Another "Where Are We Now?" Canary

9040 Cynthia St (90069)
$1,245,000
3BR / 3BA
1,279 sq ft (?)
Lot Size: 4,500 sq ft

Pristine Country English home situated behind lush privacy hedges, pedestrian gate, and gated driveway. French doors, hardwood floors, updated kitchen/bathrooms and high ceilings. Detached guest studio with gorgeous remodeled bathroom. Flat grassy yard, verdant period landscaping, spacious outdoor patio off of sun filled den complete this charming offering. Seconds from Sunset Strip and Beverly Hills adjacent. Show cold.

Sold: 8/27/02 - $575,000

Sold: 3/16/05 - $921,500


The Redfin/MLS listing didn't show square footage, so the number is from my least favorite site, Zillow, but Zillow's also reporting the house to be a 3+2, so I'm guessing the guest studio with bath mentioned in the description isn't included in the size. So maybe closer to 1500 sq ft?

Anyway, this looks like a nice property with some recent renovation. I would give this a slight location discount since you're on Cynthia a half-block off Doheny, in a mixed residential area (large multi-family building across the street and at the beginning and end of your side of the block).

So, why the "canary" in the title? Much like the birds sent in first to test the quality of air in a mine, it will be interesting to see if and how listings like this, with sales near the beginning and in the thick of of the "bubble" era, will survive.

It's difficult to tell what renovations were done when, but from the info I see, this wasn't a tear-down situation. Same structure with some renovations over time. So an almost doubling in less than 3 years from 2002-2005, and now another 30% on top of the early 2005 price?

Ask 10 people about when the "bubble" started (in other words, what prior price levels we should be looking at for normalcy over the next few years) and you'll get 11 opinions.

Personally, I think we're in for a period where, 5-8 years from now, prices will be nominally the same as they were in the 2004-2005 era, so lower on a real basis including the effects of inflation.

Do I think we'll get back to sub-$600k for a nice SFR like this in a solid area? I'm not that bearish. But could we see a $900k type price tag 5+ years from now? Sure think so.

Get Me Off the Island

With apologies to "Lost", you know we at WeHoHo love a good MLS description. Thanks to "Full Disclosure" for alerting us to this new listing.

1011 N. Crescent Heights (90046)
[picture coming]
$895,000 - SHORT SALE
2BR / 1BA
1,398 sq ft
Lot Size: 6,650 sq ft

Description: 3BD/2BA home in West Hollywood. Subject to short sale acceptance by EMC. Hostile tenant. Offers subject to interior inspection. Complete file submitted on 8/23/09.

Sold: 11/02 - $500,000

Sold: 1/07 - $1,065,000

Sold (bank buyback): 7/20/09 - $944,126


An Anon had already suggested that we'd see this property come on the market, when we profiled its neighbor in our "So It Begins" post in early August:

Where to begin, but to say that following upon the Harland Street Trifecta (now a doubleheader) is the new Trifecta of 1015, current listing 1011, and 1005 N. Crescent Heights. All sold in development-crazed WEHO during the boomdiada days about 2 years ago.

Appears that 1011 (last sale $1,065K in 1/07) and 1015 (last sale $1.070K in 2/07) were a package development deal now gone horribly sour. Zoning would have allowed 10 or 11 units total on both parcels after demolition of the SFRs. 1005 CH went for $1,000K in 3/08 to another purchaser.

My research shows that indeed, this property and our previously-profiled 1015 N. Crescent Heights have the same owner. Good information, thanks for the heads-up.

So, what's the progression here? Buy with the intent of developing, and while you're getting permitting/capital/etc together, figure you'll rent the place in the meantime to get some cash flow to cover part of your holding costs? Now the world has gone pear-shaped, your tenant has "gone native", Jacob's dead, as is the real John Locke, and Juliet's down the well (sorry).

Banks as the savior - maybe I'll pitch that to JJ Abrams and crew for the season finale next year ...

"The Walking Dead" - Update

We featured 8616 Sherwood Ave back in April in our "Walking Dead" post.

As a reminder, this was a bank-owned, 2BR / 2 BA 1,440 sq ft SFR on a 3,100 sq ft lot in what I would argue is a nice "WeHo West" neighborhood.

It appeared that the most recent buyers ran out of money while renovating (although having seen the place, it looked complete), and the bank buy-back was $782,000.

First listed in November for a ridiculous $1,049,900, it was reduced/relisted multiple times, with the last listing being in March for $849,900.

Well, it looks like the property sold on June 1 for $810,000.

Congrats to the bank on this one. Hard to tell what exactly transpired, but it looks like they might have come out even on this. Best of luck to the new buyers - given the property and lot size, I'd argue for a mid $600s market value, although it does get a location premium (but not 25%).

Zzzzz ... Another 90069 SFR Under $900k

8467 Willoughby Ave (90069)
$889,000
3BR / 2BA
1,562 sq ft ($569/ft)

On Market: 421 Days

Reduced $50k! Back on Market and Seller is Ready to Sell! Escrow fell through due to buyer financing problems. Seller says SELL NOW and has priced accordingly. Inspections from cancelled escrow show virtually pristine property condition, even zero termite work needed! WOW. What a clean property! Owners have taken meticulous care of this fully updated home. Be the lucky buyer who steals it! Granite+stainless kitchen, ebony hardwood floors, updated systems, rooftop deck+private yard.Move in+enjoy!

We last featured this property in our "Wine and Cheese" posting back in February in discussing properties that were sitting on the market with little to no price reductions. Well, now we have a recent price reduction (apparently the seller is really "ready to sell!") and are starting to see a trend of SFRs heading first below $1mm and now below $900k. Of course, readers know that at WeHo Homes, we still think decently-sized SFRs in decent neighborhoods will settle in the $700-750k range. Whether that nominal level is reached in the next 12-18 months or is inflation-adjusted over the next several years remains to be seen.

It would be interesting to know the price at which this went into escrow. I'm still of the belief that REAL-tors are not market pricing (driven primarily by delusional clients), ,and so I wouldn't be surprised if the in-escrow price was lower than the current listing, and they still think they can do better. A reminder for all: the price at which a property will sell is a price at which someone will close a deal, not the price at which the seller thinks it will sell. This property is at least a 2006 rollback, depending on when upgrades were done. Since we have already seen 2005 rollbacks, there's nothing here to "steal", despite the listing description.

As a reminder, the "death-by-1,000-papercuts" price history on this property is below, preceded by the last 2 sales, including a low $600k (assuming pre-upgrades) in 2003, already a couple years into the bubble:

Sold: 4/03 - $630,000

Sold: 11/06 - $925,000

Listed: 4/08 - $1,030,000

Reduced: 6/08 - $999,000

Reduced: 9/08 - $969,000

Reduced: 2/09 - $949,000

Delisted/Relisted 4/09 - same price

Reduced: 6/6/09 - current price

Swimming Naked, Errr ... "Nude"

551 Huntley Drive (90048)
$1,750,000
3BR / 2BA
2,370 sq ft ($738/ft)
No Picture

Fabulous Architectural home with "Nude" pool in prime WEHO. Completely remodeled to create an open, spacious, "Resort-like" setting. High ceiling in the Great room that opens thru French doors to deck & pool. A formal dining room is served from the large kitchen with granite counters & stainless appliances.The huge master suite opens thru a wall of French doors to the very private pool. Two additional well separated bedrooms. Oak hardwood & granite floors. Security sys. Wired for sound. Elegant.

Sold: 8/01 - $508,000

Sold: 4/03: $1,179,000


So what exactly is going on here? In "prime WeHo"? OK, I'd agree with that. But wait, we have a more than doubling in price in less than two years between the last sales. So I'm going out on a limb and guessing that the 2001 price was for a scraper/land value. Which begs the question, was the sale in 2003 already "completely remodeled", and if so, what level of delusion do you have to expect a roughly 50% appreciation from 2003? And if the remodel was after 2003, what happened between the prior sales.

Of course, our favorite couple, "granite and stainless steel" live here, making this smell even more like some kind of a flip situation.

Also ... first one to educate me on what a "nude pool" is wins the WeHo Homes home game and other lovely parting gifts. It's just one of those terms that doesn't motivate me to even Google it.

Our First Ever "WTF?" Pricing Award

9058 Lloyd Place (Norma Triangle)
$989,000
3BR / 3BA
1,508 sq ft ($656/ft)
DOM: 464

REDUCED!! A wonderful bit of Nantucket in the Norma Triangle. Storybook cottage with beautifully landscaped garden in front, lovely picket fence. Completely move-in. Designer perfect. Fireplace and cozy bay window in living room. Bookcases and built-in cabinets throughout. Very detailed with hardwood floors. Pine kitchen with updated appliances. It has great attached guest/maids quarters with kitchenette, also with its own separate entrance, great office area potential. Picture perfect.

There are obviously many other examples, but this Norma Triangle property hit my radar the other day after yet ANOTHER price change. Yes, you're reading things correctly, it's been on the market for over 460 days. Assuming the current owners are the same people who paid less than $400k for the property in 1997, I can only suspect one of a few things going on here that would lead to our favorite "death by a thousand paper cuts" strategy: use of the property as an ATM during the bubble years, a family/estate arguing over how to price this following the owner's death, or pure delusion.

Again, assuming the same owners as those who bought in 1997, they have their own mini-bubble example based on their purchase from the prior owners, who paid only slightly less for the property some 8 YEARS EARLIER!

This looks like a nice little property, and we've covered the allure of Norma Triangle in prior posts, but these sellers need to decide what they're doing fairly quickly. Anyone NOT think this place would have sold relatively quickly a little north of $1mm last fall if the sellers had woken up to reality, or at least the reality of there still being some willing bagholders around?

Sold: 9/89 - $335,000 (near top of past RE bubble)

Sold: 5/97 - $359,000

Listed: 1/24/08 - $1,450,000

Delisting/Relisting game played in the interim ...

Reduced: 8/2/08 - $1,390,000 (4% cut)

Reduced: 8/13/08 - $1,329,000 (4% cut)

Reduced: 12/5/08 - $1,285,000 (3% cut)

Reduced: 3/10/09 - $1,159,000 (10% cut, waking up but too late)

Reduced: 3/25/09 - $1,059,000 (9% cut)

Reduced: 4/21/09 - $989,000 (7% cut)

Friday Night Fights Vol. 4 - To Re-Do or Not to Re-Do?

This week's installment of our "Friday Night Fights" feature pits two homes that are a block apart.

The difference? One is slightly larger, on a slightly larger lot, and appears to be completely re-done. The question is, for a small family looking for their first house, or to "upgrade" to a nice neighborhood in WeHo, which makes more sense - if either?

THE CHAMPION

9011 Dorrington Ave (90048)
$1,349,000
2BR / 2BA, 1446 sq ft
($933/ft)
5,074 sq ft lot

Artistic design & day-to-day functionality are combined to create this stunning 1930's Spanish style home. Features modern layout, sensational mstr ste. (w/wet room & custom-built closets), loft-style 2nd bedroom & bath, new hrdwd flrs, & sound-system thruout. Add'l living space is achieved w/a pvt., tiled & decked, outdoor living-rm & custom pool/spa area. Dream home is located on 1 of the most desirable blocks in W.Hollywood & provides close access to some of the best dining & shopping in LA

Sold: 12/99 - $437,500

Sold: 8/00 - $499,000

Sold: 6/03 - $835,000 (bubble, anyone?)

From the pictures, it looks evident that the house was completely re-done after the 2003 purchase. At first, I thought it was a scraper and the entire structure had been re-built, but it doesn't appear to be.

A couple things here - assuming not much was done to the place between 2000 and 2003, can we see the bubble in full effect here or what? And the reason for the $500k price increase since 2003? If this was a tear-down in 2003, I could see the seller trying to break even ($835k to buy the previous house, 1500 sq ft at $300/ft = $450k + landscaping etc), but really?

From the additional pictures, it does look like they did a nice job with this. The question is, who steps up with almost $350k down (yes, you'll need 25% down for a jumbo these days) and a monthly nut of around $7500/mo? An approx $300k/year annual income to support - does that feel right for this neighborhood?

THE CHALLENGER
8908 Dorrington Ave (90048)
$975,000
2BR / 1BA, 1140 sq ft
($855/ft)
4,000 sq ft lot

Lovely, charming home on prime Dorrington block. Living room with sunny double height window and wood burning fireplace. Beautiful hardwood floors. Dining room plus separate breakfast room. Utility room. Cozy interior sunporch (sq footage not included) off the master, opens to private yard and gardens. Many improvements and the possibilities are endless. No open houses.

No prior sale history found

Here we have what appears to be a livable, small house. The description seems to indicate that while some work has been done, there may be more to do. I couldn't find a prior sale on PropertyShark or Redfin, so we may have a flexible seller (low cost basis) here?

So, as someone looking for a small house in this neighborhood, what's more appealing - a completely re-done property that may be on the uppoer end of pricing for the area, or a smaller home that may be expanded at a lower cost?

The Walking Dead

Full credit to Arti, a commenter over at SM Distress Monitor, who came up with a great term, with regards to this post, for listings where the seller (individual or bank) is holding on for a "greater fool" to appear, and where it's only a matter of time before the other shoe drops.

Since I don't know Arti, and don't have his permission, I didn't use the specific term, but you can guess it from the post title, or just meander over to our friends at SMDM. These listings are really in no-mans land.

Along those lines, we proudly present ...

8616 Sherwood Dr. (90069)
$849,900
2br/2BA, 1,440 sq ft
Lot Size: 3,127 sq ft

BANK OWNED. REO. JUST REDUCED. Beautiful contemporary home features two Bedroom suites, one with private balcony. Gourmet kitchen is gorgeous and designer sharp with top of the line appliances and beautiful high end cabinets. Gleaming wood floors and recently painted. Ready to move into. Terrific location close to the best restaurants and cafes. SUBMIT ALL OFFERS REO VERY MOTIVATED

Sold: 10/08 - $782k (bank buy-back?)

Listed: 11/08 - $1,049,900

Reduced: 12/08 - $979,900k

Reduced: 1/09 - $949,900

Reduced: 2/09 - $909,900

Relisted: 2/09 - $909,900

Reduced: 3/09 - $874,900

Reduced: 3/09 - $849,900

Wow. Just wow. So much going on here, where to start.

First off, obviously, this is a bank-owned property. It's difficult to tell, but it looks like the previous owners bought a tear-down and built this place. Maybe they ran out of money, and we're assuming the $782k number is what was owed the bank.

If that's the case, dear Mr. Banker, why oh why the pricing games? An initial listing over $1mm? OK, a little greedy if you're only owed $782k, but in November the world was in the early stages of falling apart, so we'll play along. And, if they had been aggressive about cutting the price at that point, say to the low $900s, maybe they would have found a "greater fool". But now, this thing's in free-fall, and they are so behind the curve, it's laughable.

Seeing the "gas-station" pricing (why not just round to the nearest thousand?) makes us think that there's a 22 year old at the bank who's been given a list of REO properties and specific marching orders on when and by how much to reduce the prices. At the beginning, the reductions were coming every month like clockwork.

And, of course, no blog-worthy listing would be complete without the mandatory "re-list" - at the same price as when it was taken off ...

This is a new construction house, which has some appeal, although by the looks of the pictures, the interior's been done to a certain taste (not "neutral") which probably limits the buying audience. A typically tiny lot in a decent area in the 90069. Add it all up, and we still have a ways to go on this one. The stubborness of the bank here is clearly fascinating. Even if they were owed more than the $782k we're assuming, the time to cut and run on this may have already passed.

Friday Night Fights - Vol. I

OK, so it's technically Saturday morning, but I thought I'd "spice" the blog up a little with the newly-instituted "Friday Night Fights", to be posted on (or around) every Friday.

The "Fights" will showcase similar properties for sale - sometimes condos in the same building, sometimes homes with the same specs in the same neighborhood, who are duking it out for buyers.

And, as always, we'll find out some interesting facts about these properties that continue to expose the madness of 2+ years ago and opine on if/how delusional the sellers really are.

We'll be following up on these later to see which property raised its hand in victory and which hit the canvas.

So, without further ado, Let's Get Ready To [remainder redacted for copyright reasons] ...


"THE CHAMPION"
522 Norwich Drive (90048)
$975,000 ($803/ft)

2BR/2BA
1,214 sq ft
4,851 sq ft lot


On Market: 190 Days

Sold: 8/90 - $325k

Sold: 10/96 - $285k

Listed: 9/08 - $1.25mm

Reduced: 1/09 - $1.099mm

Reduced: 3/09 - $975k

We last featured 522 Norwich here, where we wondered about the viability of the "million dollar listings" (sorry agents who had your own reality show) for tiny houses as we descend to some level of reality.

Well, the price has been reduced again, although we're still in our favorite "death by a thousand papercuts" (yes, I will come up with a new analogy soon) mode here. This property was already behind the curve on price reductions, and continues to be so. Granted, the most recent price reduction was more than $100k, but as we non-followers of the "nominal headlines" know, $100k on a $1mm property isn't fooling many people any longer. To qualify for a high-limit conventional loan here requires approx $270k down and the property remains "affordable" to those with a $200k+ annual income. For a 1200 sq ft house.

And, not to keep beating a dead horse (but it's fun), look at the selling prices between 1990 and 1996. Yes, Virginia, you can lose money in the real estate market.

Assuming this seller didn't use the property as an ATM and/or doesn't have any peronal issues happening that warrant this pricing technique, it would seem like they have room to move lower. The listing description describes our favorite "upgrades", which we all just know are worth several thousand dollars (granite, stainless appliances).

"THE CHALLENGER"

554 Westbourne Dr. (90048)
$995,000 ($721/ft)
2BR/2BA
1,380 sq ft
3,831 sq ft lot


On Market: 4 Days

Sold: 3/89 - $240k

Sold: 3/98 - $285.5k

Sold: 10/98 - $310k

Sold: 4/99 - $385k

Sold: 5/02 - $599k

Sold: 12/03 - $755k (90% financing)

Just a couple blocks down from 522 Norwich in the same "WeHo West" neighborhood is this newly-listed property. As we can see, at least from the numbers, the specs are relatively similar. Westbourne is a slightly bigger property on a smaller lot. (For any readers who have seen either or both properties, please chime in on the merits/detractions.)

This property's listing history tells an all-too-familiar-by-now tale: little to no appreciation following the late 80s/early 90s bubble for almost 10 years, and the start of the bubble activity in the late 90s, culminating with large price jumps in the mid-2000s. As expected, this property appears to have been updated along the way, although it's difficult to tell when.

As compared to 522 Norwich, these sellers have started at the sub-$1mm level, but have seemingly less room to come down, given the high-$700k previous purchase.

Interestingly, both of these properties transacted for the high-$200k level in the 1996-98 timeframe. Just for fun, let's assume $275k was a "fair" price in 1997. Now 12 years later, and assuming 5% appreciation brings you to a "current" value of approx $500k. To be clear, I'm not suggesting that these places will drop to $500k in order to be sold, but given the pricing cycles we saw after the early 90s, would it be stretch to see them sell now in the $800k range and remain at that nominal value for the next 10 years (which is the value you get with 5% appreciation from 1997 to 2019)?

Norma Triangle Pt. 2 - Trifecta on Harland Ave.

Your friendly blogger has been under the weather recently, so this will be a quick update. Hopefully I'll be fully recovered in a few days and back to regular postings ...



9048 (on left), 9052 (right) and 9056 (no pic) Harland Ave.

9048 Harland Ave
2BR/1BA, 800 sq ft
$725,000
On market: 90 days (no price change)
Last Sale: 1973 (?)

9052 Harland Ave
2BR/1BA, 1005 sq ft
$749,000
On market: 90 days (no price change)
Last Sale (?): 1979 - $210,000

9056 Harland Ave
3BR/1BA, 1230 sq ft.
Listed 2/08 ($789k?)
Re-listed several times
Withdrawn 2/09


Thanks to a couple Anons who alerted us to these properties, including:

There was a for sale sign at 9056 Harland but it's gone the last I saw, and it was last being offered at $789K. It, along with 9048 and 9052, were a trifecta presentation early last year for an outrageous $3 million. No offers, so then these individual listings appeared. And, yes, I think the owner better reconsider the current asking prices.

In doing a little research, these properties do appear to be owned by the same person. PropertyShark shows the last sale(s) happening in 1973, although Redfin shows a last sale on 9052 Harland in 1979.

The two active listings reflect that both properties are being rented on a month-to-month basis.

I won't speculate about the motivations of the seller, but with last purchases in the 1970s, even given upgrades/renovations, you'd have to think these places are cash flowing nicely. There don't seem to be any additional "transactions" for the properties suggesting someone was using them as an ATM during the funny money times, so all things being equal, you'd assume the seller has room to move on the prices.

With 90 days on the market and no price cuts, sounds like the seller needs to get serious. Would it surprise anyone to see these ultimately go into the mid to low 600s (if not lower)? As a "reality check", a purchase price of $650,000 means a (pre-tax) monthly nut, including property taxes, of approx $3500. Anyone think these are renting for even close to that?

At What Price Reality?

955 N Vista St.
3BR/2.5BA, 1558 sq ft.

REDUCED! BANK OWNED COSMETIC FIXER! Great opportunity to buy this older charmer located in desirable W. Hollywood neighborhood. Close to both Santa Monica Blvd & Melrose Ave. famous shops, restaurants & businesses. Newer bathrms & some kitchen cabinets. Hardwd floors through out. Fireplace in living room, sep. dining rm, breakfast area in kitchen. Garage was converted into a game room. House has been re-arranged, buyer is to check for all permits. Needs TLC, sold "AS IS". See remarks for details

Sold: 7/98 - $288,000

Sold: 12/05 - $827,500

Sold: 11/06 - $1,200,000

Sold (Bank buyback?): 12/07 - $995,000

Listed: 8/08 - $815,900

Reduced: 1/09 - $759,900


There is so much going on with this I don't even know where to start. Maybe just listing some of the points is easier. And remember, we're talking about a small house on a typical but tiny lot in 90046, on what I think is a fairly busy street, since Vista actually merges into Gardner at Santa Monica, with a couple decent-sized condo buildings in your backyard.

1) Look at the price in 1998.
Our friends over at Westside Bubble always post some good charts from Case-Shiller and DataQuick illustrating the market cycles going back to the early 80s. You could argue that 1998 - maybe a couple years earlier - represented the low of the last cycle. Not that I think prices for a single family in a decent part of WeHo will drop below $300k, but if you take the 1998 price and add a reasonable 5% per year typical real estate appreciation, you get a number around $450k. Just sayin' ...

2) "Sold as-is", "Needs TLC", "The house has been 'rearranged'"???
Alarm bells going off all over the place here. From the pictures, it looks like there were some upgrades done - maybe the recent owner ran out of money. The problem is, how much will it cost to "fix"? Does a teardown even make sense here above a price of maybe half of listing?

3) Allegedly this place appreciated almost $400k in less than a year back in 2005-2006.
There have been a number of stories about appraisal fraud during the boom years. I would guess this falls into that category.

Back to one of the main themes on this blog ... who SHOULD be able to afford a place like this? Assuming it needs at least another $100k in improvements, not only would the buyer need $170k to put down, but the monthly cost (pre-tax) would be approximately $4700/mo, meaning somewhere between a $175-200k annual income to reasonably afford. That income level probably puts you in the top 5% of earners in the US. And you can afford this slice of heaven?