New Condo listing: 2 bed, 1 bath $449,000

2264 29th St.  #E.   Located in walking distance to Trader Joe’s, McCabe’s music, and other destinations, this garden-apartment style condo features hardwood floors throughout. Recently remodeled kitchen includes granite counter tops, like-new cabinets, range/stove, and dishwasher. Recently remodeled bath includes double vanity with granite counter top. Both bedrooms have ceiling fans. Parking is one half of a private two-car garage.

Call Jim Brunet @ (310) 508-6878 to schedule a showing.

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August 17, 2010 at 8:40 am Leave a comment

It’s a tricky market

Wednesday, I wrote an offer on a low-end 2-bedroom condo in Santa Monica.  It received eight offers and my client didn’t receive a counter-offer.  What does this tell you about the market?   It’s strange:  on one hand, the amount of property on the market has risen by roughly 50 percent in the last six months.  Every day brings another batch of price reductions.  And yet…some properties get multiple offers and are on the market less than two weeks.   The moral is that every property is different, and that every property has to be evaluated carefully by Buyers and Sellers to determine what the market value is.   A Buyer can’t assume that offering 5 percent below asking price will be successful; a Seller can’t assume that their property has all the features that induced multiple Buyers to make offers on the property two blocks over.

July 24, 2010 at 2:07 pm 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

Foreclosures (REO’s) and Short Sales: A Cautionary Tale

I frequently get an initial contact where someone is very emphatic about finding a foreclosure or maybe a short sale.  The assumption seems to be, a foreclosure or a short sales is by definition going to be the best deal out there.   This may be so, but it isn’t guaranteed to be so and in fact often a foreclosure or a short sale is worse for the Buyer than a well-priced sale by a regular Seller.

I just had a client cancel the escrow for the purchase of an REO property.   It’s only the third cancellation I’ve had in 19 years.    What went wrong?   You should understand that banks and other sellers of foreclosed properties are relieved of the burden that ordinary sellers have in making disclosures about the property.   Was there fire damage that was superficially repaired but left the building structurally weakened?   An indivdiual would have to disclose this.   A bank probably wouldn’t even know the repair history of a property but even if they did, they aren’t compelled to disclose what they know.

The entire burden of due diligence is upon the Buyer.    Has a leaking shower caused rot and let water seep into the walls?   Better have the best possible inspection because if the property is bank-owned, they won’t know anything.  Fire damage?  Ditto.   Termite damage?  Ditto.   Problems with electrical wiring or plumbing?  Ditto.    Furthermore, most banks are selling properties completely “As-Is” with no credits or repairs given once escrow is opened.  The result is that you can discover tens of thousands of dollars in repairs that need to be made to rectify conditions that weren’t obvious when you viewed the property prior to writing an offer.

As an alternative, you can have all your inspections up front before you negotiate a purchase price but you run the risk of paying hundreds of dollars, maybe more, in inspections without knowing if you and the bank can even agree upon a purchase price.    How many inspections are you willing to pay for before knowing whether or not you have a deal?

Short sales—where the Seller is selling the property for less than he owes his lenders—are another matter.   When you reach agreement on terms and conditions with the Seller, your journey has just begun.    The Seller’s lenders—banks in most cases—then have to agree to accept less than what they are owed in lieu of foreclosure.    Simply acknowledging that they have received your offer can take two weeks.   The total process can run months; one client told me that his recently completed short sale purchase was “nine months of horror.”    One might be encouraged to hang in for the duration if one was sure that one would get a good deal but statistics show that only about half of all attempts at short sales are completed.

Furthermore, the banks approving short sales can unilaterally impose changes to the terms and conditions prior to making a final acceptance.   Seller paying for termite work?  10 days before the close of escrow you might be told, “No, take it or leave it.”    You thought you had a sales price agreed to?  Six months after making your offer you might be told, “We’ll take your deal but you’ll have to come up with $25,000 more.”   The range of changes to a contract that a bank can impose as a condition is virtually without limit.   They can’t force you to accept but often the end result is a purchase that’s not nearly as attractive as what you contemplated when you wrote your offer.

The essence of making a good buy is still the same:  find a good property in a good location at a good price.  If it happens to be a foreclosure or a short sale, then go ahead and go into the transaction with your eyes wide open.   You may in fact make that golden purchase that many dream about.   But if the property is being sold by just an ordinary Seller, relax…you might have the better deal by the time escrow closes.

October 14, 2009 at 8:01 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

Update on Market Conditions—October, 2008

I’ve recently been working with Buyers who are frustrated with home prices in Santa Monica. “Why aren’t they lower?” they ask. They read the headlines filled with dire financial news and then go out to look at homes and are dismayed that prices aren’t lower.

The answer is location, location, location. Compare the number of sales in Santa Monica from the third quarter of 2007 to the third quarter of 2008.

Q3 2007
Q3 2008
Single Family Home – Number Sold
54
63
Single Family Home – Median Price
$1,179,000
$1,610,000
Condo/Townhouse – Number Sold
96
97
Condo/Townhouse – Median Price
$775,000
$750,000

That’s right…the number of sales went up year over year.

Well, what about median prices?

Prices for single-family homes went up, due in part to higher priced homes making up a higher percentage of sales. Prices of condos edged down, year over year, a little over three percent.

As of October 8, there are 94 single-family homes and 176 condos on the market in Santa Monica. What the immediate future holds with all the financial turmoil and the elections I can’t say. If I could, I’d be in the forecasting business. But based on the 2007/2008 numbers, Santa Monica continues to be an area where property values go up more in an “up” market and down less in a “down” market.

Back in February, I wrote about Market Conditions: “For Buyers, you can get a good deal compared to a year ago or even six months ago. But I sincerely doubt that we’re going to see prices go 20 percent or more below current levels. If you say that you want to pay what prices are going to be in six months, then you need to wait those six months and see what those prices are…and those prices may not be dramatically different from what they are today.” So far, that prediction has held true

If you have a question about how a particular market niche is doing, then drop me an e-mail at jimbrunet@santamonicahomes.net or give me a call at (310) 508-6878.

October 10, 2008 at 1:32 pm 1 comment

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