Levitating

While the world wrings its hands over the financial crisis, some people just grab $7m houses. It's as if they're levitating up above it all.

This week, the large, ocean-view estate home at 700 8th changed hands for a cool $6.9m.

The sale came without warning, in that the listing never went "pending" – it went straight to "sold."

Here's a big, but not gargantuan, home with 5br/5ba and 4925 sq. ft.

The lot's almost twice that big at 9950 sq. ft., almost enough to qualify as the "grounds" for the home.

MBC must admit, we were skeptical about the most recent $7m price after it came down $1m from start. (See "One Cut: One Million.")

But we never questioned the beauty of the home or the location. If you want the Hill Section and you want those big ocean views, this one is truly up there in one of the prestige pockets with awe-inspiring, big-blue-marble views.

Is our market just a little bit different? Yes, in parts.

Open Forum (9/29-10/5)

It's a great time to be distracted.

Financial system melting down? Not to worry:

• The Fall TV season has launched with gusto!

• The presidential campaign is heating up. Just 5 weeks to go! Palin vs. Biden on Thursday!
  

• Baseball playoffs, NFL, college football!

In that spirit, MBC will note that 2 of our town's homes recently hit the radar of The RealEstalker... (as always, click on any highlighted address for more pics & details via Redfin):

204 19th (pictured) is a walkstreet home near downtown, built in 2006 and pretty much maxed out (4br/4ba, 4260 sq. ft.). Purchased new in Aug. 2006 by Dodgers starting pitcher Derek Lowe (noted by Realestalker in this story) for $5.0m. Now offered for $5.7m.

Word to the wise: Let's try to keep Mr. Lowe happy right now, as he faces the prospect of some gentlemen from Chicago wearing pinstripes who hope, very much, to hit balls he throws, while he, and we, would prefer the opposite.

228 34th is on a walkstreet uptown, 1 door west of Highland. Not the hugest, with 3br/4ba and 3450 sq. ft., but it's got a roof deck (impossible on newer homes) that absolutely rocks. Owned by KC Chiefs tight end Tony Gonzalez, as Realestalker notes, at some length. "Celebrity Beach Home!" cries the listing. Offered at $3.999m to start.

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As always, please use the "Open Forum" thread for news clips, off-topic questions & discussions of (virtually) any nature. And keep it clean.

On this post or any other, any day, use the "Email this" link at the bottom to let a friend know about MBC. The system, provided by FeedBurner, promises no spam to either party.

Goodbye to An Old Friend

When this blog was just a couple of weeks old, we made the acquaintance of 4419 Highland.

It's a new home in possibly the worst location west of Sepulveda – at 45th/Highland, across from the gas station, right on top of the busiest street in town other than Hwy. 1. We took to calling the home "The Gateway to Manhattan Beach," recognizing that it's the first (or last) home commuters see at the northwest edge of town.

After all this time, the home has not sold. We've confirmed that it is now rented out; the last posted rental price was $5,800/mo. (One informant sent a photo of a parked U-haul unloading as folks moved in.) Curiously, the listing remains active at this writing, with DOM just days short of 500 by our count.

When first we wrote about the Gateway home (see "Builder Rethinking Dubious Lot?," March 2007), it drew our notice because the builder was trying to unload it on Craigslist with construction newly under way. The catchy title of the ad: "Great Deal $200k in Equity." The price then – about $1.4m:

Price for Land, Survey, Plan check fees, Permits, Approved Design,
Demolition, Grading, Utility hook-up, Retaining walls and foudation is
$1,089,520

The balance of the construction contract is $309,980.

$1,399,500 to complete. Comps are in the $1.6 million to $1.7 million range.

True to that estimate of market value, the completed home hit the market at $1.695m in early June 2007. But, of course, no one ever cashed in that $200k in equity.

The home's got 4br/3ba and 1975 sq. ft., so it began at $858/PSF. Over a long period in which two listing agents lost the gig, the price dwindled down to $1.265m with the third. That put it down $430k/-25% from start, and down to $640/PSF.

Even that sub-$1.3m price had no takers. Part of the problem was location, part of the problem was the odd, trapezoidal lot, part of it was the oddly shaped rooms and curious layout decisions in the custom design.

Someone said early on in the comments that 4419 Highland would make a great rental. And there it is.

We still can't forget the breathless enthusiasm of that first agent, who touted the home as the "Times Square of the South Bay" and "three levels of bliss!"

As we wave goodbye for now, let's revisit a couple of highlights of recent months:

• MBC had accident-scene photos from a late-night crash at the corner of 45th/Highland that took out a fire hydrant, creating a 3-story geyser at the front of the property (see "A Crash at 45th/Highland," Oct. 2007);

• We noted when the all-creme-colored stucco got its modern green/brown paint job ("Freshening Up at 45th/Highland," Feb. 2008); and

• It was news when the home was first offered as a rental ("45th/Highland for Rent," April 2008 – this one has more pics and a complete history on the property back to 2005).

For now, so long old friend, till next we meet.


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4th Qtr. Often Quietest

Football and basketball feature exciting fourth quarters.

Real estate sales – not so much.

In Manhattan Beach over the past 20 years, the last 3 months of the year have seen fewer sales recorded than any other quarter. (To be fair, though, based on total sales over 20 years, the 4th is nearly tied with the 1st quarter.)

According to figures from Dataquick, processed by MBC, the percentage of all sales recorded in a given year that were recorded in the 4th quarter averaged 22%.

In an even distribution, of course, 25% of all sales would close in each quarter. Both the 1st and 4th quarters averaged 22% over this period.

In the past few years, as our graph here shows (click to enlarge), the 4th has been even more of an afterthought. From 2004-2007, the number of sales in the 4th was 20% or less of the yearly total.

Last year, the reason for the 4th's anemic performance was obvious. The credit crunch spooked the local real estate market in a palpable way in late Summer. (The headlines then became too much to ignore.)

It was a big contrast to the Great Spring Rally of 2007, a flurry of sales in the first part of the year, particularly March through June.

Once the slowdown took hold, the percentage of sales in the 4th quarter of 2007 hit a record low for 20 years at 15%. The previous low was 18% in both 1994 and 2004.

We figure some of you are wondering which quarter is best, if the 1st and 4th both average 22%. Over 20 years, the Dataquick numbers tell us that the 2nd is best (April-June, 29%) and the 3rd (July-Sept.) trails just a bit at 27%.

Why do these data matter now?

So far, 2008 sales in MB are well off pace from 2007. (More on that later this week.) And 2007 was the slowest in 20 years. (See "Slower, Slower, Slower" [covers 2000-2007] and "Maybe It Can't Get Worse" [covers 1988-2007].)

Now the credit markets are locked up, banks are failing, Fannie and Freddie have been socialized and some kind of additional bailout related to bad mortgages is taking shape.

If demand craters again in the 4th quarter this year, it won't be a surprise, but in matching it up against another sluggish year (2007) with a horrid 4th, we'll have something to measure against.

Weekend Opens (9/27-9/28)

Options are growing each week.

We have a new high-end listing on a west-of-Highland walkstreet and two new offerings right near downtown.

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."

We're asking MBC readers who visit these homes to also report back. Tell us what you see, what you like, what you don't like, what you'd change if you owned a particular home, and so on. Use the comments here to discuss the homes we've highlighted.

As always, click any highlighted address below for more pics & details via Redfin.


Hill Section

As we noted the other day in "Down Hill," 808 Highview (pictured) is one of a few recent Hill Section listings to go into escrow and come back on market. This one offers 5br/5ba, 4125 sq. ft., a secluded location near downtown and nice views. Currently at $4.850m. Open Sun. 1-4pm.

930 John is a new home that has dropped almost a million bucks in 6 months. It's huge and offers city views from east of Poinsettia. Now at $3.999m (-$996k/-20%). Open Sat. & Sun. 1-4pm.


Sand Section

How about a couple high-end listings on the same block, barely north of downtown, on walkstreets west of Highland?

215 19th (pictured) is a big (4br/4ba, 4250 sq. ft.) and newer (2002) home that starts at $5m.

Delightful kitchen and warm family spaces. Ocean views are automatic on this block. Open Sat. & Sun. 1-4pm.

220 19th is slightly bigger (5br/4ba, 4325 sq. ft.) and than the new listing above and just a year older (2001).

It has also adjusted a bit since starting at $5.2m in early July. Now at $4.850m (-$350k/-7% from start). Open Sun. 1-4pm.

333 3rd is Spanish on the outside, modern on the inside – a bit jarring. But that street-to-alley lot in the South End is nice. Priced at $1.999m. Open Sun. 1-4pm.



Tree Section

You'll recognize much about 2600 Poinsettia, newer construction (2000) with 4br/4ba, 3200 sq. ft. But Mrs. MBC is looking past the cookie-cutter factor and grooving on the atmosphere. Custom touches reflect a family's love for the home, making it her pick for the week.

The quiet, private patio, with stone and lush plantings, is a well-realized outdoor living space with an "outdoor kitchen" featuring a terrific BBQ.

Yes, the location is bit of a concern – this block of Poinsettia is a little island between Marine and Ardmore. That and a few other factors (see your newspaper) may make the $1.899m start price appear ambitious. But sometimes you just love a place. Open Sat. & Sun. 1-4pm.

645 12th is a huge (5br/6ba, 4750 sq. ft.) new home near the top of the hill on 12th St. Nice ocean and PV views, including from the large, 3rd-story patio with fireplace. Starts at $4.499m. Open Sat. & Sun. 1-4pm.

512 12th (pictured) was purchased in 2006 as 1148 Ardmore for $1.360m. That version of the home was chopped up and suffered from an 80s vibe. The current owners partly gutted the home, reconfigured it and remodeled substantially.

The space is not huge – 3br/3ba and 2300 sq. ft., but there is a bonus, large deck off the kitchen. The location – fronting Ardmore, looking out over Metlox, has to be what you're looking for. There is a lot to be said for practically being downtown.

Start price is $2.149m, about what you'd pay for brand new homes with 1000 sq. ft. more living space in other parts of the Trees – but then, this feels kind of Sand Section-y. Open Sat. & Sun. 2-4pm.

591 35th is pushing for $1.650m for a somewhat updated cottage. Offers 4br/3ba and 1760 sq. ft. Open Sun. 1-4pm.

Down Hill

News of the Hill Section's recovery from a late-Summer slump may have been exaggerated.

One month ago, to the day, MBC featured 4 Hill Section homes that had all gone into escrow within days of each other. (See "A Hilly Hat Trick.")

Now, 3 of those 4 are back on the market after failed escrows:

• 910 2nd (pictured, 5br/4ba, 3400 sq. ft.) is back at $2.895m;

• 913 8th (4br/3ba, 2925 sq. ft.) is back at $2.249m; and
  

• 808 Highview (5br/5ba, 4125 sq. ft) is back at $4.850m.

After that story last month, just 1 Hill Section listing, 1031 Boundary (a 3br/3ba, 2950 sq. ft. home we called "funkytown, alarmingly near to Sepulveda") went into escrow – at $1.499m. (It was featured in "A Nice Little Burst" about 2 weeks ago.)

Otherwise, it's been the sound of crickets all over the Hills, MB's prestige region.

Surely this has something to do with the credit crisis and economic turmoil all around us.

In our town, buyers tend to come pre-approved, with cash in hand, so dropouts can be all the more surprising.

What's happening to financing, or buyers' attitudes, or sellers' commitment to proceed to closure in this environment?

In the Hills of MB, the answers to those questions are coming up, quite simply, as zeroes.


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UPDATE: The original story referenced a fourth home, 914 2nd, whose status was shifted to "withdrawn" rather than "sold" when, apparently, escrow closed, creating the impression that the escrow had failed.

MB Market Update for 9/15/08

We hope you'll bear with us as we unveil the somewhat delayed MB Market Update spreadsheets for 9/15/08. They are now available for download by clicking here or, any time, by using the link at the upper-right corner of the front page.

Inventory of SFRs west of Sepulveda stood at 110 on Sept. 15, inching back near 116, the highest figure MBC has recorded in 18 months of public market tracking.

In the first half of the month, we saw 16 new listings, 10 sales (new escrows) and 3 cancellations. (We are actually aware that 2 of the 3 cancellations came back as re-lists after Sept. 15, but the spreadsheets show them dropping out of action.)

The most noteworthy trend in this update was probably the re-pricing of several listings in the Tree Section in the $2m+ segment. Several listings that started in the mid-to-high $2m range are now pushing down toward $2m even.

That can be good strategy. Once it became the lowest-priced of the $2m+ listings, at $2.199m, the new modern at 560 36th made at deal, down at least $800k from start. (See “Not Holding Out.”)

Leapfrogging down afterward: 3404 Pine (start: $2.45m, now: $2.175m) and 757 30th (start: $2.699m, now: $2.199m). Several others are now clustering near $2.3m, from start prices around $2.5m.

We now have another Hill Section listing that has dropped more than $1m – 218 N. Dianthus is now at $5.695m after a start in March at $6.750m (now down $1.055m/-16%).

Among closed sales, the biggest cut percentagewise in this period was 25% on 794 27th (see “Close the Books on 794 27th”). With a closed sale price of $1.950m, the seller actually went $550k below the May 2006 acquisition price – a symptom, in part, of overpayment back then, and of course a slower market now.

Three Sand Section listings closed, all double-digits below their start prices – 125 31st came in at $3.150m (-$399k/-11%), 224 23rd Pl. came in at $1.525m (-$274k/-15%) after just about 2 months on the market, and the nice remodel offering only 2br to go with 2650 sq. ft. up at 448 27th closed at $1.725m (-$364k/-17%).

On a brighter note, two lower-priced Tree Section listings came in closer to their starts – 1412 Elm closed for $1.250m (-$135k/-10%) and 3513 Oak, near Rosecrans and Barnabey's – no, wait, Belamar! – took $990k, down just $9k/-1% from asking.

Open Forum (9/22-9/28)

It could be a coincidence, but this is the week that a couple of listings took big hits.

This being the Open Forum kickoff, your blog author gets license to mention a Hermosa listing.

First, an MB Hillie: 1015 Boundary Pl. first went on public offer in May. This 3br/3ba, 2400 sq. ft. home on an alley started two dimes short of $2.5m ($2.480m).

The home was the putative "winner" of an MBC poll comparing 3 listings, entitled "Who's Most Delusional?" The listing cleaned up, garnering 52% of the vote.

There were no takers. After 4 months, Boundary quit. Monday, it returned at $1.759m. That's a sudden cut of $721k/-29%. We're going to take that as a sign that someone finally told the sellers they were delusional.

Next, an MB-adjacent Hermosa premium property: 3410 Hermosa Ave., a bit of a landmark home if you know North Hermosa, on a big 5,000+ sq. ft. lot, started quite near $8m ($7.9m) in mid-August.

All of a sudden: POOF! went $3m. It's now at $4.995m.

Startling. But as it turns out, the discount is not, in fact, a sudden correction of 37%. The difference is that now you don't get the basketball court (or the adjoining lot).

At least this makes the home more, achem, affordable.

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UPDATE: The original version of this story did not account for the change in land offered with 3410 Hermosa. We'll stick to MB.


As always, please use the "Open Forum" thread for news clips, off-topic questions & discussions of (virtually) any nature. And keep it clean.

On this post or any other, any day, use the "Email this" link at the bottom to let a friend know about MBC. The system, provided by FeedBurner, promises no spam to either party.

We Won't Forget

The cascade of big, bigger and then even bigger financial market news over the past month has been shocking and will be impossible to forget.

We'll remember that this was the time when the housing bubble's burst started to lay waste to our financial system.

For 2 years or so, the lenders who pushed the envelope to expand credit beyond all reasonable bounds have been teetering and falling. (See the Mortgage Lender Implode-O-Meter.)

More recently, the punishment started to rain on firms that midwifed the credit bubble behind the housing bubble. Suddenly, those "innovations" that enabled easy credit, and big profits for Wall Street paper-pushers, don't look so smart.

To make a spectacularly complex story simple, new ways of packaging mortgages wound up hiding information that might help place a future value on them, while the risk in those packages – thought to be low, but that was wrong – was spread out all over the globe. Those bundles of mortgages are worth less now, but how much less? No one knows, and almost everyone has a piece of them.

Everyone has a piece – that's even more true now after the government takeovers/bailouts/rescues/guarantees of Fannie, Freddie and, now, the whole damn mess of toxic waste loan packages. The starting price of the new Mortgage Superfund to the U.S. taxpayers is $700 billion. Add the other bailouts and loan guarantees made since Spring of this year, and we're all in for over a trillion dollars. (A trillion is a really big number.)

We probably won't forget thinking this thing could be solved for only a trillion dollars.

There are pros and cons to this vast nationalization/socialization of the housing bubble's aftermath. It might achieve its goals. (That's up for debate.)

But we definitely won't forget who was in charge when this nationalization happened – one of the most dogmatic free-marketeer administrations ever in Washington, D.C., forced to suck it up and go pinko in its waning days.

Is the worst behind us? Will all the fixes work? Or are we all now about to fall over the cliff?

Your blog author doesn't know and is not paid to know. It's just clear that this is a time to take stock, so we can later look back.

And no, we can't forget this feeling that every time a big, bold solution comes along, some new monster is around the corner.

Weekend Opens (9/20-9/21)

One glance at this week's Beach Reporter list of opens, and we think you'll agree: Now the inventory is really growing. At least what's showing is growing.

There's plenty of new stuff in the Hills and Trees, but a curious dearth of new opens in the Sand Section. Could it be AVP syndrome?

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."

As always, click any highlighted address below for more pics & details via Redfin.

We're asking MBC readers who visit these homes to also report back. Tell us what you see, what you like, what you don't like, what you'd change if you owned a particular home, and so on. Use the comments here to discuss the homes we've highlighted.


Hill Section

Sometimes you can tug at Mrs. MBC's heartstrings and get a nice little response.

So when the listing agent got a little personal – noting that he'd raised his two daughters at 1042 1st over the past 5 years – she saw that line about it being a "Special family home" as more meaningful.

When she saw that the builder was one of her faves, she started leaning toward supporting it.

And then, going thru the pix, she was hooked. 1042 1st is Mrs. MBC's pick for the week.

Here's a darling, huge home (5br/5ba, 4800 sq. ft.) that has been completely updated – so it's easy to look past the 1992 vintage.

Surprisingly good ocean views from the top of 1st St. Be aware, the location is very near to Sepulveda.

It's clear from the copy that the agent thinks the world of his home. It starts now at $3.495m. Open Sun. 1-4pm.


407 Larsson will be considered by the same crowd looking at 1042 2nd, or any of the other dozen-plus Hill Section listings above $3m. It's much newer (2005) and a bit bigger (5br/6ba, 5000 sq. ft.). No views, but a nice yard. This one also starts lower – at $3.150m – and closer to the acquisition price ($2.890m in Nov. 2005). Open Sun. 1-4pm.


Sand Section

The only "new" open in the Sand is actually something small and old. 131 Kelp was listed starting in mid-February of this year, and hung around for 4 months. The timing of its cancellation and return might suggest it was rented out, or used by the owners, for the Summer.

The little 2br/2ba, 1400 sq. ft. cottage, surrounded by bigger buildings, is up now at $1.049m, a trifle below the $1.095m price earlier this year. Open Sun. 2-4pm.

424 5th is a "sweet vintage beach cottage on a flat South End walk street with enough indoor/outdoor living space for the whole family." That's what Mrs. MBC had to say a few weeks back. It's still at $2.399m. Open Sun. 1-4pm.


Tree Section

2622 Pacific looks a bit like a large starter, a remodel of a 1946 cottage now with 3br/3ba and 2300 sq. ft. It's got a beachy feel, though a compromised location.

This one tried last year at $1.699m and slowly cut to $1.599m, but those prices were always out of kilter. (In June 2007, we noted the case of a smaller neighbor, 2804 Pacific, that came on at $1.399m at the same time. That one sold quickly for $1.420m. See "Price War Starting on Pacific?")

2622 Pacific canceled rather than adjust its price last year. It's up anew at $1.299m, which is substantially more realistic. Open Sat. & Sun. 1-4pm.

2907 Pacific, a cute, remodeled starter just 400 sq. ft. smaller than 2622 Pacific, is just down the block, with a reduced price of $1.149m after 100+ DOM. Open Sun. 2-5pm.

1801 John is quite large (5br/4ba, 4000 sq. ft.) and very nicely located. (John!) It's priced near the pinnacle of comparable listings in the Trees at $2.850m. Open Sat. & Sun. 2-4pm.

848 14th is an ambitious, big (5br/5ba, 3500 sq. ft.) new home on a hill overlooking the lower soccer fields by Pacific School. It's also pushing the ceiling among new construction in the Trees at $2.899m to begin. Open Sat. & Sun. 1-4pm.

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UPDATE: The original story made reference to 1042 1st being purchased 5 years ago for $1m. In fact, that was the price on an unrecorded land contract of sale from 1993 that was posted 5 years ago. We are happy to correct the record.

A Couple Shockers

This week, a couple of sales closed (good news!) with sale prices that will surprise to the downside.

Down at the much-discussed flat South End walkstreets (see "Quiet Walkstreets"), the one listing to make a deal since May was 500 7th (pictured).

It was listed as a 4br/4ba, 3100 sq. ft. home, though one of the "bedrooms" was fishy – currently a living space off the kitchen and dining room, not easy to see as a BR.

The listing began at $3.195m on June 3. Almost instantly, there was a deal – verbal, not formal. And why not? The 7th St. walkstreet is one of MBC's "Great Streets."

Alas, that deal did not happen. After a couple months, someone else came along.

And you might say they got a steal: the sale closed for $2.650m this week. That's a substantial chop of -$545k/-17%.

Here's an interesting case of a start price that did not seem, on its face, to be over the line. (Hence the immediate, though failed, deal.) But the sellers moved big, and moved quickly (at only 2+ months, 73 DOM) when a new party came along in order to make a deal possible.

A different situation is presented by 621 Marine.

This was a one-year-and-out situation, and everyone expects sellers to take a hit for a short-term hold. (Job transfer, we first heard.)

The home is spacious (5br/4ba, 3100 sq. ft.) and extremely attractive, done mostly in a Spanish style with delightful living spaces, lots of light, a custom feel, a decent yard, and much, much more quiet than you might expect from an address on Marine.

In March 2007, the buyers paid $2.436m.

This week, they sold it for $2.150m.

That's a rather sudden decline in value of $286k, or a drop of 12% over 18 months.

It would appear that the sellers who are making deals these days are not holding out at all. They're taking seriously the offers of buyers who come in well below list. Whatever it takes.

Open House Madness

This is a week that could stand a little levity. So here goes.

Tell us your strangest open house stories.

Realtors, buyers, neighbors, looky-loos – you're all invited to share. What have you seen that was at least a little bit off, funny, surprising, even disturbing?

We can offer 3 quick examples:

• Open house visitors were instructed that 2 back bedrooms of a multi-million-dollar home were not available for inspection. Serious buyers might get the chance to see them, but perhaps not till escrow closed. The reason, it turns out: One owner, not a fan of the sale or the opens, was hidden away in the back rooms monitoring the open houses via video cameras.

• Early visitors to one recent open who visited the upstairs bath were able to note, quite readily, that the agent holding the home open had, evidently, not had the chance to "go" before getting to the house. Also called into question – the adequacy of that bath's fan. Whew!

• Dropping in on a recent FSBO, tourists may have been surprised to find a total lack of the usual open-house atmospherics. The family was home. A teen and a baby, plus mom – no realtor. They were doing what they would be doing on a weekend afternoon – violent video games, diaper changes. Visitors were simply in their world for a few minutes... a different take on the notion of an "open house."

So that might kick this thing off.

From the agents' perspective, oh, we know open-house visitors can be bad. Very bad. They can be strange and disrespectful. There's another wellspring there.

We're not expecting big treatises or over-the-top horror stories. But we know you've got something to say. Have at it.

Why Sell When You Can Rent?

The slow pace of sales is prompting some MB sellers to offer homes simultaneously for rental and for sale.

A few are even new homes that clearly were never meant for the rental market. There are 3 active SFR listings west of Sepulveda meeting that description, and 4 more newbies that we're aware of that have already gone rental in recent months. You gotta do what you gotta do.

As always, click any highlighted address for more pics & info via Redfin.

New Homes Offered for Sale & Rent

815 2nd (pictured) – a large (5br/6ba, 4550 sq. ft.) new home with ocean views and some delightful little rooms, good finishes. Started at $4.799m in February, now at $4.275m and offered for rent at $15,000/mo. (Also the subject of an MBC pricing poll – results story here.)

332 20th – a plush and gorgeous, large new home (5br/5ba, 4200 sq. ft.) up near the top of the 20th St. walkstreet. It's got class and huge ocean views. Began at $4.795m in January 2008, cut a bit, went dark (we think it was rented for the Summer) and has now returned to the market at $4.154m and offered for rent at $15,000/mo.

4419 Highland – the "Gateway to Manhattan Beach" began last year at $1.695m and drew no interest. Has been priced at $1.265m for a few months. Rental rate is down from $6,500/mo. to $5,800/mo.


Other Active Listings for Sale & Rent

923 1st – the strange, huge ocean-view home we've mentioned several times (see "Unpredictable" for our walk-through review) began at $7.995m and has been priced as low at $7.150m. With a new agent, it's priced now at $7.350m and offered for rent at $18,500/mo. (was as high as $22,500/mo.).

114 N. Poinsettia – a new "Andalucian" home built in 2007 and offered first at $7.750m in May 2008, recently canceled and re-listed at $6.995m. Offered for rent at $16,500/mo.

717 10th – since this large, modern home hit the market in July, it's been priced at $3.850m and also offered for rent, furnished, for $14,000/mo.

312 20th – this sizable (5br/5ba, 4100 sq. ft.), 10-year-old beauty just hit the market at $3.599m and is offered, at the same time, for rent at $11,500/mo.

3210 N. Ardmore (pictured) – just like the previous two on this list, this good-sized home (5br/4ba, 3500 sq. ft.) hit the market simultaneously for rent and sale – buy for $1.999m or rent for $7,500/mo.

612 11th – this home on an odd "flag lot" recently returned to the market after, apparently, a failed escrow. Offered at $1.199m and for rent at $4,500/mo. (short term). That list price, by the way, is $76k below the price the current owner paid in a bidding war last year. (See "Maybe They Lost the War.")

We would also note that an off-and-on listing spanning the past 2 years is 3200 Pacific, a fairly giant (double-wide) and imposing home, is off the market now but offered for rent at $7,900/mo. The initial, stratospheric price was $3.9m and the last price we saw this year was $3.199m in early 2008.


Homes That Rented Instead of Selling

769 33rd (pictured) – a new home first offered, pre-completion, at $4.5m; later cut to $3.950m. The 6br/4ba, 5000 sq. ft. home is on a nearly double-wide lot (7800 sq. ft.) and features an 1100-sq.-ft. master suite. It vanished, unsold, from the MLS, and appears to be rented out. (Not confirmed.)

3305 Laurel – was built by the same builder as 769 33rd, the home next door, and lingered more than 300 days. (Laurel was on the market before 33rd was completed.) It began at $3.75m and slowly cut to to $3.29m before going rental – our information is that the rate was $8,500/mo. For what it's worth, this home was featured in a pricing poll of sorts by Curbed LA (see MBC's story: "LA Doesn't Know MB," which asks who really knows the value of MB new construction – locals or out-of-towners).

3413 Pacific – this was a new home that never hit the MLS but was offered for rent at $9,500/mo. No recent sale has posted. Given the location in clear view of the refinery, we inferred that the builder knew it would have a very hard time selling.

1144 Elm – a new home we first featured in November 2007 because it was the first new home in the Trees we had seen start below $2m in quite a while. (See "First Newbie Under $2m.") It was last at $1.879m but quit in April 2008; we assume to go rental, since no sale has posted.

1308 Elm – this was "Cutie," a little cottage with some bonus space that hit the market at $1.199m and prompted the question from MBC: "How Fast Will Cutie Go?" Turns out, it went quickly (18 days) – as a rental, at a reported $4,500/mo. (See "Cutie's Gone, Not Sold.")


A Recently Sold Home Now Up for Rent

This doesn't speak to the market one way or the other, but it caught our attention nonetheless.

117 7th – is a Strand-adjacent, newer, 2br/3ba, 2350 sq. ft. home that was a minor sensation when it hit the market in late June. They wanted $4m and got $4.325m after multiple bids. Turns out you don't have to pay that mortgage – just rent of $11,900/mo.

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Open Forum (9/15-9/21)

It's no good for anyone to see giant firms vanish, get engulfed or go BK.

In the financial realm, we're up to an unlucky 7 this year so far:

• Countrywide
• Bear Stearns
• IndyMac
• Fannie
• Freddie
• Lehman Bros.
• Merrill Lynch

Most of those in the last week or so. Something's afoot, don'tcha think?

The media try to tell you who's next. What about AIG's restructuring? How about WaMu?

But the truth is no one knows.

The mucky-mucks just want to talk about "confidence." Tonight's AP dispatch:

The American people should remain confident in the "soundness and resilience in the American financial system," [Treasury Secretary Henry] Paulson told reporters at the White House.

And we should, indeed, be confident that there will be a financial system of some kind in the future.

The only thing that's clear now is that credit is not getting any looser any time soon. And, of course, that affects real estate everywhere.

The players to watch are Fannie and Freddie, under new ownership (kinda). They may be subject to the whims of the next president.

That's a long way off, though. Lots of pain, unwinding and loss-taking till then.

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As always, please use the "Open Forum" thread for news clips, off-topic questions & discussions of (virtually) any nature. And keep it clean.

Finally, on this post or any other, any day, use the "Email this" link at the bottom to let a friend know about MBC. The system, provided by FeedBurner, promises no spam to either party, and there are laws about that sort of thing.

Close the Books on 794 27th

If you overpaid for your home, the market has ways of telling you.

Twice this year on Pacific Ave. in the Trees, the market has told recent buyers that they goofed when they bought in.

This past Spring, a one-year-and-out situation presented itself at 3412 Pacific. Folks had paid $1.491m in January 2007 for this 3br/3ba, 2200 sq. ft. home on a corner with a view of the refinery.

Really, they should have known they were overpaying, because the home was on the MLS for several months, last priced $150k lower. They bought it after it canceled off the market, soon ran into trouble and sold it short (with lender's agreement) for $1.199m in May this year.

That means the previous owners paid $292k more than the 2008 value about a year before – or 24% too much.

Same street, much classier home, similar bottom line at 794 27th (on the corner at Pacific).

This supercool Asian-modern remodel offers 5br/4ba and 3075 sq. ft. It's extremely high-style but with some nice family spaces. The gorgeous master suite is oriented to the east to catch the morning sun, which is sweet, but, unfortunately, that also means it overlooks a 4-way stop on a fairly busy street.

In May 2006, someone was blown away by the home and rushed to overpay. It was an emotional decision to pay $2.5m for the home, not a calculated judgment.

Not quite 2 years later, the owner decided to get out of the house. In the meantime, the RE world had changed.

Suddenly, buyers were paying attention to factors that could harm their own resale values. Ultra-contemporary design turns off as many buyers as it impresses. Location problems now matter again.

No one rushed to grab 794 27th when it started at $2.599m this February. It slipped, then chopped and chopped, and finally made a deal with the list price at $2.099m. (See our last dispatch, "You Can Lose in MB.")

The closed price: $1.950m, another $150k off that last list. Talk about driving a hard bargain.

That means the previous owner paid $550k more (+28%) than the home's 2008 value in grabbing it 2 years ago. Quite a price to pay for an emotional reaction to a house.

More broadly, we're not yet at a stage where resales of short holds (1-2 years or so) are commonly selling for a lot less than their acquisition prices. Indeed, many get a tick above their purchase prices.

Late last year in the Trees, another example of a marked decline in market value was 3011 Elm. It was a superb home that went to a bidding war in March 2005, going for $2.8m, about $200k more than asking. Two and a half years later, in December, it sold for $2.650m, basically flat to the list price of 2005, but a loss of $150k for the seller.

Market frenzies, emotional buyers, uninformed and overstretched buyers... all led to substantial losses. In the current market, all these phenomena seem to be far less common.

Weekend Opens (9/13-9/14)

With the rush of new listings post-Labor Day, once again we have a nice selection of opens for the weekend.

It feels like we're going back to our roots here with this feature.

We're asking MBC readers who visit these homes to also report back. Tell us what you see, what you like, what you don't like, what you'd change if you owned a particular home, and so on. Use the comments here to discuss the homes we've highlighted.

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."

As always, click any highlighted address below for more pics & details via Redfin.


Hill Section

301 Anderson is on a small, quiet corner lot with ocean views in the Hills. That's the good news.

The home itself is sort of cobbled together, an older cottage plus a second building, both showing their vintage(s) – 1950s and 1970s.

There's some decent square footage – 3br/3ba and over 2450 sq. ft. A lot of stuff needs updating. But there's a traditional appeal here, the kind of thing that would be super-charming if it didn't come with a $2m+ price tag.

Important detail: Sellers paid $1.9m a bit more than 2 years ago, in Feb. 2006. They're looking for $300k more now, and we just don't see it. Starts at $2.199m. Open Sun. 1-4pm.

1042 2nd, which we've mentioned before, is a large, newer (2003) home with views of the city, not the ocean, owing to its location next to a commercial building and Sepulveda. (Talk about your views of the city.)

The location means a discount – and the owners got one, paying $1.460m in March 2004 – nice for 5br/4ba and 4400+ sq. ft. A few years later, they're asking almost a million more: $2.395m at present. Open Sun. 1-4pm.


Sand Section

Curiously, all of our Sand Section selections this week start with the number 33...

333 3rd St. is a nice South End Spanish remodel, pretty spacious with 4br/3ba and 2750 sq. ft.

It's not a walkstreet, but it is priced $400k below the substantially smaller home at 424 5th that we featured last weekend.

This starts at $1.999m, giving South End seekers a potentially superior option, all things considered. Open Sun. 1-4pm.

332 20th was described by MBC when it first hit the market in January as a "spectacular and special new Spanish home ... offering big ocean views and a warm, custom feel." It has 5br/5ba and 4200 sq. ft., plus elevator, on a full-size lot up at the top of the 20th St. walkstreet above Highland. It is splendid, plush, unique and offers great ocean views, plus back-door access to Live Oak Park.

This one has a lot going for it, but it's down almost $650k from its start in January, now at $4.154m after a few months off the MLS (we're thinking it was rented for the Summer, but no solid info). It is currently offered for rent at $15k/mo., so think about that, too. Open Sat. & Sun. 2-4pm.

3316 Crest is uptown contemporary beach living – an ambitious remodel that is cozy in parts (yes, very small BRs), 4br/4ba, 2100 sq. ft. on a half lot. Includes a separate rental or guest unit downstairs. Terrific ocean views upstairs, and a nice execution of the modern wood/steel/glass look. Priced at $1.995m. Open Sun. 1-4pm.

330 41st #B is a small condo (1br/1.5ba, 820 sq. ft.) in a recently renovated building located on Highland in El Norte. In no way is this our normal cup of tea, but this week it gets a mention anyway, thanks to that 33 at the beginning. Currently $799k. Open Sun. 1-4pm.


Tree Section

529 18th gets Mrs. MBC's nod this week largely due to location. And yet, location is also a challenge for this new Craftsman (see below). What a puzzle.

First, let's talk about 18th. Your blog author has labeled the segment west of Highland as one of MB's "Great Streets." Mrs. MBC doesn't disagree, but she still prefers the Martys Hill segment. It's that beach vs. 'burbs debate that is so familiar to MB residents.

Given a spacious (perhaps overly spacious) new 5br/5ba, 5600 sq. ft. home on the hill, the argument for the 'burbs carries more weight. You don't get this kind of space with an ocean view, but here you're just moments from the beach as well as the park and downtown. And 18th is a fairly low-traffic street with great breezes.

The hitch – this new home faces a parking lot and a somewhat ancient monstrosity of a building: the Manhattan Beach Badminton Club (click for their site). The institution has always perplexed us. Is badminton more important than the $6-$10m worth of land the building is sitting on? Is there something else going on that we are not even invited to understand? Regardless, the view of MBBC a net negative for this new home.

529 18th starts at $4.279m. Open Sat. & Sun. 2-4pm.

2610 Maple cannot be found online at this time, but this little starter with 2br/1ba and 1000 sq. ft. is available nonetheless in the "real world." Starts at $1.129m. Open Sun. 2-5pm.

Early coffee & donuts are the new pitch at 633 15th. The unusual open is Sunday 10:30am-1pm. It's a transparent attempt to get someone attending mass at American Martyrs to wander over and decide to spend $5.495m. Good luck with that.

Those who do wander will see that the home is vast but flawed. Some of that square footage is devoted to some kind of original, unimproved unit that could be described as servant's quarters. Much of the construction feels dated (90s) and some materials are far from high-end. Someone will love this house, but only after a big adjustment. Open Sun. 10:30am-1pm.

A Nice Little Burst

We're not setting any records here, but the first part of September has seen a little burst of sales activity.

Gone in recent days (highlighted listings are still viewable at this writing via Redfin):

400 3rd (pictured), a sweet Nantucket in the quiet South End, offering 4br/4ba and 4000+ sq. ft. on a corner lot. It began in March at $3.499m and cut to $2.999m after a change of agents. It was Mrs. MBC's pick when it first hit the market.

2611 Palm, one of the last cookie-cutter Caliterranean homes on the market in the Trees, finally made a deal after 600+ DOM and about $500k in price cuts. Even more challenging, the builder was in default (see "Palm Blues") on the loans and the bank was moving. Just last month, the print ads began to scream: "Bank Says Owner Must Sell." And he did. Last at $1.999m.

1829 Poinsettia, as we mentioned the other day (see "Reality on Poinsettia"), after about 475 DOM.

841 12th Ct., the quick flip we discussed in "A New Lot Flip" last month – a little crusty cottage that went for $950k and was up anew at $1.1m the day after it closed. It is actually livable if you replace everything, so the bulldozers might be held at bay.

1031 Boundary Pl. (pictured), a Hill Section home with plenty of space (3br/3ba, 2950 sq. ft.), a large lot (6800 sq. ft.) and some ocean peeks, which dwindled from $1.699m to $1.499m before making a deal. We called it "funkytown, alarmingly near to Sepulveda" in this story.

768 26th, a little cottage (3br/2ba, 1450 sq. ft.) with some updates in a tucked-away part of the Trees, featuring a large lot (6100 sq. ft.) and a pool. Also, due to the FSBO situation, one of the most bizarre open-house experiences we've heard about. Lasted 6 weeks at $1.474m.

So we've cleared out some old and some really old inventory, and we're about to see just how badly 841 12th Ct. was priced below market when it first came on in early August at $950k.

And September 2008 is already lining up to be considerably better than September 2007. You'll recall that the spinning gears of the financial system locked up last year in early August, and home sales everywhere (yes, including MB) took a dive thereafter.

September last year was the first month of true shock, with just 7 SFR listings west of Sepulveda going into escrow, by MBC's count. We've got 6 now and most of the month to go.

The Fisher King (& Queen)

They've finally finished 2 giant new, neighboring homes on Fisher Ave. This continues that tiny, once-humble Tree Section street's transformation into the Land of the Titans, as MBC opined earlier this year. (See "Street Smarts" for a detailed description of the little, unknown avenue.)

The King: 1212 Fisher (pictured; click for more pics & details via Redfin) boasts 5br/6ba and 5825 sq. ft., filling out a 4500 sq. ft. lot, quite large for the area. Style is sleekly modern. The listing copy sings that it's a "timeless modern cathedral ... [s]oaring proudly above town." Starts at $5.950m.

The Queen: 1208 Fisher (click for details) offers 4br/4ba and 4750 sq. ft. on a 3000 sq. ft. lot next door, to the south. It's a high-style modern, too, comparable to, but different from, the King. Bonus: A "rooftop yard." Starts at $4.995m.

Both homes are real achievements, years in the making. They add to the burgeoning high-end inventory in MB west of Sepulveda, where we already had 14 listings above $4.5m before the King & Queen joined the game.

Redevelopment on Fisher has seemed to be on a tear recently. Down the short block at 12th St., two more new homes are under construction – both custom builds for the owners, one of whom just grabbed the lot (1148 Fisher) for nearly $1.7m in July 2006. The design on that one is really striking, one-of-a-kind, ultra-modern with lots of glass and shocking curves... worth a drop-by.

The tiny stretch from 12th to 13th (half the street) consists of just 6 lots. Of those, 4 have now been replaced with newbies since 2001.

The corner house at 13th/Fisher (612 13th), the first to get scraped, sprouted into a 4400 sq. ft. manse in 2001. It sold for $1.775m, which may have seemed like a lot at the time. Check this – the price per square foot on that one as a newbie was $406/PSF. Good luck finding anything at all decent in MB for $400/PSF today.

And if you think this is the end on Fisher, you're wrong. The next to go: 1204 Fisher, purchased at about the same time as the lots for the King & Queen for $1.7m by the same developers.

If the King & Queen prove to be profitable, the little red brick house at 1204 Fisher could be transformed into the Jack. (Such a development, not incidentally, will also ruin the temporary views to the south that the Queen currently enjoys.)

An aside: The same agent sold all 4 lots mentioned in this story – 1204-1212 Fisher plus 612 13th, and is now repping the King & Queen. However he worked that magic, you must admit it's very sweet.

This little block is a bit of a microcosm of MB's recent redevelopment. Looking forward, scraping 1204 Fisher would mean the end of a home built in 1929, but the oldest home on the block is the as-yet-uncompromised neighbor at 1200 Fisher, built in 1928.

Like isolated pockets of MB, perhaps that one will escape this housing cycle, too, and remain original. Watch out next cycle, though.

Reality on Poinsettia

It was 15 months ago when MBC first featured 1829 Poinsettia. (Click for listing details via Redfin.)

That was during the storied Spring Rally of 2007, a time when the doldrums of Fall 2006 seemed miraculously cured by renewed buyer enthusiasm all over MB.

The sellers at Poinsettia had just completed (well, mostly completed) a sharp remodel on the cottage and had decided this one was ready for the record books. They started this 1400 sq. ft. home with no real yard at $1.785m on May 17, 2007.

There was much to like, but the price struck us, and many others, as preposterous. (See MBC's stories, "Aiming High on Poinsettia" and "Aiming High, Part II" for more.)

We heard here in comments at MBC that the sellers received an offer for $1.550m not long after the listing hit the market. This was viewed as an offensive lowball, however, and it was rejected.

Seven months into the listing, MBC put out a pricing poll – our first – on Poinsettia. The reader consensus: 70% thought it would sell for less than $1.4m. The most popular choice, with support by 37% of voters, was the range of $1.25m-$1.4m. (See the story with poll results here.)

Lo, these many months later, 1829 Poinsettia is now in escrow. (Actually, looking for "Backup Offers.") It was last priced at $1.389m – down essentially $400k from that very high start. That has been the price since June 10, fully 3 months ago, so we might guess that the deal price is below that.

Guess what, folks? This means the readership was largely right on that first MBC pricing poll. How right? It remains to be seen. If this deal gets sealed, we'll close the books in a month or so with a final story.

Open Forum (9/10-9/14)

We'll kick off this Open Forum with a little trip down memory lane.

As Labor Day approached, we asked MBC readers to let us know how they had taken advantage of our hometown's ample beach resources this Summer.

The results are in these two graphs (click either one to enlarge), showing the overwhelming popularity of the Strand, Pier and the sunset, wherever you can catch it. Some things don't get old. Great to know.

We're very happy to report that 94% of readers said they went to the beach at least once. No need for a law, then, to require it.

Even better: By more than a 2-to-1 margin, those who went, went more than 5 times. Fine work, team.

In the water, we've got a lot more readers bobbing up and down unassisted than riding sticks of various sizes and purposes. From the look of things, just half the people who go to the beach get in the ocean.

Out of the water, we have a good proportion of runners hitting the pavement and the sand (39% and 28%). Not your average sittin'-around types. And we've got a good volleyball contingent as well.

Before we close, we have to thank Dan90266 for the pic in our "Beach Activities graph." He's got plenty of cool MB stuff on flickr.

As always, please use the "Open Forum" thread for news clips, off-topic questions & discussions of (virtually) any nature. And keep it clean.

Finally, on this post or any other, any day, use the "Email this" link at the bottom to let a friend know about MBC. The system, provided by FeedBurner, promises no spam to either party, and there are laws about that sort of thing.

Spring/Summer Wrapup

The real estate calendar tells us that the 6 months of Spring and Summer are behind us, and we're into Fall/Winter.

From March 1 to August 31, SFR inventory west of Sepulveda grew from 84 to a high of 116, and stood at 105 at the end of this period.

(Note: our chart covers all of 2008 and gives month-end figures, so "Dec." is Dec. 31, 2007, or essentially Jan. 1, 2008.)

At the same point last year – end of August 2007 – SFR inventory in our subject region stood at 83, according to MBC's public tracking at the time. So we were higher by 22 this year (+26% if you don't mind the small sample).

The very striking reality of recent months has been the high number of cancellations. (A category into which we group "expired," "withdrawn" and outright "canceled" listings – each has a different MLS code.)

In the Summer months alone (June-August), we saw 41 listings cancel. In the 3 months previous, only 21 canceled. In the June-August period in 2007, only 15 listings canceled, meaning this year's total was nearly triple the Summer 2007 pace. The month of August actually saw more listings cancel than it saw sellers making deals.

Those cancellations kept inventory relatively flat as Summer wound down.

Please download the MB Market Update Spreadsheets for 8/31/08 for more info.

June was the busiest month for new listings in 2008, with 40, just as June was the busiest for new listings in 2007, at 31.

Overall, in the Spring/Summer period, MBC tracked 172 new listings coming onto the market. (We began with inventory of 84 on the first day of March.)

Over the same period, we saw 159 listings leave the market – 97 sales (new escrows) and 62 cancellations.

By this reckoning, 38% of the listings that dropped off the MLS did so because they quit the market, while 62% of the listings that left the active market actually sold. Plenty, of course, have lingered.

We need to 'fess up to a bit of imprecision. When escrows fail or canceled listings return a couple weeks after they are first recorded, MBC's tracking numbers can, sometimes, be thrown off a bit. That's the risk of volunteer, real-time tracking, but we hope you like the price.

We think 4 listings or so have confounded our tracking slightly, so not all numbers add up perfectly to yield the Aug. 31 inventory number. Please consider our figures to have about a 2% margin of error – terrible for launching rockets, pretty good for real estate.

The Seizure: Sign of Hope?

They went and did it.

The government has seized Fannie Mae and Freddie Mac. The brass are out on their...

The U.S. Treasury is now on the line, buying stock in the formerly private companies, gearing up to buy mortgage-backed securities, and, significantly, taking on risk.

That's your U.S. Treasury, by the way, the one that prints money.

There are all kinds of words to toss around in this discussion – bailout, nationalization, Hail Mary, and so forth. Each word will tend to offend various religions and ideologies.

On one point there's little to argue about, though. This move is a landmark in the current, national housing collapse. To see the Wall Street folks and privatizers in power in Washington orchestrating this move is to recognize how urgent it must have been.

So, with all the potential assurance that government involvement could provide to the mortgage market and the financial markets, the question becomes: Is this the beginning of the end of the housing collapse, or the end of the beginning?

Give us your quick read. Vote in the new poll.

Just let us know if this move, however grand or grave you may consider it, gives you the sense that our local RE market will stabilize, improve or suffer in the next 2-3 years. We'll run the poll just less than 48 hours so that news doesn't intrude too much; closing at 8pm Tuesday.