We've now closed our spreadsheet for the month of March, and here we are with the highest inventory figure MBC has reported since its inception a year ago: 97 SFRs west of Sepulveda.
It has been a steep and almost unbridled climb since the first of the year.
As is clear in the graph, we've now substantially exceeded the June 2007 peak of 83.
It could be worse. In the month of March, we saw 7 cancellations, expirations and withdrawals. (Ignoring, of course, the cancellations followed immediately by a bogus re-list.)
We saw 13 sales (new escrows) in this period west of Sepulveda, which also helped tamp down inventory levels. That figure was lower, however, than February's new-deal figure of 19.
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UPDATE: We revised the graph, inventory and sales numbers slightly after publication. Turns out we had to re-open the spreadsheets for a moment to make changes.
Monday, March 31, 2008
Inventory Swelling
Sunday, March 30, 2008
If You Waited...
There are plenty of potential home buyers waiting on the sidelines, in MB and elsewhere. Imagine yours was one of the families that decided about 6 months ago to stop searching and reassess in the Spring.
What would you find now? Was waiting the right call?
Let's look at the big picture first, then the local market:
- Housing market generally – There's not much debating the fact that the housing market continued its deterioration with a vengeance these past 6 months. The current Case-Shiller index shows a home price drop nationally of about 10% over 6 months (July '07-Jan. '08), and a drop of 14% in LA County. January was the worst for sales in all of Dataquick's 20 years in business, and February was only a trickle better.
The economy – Recession talk was largely confined to bears late last September (6 months ago). By mid-October, however, Treasury Secretary Henry Paulson began the now-familiar march to the podium by official bigwigs with the dual purpose of warning us of peril ahead and promising solutions. Now it's news if someone thinks the U.S. economy is not in recession already. What's more, it's shaping up to be a housing-led recession, which they used to say could not happen. (Time to rewrite the textbooks.)
There's as much foreboding out there now as there is a budding confidence that aggressive actions are going to come wherever the financial markets can be intervened upon to stave off disaster. Recession – sure. Meltdown – ummm, maybe not!?...?...?!? The import here is that recessions nearly always mean dropping home prices, regardless of how those recessions get kicked off.
Interest rates & loans – The Fed has cut its target rates sharply in hopes of stimulating borrowing and economic activity. At the same time, consumer CDs and money-market accounts are paying sub-inflation rates. Yuck.
What matters to home buyers is mortgage loan rates, and jumbos (30yr fixed and ARMs) are essentially even now with their early-October levels, after some dips and spikes during the past 6 months. The big news of this period is the congressional move to increase the "conforming" loan limits to almost $730k, which might help break some of the liquidity logjam in the mortgage finance pipeline, though the change is of little use to the average MB buyer.OK, hypothetical family, you consciously took time off to see what happened in the world. Now, what has happened in your local RE market of interest?
Slowdown arrived – In MB, the first thing to note is that by Oct. 1, 2007, MB was entering a serious slump. As we reported in our MB Market Update for 9/30/07 (click for the story), there were no sales, none at all, of SFRs west of Sepulveda in the second half of September, and the month ended with just 6 sales (new escrows) west of Sepulveda that stuck. We're seeing a sales pace nowadays that is roughly half that seen during the bulk of 2007. Also:
Inventory – SFR inventory west of Sepulveda stood at 81, by MBC's count, on Sept. 30. Six months later, we count 94, the highest number we've published in a year-plus. That means more choice and, they told us in Econ 101, downward price pressure.
Chops – We looked back at the Sept. 30, 2007, Market Update spreadsheets (click to download and play at home) to see what's still around. There are plenty of listings with impressive price cuts (click addresses for details via Redfin):
- In the Hill Section, 3 actives are down at least $200k from their Oct. 1 prices (811 Boundary [-$300k], 916 9th and 869 3rd, which is down $245k).
- In the Sand Section, the highlights are 225 39th (-$155k), 4419 Highland (-$281k) and 228 29th Place (-$450k).
- In the Tree Section, at least 13 listings are still lingering from Oct. 1. Some lower-priced homes have taken cuts, but the news is among new construction: 3305 Laurel cut 10% (-$360k), 570 27th cut 9% (-$300k) and 2509 Walnut cut 10% (-$250k). And so on.
- In the Hill Section, 911 Duncan was at $3.770m last October, but it sold for $3.190m (-$580k/-15%) in February.
- In the Sand Section, someone saved $300k (-12%) off the Oct. 1 price on 420 30th, someone else took $150k (-7%) off 3617 Vista's Oct. 1 price and someone brought home a great deal overall on 209 42nd, which had begun at $2.3m and had neared its sale price of $1.830m by last October.
- In the Tree Section, we count at least 19 sales from inventory active Oct. 1, 2007. In this period, we saw the first recent examples of new construction going for less than $2m (3104 Pacific [$1.950m], 2705 Oak [$1.95m] and 1901 Poinsettia [$1.999m]). We also saw a raft of sales that went for double-digits below their start prices (see "Early Warning: Ask-Close Spreads").
What to Do with Comments?
It seems the time has really come to consider a change in comments policy at MBC.
This was a week in which we had some days with substantive, well-considered comments, and some days with comments that went off the rails. So maybe it really is time to change, if this is disrupting the average reader's experience – as we often hear.
We recognize that the final decision on the subject belongs to your humble correspondent here. But we'd rather get some input first. Please vote in the poll – and keep in mind that you can vote for all the options you like. Voting closes Weds. at 8pm. Please support your rationale for voting within the comments on this story.
Know this: We've so far deleted about 5 comments in one year of MB Confidential. (Excluding SEO advertising BS.) Not one deleted comment was critical of the blog or the author. Allowing your direct criticism of the content is vital.
In our view, there ought to be sufficient room for a spirited debate, emotional at times, even with harsh words. Perhaps you disagree and want something more watered-down and with more rules.
Most particularly, we want to find the balance between encouraging free discussion and maintaining a somewhat civil forum. Our chief concern is that requiring sign-in, in any form, is going to restrict people from posting what might otherwise be useful, valuable information and perspective. That's why we've held off all this time.
It's true, MBC could set up guidelines and we could be more aggressive in moderating the comments. However, we don't relish the extra work. And we're sure people will feel stifled and perhaps treated unfairly along the way.
That's why our preference is to go with some form of sign-in requirement, but not much more. There are 2 options, requiring Google identities or Open ID identities – a broader option that includes Google. (Click Open ID for a little more info.) We're thinking this doesn't burden posters much, given that anyone can set up a gmail account or an identity under other Open ID providers that is private to everyone on the outside.
The hypocrisy angle: There's a rather obvious point to be made here while we're on the subject. If MBC comments require sign-in, shouldn't the author's identity be made public?
However, that's a nonsequitur. We can't imagine a comments policy that requires "true" identities to post. If we don't do much more comment moderation, really we're just talking about requiring posters to use handles. Will that be sufficient to improve the tone?
Consider your vote and comment here – anonymously if you like.
Friday, March 28, 2008
Weekend Opens (3/29-3/30)
We're back to a more normal volume of opens this weekend. Click here for the complete list of opens published in the Beach Reporter, or at any time use the link in the right-hand column under "Prop. Search Tools."
Hill Section
916 9th is a perennial favorite here at MBC; it made Mrs. MBC's year-end list. It's the great room/living room/yard combo, mainly, that works. Offers 5br/5ba, 4550 sq. ft. It was on the market last year, as high as $3.275m, but it's at $2.895m now. The first posted open since its late-February return is Sun. 1-4pm.
923 1st offers the lay public the chance to see a $7.6m home, much as they were once offered the chance to see an $8m home. But please recognize this one requires advance arrangements/RSVP (see info in the BR open house listings). Worth a shot. Sun. 3-5pm.
Sand Section
400 3rd (pictured) is Mrs. MBC's pick this week, though – just like her pick last week – it's not posted as open. Well, we suppose that just walking by any old day could be delightful. 400 3rd is a lovely, large (4br/4ba, 4000 sq. ft.) classically styled beach home on a corner lot down in MB's South End. A couple of ocean peeks = bonus. Starts at $3.499m.
341 10th is a South End flat walkstreet home right next to downtown that we featured last week, when it was only open Saturday. Definitely worth a look for its great style and materials. Starts at $3.3m. Open Sun. 1-4pm.
228 29th Place is ultra-cool, unlike anything we've seen recently in the Sand. Big wows, big views, and a price that has moderated from a big $3.049m last year to $2.499m now. (NOTE: The newest reduction of $130k just occurred Saturday.) If you haven't yet seen it, do. Open Sat. & Sun., 1-4pm.
Tree Section
621 Marine (pictured) is a custom-built (2002), "rustic Spanish" with 5br/4ba and 3100 sq. ft.
As we noted previously, the owners just purchased it last year (March 2007) for $2.436m (double checked) and they're offering it now for $2.489m (double checked!).
Open Sun. 1-5pm.
560 36th (second pic) is daring for a speckie, with an ultra-modern design in a land of Mediterraneans and Cape Cods. Offers 4br/4ba and 4040 sq. ft., but it's not priced at $4m, just $2.999m. A bit close to the armory and Sand Dune Park. Open Sat. and Sun. 1-4pm.
2611 Palm is a new one in the Trees – well, it has been new for some time (first offered Jan. 2007), but it's worth a first mention here anyway. Plenty charming, with some unique details and 5br/4ba, 3200 sq. ft., priced at $2.399m. Its twin (with reverse layout) is at 2309 Pacific (now at $2.099m). Both are open Sat. & Sun. 1-4pm.
Great Escape
It wasn't long ago at all that someone purchased 523 Marine – September 2006, to be exact. Purchase price then was $1.310m.
It was a nice discount at the time – our older records show the property was first listed at $1.450m in May of that year.
The purchase was about 18 months ago. Then 523 Marine was back on the market in early late February of this year.
This owner sought $1.379m, and the property sold quickly – less than 3 weeks on the market. (There's some of that going around these days – what's selling seems to be selling fairly fast.)
After a quick escrow, the former owner got $1.340m (-$39k/-3% off list, +30k/+2% over Fall 2006).
Though the price was essentially flat, it seems fair to assume the owner took some kind of financial hit. The buyers' agent's commissions alone, at 2.5%, would be $33k, wiping out the $30k bump over the purchase price. Also, assuming there was a mortgage on the home, you have to consider 18 months' worth of mortgage payments, much of which would have gone to interest. Tax deduction or no, much of that money is simply gone.
Still, in today's market this could have worked out a lot worse. A quick sale and a quick escrow gave the seller a great escape, and the buyer a pretty good deal.
Just down the block, a brand-new listing at 621 Marine has a seller hoping for a similar escape after a shorter hold. This home was purchased in March 2007 for $2.436m. A year later, it's up at $2.489m (+$53k/+2%). Quick sale, anyone?
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NOTE: The original story transposed two digits of the sale price at 621 Marine and two digits of the original sale price. A percentage increase was calculated based on those incorrect figures – explaining the first several comments on this story. We regret the errors.
Thursday, March 27, 2008
Meet Francisco
In our somewhat whimsical poll this week, we tried to determine which MB street might be the least-well-known in town.
The results, which we'll publish in another brief story soon, told us that Francisco St. is the city's most obscure street.
It's with good reason. For one, Francisco is a border street, more or less, at the far south end near Hermosa. For another, there are only 6 homes with a Francisco St. address, so odds are you haven't visited anyone there. We also don't see any sales on the short block since 2001.
Finally, Francisco is only part of a street. Most of the block you see in the picture here is actually 33rd St., Hermosa.
On the map here, from the county assessor's site, you can see how the grey border line between Hermosa and MB cuts a little jog at Ingleside to create what must be MB's shortest street. (Bonus fact: this map also reveals that 5 MB homes west of Sepulveda have a Longfellow address.)
Our poll showed that just 22% of MBC readers were familiar with Francisco. But if you've got kids at Robinson (part of which is highlighted in yellow here), you've got to know Francisco. It's the only legal street to use to approach the school – in a vehicle – during pickup/dropoff times.
And so, dear Francisco, now's your time in the sun. No one knew you before; soon few will know you again. But online, you're king for a day.
Wednesday, March 26, 2008
Median Price Preview (Q1 2008)
We've said here before that median price is just one of many awful measures of real estate prices and activity. Still, it's a common measure and most people can wrap their minds around it. (It never hurts to remind folks that a median is not an "average" [mean], but the one price at which half of all sales recorded are above that number, and half are below.)
In comments here at MBC, someone posted the following median price stats for Q1 2006-2008, drawn from the MLS:
2006 - $1,625,000These statistics were said to reflect all sales in MB in these 3 comparative periods – which means some sales we don't cover here, i.e., THs/condos and sales East of Sepulveda. And, obviously, Q1 2008 hasn't quite finished yet, so there's some chance for that number to change.
2007 - $1,655,000
2008 - $1,832,000
We were inspired to check on the number of sales in our subject region, and the median price for those, so we compiled the sales to date in a one-page spreadsheet. (Click to download the PDF.) It will be little work to re-publish that once the quarter's over, so we'll let you know when that's up and ready.
What did we find?
There were 29 sales in our subject region in this period. (We're dealing with closed sales; these were deals made in December 2007-Feb. 2008, mostly.) That's a pretty small sample, so we should be careful what kinds of conclusions we draw.
The sales prices went from a low of $772k to a high of $5.6m – quite a range. The median for this sample is pretty solid at $1.950m – solid, because the next sale below it was also $1.950m and the next above was $1.999m. You wouldn't expect too much movement with 5 more days' worth of sales coming in.
There's more to look at here than just median prices drawn from small samples.
Look at the price ranges of these sales, and they fall this way:
- 8 sales below $1.5m
- 12 sales between $1.5m-$2.5m
- 9 sales above $2.5m
Alas, no. Take this small sample of 29 sales and compare it to a somewhat larger sample of 91 current active SFR listings in our subject region, and the numbers match up:
- 26% of inventory is priced below $1.5m; 28% of sales were in that range;
- 40% of inventory is priced between $1.5m-$2.5m; 41% of sales were in that range; and
- 34% of inventory is priced above $2.5m; 31% of sales were in that range.
We have the general sense from tracking market activity over the past year that inventory below $1.5m is starting to bloat for the first time in a while – mostly in the Tree Section. And we, like many, have seen the proliferation of sales at the high end as a sign of a significant bifurcation in the local market – luxury homes just keep selling, while more modest (and marginal) offerings are stalling out.
We think both trends are real, but at the same time we'll concede that this data snapshot doesn't support either claim. We're eager to hear your thoughts on what this quarter's sales (to date) say to you.
Tuesday, March 25, 2008
All New, Except for All Those Months Before
We had once sincerely hoped that the whole DOM issue would just go away. But it won't.
We'll write up some current activity on this front now, but henceforth we'll try to confine references to re-lists and True DOM to our twice-monthly market updates.
The bottom line for now is that the old tricks seem to be back. Our faith that Mr. MLS would solve this issue is largely broken, and the practice of bogus re-lists survives.
To recap: As is well-documented in MBC's 1-year history of public market tracking, it's a deeply embedded practice among local real estate agents to cancel and re-list properties that have gone stale. We call the tactic a "bogus re-list." The new sheriff in town, Mr. MLS, calls it "churning," and also a "deceptive business practice." Nice. We agree.
Getting ready for the Feb. 4 transition, Mr. MLS notified our local MLS members of its "data integrity policy" prohibiting churning. Individual agents would no longer be able to cancel listings. They'd need broker approval – a step that, in Mr. MLS's experience, had "virtually eliminated the practice" of churning. (We're quoting from Kaye Thomas quoting the memo. See our Jan. 20 story here.)
So how is this new regime working? In our view, impressively, but not perfectly. We've seen one bogus re-list get reversed (3009 Poinsettia), while another that some view as arguable was let stand (1413 Pine).
Now there are 3 new examples.
Heading the new bogus re-list parade is 2309 Pacific, new construction that was first put on public offer on May 18, 2007. (Click address for details via Redfin.)
About 10 days ago, the listing with MLS # S951920 was canceled. This week, it's back with a new price and a new MLS # S08042842. This one began in May at $2.299m, got re-listed in July 2007 at $2.239m, trimmed a bit before dropping off and came back at $2.099m – $200k in reductions over 300+ days.
An alternative tack is being taken over at 516 24th. The old listing has not been canceled. There are 2 active listings for the same home. Click to see the old listing under MLS # S961440, or click the new MLS # S08042231 to see the same information there, with fewer DOM.
The existence of two listings for the same home creates the bizarre spectacle captured here in a screen grab from Realtor.com. Same home, same details, but one is "New this week!"
There may be some perfectly reasonable explanation for the dupes on 24th. F'rinstance, the older one is listed as Sand Section, while the new one is Tree Section. Wait, that's not an explanation for the re-list.
There is also the matter of the change in construction date listed for this home – from 2007, to 2008. It's a small detail, perhaps. But the fact is that the home was first offered in October 2007, and it was quite complete then – staged, even. MBC featured the home in "Mrs. MBC's Xmas List," and also in a year-end column in the Easy Reader, because we like it. However, since it's now said to have been built in 2008, we have to conclude that the completion date was changed willfully while freshening up the listing.
Finally, another re-list has hidden the history of 473 31st. This brand-new home first came on in early November 2007. The listing with MLS # S957772 expired recently, but the home began a new life right away – how very nicely in keeping with the season! – with a new clock and a new # S08039357. (There's also a dupe of this one on CLAW MLS.) Best that can be said: The "CDOM" (combined days on market) field for this one properly states 140 CDOM.
Two of the listings above meet the "new product" test, put forth by a prominent local agent in the Daily Breeze earlier this year:
"My contention is that when you have a piece of property, and you change it $100,000 in price, it's a new piece of property. It shouldn't be penalized by the number of days on the market that it was at another number. It's a new product."Of course, we'll watch to see if Mr. MLS takes any action to un-re-list these properties, but we're skeptical. After all, if "broker approval" is all that's needed to make a re-list legit, we've got plenty of brokers in town who will gladly give their approval. That, we have learned.
As we wind down this perennial discussion, after all the battle-line-drawing, back-and-forth debating and you-don't-get-it lectures, what have we learned?
First, the number for "Days on Market" means something other than the "number" of "days" that a property has been "on market."
Second, there's an unbridgeable gap in perspectives on this issue between agents and consumers. Some people view re-listing as "deceptive" and some don't. Here's wondering if we can come together on the idea of changing new-construction completion dates.
Third, there's still a need for independent tracking to keep more accurate records of our local RE market. MBC will keep doing that, and we'll try to stop explaining why we need to.
Finally: caveat emptor, but then, you knew that.
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Monday, March 24, 2008
Want Lower Taxes?
To paraphrase Mark Twain, there are only three things that are certain in a real estate downturn: foreclosures, bank failures and declining property tax bills.
The LA County Assessor, Rick Auerbach, has seen beyond the horizon. He knows he's going to be flooded soon with requests for re-assessments (and lower property tax bills), given all the headlines about the RE market's rapid crash in the county. So he's offering to do the work himself first, lowering property tax bills en masse before the requests start pouring in.
In print, on radio and TV – and on the internet – the assessor is trying to get the message out and tell homeowners: Don't bother us, we'll take care of you, it'll be fine – you'll pay less, just let us do our work. (Click to download the Assessor's press release.)
Re-assessments? Lower taxes? Where do I get mine?
Let's back up a moment for a refresher on California's property tax laws to understand what the Assessor is up to.
In their wisdom, the voters of California cut themselves a great deal in the 1970s. Via ballot initiative, the voters ended routine re-assessments of homes – and with them, routinely increasing property tax bills. Voters also capped the property tax rate at 1% and limited the annual increase in homes' assessed values to 2%. Homes would only be assessed at market rates when purchased.
Get that: 2% per year – below the annual rate of consumer price inflation, and below the average long-term rate of home price appreciation as well.
That was a good deal, but the voters also gave themselves a bonus: If the market value of your home drops, you can get your property tax bill reduced. So how about that?!? If the market value goes up substantially, you sit tight and pay very little more in taxes. If the value goes down, you might save on taxes by getting your home re-assessed.
That brings us back to the present day. Home values are now going down. So the Assessor is going to reevaluate over 300,000 properties in the county and reduce property tax bills where necessary.
What Auerbach & Co. are looking for is recent purchases that already aren't worth what was paid during the boom years.
How do they define boom years? At first they assumed it would be purchases from 2005-2007 that might merit a downward revision. After some sampling, they realized that they needed to go back to 2004. (Translation: The downturn is already worse than the county tax assessor realized – there are homes in the county that are now worth less than their purchase prices from 2004.)
Auerbach & Co. have now decided to look at all homes purchased between July 1, 2004-June 30, 2007. That's 310,000 homes. If you purchased your home during that period, the assessor's geeks are working on it.
If they determine that your home was worth less on Jan. 1, 2008, than at the time of purchase – plus 2% annual increases – the assessed value will be cut along with your property tax bill. So far, 60% of the 67,000 homes examined have qualified for a reduction.
If you're a homeowner who bought after July 1, 2004, it seems best to wait for the notice in the mail this summer (by June 30) and see if you like the Assessor's work. If not, you'll still have 6 months to appeal for a further reduction.
Anyone can, at any time, file a "Decline-in-Value Reassessment Application" to seek an adjustment in the assessed value of a property. (Click title to download the 1-page form.) You don't even need to support your case with data, but it's better if you do. The form asks for you to list 2 recent comparable sales "that sold as close to January 1, 2008, as possible."
In our local market in Manhattan Beach, sale prices have only begun to decline recently, and there's plenty of statistical noise, like high-dollar sales in highly desirable areas.
Recent home buyers might be encouraged, however, by the Assessor's focus on sales near January 1, 2008.
The current MB Market Update spreadsheets (click to download) show that several sales in late 2007 and early 2008 were discounted significantly. Based on PPSF and other factors, you can see that the data that the assessor's geeks will be working from will reflect one of the softer periods in this market in some time.
Hence, the geeks might be more inclined to cut some local tax bills. And if they don't cut your bill enough, you can always appeal.
It's true that, in MB, we're not talking about a lot of people getting big tax cuts. Not yet. It's early. We'll be late to the tax-cut party.
But if they're already looking at 2004 purchases, how far back might the assessor's team be looking in 2009 and 2010?
Sunday, March 23, 2008
Where's Homer, Again?
Here's hoping you had a great Beachster Sunday.
We've got plenty to cover this week, but we're going start on a more whimsical note, with a different sort of poll. This one will test readers' knowledge of the back streets and hidden corners of MB.
The idea for this poll comes out of the fact that there's now a second listing of the year on Homer (225 Homer). Well, we know where Homer is, but we had lived in MB quite a while before we saw that street. We wondered how many other MB residents even know there is a Homer in town.
Another listing at 131 Kelp posed the same sort of question for us before: Do people know where Kelp is?
Here's how the poll works: You can select multiple answers. We're asking which of the fairly obscure streets – all west of Sepulveda – that are listed in the poll you already know and could locate, more or less, if you had to. (Could you give someone directions?) Vote for all of the streets you know, and leave blank the ones you really don't know.
This is both a test-your-knowledge quiz and a way to generate a result that might be interesting: MB's most obscure street. The street with which the fewest readers claim any familiarity will "win" as the city's most obscure. Poll closes Weds. nite at 8pm.
We will then find a way to recognize this distinction and perhaps bring the street out of the shadows.
Find this concept entirely too vapid? Check out Kaye Thomas' new post on the end – or redefinition – of "starter homes."
Friday, March 21, 2008
Weekend Opens (3/22-3/23)
It's a short weekend for open houses given Easter – lots of listings are only open Saturday, while many of the listings that are new this week are not listed as open.
Idea for a drinking game: Browse this week's Beach Reporter ads and take a quaff each time an ad says "Hop on Over!"
You can click here for the list of weekend open houses via the Beach Reporter online, or any time use the link under "Prop. Search Tools" in the right-hand column on the front page.
As always, click on any highlighted address for more pics & details via Redfin.
Hill Section
There's a dearth of open houses in the Hill Section this weekend. It's a very observant region of MB.
We're happy to call attention to the Easter open at 939 Duncan, a big-time remodel purchased 2 years ago by some flippers. Opulent, overdone, odd, and – hey, you expect this – overpriced. Nearly 6 months on market so far. Along with 534 14th, Duncan shares the remarkable quality of offering access to the pool through the master bedroom. Currently $3.695m. Open Sun. 2-5pm.
Sand Section
341 10th is on a South End walkstreet. Need we say more?
Offers 4br/5ba, 3150 sq. ft. Steps to downtown.
Nice, spacious remodel with a rental unit (not much improved) to help you defray the costs of ownership, which are considerable: Starts at $3.3m.
Open Sat. 1-4pm.
Mrs. MBC's pick for the week isn't posted as open (it's a funny weekend that way), but we'll write it up anyway, just in case they throw the doors open after all.
She loves a good project, so her pick is 456 27th. It's a rare Tudor-style home (3br/3ba, 2625 sq. ft.) in a sleepy location up on the plateau above Sand Dune park. (Is it just us, or has this become the busiest area of the Sand Section recently?) The home is a bit dated – OK, really 70s – but one person's ghastly throwback is another person's great remodeling opportunity. Bonus: Roofdeck. Starts at $1.950m.
Tree Section
672 19th is a square box with little inherent style, but my, how they've gussied it up with paint and decor. (Click the address for pics.) The home offers 3br/2ba and almost 1700 sq. ft. You've just got to see a home that touts a "beautiful hardscape" and tiki lights. Psssst! Nice location. Starts at $1.789m. Open Sat. 1-4pm.
As we mentioned in the MB Market Update the other day, 3412 Pacific was purchased just a year ago (Jan. 2007) for $1.491m. It's up now at $1.199m ($-292k). We don't think they've trashed the place; there are other issues behind the fall. Open Sat. 1-4pm.
A price war is breaking out at the lowest end of Tree Section inventory – 1708 Oak and 3612 Poinsettia keep undercutting each other. Both are 2br/1ba and 850 sq. ft. in off locations. Last week, Oak moved down to $899k; now Poinsettia is at $849k. Take your pick: 1708 Oak is open Saturday 1-4pm; or drop in Sunday (1-4pm) at 3612 Poinsettia and say hi to Kaye Thomas.
Thursday, March 20, 2008
Pricing Poll: 3200 Alma
You've got to love older homes to want to buy one today for top dollar.
And top dollar is exactly what the sellers are asking for 3200 Alma. The start price is $1.899m for 3br/2ba and 1500 sq. ft. Old-home lovers, come on out!
We're asking MBC readers once again to weigh in, through a pricing poll, on what the final sale price for 3200 Alma is likely to be.
Please read the story below, vote in the pricing poll and explain or support your vote in the comments. Voting closes Sunday night at 8pm.
Here at MBC, we have a well-documented soft spot for charming old Spanish homes on Alma. Specifically, we went ga-ga for Matthew Fox's home at 3116 Alma (see "Old's Cool"), only to find that he wasn't serious about selling (never cut the price, tested the market for just 2 1/2 months), and that no one was serious about buying. The listing was canceled and the home continued, presumably, as a rental.
So we were looking forward to 3200 Alma. The listing language set the stage:
This is the Spanish Charmer that everyone knows and loves. It has been updated over the years, but its authentic elegance has been carefully preserved.So, would we join the multitudes who "know and love" this home? Nah.
Alma is quirky and authentic and cute in all the right ways, but there was no "wow" factor for us. The phrase that occurred to us over and over was "rough edges." Overgrown vines, chipped tiles, dirt here and there, a BBQ that saw better days several years ago, a tiny kitchen with old cabinets that are just painted over.
We quickly got the sense that this home hasn't been tidied up much for sale. The flaws, we guess, are supposed to be part of the charm.
Likewise for the dated, er, period tile work in the bathrooms. Impossible color combinations. (Did we really see green and purple together?) The kitchen and baths really challenged our broader commitment to the ideal of preservation. We'd take these compromises in the right circumstances, but not for a big premium.
On the plus side, the home has natural character, two small but sweet outdoor spaces, and here are some ocean views from the master (and even from the master closet – a first for us).
The owners paid $1.1m in July 2002. That means they're asking for a markup of $799k/+73% over 5 1/2 years – 13% average annual appreciation. That's certainly not unprecedented in MB over recent years, but it's on the high end.
At $1.899m, the sellers seek a remarkable $1,266/PSF, the second-highest PPSF in all of the Sand Section now. At just $1,000/PSF – still a premium price – the sale price would come down $400k. The often-optimistic Zillow thinks $1.47m is about right.
Another newer listing really undermines the price on 3200 Alma. Quite nearby – although lacking ocean views – 445 30th St. offers an older Spanish-style home with 1100 more square feet on a larger lot (2700 vs. 2150 at Alma) for just $100k more ($1.999m), and at just $769/PSF. The big differences on 30th St. are that there's adequate living space – two living rooms plus a separate dining area – and the kitchen is modern.
We wanted to like 3200 Alma more than we did, but there's no question that it has its charms. The question is: What's the right price?
What's Up with Rates?
It appears that mortgage rates are settling down, but there's a notable break between traditional 30-yr. fixed loans and jumbos, which are most common in MB.
One month ago, in "Rates Spiking Again?," we took note of a recent uptick in 30-yr. fixed loan rates, and noted the fears of one local realtor that the rate increases could continue.
Today's headlines include "Mortgage Rates Fall, 1st Time Since February" (via CNN Money). However, as the first graph here shows (via Bankrate.com) – on a short, 3-month time scale – jumbos are remaining stuck in the lofty territory of late February. (Note: We created these graphs using Bankrate's free tool.)
The second graph shows two jumbo products. The green line is the same 30-yr. fixed as in the first graph, while the blue line is a 5/1 ARM with interest-only payments. The ARM rates seem to have risen significantly from the late-February peak.
Of course, these graphs provide only an illusion of hard data. The data are drawn from lots of sources and there is a lot of variation by region and by lender.
We also have yet to see the effect of higher conforming-loan limits (about $730k) working through the system – redefining what a "jumbo" loan is. Finally, knowing what rates are generally doesn't tell you whether there are willing lenders and whether buyers can meet increasingly rigid criteria.
We're curious what buyers and pros are experiencing right now in the local market.
Wednesday, March 19, 2008
MB Market Update for 3/15/08, Trees
This is the third installment of the MB Market Update for the period 3/1-3/15/08. The Hill Section and Sand Section stories were posted earlier this week.
Click here to download the complete 3/15/08 spreadsheet, or any time, use the link at the upper-right corner of the front page.
In the article below, click on the smaller pics to enlarge and, as always, click on any highlighted address for pics and details via Redfin.
Tree Section
There were 47 active SFRs in the Trees as of 3/15/08, of which 26 were priced below $2m, and 21 were priced above $2m. This continues the trend we've noted previously, a slight reversal of what we saw for much of the year 2007, when most of the Tree Section inventory was above $2m.
Seven of the 9 new listings in our spreadsheets this period were priced below $2m; 5 were between $1m-$1.5m. (Note that one of the Twins in the Trees – 3309 Poinsettia – is shown as "new" here, too, meaning 10 show as new in the Trees, but its start date was actually Feb. 28.)
Short Holds
Two new listings were purchased in late 2006/early 2007 by their current owners:
2005 Oak (another Oak listing!) was offered for $1.460m in Fall 2006, and purchased for $1.350m by the current owners, who now face a job transfer. The home is delightful in some respects – garage tucked away in back, spacious kitchen/dining area, cute living room up front. There are only 3br/3ba, however, and the living spaces could star