"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%).

Reality vs. Delusion

First, a tip of the hat to "Warchest" over at SMDM ... I should probably pay him a royalty every time I use some form of the word "delusion" when talking about pricing, since he really coined its use in this context. Warchest - put it on my tab!

One of our theses here at WeHo Homes - not that it takes a lot of smarts to figure it out (unless you're a delusional seller) - is that the wave of bubble deflation will look like this:

- Outlying areas hit. Check.
- Lower-priced "inlying" areas hit. Check.
- Condos in nicer neighborhoods hit. Happening.
- SFRs in nicer neighborhoods hit. Starting to happen but still in denial.

Here's an example of the last two events, and one that shows a contrast between two sellers. As we continue to say, be patient ...

1145 Larrabee St. #5 (90069)
$495,000
2BR / 1BA
870 sq ft
HOA: $326/mo

DESIGNER DONE CORNER UNIT CONDO! This ultra chic 2 bedroom 1 bath condo boasts loads of natural light, a beautifully updated kitchen with stainless steel appliances, wood floors and an in unit washer/dryer. The master is a tranquil oasis with french doors opening to a private balcony. The bathroom has been remodeled with top of the line materials. Wonderful location north of Sunset close to shops and restaurants.This is the BEST DEAL AROUND!

Sold: 7/90 - $185,000

Sold: 8/91 - $170,000

Sold: 7/98 - $85,000 (are we paying attention yet???)

Sold: 7/00 - $190,000

Sold: 7/02 - $337,500

Sold: 8/05 - $510,000

Here we seem to have a seller in touch with reality. We've already been seeing 2005 rollbacks and have started to see some 2004s. This unit appears to have been upgraded some since the prior purchase, so we may be into an early 2005 rollback with the listing price, which is probably a smart place to start. There are no signs of "distress" indicated (not a short sale or REO) from what I can find, so this seller has accepted that he/she will take a loss given the current environment. Kudos. Of course, we believe that we'll eventually get back to early 2000s pricing, so low to mid-300s is probably more reasonable, but time will tell.


559 Huntley Dr. (90048)
$1,995,000
4BR / 3BA
1,818 sq ft

Private & Gated, this Spacious Country English juxtaposes a modern interior w/ the charm of a Cottage style exterior. From the private courtyard w/ trickling fountain, Step into large scale rooms with vaulting open beamed ceilings, glass walls & a loft library. Spacious cooks kitchen with marble counters & stainless appliances. Step down master in the rear which opens to a sparkling pool & spa. Also a beautifully done detached one bedroom guest house plus bonus room perfect for a gym or office.

Sold: 6/12/08 - $1,830,000


No real comments here - the numbers speak for themselves. Of course, missing in the description is the fact that your property abuts the commercial establishments on Melrose. So you've got that going for you. Also, you're in competition with the larger, remodeled 551 Huntley a couple houses down, which has the benefit of a "nude pool" that we profiled last month.
No explicit signs of upgrades here, aside from the "flipper's double" of counters and appliances, so maybe some work has been done, but pricing higher than a year earlier? That's SO 2007 ...

Apples to Apples in "WeHo West"?

435 Westmount Dr. (90048)
$1,150,000
3BR / 1.75BA
1,344 sq ft ($855/ft)
5,400 sq ft lot

Just listed

Cozy Span bungalow set privately in an urban oasis. Enter thru gated arbor. Living Room features barreled ceilings, FP, hardwood floors & picture window. Open LR & dining room flows into custom galley kitchen which is perfectly appointed for gourmet dinners. 3 bds/1.75 bas. Both rear bedrooms have French Doors which open out to lush yard, with Zen inspired Koi pond. Lose yourself in the tranquility, only minutes from shopping, entertainment & restaurants.

Sold: 9/3/04 - $950,000

Yes, I know. Technically, I think we're talking "WeHo Adjacent" here. This property is on the cul-de-sac portion of Westmount (the larger spur, not the smaller one coming off La Cienega), and the WeHo boundary - I believe - cuts through Westmount in that area.

In any case, I thought this would be an interesting base case. We've been seeing - and predicting - 2004 rollbacks to be hitting the market. The description doesn't seem to indicate any major upgrades to the property since the 2004 sale, so this could be a nice comparison.

Despite the not-technically-WeHo-address, the house is in a nice area and looks to be in good shape. We can debate the merits of being a block from La Cienega, but given that you're a few lots from the end of the cul-de-sac, at least you're not bounded by a parking lot, like the properties at the end.

WeHo West

Lots of good comments recently. When I get some more time in the next week or so, I'm going to try and do a comparison of a few neighborhoods and take a look at some data to try and answer that $64 question of "where are we headed?"

In the meantime, how about some real estate porn? The "crown jewel" of our little area to some, a/k/a "land of the snobs" to others, the neighborhood known as "West Hollywood West".

In looking at some of the SFR listings in WeHo West, and thinking about that "where are we headed" question, it's difficult to get an apples-to-apples because, like its truly Western brethren in Beverly Hills or Santa Monica, there's been a whole lotta scrapin' going on in the past 10 years.

Enjoy ...

8822 Rangely Ave.
$2,595,000
3BR / 3.5BA
3,150 sq ft
5,000 sq ft lot

New Construction

Newer Contemporary Architectural Musm. Quality Master-Piece in Prime Western part of West Hollywood. A 2bed+2.5bth main house built around a decadent designer central courtyard connecting to large roof top patio/lounge with fire place. There is also a sep. 1bed. loft unit with multi functional use & its own private patio. Open floor plan enhanced by over 14' high ceiling & walls of glass. Superb example of Urban with indoor/outdoor living.

Listed: 8/5/08 - $2,795,000

Delist/Relist game several times until latest listing on 6/22.


330 Huntley Dr.
$2,475,000
4BR / 3BA
2,600 sq ft
5,100 sq ft lot

Newer Construction

Beautiful execution & superb quality unite to create this extraordinary 4 bed, 3 ba + den Med. residence. Located majestically on a cul-de-sac, this home has a spacious Frml Lv, Dining rm highlighted by a frplce, wide plank dk wd flrs & arched windows. The gourmet kit incl SS applnc & extensive use of cust tiles, fixtures & cabinetry. Adj to the kit is a spectacular den w/ coffered beamed ceilings & cust built-ins. (see private remarks).

Sold: 12/05 - $1,000,000 (assume scraped property)


8703 Rosewood Ave
$2,149,000
3BR / 2.5BA
2,391 sq ft
4,600 sq ft lot

Reduced 100 K !!!Exquisite Mediterranean home in one of the best West Hollywood neighborhoods, steps away from high end boutiques, great restaurants and coffee houses. 2 stories, 3 bedrooms, 2.5 bathrooms and family room .Built in 1997 and recently remodeled.The chef's kitchen and family room open to the backyard with new pool creating the perfect flow for entertainment. Professional appliances in kitchen. 2 car garage attached with driveway wide enough to accomodate another 2 cars .

Sold: 7/00 - $710,000

Sold: 4/05 - $1,500,000 (remodeled prior to this to justify 100%+ increase in 4.5 yrs?)

Listed: 5/14/09 - $2,249,000 (if remodeled prior to 2005 purchase, up 40% from a date we've seen prices roll back to in some areas)

And by "Rare", You Mean Bloody??

1233 N. Flores St. #204
$359,000
1BR / 1BA
744 sq ft
HOA: $330/mo

Short Sale

RARE OPPORTUNITY TO OWN THIS FABULOUS CONDO IN THE HEART OF WEST HOLLYWOOD * THIS BEAUTIFUL TREE LINE STREET CONDO HAS IT ALL * WALKING DISTANCE TO RESTAURANTS, THE MARKET, SHOPS AND NIGHTLIFE CLUBS * GREAT SINGLE LEVEL FLOORPLAN WHICH IS HIGHLY LEASABLE FOR AN INVESTOR * CEILING FAN * A/C * INSIDE WASHER/DRYER * DISHWASHER * THIS IS A DREAM HOME AND PRICE TO SELL QUICKLY * THANK YOU FOR SHOWING!

Sold: 5/98 - $75,000

Sold: 7/01 - $174,000 (and people say the bubble didn't start until 2003?)

Sold: 11/05 - $385,000 (yep, 100%+ in 4 years sounds right)

Why, why, why? Why, when I'd prefer to focus on SFRs or nice and/or unique condos/townhomes, do listings like this come up to bring my cynical side to the surface?

This is one of several "rare" listings I've seen recently. No, "rare" is when the price drops to a level where it's actually "highly leasable for an investor". You know, investors are people who generally like to make money over a period of time?

At the current pricing level, monthly payment would be around $2,300 (5.5% with 20% down). This place looks to be in a nice area, but to think you're getting more than $1600 or so for rent in this market is laughable. I've seen decent 2BRs at $1800-2000 on Craigslist recently. So, yes, by all means, investors come forward!

Of course, we have another case of a seller trying to walk away with minimal losses in this short sale situation. This property sold for the high $100s in 2001 and I wouldn't be surprised to see it back to that level (not nominally, but inflation-adjusted) in the next several years.

I'd say the odds are high (as in, over 100%) that this is foreclosed on over the next month or so. Will be interesting to see where the bank starts its listing.

Marketing 101 - Clues For Sale

972 N. San Vicente
$1,295,000
2 Units
Lot Size: 6900 sq ft

Two Original Craftsman bungalo's on one lot in prime West Hollywood location. Front house approx 1400 sq ft. Back house approx 900 sq ft as well as a large Storage rental area. Surrounded by beautiful speciman trees and flowers. Perfect for a developer to convert up to 7 condo's. Newly developments within area selling quickley. Time is of the essence, this is a property you do not want to pass up !! Co-Listed


Last Sale: 6/10/05 - $1,220,000

A couple of things here. First, the petty side of things ... there's been a fair amount of ongoing discussion over at SMDM about the level of (ahem) intellect in the REAL-tor community. I personally do believe that US American REAL-tors are like any other profession - plenty of bad apples among the good. However, each time I see a listing like this - replete with misspellings - I am reminded that this is a "profession" one can enter through a multiple choice exam.

Moving on ...

The more interesting thing here is another seeming act of delusion. I won't continue beating the rollback horse, but I'll give it the whip slightly here ... look at the 2005 price. Should we really be above that level?

And, I won't pretend to know anything about developing properties and knowing the costs involved, but, despite the spelling, to say that "newly developments are selling quickley" is just a joke - how many examples have we pointed out of languishing new condos that have been forced to cut their prices significantly - and are probably still overpriced.

Point being, I do think you need to be pretty smart, and have a lot of cojones, to be in the real estate development game. During the bubble, I'm sure a lot of people got "in the game" who didn't have much skill, but got lucky with the huge run-up. Many of those have (or will have) busted out, never to return. I'm guessing the developers that are left - although they may have taken some lumps - are those who've been through cycles before and now have even a sharper eye on the financial side. Don't we think they're paying attention to the market, and the current "realistic" levels?

Maybe someone with RE development experience can chime in and tell me that I'm off base and show the group how the numbers would work for a property like this ...

Paging Willard Scott ...

A quick post here in response to an Anon's comment:

Have you thought of devoting a post to the longest-running listings?

Well, let's see ... anecdotally, a 6-month supply is historically considered a "balanced" housing market, meaning 6 months is the "average" time on the market for a property if you ex out recent years.

So, in looking at stats on properties listed longer than 6 months in WeHo:

SFRs: 16 (out of approx 75 total on market).

Condos/Townhomes: 46 (out of approx 250 total on market)

In each case, roughly 20% of the properties have been on for more than 6 months.

The "winners" ... errr ... "losers"? A/K/A the "WTF?!?" awards ...

SFR:
901 N. Orange Grove Ave
$594,000
1BR / 1BA (sq ft not listed)
Listed: 1/3/05 (563 days on mkt)
Reduced multiple times from $699,000 to $594,000
Last Sale: 1/05 - $579,000

Condo/Townhouse:
8380 Waring Ave #103
$599,000
1BR / 2BA, 1382 sq ft
Listed: 7/15/07 (705 DOM)
Reduced many times from $749,000 to $599,000
Last sale: 8/02 - $365,000

I actually feel like it's a waste of time to even focus on listings like this, since there's clearly no acceptance of reality.

In the SFR case, we know that we're at least at 2005 rollbacks, if not 2004, so any price above the last sale is out of line with current market. Forget the fact that we're talking about a 1BR/1BA bungalow.

In the condo case, we don't know if there's been a home-as-ATM situation. If not, get your listing off the market - you have room to drop the price to current market if you're really serious.