Home Market. Only two houses closed in West Hollywood in February 2009. Both houses are in the West Hollywood West Area, just south of Melrose Avenue, between LaCienega and San Vicente Boulevards.
334 Huntley Drive, a 1,444 sq ft house on a 5,355 sq ft lot sold for $880,000 close to its reduced asking price in 62 days. 421 Westmount Avenue, a semi-distressed three bedroom, two bath REO property with a pool was listed at $905,000 and sold for $860,000 in 98 days.
Only 3 out of 69 -- an astonishing 3% -- of houses in West Hollywood were under contract in February 2009. To make matters worse, many high-end properties are on the market, priced well over the $800,000 - $900,000 range of February’s sales. As March 5, there are 29 houses in West Hollywood listed for over $1 million.
Condo market. The West Hollywood condo market remains equally languid – only fourteen condos sold in February 2009. The median sale price for West Hollywood condos was a mere $392,500, well below the 2008 median sale price of $560,000.
The three highest priced sales were all new construction – 1351 Havenhurst Drive #203 ($835,000), 1248 N Laurel Avenue #203 ($699,000) and 1029 N Vista Street #103 ($699,000).
The sale at 1248 N Laurel Avenue (The Milano) is an example of a developer capitulating and chopping an over-inflated price to make a sale. In January 2008, the 3 bedroom, 2 bath 1,740 sq ft condo was listed at $990,000 – and after almost 20 months on the market, closed for 30% less.
The right price can also lead to a quick sale. 1029 N Vista Street #103 (2 bedroom, 2 bath 1,850 sq ft), in a slick, new five-unit development sold for its reasonable $699,000 asking price in 16 days.
The market is a difficult one for sellers. Buyers are looking for deals. In this climate, only the most aggressively-priced properties will change hands.
Thursday, March 5, 2009
1627 Blue Jay Way
16 homes sold in this area during February 2009, including a Bird Street showpiece, 1627 Blue Jay Way, that closed for $10,000,000 (asking price $12,995,000) in 82 days. With 5 bedrooms and 7 ba, this new construction masterpiece has 6,550 ft of living area on a 13,370 sq ft lot with an incredible pool and amazing views. Some buyers may be considering Los Angeles real estate as a safe-haven from the tumbling financial markets.
1266 Sunset Plaza Drive
Two other properties closed above $3.75 million – 1266 Sunset Plaza Drive (sale price $3,925,000, 74 days on market) and 1267 St Ives Drive (sale price $3,800,000, 31 days on market) – demonstrating that good properties that are well-priced and in the most exclusive areas are finding buyers even in these trying times.
1312 Larrabee Street
Four houses closed at $770,000 or less in February 2009, two of them REOs. One notable property was 1312 Larrabee Street, located high in the hills in an area of multi-million properties. This fixer was originally listed at $1,099,000, but closed at $705,000 after 170 days on the market. Gone are the days when any opportunity in the hills – fixer, tear-down, distressed property – sells for a cool million.
Wednesday, March 4, 2009
The Obama Administration's lifeline to beleaguered homeowners has been unveiled today on two government-run websites: http://www.hud.gov/ and http://www.financialstability.gov/.
The "financial stability" website is intended to aid homeowners who are not delinquent on their payments as well as those who are delinquent.
Many of those who are making on-time payments will be able to refinance into lower-interest rate fixed mortgages. Those who are delinquent may be eligible for loan term modifications that will make their monthly payments affordable.
The guidelines for "Making Home Affordable" refinances and loan modifications may be found here. (More details on "Making Home Affordable" from the Los Angeles Times can be found here.)
More than any single measure, the "Making Home Affordable" program will help those in Southern California impacted by falling home values and rampant unemployment. Look for an unprecedented waves of refinancing in the upcoming weeks and months.
Tuesday, March 3, 2009
7917 Willoughby Avenue, West Hollywood, CA 90046
Asking price: Originally $795,000 - $1,189,000 -- Relisted --
Unit 7 -- Penthouse -- 1701 sq ft -- $995,000
Unit 2 -- 1,655 sq ft -- $790,000
Unit 3 -- 1,577 sq ft -- $770,000
Unit 6 -- 1,434 sq ft -- $695,000
Number of units in development: 8
Number of units sold: 4
Days on Market: One year +
The townhouse style lofts at 7917 Willoughby Avenue have a great contemporary look, including really cool metal sheathing covering the building's block-like exterior. The units, all 2 bedroom and 2.5 baths, with superior finishes, vary in size from 1575 sq ft to 1715 sq ft and were designed by noted architects Lorcan O'Herlihy.
Only two of the eight units have sold, for $810,000 and $830,000, close to the asking price. (Note that the original asking prices back in May 2008 were just under $1 million - $1.3 million+) Why are these great-looking lofts not selling?
Two simple answers: price and location.
Take the $830,000 sale. With a 20% downpayment ($166,000) your monthly "nut" including property tax and homeowners fees (around $380/month) amounts to about $4,950/month.
Times have changed. Take Unit 2 at a sale price of $770,000 . With a 20% downpayment ($154,000) your monthly "nut" including property tax and homeowners fees (around $380/month) amounts to about $4,378/month at the current low 4.875% interest rates. A buyer can benefit from a $10,000 California tax credit for new construction and possibly an $8,000 first-time buyer credit. (updated 4/22/09)
You've put down $166,000 and you're paying almost $5,000 per month to live in gritty east WeHo, close to Fairfax, across the street from a school yard? Why buy a townhome when you can buy a single family home in that area for the same price or less? Or, why buy this lovely townhome when you could rent an equivalent property for far less?
The developers picked a great design and a seriously inferior location. The two nicest units are priced at almost $1.2 million -- far above what any current buyer will pay.
Bottom line: great townhomes and the prices are coming down to earth -- jump on board, these are starting to be good buys (updated 4/4/09)
Monday, March 2, 2009
Sometimes it's easy to forget how beautiful LA really is. Enjoy this scenic drive down one of LA's most memorable (and hypnotic) corridors, Santa Monica Boulevard, the old Route 66.
Sunday, March 1, 2009
841 Westmount Drive, West Hollywood, CA 90069
Asking price: $810,000 - $1,015,000
Number of units in development: 16
Number of units sold: 5, 1 sale pending
Days on Market: 10 months
The townhouse style apartment-homes at 841 Westmount Drive surround a central courtyard with a small pool. The architecture is an unoffensive Mediterranean style.
The units are all 2 br, 2.5 ba and vary in size from 1,200 – 1,570 sq ft and are multi-level. The downstairs area in most units is large and open.
Bedrooms are on the small side. Closets are few and under-sized. This is one of the only new construction projects in West Hollywood with a pool.
Although the units have been heavily marketed for 10 months, only 5 of 16 units have closed. A 1,352 sq ft unit closed for $810,000 on December 13, 2008. The most expensive unit, listed at $1,015,000 sold for $940,000 on October 10, 2008.
The lowest list price is currently $810,000. Ten units are available.
The units' interiors are hip and mod. The pool is small -- but a nice gathering point for the complex. Neighbors are close-by in this courtyard setting -- live your own "Melrose Place" dream at this central West Hollywood location.
Bottom line: ideal if you want to be in central WeHo with a pool … but lacking the flair of many new 'architectural' developments