West Hollywood Area New Construction Update 2011: Projects Sell Through at $390 - $450/sq ft

2011 New Construction Condo Round-Up

In 2009-2010, years that many developers would like to scrub from the record books, a raft of great West Hollywood condo projects came to market.  The level of architecture, design, planning, and plain out "cool" factor far exceeded the new construction that preceded it.

And 2009 - 2010 was an exciting time for condo buyers.  Developers either had to slash their prices, or worse (and better for buyers), head into receivership or loan workout and then "red tag sale" these excellent units to move the inventory.

Bottom line is that units sold from about $390 - $450/sq ft, and buyers were able to purchase condos on the best terms of a generation: best loans, best quality, best price. 

And here's the round-up:

Harper West Hollywood --  1250 N Harper Avenue, West Hollywood 90046

In ten months, all of the 32 units are now in contract, and 27 units have closed.  Sale prices ranged from $485,000 for the the (5) ground floor one bedroom, 1.5 bath units of approx. 1,382 sq ft.  The top price paid was $890,000 for the largest penthouse (1,897 sq ft).  Units were listed at an average of $415/sq ft and sold at exactly $400/sq ft.  This project sold quickly and in our opinion was an excellent deal for buyers.

A video tour of a Penthouse unit:



Read our previous postings on Harper West Hollywood:

• Adner Realty Group presents the Harper West Hollywood Blog - Stay Updated on this Not-to-Miss 32-Unit Condo Project in West Hollywood (June 28, 2010)
• Harper West Hollywood Unveiled - 32 Stellar Condos Almost Ready to Make Their Mark in West Hollywood (May 12, 2010)

Habitat 15 -- 1322 N Detroit Street, Los Angeles 90069

This high-style building in the east part of West Hollywood designed by architects Predrock_Frane now has 14 of 15 units closed.  All layouts are 2 bedroom, 2.5 bath and varied in closed price from $520,000 (1,207 sq ft) to $660,000 for the largest unit (2,013 sq ft).  Units were listed at $433/sq ft and sold at $410/sq ft.  This is an excellent project in a somewhat "edgey" Hollywood-adjacent neighborhood.  But once you get inside the units, it's grand living!

Read our previous post on Habitat 15:

• Habitat 15 @ 1322 N Detroit Street

Lofts @ Cherokee Studios -- 751 N Fairfax Avenue, Los Angeles 90046

The Lofts @ Cherokee Studios has an incredible array of green features and top design courtesy of Pugh + Scarpa Architects.  It also has the legacy of being built on the site of the recording studio where Michael Jackson recorded "Thriller" and David Bowie recorded "Station to Station."  After 18 months on the market and insufficient sales to pay the huge construction loans on the project, the project was sold in a Trustee's (foreclosure) Sale in March 2011 for $5.8 million.  Stay tuned for further activity on this project.  There are 12 excellent units that will come to market, ranging from 1,197 sq ft (2 bedroom, 1 bath + mezzanine) to an incredible 2,275 sq ft penthouse (3 bedroom, 2.5 bath).

Read our previous post on Lofts @ Cherokee Studios:

• 751 N Fairfax Avenue - Lofts at Cherokee Studios Brings Sophisticated Pugh + Scarpa Design and "Green" LEED Platinum to West Hollywood (April 8, 2010)

817 Alfred -- 817 N Alfred Street, Los Angeles 90069

817 Alfred after being a stalled construction project for many years, was taken over by a new owner, completed, and put on the market in August 2010.  Only one of 18 units is now available.  Most units have a 2 bedroom, 2.5 bath layout with 1,400 - 1,700 sq ft.  Prices ranged from $599,000 - $749,000. 7 units are recorded as having been closed, with list prices of $453/sq ft and sale prices of $445/sq ft.  Sale prices ranged from $625,000 to $729,000.

855 Croft -- 855 Croft Street, Los Angeles 90069

About 18 of 33 units are now sold, and the building is now occupied.  The developer is holding firm on prices, and is capturing a higher $/sq ft than competing projects (although the units are selling at a slower pace).  All non-penthouse floorplans have 2 bedrooms, 2.5 baths, 1,450 sq ft with a 107 sq ft deck.  Prices range from $689,000 for a 3rd floor unit with obstructed views to a $1,449,000 sq ft penthouse.  It is noteworthy that one of the penthouses listed at $1,390,000 sold for $1,240,000 or $675/sq ft.

See a video walk-through of a Penthouse unit:



Read our previous post on 855 Croft:

• 855 Croft Avenue: Impeccably-Styled City Flats in the Heart of West Hollywood

123 N Kings Road, Los Angeles, CA  90048

This Beverly Center-area 12-unit complex, variously known as "Two Kings", "Kings on Kings" ("One and a Half Kings" anybody?) sold in receivership in the winter of 2010-2011, with sale prices ranging from $545,000 to $645,000.  The location of this building across from the Kings Road Cafe and down the street from some of the best restaurants, cinemas, and shopping, can't be beat.

This amounts to a $401/sq ft list price and a $390/sq ft.  Funny that two years ago these units had list prices of $949,000 - $1,185,000.  These units finally cleared at market prices that are likely at or below the developer's construction cost.

Read our previous post on 123 Kings:

• 123 N Kings Road - Boutique Lofts Near the Boutiques

Legendary Place - 1411 N Detroit Avenue, Los Angeles, CA  90046

Legendary Place came on the market more recently and has enjoyed steady sales.  List prices are $411/sq ft, closing prices are $388/sq ft.  A penthouse units sold for $975,000 and the least expensive unit sold for $550,000.

Orange Grove Lofts - 1220 N Orange Grove Avenue, West Hollywood 90046

The Lofts at 1220 N Orange Grove Avenue (nee 1220 Art Lofts) was a building that failed to sell as a traditional sale in 2009, went into receivership, resulting in deeply discounted prices and about the lowest $/sq ft sales in West Hollywood for a high-quality product.  These 2 br, 2.5 ba multi-level units had Bertazzoni ranges and other high-end appliances / finishes and surround a central courtyard.  They are located down the street from Whole Foods just east of Fairfax.  Sale prices for the approx. 1,900 - 2,000 sq ft units ranged from $665,000 - $815,000, an average of $370/sq ft and $716,000 per unit.  Note that in its previous incarnation as 1220 Art Lofts, list prices averaged $850,000. 

Read our previous post on 1220 N Orange Grove Avenue:

• Spacious Art Lofts @ 1220 Orange Grove Avenue - West Hollywood

Hancock Lofts - 901 Hancock Avenue, West Hollywood, 90069

Mercury must have been in retrograde when the development execs at Lee Homes set out to build, market and sell what was certainly the most awaited project in West Hollywood, the Hancock Lofts.  Located in the center of Boystown in West Hollywood, this hip, 31-unit project had everything going for it: loft design, great pool, and an unbeatable location.  But with stratospheric asking prices of $900,000 - $1,400,000, it was no surprise that only two units sold.  About a year later, the developer chose to "sell" 15 units at "auction", with ridiculous teaser prices of $395,000.  The auction proved to be a free-for-all where buyers' low offers were countered at stratospheric levels.  Two years later, some of the units are for lease with stratospheric list prices of $4,900+/month.  In better times, some of these units are destined to creep back on the market for sale.  In the meantime, you can lease with a much lower risk (and cost) than owning.

Read our previous posts on the Hancock Lofts:

• Hancock Lofts, West Hollywood: Hip, High Style @ 901 Hancock Avenue (August 24, 2009)
• 901 Hancock Avenue Lofts: The "New" West Hollywood (March 9, 2009)

Luminaire - 928 Croft Avenue, Los Angeles 90046

Buyers liked the 12-unit Luminaire from the start and the building sold quickly at an average price of $797,500  and $428/sq ft.  The 1 bedroom top floor unit at $550,000 seemed like a particular bargain.  These well-appointed units included bathrooms with Grohe fixtures, and kitchens with Bosch appliances, except the cooktop which is a cool Italian design by Smeg. Kitchen cabinetry is by Gatto Cucine, an environmentally friendly, modular cabinetry system from Italy.  You may be lucky enough to one day get a unit here on resale.

• Luminaire on Sale: 928 Croft in West Hollywood Slashes Prices (August 7, 2009)
• Luminaire at 928 Croft: Scintillating Condo Debut in WeHo (May 20, 2009)

May 2011: Housing Market is "Flat" and "Stable" in Sunset Strip - Hollywood Hills West, West Hollywood, Beverly Center - Miracle Mile, and Hancock Park - Wilshire; Sailing in the Doldrums is Better than Sinking in the Dinghy

Keller Williams Hollywood Hills @ The Directors Guild Building

Our Keller Williams office has just relocated to the ground floor of the Director's Guild Building at 7920 Sunset Boulevard in Los Angeles, between Crescent Heights and Fairfax. Very convenient if you want to catch a screening after work -- with some of the plushest, red velvet seats in LA!  Many may know the Griddle Cafe next door, that does a booming busines, and has some of most savory (and spicy) chili in town.

Periodically we like to check in on the residential real estate market in our own backyard. The neighborhoods nearby that typify this "middle" slice of the city are Sunset Strip - Hollywood Hills West, West Hollywood, Beverly Center - Miracle Mile, and Hancock Park - Wilshire. We've done a little "data mining" to try to make sense of the market, and here are our conclusions:

1.  Prices have been flat for two years and show no signs of increasing.  The median price of a home in this area was $1,335,000 in January 2008, and now stands (according to trendline) at $1,165,00 -- a drop of 13% in 2.25 years.  Note that in the Spring of 2009 prices were already at current levels.  Large price drops have already occurred; no real price gains are anticipated.  It's our best guess that prices in this price range will not change much over the next year, since real estate markets tend to "bottom" over a long period of time.

2.  The market has been "tightening" since its low point, the Winter of 2008 - 2009, in the depths of the financial crisis.  The chart above covers the percentage of homes  under contract from January 2007, when the market was still "hot" (and many would say, "overheated"), to April 2011.  The number of homes in contract stands at a robust 11 - 12%, at levels not seen since the heady era of "no documentation", "liar loans".

3.  Sales volume has stabilized.  The chart above illustrates a 12-month moving average of sales, which has been level for about one year.  We are going through a period when there are neither large declines nor large increases in sales of homes. 

And how does this "flat", "stable" market feel?  Like being adrift in the Doldrums, that belt of "calm and light baffling winds north of the equator".  In this "stable" market there isn't much "wind in the sails" to compel buyers to buy or sellers to sell.  Sellers find it takes a long time to market and their property, because buyers have no urgency to purchase.  But, better to be adrift than in the dinghy with one oar as we were during 2008-2009.

JUST REDUCED to $469,000: 906 N Doheny Drive #306, West Hollywood, CA 90069 - Adner Realty Group presents a 2 br, 2 ba condo at the Border of Beverly Hills

Jamie Adner and Luke Jones of Adner Realty Group at Keller Williams are pleased to present a 2 bedroom, 2 bath condo at 906 N Doheny Drive, Unit #306, which has just been reduced to $469,000 (updated May 13, 2011).

What we really like about this unit are the many upgrades that include travertine floors, crown molding, granite counters and stainless steel appliances in the kitchen, and Italian tile in the baths.  Homeowner's dues are low at $364/month, and the building also has a beautiful pool.

Unit #306 comes with two tandem parking spaces, and has two balconies and a gas fireplace (for those cold California winters.)

Doheny Drive is the border between West Hollywood and Beverly Hills and means Westside destinations and points further East are equally accessible.  Restaurants, shopping and a plethora of amenities are all at your doorstep.

FHA Modifies Loan Formula: Higher Mortgage Insurance Rates adds Cost to the Excellent, Low-Downpayment, Low-Credit Score FHA Loans

The Federal Housing Authority (FHA) periodically recalibrates the way it charges for the excellent, low-downpayment, low-credit score loans that it backs.  On April 18, the FHA increased the fees for mortgage insurance (MI), from .85% to 1.1% (for 5% downpayment or higher) and .9 to 1.15% (for downpayments less than 5%).  The one-time mortgage "points" (fees) that FHA charges for obtaining the loan is unchanged at 1.0% of the loan principal.

What is the monthly cost of owning a home purchased with an FHA loan?  Let's take the example of a $500,000 home purchased with a 3.5% downpayment.

• Downpayment = 3.5% x $500,000 = $17,500
• Mortgage points = 1.0% x $500,000 = $5,000
• Closing costs = $3,000 (estimated, this could vary)

FHA allows the Buyer to roll the mortgage points and closing costs into the loan principal.  In this case, the loan principal is $482,500 (96.5% of the purchase price) + $5,000 + $3,000 = $490,500.  At today's interest rate of 4.875% (still near historical lows), the monthly mortgage payment is $2,596.

The monthly "nut" for this $500,000 home:

• Principal and interest (P & I): $2,596/month (during the first year, about $615 of this is principal, the rest is interest; still, you are paying off $7,400 of the loan balance in the first year!)
• Mortgage Insurance (MI): $470/month (calculated using the FHA rates)
• Hazard (fire) insurance: $80 (estimated)
• Property tax: $521/month (in Los Angeles county, this amounts to approx. 1.25% of home sale price, which is paid annually; this may vary due to differing tax levies in different areas)
• Total: $3,667/month

Given the belt-tightening in Washington and the greater risk of default of these loans, they may one day (soon) go the way of the "no doc", "negative amortization" and "options ARM" loans.  Buyers should take advantage of buying opportunities in the market today, while this excellent buying "constellation" fueled by cheap government-backed money still exists.

Read the New York Times article about FHA loan rate changes.

Los Angeles Apartment Vacancy is 4.9% Entering 2011, down .5% in 9 Months -- First Vacancy Decline Since 2002 -- Westside and San Fernando Markets Tigthen Considerably, Reversing Trend

Things are looking up for Los Angeles apartment owners when it comes to vacancies. The average apartment vacancy in the city of Los Angeles declined from 5.4% in March 2010 to 4.9% in December 2010 (the most recent date for which data is available), a .5% drop.

Also note that the increase in vacancy rate was nearly unabated from 2002 - 2009.  The tide has turned, and the vacancy trend has reversed.

Considering the weak overall economic recovery and the persistently high jobless rate in Los Angeles City and County, this reduction in vacancy is a bellwether for improving multifamily fundamentals in Los Angeles.

The vacancy breakdown of the four geographic areas in December 2010:

• Central Los Angeles: 5.2% (down .3% since March 2010) -- 416,000 units
• San Fernando Valley: 4.4% (down .8% since March 2010) -- 224,000 units
• West Los Angeles: 6.1% (down 1.0% since March 2010) -- 116,000 units
• Harbor Area: 4.0% (up .1% since March 2010) -- 31,000 units

The largest district, Central Los Angeles, includes neighborhoods like Wilshire (95,000 units, 4.7% vacancy, down .7% since March 2010), Hollywood (75,000 units, 5.0%, down 1.1% since March 2010), South Central (49,000 unit, 7.2% vacancy, unchanged since March 2010) and Silver Lake / Echo Park (18,000 units, a low 4.4% vacancy, down .3% since March 2010.) The lowest vacancy was recorded in Boyle Heights (3.6, down .2% since March 2010).

The second largest district, the San Fernando Valley Area, includes North Hollywood (42,000 units, 4.8% vacancy, down .3% since March 2010), Van Nuys (37,000 units, 4.3% vacancy, down .8% since March 2010) and Sherman Oaks-Studio City (23,000 units, 4.5% vacancy, down .8% since March 2010). The lowest vacancy was in Pacoima - Sun Valley (5,000 units, 3.3%, down .6% since March 2010).

West Los Angeles, the third largest area, includes Palms-Mar Vista-Marina del Rey (35,000 units, 3.9% vacancy, down .9% since March 2010), West LA - Century City - Rancho Park (30,000 units, 4.3% vacancy, down 1.0% since March 2010), Westwood (15,000 units, 5.2% vacancy, down 1.4% since March 2010), Venice (13,000 units, 9.1% vacancy, unchanged since March 2010) and Westchester-Playa del Rey (12,000 units, 6.9% vacancy, down .8% since March 2010).

The Harbor Area, includes San Pedro (14,000 units, 4.3% vacancy, down .1% since March 2010), Wilmington-Harbor City (10,000 units, 3.2% vacancy, up .2% since March 2010) and Torrance-Gardena (7,000 units, 4.9% vacancy, up .1% since March 2010).

Our conclusion? The rental market across vast swathes of Los Angeles is becoming tighter and flipping from one favoring tenants to favoring landlords.

Consider that 65,000 units of Westside rental stock (Palms-Mar Vista-Marina del Rey, West LA - Century City - Rancho Park) is averaging 4.1% vacancy down a full percentage point from nine months earlier.  60,000 units of San Fernando Valley rental stock (Van Nuys, Sherman Oaks-Studio City) is averaging 4.4% vacancy down .8% from nine months earlier.

Vacancies in the 4.1 - 4.3% range is a tight market, and the drop in vacancies has been precipitous during the nine month period.

Also, consider that multifamily construction in Los Angeles County has virtually ground to a halt for the past 2.5+ years (see chart of Los Angeles County multifamily building permits above). There are few new buildings coming online and virtually no vacant land to build on, meaning the supply of units in the future will be constrained.

See our Blog Post from May 14, 2010 on Los Angeles apartment vacancy rates.

Data comes the Department of Water and Power (LADWP) and its records on individually metered apartments. We consider this the best reflection of the market, although it does not cover records from the cities of Santa Monica, Beverly Hills, West Hollywood, etc.

Adner Realty Group @ Keller Williams Sunset presents 2500 S Abbot Kinney Blvd #3 - 2 br, 2.5 bath condo in Prime Venice - Offered at $529,995

It's Friday here in Hollywood, California, the time when, like our brethren at the studios, we debut our latest releases. Adner Realty Group is pleased to present a one minute video featuring 2500 Abbot Kinney Boulevard in Venice, California 90291.  

This 2 bedroom, 2.5 bath condo has 898 sq feet and is located in located in the heart of Venice and is priced at $529,995.

This breezy unit has private balcony, in-unit washer/dryer, good storage, two tandem parking and spacious communal areas.  Yards from the French Market Cafe and all the bars and restaurants of Abbot Kinney.

Abbot Kinney has iconic status, representing the grit, the haute tastes, and the down-home kick-back funk of this bourgeois bohemian beachside community.  A great address to call home.

A Beachside Starter Pack for a New Family: Finding that Perfect Single Family Home Under $1 million in Venice, Culver City and Marina del Rey

This is a post by Luke Jones, who joined Adner Realty Group at Keller Williams Sunset as an Agent in January 2011.  We congratulate him on his wedding!

I recently took the plunge and got married (whooohooo!!) so now, naturally, my mind suddenly turns to finding that perfect first home together. With so many Single Family Residences (SFR’s) in LA, the choice is endless. But a few things stand out when making that decision about where to ‘nest’; room to expand when the time comes; a good space for entertaining the in-laws; a little privacy for when your betrothed drives you mad (I’m told that happens); and a good size master where all the magic happens. Add to that the fact that you’ll want parking for two cars and a bit of yard to pretend like you have green fingers and all of a sudden what might seem like a glut of choices, is actually reduced down to a more manageable amount of properties.

This week, I’ve decided to target the Venice / Marina / Culver City area trying to find that perfect place under $1 million. Here’s what I found:

First up is 125 Breeze Avenue in Venice (90291), a cute craftsman cottage on a nice Walk Street between Main and Pacific. This rustic property is a decent size for a traditional craftsman with 1,137 sq ft on a 2,200 sq ft lot. It’s got an open plan feel with oak flooring throughout. The master bedroom is well proportioned and the guest room is a good size for an infant (or a study room w/sofa bed if waiting is your game!) What makes this property cool and unusual is the spacious loft area that runs the length of the house that could be easily converted into a slumber party area for the kids or a private space for the adults. The property also benefits from a decent-size basement where the handyperson of the household can store their toys and tinker away for hours. Priced at an ambitious $1,085,000, I wouldn’t be surprised if it ended up selling in the low-to-mid $900K range…

Next up is 823 Howard Street, Marina Del Rey (90292), near the corner of trendy Abbott Kinney and Washington Blvd. This contemporary beach home is compact at just over 1,000 sq ft, but benefits from well-proportioned rooms and a nice size yard. The master bedroom has great built in cupboards and is at the back of the house with a smaller office / den / 3rd bedroom just off of it giving it a certain amount of privacy and seclusion. The second bedroom is well sized too with the guest bathroom just next door. It’s very modern throughout with custom counters and stainless steel appliances. What is most appealing is the price, compared to 125 Breeze Avenue. At $759,000, it’s a lot more affordable and whilst it’s not on a Walk Street or in a traditional craftsman style, it benefits from being in a quieter neighborhood with ample street parking and is merely a stone's throw from pricier Venice to the north.

Heading further east towards Culver City, the prices start to drop and the square footage starts to rise! 4319 Campbell Drive in Los Angeles (90066), a 3 bedroom, 2.75 bathroom home on an enormous 5,800 sq ft lot, priced at $698,000, has opportunity written all over it. From the outside it looks like a charming, old-fashioned, traditional home with terracotta roof, but inside it has been modernized to feature stone flooring, custom cabinetry and new doors and windows throughout. The interior is neutral and it wouldn’t take much to restore it to something more contemporary and trendy in style. As with quite a lot of these 1920s homes, the ceilings are low but the rooms are well proportioned. There is a large work space / converted garage out back and a large yard with room for a hot tub or small pool. Given that Culver City is only 10 minutes from the beach and has some great new bars and restauarants, this property feels like a great starter pack for a new family.

If modernization and a refurb is something you’d like to try your hand at, then what about 4221 Neosho Avenue in the Palms / Mar Vista neighborhood (Los Angeles 90066), priced to sell at $649,000. It has all the original features from this cottage-style period including crown moldings and built-ins, large brick fireplace, and vaulted ceilings. However, whilst the property is technically move-in ready, it will need a new roof, electrical, and serious TLC. Also, one other downside is that it currently only has one bathroom. However, with an oversize lot that screams for a hot tub and a detached garage with bonus workshop space, this represents a lot of "bang for your buck".

So, what I hope I’ve conveyed from these four very different listings is the sheer range of properties that are out there. From the beach lifestyle, to the white picket fence suburban dream, to the rustic fixer upper from bygone days, there is something for every taste, disposition and wallet.

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Have a question about the buying your first home or "moving up the property ladder"?  Please call Luke at (310) 435-4774 or email him by clicking on this link.

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