California Legislature Offers Hope to Homeowners Following Foreclosure or Short Sale -- and Added Time to Homeowners in Distress

The state of the state of housing of in the State of California, is, well, dire straits. In May, California was home to six of the top ten metropolitan areas in the nation with the most foreclosure filings (Riverside-San Bernardino, Bakersfield, Merced, Modesto, Stockton and Vallejo-Fairfield.) Not to be forgotten, though, is the situation is improving:

"In May, 23,911 Californians received notices of default — the first step in the foreclosure process — and 27,841 got notices of trustee sale, according to online tracking service ForeclosureRadar.com. Default notices dropped 43% in May compared with May 2009, while trustee sale notices fell 36%." (Los Angeles Times)

Help may be on the way to those who have gone through foreclosure (or are facing foreclosure) in the way of three bills that have been approved by the state Senate and are before the State assembly.

The first bill addresses the issue of deficiency judgment for those who refinanced their home during the time they owned it. Under current law, since the loan is not the original ("purchase money") loan, those foreclosed are liable for the "deficiency" amount (the unpaid principal). The idea is, the collateral is the house -- and even if the owner has a "new" loan, the bank cannot pursue the person's other assets.

The second bill concerns eliminating the deficiency judgments for short sales (read our notes on short sales here).

Both the first and the second bill address the "double whammy" of owners losing their home (presumably under financial stress) and then being served with often outsized bills for unpaid principal.

The third bill will allow more time before homeowners who face foreclosure while they attempt to obtain a loan modification or other work-out.

It's impossible to assign blame for who created the "bubble" real estate market. But the reality is, with so many homeowners "upside down" (owing more on their mortgage than their property is worth), measures must be instituted to prevent the state's citizens from being saddled with loans, for something they no longer own, that are far beyond ability to repay.

Adner Realty Group presents the Harper West Hollywood Blog - Stay Updated on this Not-to-Miss 32-Unit Condo Project in West Hollywood

We are pleased to announce that Adner Realty Group will be doing the online marketing for the excellent Harper West Hollywood condo project that just launched at 1250 N Harper Avenue in West Hollywood.

We have been long time fans of this innovative project, and we eager to tell you more about it:You can also check out (and "Like") the Harper West Hollywood Facebook Page.We've previously sung the praises of this project. Here are seven reasons why we love it so much:

• 1. A great architectural plan. Two new buildings (24 units and 8 units) that are blended with a historic preservation project of two Spanish fourplexes.
  2. A great mix of units. 1, 2 and 3 bedroom units, floorplans that include ground floor "flats", two-level duplexes, and penthouses.
  3. Room enough to spread out. Units range from 1,260 sq ft - 1,932 sq ft.
  4. Indoors meets outdoors. With plenty of balconies and open space, this project which has been conceived with a courtyard-style architectural plan that integrates indoor and outdoor space.
  5. A neighborhood that delights. This location can't be beat: all the conveniences and excitement of West Hollywood and Los Angeles at your doorstep.
     
  6. Keeping it green. The building incorporates renewable materials, energy-efficient heating, cooling, plumbing fixtures and appliances, and a design that promotes natural light and cross-ventilation.
  7. Keeping it real. Prices range from $554,000 - $954,000.
  
  Harper West Hollywood
  1250 N Harper Avenue
  West Hollywood, CA 90046

Venice, California -- Hello Summer, "June Gloom" Departs and I'm Housespotting from the Canals to Abbott Kinney and Across Lincoln

This is a Guest Post by Luke, who is pleased to announce he will soon be joining the Adner Group team.
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Warren Wilson Beach House

Summer has officially arrived in Venice, California. It’s not just that the Summer solstice was the other day. It’s not just that it’s World Cup time. It’s not just that “June Gloom” ceases to be a daily gripe amongst Venice’s residents. (June gloom, for the uninitiated, is a LA Westside phenomenon that occurs when the cool air from the ocean hits the warm winds from the East, causing a blanket of sea mist to stretch as far inland as the 405.) When summer comes, the change in mood is almost palpable. The skies are blue. The beaches are busy mornings and afternoons, and those lucky tourists who missed the mist don’t know the difference. So, a perfect day for me to write my first post, about Venice.

Venice Canal

Different homes, different sizes, different prices, and different vibes, that’s what I love about Venice. Venice is one of the best areas in Los Angeles to live in on a long-term basis, for as one gets older, has a family, gets richer or poorer, there’s always somewhere to lay your hat. It has a bustling rental market, too. From a studio on the beach for $1,200 / month to a 3-story townhouse on the canals for $2400 / week, there’s something for everyone. Sound interesting? It is. Let’s take a look at some new properties on the market.

434 Linnie Canal, Venice. With 3 bedrooms and 2 bathrooms across 2 floors, this English-style home is on a nice 2,800 sq ft lot right beside the canal. The living room bay window looks out onto a reasonably-sized front garden that fronts the east/west-running canal. Did I mention this house has its own little launch jetty? However, don’t get too excited. When I say jetty, it’s more of a platform on which to sit and dip your toes in the water. The back of the property looks over the alleyway. This is where the three main bedrooms are with one on the ground floor and two on the upper. The upper bedrooms benefit from a large patio space that gets a ton of sun since it’s south facing. The architecture is a little funky, particularly with the Swiss chalet-style roof and rather gloomy front door passage way, but at $1,595,000 it’s well-priced.


690 Harbor Street #1, Venice. If living by the water but with a condominium lifestyle is your cup of tea, why not check out 690 Harbor Street in the Del Rey Colony. This secluded little triangle that nestles just to the north of Washington between Pacific and Lincoln is a unique 53-unit ‘resort style’ community featuring a heated pool, spa, gym and BBQ area. The unit itself is bright and breezy with a 1980’s modernist style. The frontage is lovely with a wide vista of the community and a private deck that looks directly over the canals. For 3 bedrooms, 2.5 bath and a kickass view, $1,125,000 seems a good deal, but the homeowners’ dues are a whopping $1,080 a month. Granted, you get bang for your buck but that’s around $13K a year on top of your other bills for the privilege. The unit feels quite ‘sophisticated’ and is set right on the canals.
1225 Elm Street, Venice. Now, I’m European, so I’m kind of used to that ‘lived in’ look, so I really liked this place. But it’s definitely been lived in. It’s got plenty of original features throughout and it looks like, at some point, an extension was built at the back of what would have been a very cozy and traditional Venice house. This extension has a nice kitchen and dining area as well as plenty of storage and access to the back garden. The current owners have also recently constructed a 560 sq ft studio space above the large detached garage. It's got a small but functional yard outback that has a built in BBQ and some cool landscaping as well. I liked this place. It’s a bit cozy if you’re used to big open spaces, but if what you’re looking for is a groovy, Venice-style home, this could be it. The house sits about 50 yards East of Lincoln, so for those Venice snobs who consider that too far away from Abbot Kinney, take a look at the price - $847,500….That’s pretty good when you consider that only 5 or 6 blocks West and you’re probably looking at another $50K – !
217 Windward, Venice. Fancy living a hip, modernist lifestyle with that bright, architectural vibe? Well, check out 217 Windward just a stone’s throw from Hama Sushi and smack in the middle of Venice. With the beach 500 yards in one direction and Abbott Kinney 500 yards in the other, this is about as central as it gets. It’s a 2-story, industrial-style build with a mix of bamboo and granite flooring throughout the ground floor and with grey carpeting in the bedrooms. Yes, very chic. What’s unique about this place is that it has an entirely separate dwelling out the back that is connected to the property by a metal gangway. This other property could either be a rental unit, a work / office space, or just somewhere to “get away from it all.” It’s bright, airy and has a sizable 3-car garage. There’s no real yard to speak of, other than a small koi pond / soaking tub in between the garage and the main house. Priced at $1,485,000, this would come down to a matter of taste and location.
235 Main Street, Venice. And, ahhh, to close, the Clown building just on the corner of Main and Rose. It’s a big complex built back in the late 80’s that has great restaurants, bars and coffeeshops on-site. It’s a short distance from Santa Monica. But I mention it because it’s one of those “plug and play” kind of homes. It’s got everything you need from a shared pool, spa and all the amenities. The condo itself is compact. At 1,200 sq ft, it’s not a manse, but it would be a great pied-a-terre for an East Coast urbanite who needed a West Coast home, or for a savvy investor looking for a great unit to rent out to the holiday crowd. At $849,000, it seems fairly priced. Again, it’s a case of location, location, location.

So, that’s my assessment of this week’s Venice market. Check in next week for more West Side observations.

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Venice for Beginners:

North West Venice (North of Windward as far as Navy and West of Main) is still pretty grungy. A lot of locals, the Venice dog park. Some industrial warehouse space, Golds Gym, and some of the local beach bars.

South West Venice (South of Windward and West of Pacific as far as Washington) is the slightly more upscale version of its northern counterpart. Fewer homeless people, more townhouses, a couple of cocktail bars, and generally higher income professionals. The beach is still pretty hectic, what with world-famous Muscle Beach, Venice surf break, and Venice recreation park right there.

Central Venice and the Canals (East of Pacific and south west of Abbot Kinney as far as Washington) feels like an entirely different city. A certain Mr. Abbot Kinney envisaged an entire community based on Venice, Italy and it’s here that you can still see his vision intact. Four main canals remain with all its little tributaries and it’s here that property prices really start to rocket.

Los Feliz First Half 2010: Sales up 24% in "Eastside's" Poshest Enclave

In the first half of 2010, sales are up 24% in the Los Feliz neighborhood (which encompasses high-end Los Feliz estates as well as more modest neighborhoods of Atwater Village, Franklin Hills, and part of East Hollywood). Median sale price was $800,000 during this time, down from $885,000 during the same period in 2009.

Since 2007, when the median sale price in Los Feliz was $1,099,000, values have fallen 27%, which is more than Beverly Hills price drops (20%) and close to the price drops in the Hollywood Hills (25%). Values in many neighborhoods have fallen in lockstep as bubble-era financing has evaporated and incomes and numbers of qualifying buyers have declined.
As is seen across the city, trophy properties are trading hands. 4519 Cockerham Drive, a Wallace Neff-designed estate "Los Pavoreales", sold for $4,895,000 -- less than half its original asking price of $9,995,000. The house has 5 bedrooms, 5 baths, with a guest house and is set on nearly two acres.
2349 Nottingham Avenue was a quick sale. This 5 bedroom, 5 bath house on a 13,710 sq ft lot was listed for $3,250,000 and sold for $2,900,000 -- after a brief 4 days on the market.
2700 Glendower Avenue, an Egyptian-inspired 4 bedroom, 4 bath home on a 13,420 sq ft lot sold for $1,495,000. It sold previously in multiple offers in August 2007 for $1,707,000 -- or a price decline of 12% in two and one-half years.
2221 N Catalina Street was another quick sale. This 6 bedroom, 5 bath home on a 10,500 sq ft lot sold for $2,500,000, just under its $2,549,000 asking price, after 3 days on the market.

And for anyone who protests that these mansions don't reflect what's really transacting in the city -- you are right. Look no further than 1216 N Commonwealth Avenue, a 2 bedroom, 1 bath, 916 sq ft bank-owned property that sold for $224,000 after only 5 days on the market. There are plenty of foreclosures and short sales dotting the landscaping, driving the median price down.


We think the bargain of Los Feliz award must be given to 1749 N New Hampshire Avenue, which sold for $135,000. With 1 (cozy) bedroom, and 1 bath and a total of 480 sq ft of living area on a 1,650 sq ft lot, we expect a high return on investment for this little slice of the California dream.

Sunset Strip - Hollywood Hills West Luxury Homes Selling for $690/sq ft - Feathered Nests in Bird Streets Command Top Dollar

What's been happening in the high-end home market in the Hollywood Hills during the past few months? Properties of all prices have been selling, and some big-ticket homes that had been marketed for some time finally reached their clearing price. Average is $690/sq ft for those sales above $1.5 million.
The biggest sale was 9444 Sierra Mar Place. This home has 3 bedrooms, 5 baths and 5,913 sq ft of living area. Originally listed at $7.9 million, it closed 668 days later at $5.4 millionn, 32% off its original list price. Located in the desirable Bird Streets area.
A little further east, in the Sunset Plaza neighborhood, 1305 Collingwood Place sold for $4.95 million. This home has 5 bedrooms, 4.5 baths and 4,586 sq ft of living area. The house was marketed for 228 days and sold at a 29% discount from its original list price of $6.95 million.


But don't conclude that the market is subject to a 30% discount. 1400 N Doheny Drive (also in the Bird Streets) with 4 bedrooms and 5 baths, sold for $4.08 million, $30K above its asking price, after a brief 24 days on the market.

1232 Sunset Plaza Drive in lower Sunset Plaza sold at a 25% discount to its original $5.0 million asking price, closing at $3.775 million. This home has 8 bedrooms, 9.5 baths and is a development opportunity set on more than one acre.
2366 Astral Drive, with 4 bedrooms, 4.5 baths, 3,400 sq ft of living area on a 13,464 sq fot lot, sold for $2.765 million, just below its $2.90 million asking price, after 58 days on the market.
Finally, anyone doubting the exuberance of the market should look no further than 1117 Sierra Alta Way. This home in the Bird Streets has 3,352 sq ft of living area and a 10,890 sq ft lot, and was listed at $1.495 million. Sound like a deal? Apparently, the buyer felt so. They were in contract 4 days after the house came on the market and paid $1.75 million, 17% over the asking price.

Los Angeles Apartment Market (Same Story): Sales Volume Up - Rents Down - Vacancies Up - 5% Cap for Class A - 7% Cap for Class C Buildings

Apartment vacancies were 5.5% in the greater Los Angeles area during the 1st quarter of 2010, according to Lee & Associates (consistent with our analysis of 5.4% vacancies). The increase in vacancy rate is due to a lack of household formation -- young people don't move out of their parents' home, and others "double up" rather than getting their place.

According to the same report, Westside rents are down 20 - 25%, and rents in less prime areas are down 10%.

Cap rates in the Los Angeles area are in the 5% range in prime neighborhoods and in the 7% range for C-class buildings.

Although prices are down, Lee & Associates does not see the marketing softening as it did in the early 90's: there's too much demand on the buying side:

“This is Southern California real estate, and people want to live here. You’ll always have people coming here, and that will always drive rental demand, and you have a supply-constrained market—that will always exist here.” [Multihousing News Online]

Los Angeles Times: "Commercial Property Rebounding" -- Sidelined Capital Seeks Deals -- Foreclosures Fail to Materialize

Commercial real estate pundits and investment property soothsayers take heed: the commercial real estate market may be in the course of bottoming out, and the long-predicted commercial real estate crash may never come to pass.

According to today's Los Angeles Times, with prices down and the forecasted wave of foreclosures failing to materialize, investor interest is rising. Rafts of cash that has been earmarked for better days is now coming into the market, driving up prices.

Although commercial building landlords in many markets are still struggling with high vacancy rates and weak rents, the erosion in some sectors has slowed, piquing the interest of buyers. In addition, reinvigorated banks have been able to postpone or avoid liquidating billions of dollars' worth of distressed real estate loans sitting on their books, helping to solidify prices.

In a similar fashion, Southern California's housing market hit bottom more than a year ago and prices have been trudging higher ever since, partly because a feared wave of fresh foreclosures hasn't materialized.

According to research by MIT, commercial real estate prices are 41% below mid-2007 peaks, and the industrial and multifamily sectors are not moving sideways, but are experiencing price increases as competitive bidding resumes.

Have the vultures found their quarry? Not really. As banks extend and rework loans for landlords in trouble, distressed assets have been few and far between. Those speculators, investors, and owner-users who have been (rightly) timid to re-enter the murky commercial real estate waters, should perhaps don a new outlook, brush off their checkbook, and start looking for some "smokin'" deals.

West Hollywood 2010 (First half): New Construction Sells for $440 - 500/sq ft; Despite Some Sales, Market Still in Doldrums

What they sold for. West Hollywood new construction is selling in the $440 - 500/sq ft range and a number of buildings with few sales finally had units close.

The Vue at 921 San Vicente Boulevard, with five units, had a second sale at $491/sq ft. (List price $999,000 -- closing price $840,000).

8265 Fountain Avenue, with 7 units, had its first closed escrow at $501/sq ft (asking $537/sq ft).

Habitat 15 at 1322 N Detroit Street has had 5 sales (of 15 units) in 2010, with closings at $438/sq ft (asking $470/sq ft).

But one, all 16 units at 841 Westmount are now sold. Five units closed in 2010 at $501/sq ft (asking $533/sq ft). By way of comparison, units sold for $542/sq ft in 2009 (asking $582/sq ft).
Units at the Luminaire at 928 Croft Street are selling at $453/sq ft (asking $480/sq ft) in 2010. 7 of 12 units have closed this year.


One of the five units at 950 N Orange Grove Avenue sold for $400/sq ft ($413/sq ft), the lowest level in the West Hollywood area. (The 2,000+ sq ft area of these units skews the data, and we have excluded it from our "$440 - $500/sq ft" quote). Resale units in West Hollywood are averaging $444/sq ft in 2010, not much different from the higher-quality, undepreciated new buildings.

Many buyers are benefiting from the low prices of new construction as the business-minded sellers (developers, receiver, banks, and the like) are often more willing to make a deal than individual owners.

Prices are flat, plenty of inventory remains, and the market is still skewed in favor of buyers. Those who are qualified and can get into the still-expensive West Hollywood area have a smorgasbord of excellent options.