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Please see my new blog

For technical reasons, I’m retiring this blog.

My new real estate blog is http://santamonicarealestatebyjimbrunet.wordpress.com/

All future posts will be to that blog though I will be retaining this blog as an archive

for the time being.

 

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August 17, 2011 at 10:09 am Leave a comment

Q3 2008 versus Q3 2009 Westside statistics

Number of sales up over all on the Westside (about 15 percent if you exclude Topanga) for the third quarter compared to last year, prices varying from nearly flat for Brentwood single-family homes to down 14 percent in Santa Monica to down 20 percent in Venice.  I’ve said it many times but it bears repeating:  all real estate is local, even among various communities within the Westside.   When it comes to gauging the market in your area of interest, you might as well throw away your newspaper and the overwhelming majority of websites.

Tracking other numbers through this year, the market has definitely hit a plateau, most likely the bottom, in Santa Monica.  Inventory—the number of properties on the market—in Santa Monica has dropped by roughly 25 percent in the last eight months.   Median asking prices in several market niches have actually edged upwards in the past couple of months.

Interest rates continue to be both low and relatively stable.   But with unemployment expected to remain stubbornly high for the coming year, consumer confidence will be the key number to watch.

One of the biggest factors about the Santa Monica market is the number of foreclosures…or rather the lack of them.   Year to date, only 4 single-family homes and 20 condos & townhouses that were foreclosures have sold in Santa Monica, a very small fraction of the overall sales.   Unlike other areas as close as the San Fernando Valley, foreclosure sales have not defined and driven the market in Santa Monica.

I plan to post another market report in January examining year over year statistics as well as looking at the latest trends.

Q3 2009 vs. Q3 2008
Real Estate Activity for the Westside

Q3 2008 Q3 2009
Area
# of sales
median price
# of sales
% change
median price
% change
Single Family
Santa Monica
86
$1,850,000
93
8%
$1,600,000
-14%
Brentwood
58
$2,100,00
90
55%
$2,088,000
-1%
Westwood
57
$1,349,000
66
16%
$1,261,000
-7%
West LA
19
$745,000
28
47%
$714,000
-4%
Palms/Mar Vista
97
$792,000
105
8%
$695,000
-12%
Culver City
65
$670,000
63
-3%
$630,000
-6%
Marina del Rey
5
$1,625,000
9
80%
$1,375,000
-15%
Venice
53
$1,120,000
50
-6.0%
$900,000
-20%
Topanga
34
$888,000
20
-41%
$614,000
-31%
Bel Air
42
$1,728,000
42
0%
$1,300,000
-25%
Total Single Family
516
$1,284,000
566
10%
$1,196,000
-7%
Condo/ Townhouse
Santa Monica
149
$730,000
136
-9%
$630,000
-14%
Brentwood 50
$717,000
51
2%
$620,000
-7%
Westwood
167
$684,000
152
-9%
$621,000
-9%
West LA
45
$635,000
52
16%
$545,000
-14%
Palms/Mar Vista
29
$419,000
48 66%
$439,000
5%
Culver City
76
$397,000
92
21%
$350,000
-12%
Marina del Rey
79
$739,000
99
25%
$550,000
-26%
Venice
6
$1,227,000
18
300.0%
$718,000
-41%
Topanga
0
0
1
N/A
$400,000
N/A
Bel Air
1
$615,000
0
N/A
0
N/A
Total Condo/ Townhouse
602
$658,000
649
8%
$560,000
-15%

November 5, 2009 at 9:13 pm Leave a comment

2009 versus 2008 Westside Market Report

It’s interesting to track real estate sales in 2009 versus 2008.   Following is a chart comparing the number of sales and median sales prices  in several Westside areas.

The first thing to leap out is that not all areas are equal.  Compare the token increase in the price of Westwood single-family homes with the 42.8 percent drop in prices in Brentwood.

The other thing that strikes me is the overall decline in single-family home prices at 20.6 percent for the Westside as a whole versus only 9.0 percent for condos & townhouses.   To a large extent, these numbers reflect the relatively greater difficulty in securing loans in higher price ranges compared to lower and they are skewed accordingly.   However, the implication is that if you can sell your condo/townhouse and you can get the necessary loan, this is actually a *great* time to move up from a condo/townhouse to a single-family home as the gap in prices between them has narrowed overall.

The market shows signs of bottoming on the Westside, particularly in the lower price ranges, as prices begin to firm and multiple offers pop up on well-priced properties.   As one important marker, there are only 7 single-family homes that are foreclosures in these Westside areas combined.   In places where there are many foreclosures, there is still downward pressure on the market.  Buyers expecting to find the same kind of deals on the Westside are going to be disappointed.

I will post another market update in a couple of weeks when comparisons of the first half of both years can be made.

Q 1 2009 vs. Q1 2008
Real Estate Activity for the Westside

2008 2009
Area
# of sales
median price
# of sales
% change
median price
% change
Single Family
Santa Monica
33
$2,134,235
14
-57.6%
$1,539,500
-27.9%
West LA
9
$840,000
9
0.0%
$590,000

-29.8%

Brentwood
37
$3,000,000
27
-27.0%
$1,715,000
-42.8%
Westwood
33
$1,338,000
23
-30.3%
$1,370,000

2.4%

Palms/Mar Vista
52
$762,500
41
-21.2%
$713,000
-6.5%
Culver City
21
$740,000
29
38.1%
$585,000

-20.9%

Marina del Rey
8
$1,650,000
3
-62.5%
$1,300,000
-21.2%
Venice
24
$1,074,500
12
-50.0%
$831,000
-22.7%
Topanga
8
$842,500
9
12.5%
$700,000
-16.9%
Bel Air
23
$1,840,000
12
-47.8%
$2,150,000
16.8%
Total Single Family
248
$1,233,677
179
-27.8%
$979,302
-20.6%
Condo/ Townhouse
Santa Monica
62
$660,000
58
-6.5%
$578,750
-12.3%
West LA
32
$601,500
14
-56.3%
$672,500
11.8%
Brentwood
30
$670,000
19
-36.7%
$699,000
4.3%
Westwood
66
$700,600
50
-24.2%
$667,500

-6.2%

Palms/Mar Vista
30
$440,750
10
-66.7%
$400,000
-9.2%
Culver City
28
$409,900
34
21.4%
$350,000
-14.5%
Marina del Rey
34
$780,000
35
2.9%
$587,000
-24.7%
Venice
2
$865,000
6
200.0%
$702,500
-18.8%
Topanga
0
0
0
N/A
0
N/A
Bel Air
0
0
2
N/A
$647,500
N/A
Total Condo/ Townhouse
284
$631,852
228
-19.7%
$574,971
-9.0%

June 22, 2009 at 9:02 pm Leave a comment

The Santa Monica Market: 2008 vs. 2007

Market Report—January, 2009

It has long been my contention that prices in Santa Monica go up more in an “up” market, down less in a “down” market. The pattern of prices over the last two years would seem to validate that conclusion.

As of January 8, there were 150 condos and 98 single-family homes on the market in Santa Monica.

Median Asking Prices
Single family homes

# bedrooms # on market Median Asking Price
2 BR 23 $1,099,000
3 BR 28 $1,199,000
4 BR 21 $2,375,000
5+ BR 24 $3,922,000

Condos:

# bedrooms # on market Median Asking Price
Studio 5 $399,000
1 BR 32 $458,000
2 BR 85 $764,900
3+ BR 33 $1,349,000

Some interesting numbers are the year to year comparisons for 2007 vs. 2008, both of numbers of units sold and median selling prices.

Single Family homes

Area # sold 2007 Median Selling Price # sold 2008 Median Selling Price
Santa Monica 280 $1,681,750 192 $1,900,000
Brentwood 223 $2,075,000 154 $2,100,000
Westwood 179 $1,351,000 146 $1,338,000
West LA 78 $762,000 45 $745,000
Mar Vista/Palms 310 $861,250 238 $770,000
Culver City 145 $779,000 129 $695,000
Venice 173 $1,170,000 130 $1,150,000

Condo/Townhouse

Area # sold 2007 Median Selling Price # sold 2008 Median Selling Price
Santa Monica 439 $780,000 339 $680,000
Brentwood 250 $714,500 131 $690,000
Westwood 718 $670,000 365 $680,000
West LA 176 $629,500 149 $595,000
Mar Vista/Palms 141 $485,000 107 $419,000
Culver City 202 $440,000 180 $399,500
Venice 38 $925,500 18 $1,112,500

Note that price declines were modest in comparison to what one might expect from reading the newspaper headlines and that for single-family homes prices in Santa Monica and Brentwood actually increased.

Why are prices in the Westside so relatively inelastic in comparison to other areas? In a word, foreclosures. Or, more precisely, the relative lack of them.

Foreclosure sales pattern
Data as of 1/15/09

Single Family homes

Area # sold 2008 # on market now # in escrow now
Santa Monica 0 0 0
Brentwood 4 0 1
Westwood 2 0 1
West LA 2 2 0
Mar Vista/Palms 13 5 0
Culver City 10 2 4
Venice 2 0 2
Bel Air 6 0 1
Topanga 5 2 0

Condo

Area # sold 2008 # on market now # in escrow now
Santa Monica 8 9 6
Brentwood 4 1 2
Westwood 14 4 5
West LA 9 2 1
Mar Vista/Palms 5 0 0
Culver City 15 3 6

More than half of all home sales in December in Southern California were foreclosures and yet very few were in communities on the Westside. One doesn’t have to travel far to find a completely different picture.

Area # sold 2008 # on market now # in escrow now
Sherman Oaks 45 20 8

And this data from Sherman Oaks is incomplete due to overlapping MLS services. The actual foreclosure activity is even higher, I just can’t quickly document it. And as dramatic a contrast is this is from the Westside, areas other than Sherman Oaks are even worse.

Unless the foreclosure pattern changes radically, prices on the Westside in general and Santa Monica in particular will continue to be relatively inelastic compared to prices elsewhere in Southern California.

January 22, 2009 at 6:06 pm Leave a comment

Traditional vs. On-line home hunting

I’ve heard several presentations over the past couple of years on the differences between “traditional” and “on-line” clients searching for homes.   The on-line world is increasingly important; the most recent study I’ve seen says that 84 percent of all Buyers start their home hunting by searching on-line, even before they contact a realtor to work with.

But I’ve noticed a trend lately and I want to direct some comments to on-line home Buyers.

With a “traditional” Buyer, at some point we meet, we review their criteria—such as price, desired location, number of bedrooms, and other factors—and then I make suggestions of properties to see.   Often I’ll e-mail property descriptions and my clients will see the ones that interest them at Open Houses.  Others will give me feedback and I’ll set up appointments at their convenience.   Eventually, we find a property that they like the best, I give them my view of the pros and cons, an offer is written and then accepted or not.

Many clients that I’ve met “cold” via my on-line presence, whether it be this blog, my website, or on-line ads, wind up going down the same path.

But some don’t.  There are some Buyers who will contact me about a specific property and then, if that property doesn’t meet their needs, vanish.  Presumably they then contact the next realtor about another specific property and repeat the process.

I think there is a value in working with a realtor, whether it’s me or someone else, who gets to know you and your preferences over time.   Once I’ve seen 6-8  potential homes with someone, I can pretty much internalize their values and “play” them when I see a property that is newly listed in the market, noting what they’ll like and dislike and, from their point of view, whether or not the property is something “hot” that they should see right away.

I’d like to suggest to the “on-line” Buyers who are reading this that they keep searching for specific properties on-line but that when you find a realtor who seems to click with you, for whatever reasons, you think about making that realtor a partner in your search.   Having a professional who understands your values and preferences will make your search much more efficient.   And who knows, as your realtor comes to understand what constitutes and ideal property for you, he or she may make suggestions that would have never occurred to you, thereby broadening the choices from which you will ultimately make a suggestion.   It happens.

August 19, 2008 at 11:41 am Leave a comment

When is a Loan Approval not a Loan Approval?

In most real estate transactions, the purchase of the property is contingent upon the Buyer getting a loan at terms specified within the contract and within a specified time, often 17 days per the boilerplate language of the standard contract, though many realtors in the current market with its lending challenges are extending that period to 25 or 28 days. Exceptions are when the Buyer is making an all-cash offer or in a hot market where a Buyer may remove contingencies in their offer up front in order to make their offer more attractive.

In the course of the transaction, the Buyer is expected to remove the loan contingency upon getting loan approval. If the Buyer doesn’t remove the loan contingency, the Seller may require the Buyer to cancel the transaction or Buyer and Seller may negotiate an extension of the loan contingency, sometimes accompanied by the release of a portion of the Buyer’s deposit from escrow as a gesture of good faith.

But what constitutes “Approval”? Loan representatives who take an application enter the data from the application into an automated system and receive an automated Approval (or not). So when that approval comes back, the Buyer can remove their loan contingency, right?

Not so fast. After that automated loan approval, the lender’s rep submits the loan package—application, credit report, pay stubs, copies of bank account statements, and all the myriad other bits of paper comprising an application—to the lender’s underwriting department for review. The underwriter orders the appraisal and reviews all the documents. And here’s where some of the fun can begin. The Buyers’ income may be fine but the underwriter may be concerned about the solidity of an applicant’s job history. Or there may be an item on any of all those pieces of paperwork that cause the underwriter concern. The appraisal, especially in the current market, may come in at a value below the purchase price or the lender may even arbitrarily slash an appraisal by 5-10 percent as a hedge against a declining market. An loan application isn’t approved until the underwriter—and, often, the underwriter’s supervisor—signs off on the application. But at that point, we have approval and the Buyer can remove the loan contingency, right?

Not so fast. When an underwriting department approves a loan, it does so with a number of conditions. Many of them are trivial and many are completely transparent to the Buyer or their agent, information to be furnished by the lender’s rep. Other items are things like the lender being provided with copies of the Buyer’s driver’s license. But then there may be more problematic conditions, such as an appraiser being asked to come up with two or three additional properties, either sold or currently on the market, to validate the appraisal. In some cases, an entirely independent second appraisal is called for. Only when all these conditions, called “pre-document conditions,” are met can the Buyer more or less safely remove the loan contingency.

And, actually, the pre-document conditions are not the end of the line. After loan documents have been issued and signed by the Buyer(s), there are additional pre-funding conditions that have to be met prior to the loan funding. These usually are really trivial, and include such things as the lender calling the Buyer’s place of employment to re-confirm employment status before the loan is funded. For what it’s worth, a Buyer client of mine once changed jobs during escrow just before the loan was due to fund; that provided way too much excitement in the process.

The consequences of removing a loan contingency without prudent diligence can put the Buyer’s entire deposit at risk should the loan fail to be funded. The problems, especially with possibilities such as second appraisals, are even more acute into today’s lending environment. The bottom line is, Buyers and their agents need to be very careful about removing loan contingencies.

April 9, 2008 at 7:20 pm Leave a comment

Sellers: looking at contingent offers

Virtually every real estate contract has contingencies that the Buyer must meet or otherwise have an option to withdraw from escrow. The three traditional major contingencies are the ability to get a loan for specified amounts at specified terms, the acceptance of the result of a physical inspection and other due diligence, and a review of documents pertaining to the property, such as a preliminary title report.

But the current market is seeing a new contingency that we haven’t seen much of at all in the past 12 or so years: Buyer’s offer is contingent upon the sale of the Buyer’s property. In the past few years, Sellers would have laughed at such a contingency…why wait for the Buyers to sell their property when you can get another three or four or eight offers without that contingency?

But times have changed. Now, with many properties being on the market for 60, 90, 120 days or more, Sellers may be more willing to consider an offer contingent upon the sale of the Buyer’s property.

There are many factors that a Seller should consider, including length of time the Buyer has to remove this contingency, how attractive the property is and how well priced it is (to gauge the likelihood of reasonably prompt sale), the apparent willingness of the Buyer to do what it takes to get their property sold and assessment of the Buyer’s real estate agent’s ability to successfully market the Buyer’s property.

There isn’t a simple, clean set of answers to these questions. If Sellers have their property listed with me, I will walk them through the questions and answers as I evaluate them, giving them the benefit of my 17 years of experience, including experience gained in the last down market of 1990-1996.

When the market changes as it has over the past few months, Sellers have to change and adapt with it. Carefully considering a contingency of the Buyer’s selling their home may be a prudent thing to do if the offer is otherwise solid and if the prospects of the Buyer doing so look good within a specified period of time.

February 18, 2008 at 10:28 am 1 comment

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