Super Saturday for Opens (1/31)

Here comes the Super Bowl, one of the last big secular holidays worth stopping everything for – even if you don't believe in football.

Though there's an increasing wave of open houses this week, most are not open Sunday, or they end before kickoff.

The ones open after 3pm Sunday – maybe they're telling you something...

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 on any highlighted address for more pics & details via Redfin.

We ask MBC readers who visit these homes to also report back. Tell us what you see, what you like and what you don't like. Use the comments here to discuss the homes we've highlighted.

And, by all means, if you do visit one of our recommended opens, tell the agent MBC sent you.


Hill Section

If you see just one open house this week – heck, this year – make it 511 Pacific. It's open to the public for the first time on Saturday, 2-5pm.

This ginormous home (5br/8ba, 8300 sq. ft.) is geared toward the very top of the market. The high ceilings make you think maybe even a b-ball star would fit right in.

Great finishes, big-time extras (like the 10-seat theater) and surprisingly good views over the treetops of the South End Sand Section and to the water make the whole package quite impressive. Pricewise, it has even been moving from $8m+ last year, pre-completion, to $6.699m today.

If you do your research, you'll see a notice of default against this home – construction loans in trouble. But there's still quite a gap between what's owed and what the likely market value is, and we would not bet on this one going back to the bank. If you're looking for an over/under, consider betting that the final sale price on this one will be the highest in the Hills in 2009.

511 Pacific is, as noted above, open Saturday 2-5pm.

852 8th (5br/6ba, 4650 sq. ft.) is a big new Cape Cod to the west of Poinsettia. The first time we featured it as a "Weekend Open" to see in mid-December, we got back several raves.

It's a pristine, traditionally styled home that carries plenty of East Coast flavor, with great cabinetry and nice finishes across the board. The big ocean views should be nicely featured all weekend as the skies look to be clear.

852 8th remains at $4.250m. Open Sat. & Sun. 1-4pm.

218 N. Dianthus (4br/5ba, 5600 sq. ft.) is back again among our weekend recommendations, owing to the newest price cut – $200k more since last week. A home that began 11 months ago at $6.750m is now at $4.995m, a total drop of almost $1.8m. That's not because it's got big issues, just a big pricetag and a more limited buyer pool. Open Sat. 1-4pm.


Sand Section

2520 The Strand is a recently completed, contemporary remodel of a townhome bordering the Strand and the lifeguard HQ by Bruce's Beach. That location means a walkstreet on one side and huge, unobstructable views west and north toward Malibu.

We know, we know, these contemporaries aren't everyone's favorite, but, on the Strand, these slick, angular moderns tend to shine. The style allows for the biggest windows – in this case, picture frames for the Pacific.

The home is 3br/3ba and about 2500 sq. ft. At $5.850m, that works out to a stratospheric $2,400/PSF. Well, this is the Strand.

Across the park, another TH at 2700 The Strand is asking $1m more for just 300 more square feet – and that one's got diggers and cranes and a huge sewer-repair project in the front yard.

2520 The Strand is open Sat. 1-4pm.

425 26th has largely been off the MBC radar, but we now suggest a look. This is one of a dozen or so homes on the plateau up above Grandview School, with treetop views of the Tree Section and ocean views toward Catalina to the west.

It's not cheap at $2.973m, but 26th is down $777k from its pre-completion price. For that you get 5br/5ba and 4400 sq. ft. in a different sort of Asian-inspired build.

For the builder, margins may be getting tight – the lot was acquired in April 2007 for $1.725m.

425 26th is open Sat. 1-4pm.


Tree Section

2103 Elm joins the ranks of new construction in the Trees, offering 5br/4ba and 3100 sq. ft. for $2.199m.

That's sort of the standard profile, so how does it compare? First, you need to see it to know.

Around the Trees, there are now a few competitors of similar size below $2m, and a few more just above $2m. None features a great location, but then, neither does 2103 Elm. (Perhaps the best current combination of price, style and location is 2504 Poinsettia at $1.649m.)

Up the block, newbie 1820 Elm (5br/4ba, 3025 sq. ft.) sold last August for $2.1m, and 2408 Walnut (5br/4ba, 3100 sq. ft.) went for $2.062m in December. So $2.199m has some basis as a start price, but this is the sort of new-construction listing, late to the party, that will help tell us what 2009 will be like.

2103 Elm is open Sat. 1-4pm, also Sun. 12-3.

Best Deals of 2008 – Sand Section

The other day we commended the buyers of some of the “Deals of the Year” for 2008, focusing first on the Hill Section.

Today, let’s look at the Sand Section, where our top deal of the year is to be found.


Sand Section

Best Deal of 2008, Sand Section and MB west of Sepulveda: The new construction at 221 34th (5br/4ba, 4200 sq. ft.) drew raves from MBC when it first hit the market in April. We've called it an "ultra-contemporary showpiece, stunning, cool, clean, and featuring world-class ocean, PV & pier views."

Two problems: 1) contemporaries simply have a limited audience, and 2) the start price of $5.4m was a bit too rich for the North End.

Over time, we learned how much too rich.

Once the sellers started sending clear signals that they were ready to unload the property, cutting as low as $3.599m, in walked an internet entrepreneur who'd had his eye on the home.

The buyer made his own deal, saving a bit more on the transaction, with a purchase price of $3.315m. (The sale closed last week, but since the deal was cut in 2008, we're ascribing it to last year.)

That chop from start was an astonishing $2.085m, fully 39% off the start price. That may well have cut into bone.

Consider that the developer purchased the lot almost 3 years earlier, for $2.150m (in June 2005). If the build cost much more than $1m, the sellers lost and the buyer grabbed it for less than replacement cost. That's the deal of the year.

Honorable mention: 225 Homer is a "decent-sized 3br/3ba, 2300 sq. ft. home with substantial ocean views," as MBC put it earlier in the year.

We also called it, "Contemporary, clean, and nice, nestled in a very quiet part of the South End."

Despite its pluses, 225 Homer lingered for quite a while after starting at $2.3m, ultimately cutting $600/-26% to close a deal at $1.7m in August. (See "Homer's Shocking Fall.")

That was a markup of $358k/+26% over the seller's Aug. 2002 acquisition price – a not-insubstantial profit, but well below trend for all those boom years in between.

Honorable mention: 532 6th is a South End walkstreet modern (4br/4ba) that sold for an insignificant $27k markup over its March 2005 acquisition price.

Then: $1.818m. Oct. 2008: $1.845m.

The 6th St. house is a surprisingly warm gem, with nice – if tight – family spaces and treetop views from the master. It was hindered by a location bordering busy Valley, although clever architecture largely disguises the street and features the greenbelt from a few spaces inside.

Buying today at 2005 prices struck us as a pretty nice deal.

All the more so because the first time 532 6th hit the market (with a different agent), it was marked up 49% to $2.7m. No, no, no, said the market, it's flat.

So that's our sense of the best deals, but, of course, these are relative and subjective. You may have a different view. For instance, you might have chosen at least one home that wasn't a contemporary/modern. Let us know.

We did search far and wide among the Sand Section sales from '08 for something at the lower end (near $1m) that struck us as a special property. Sorry to say that even among sales approaching $1.5m, the homes, locations or both were mostly challenged in one way or another, leading us to conclude that beach areas are the slowest to drop. Or were, in 2008.

Open Forum (1/29-2/2)

As sometimes happens, your blog host forgot to start up a new "Open Forum" this week. That tends to push off-topic discussions into the other stories.

So here goes – no flashy intro this time. Just a pic of MBC's coverage area from space. The "A" tag points to Ercole's.

As always, please use this week's "Open Forum" thread for news clips, off-topic questions & discussions of (virtually) any nature. Keep it clean.

A Surprising Development on MBB

We have been watching a new development sprout over the past year on Manhattan Beach Blvd. (MBB) at John St.

All along, we have assumed this was to be a commercial building.

You know what they say happens when we assume...

In fact, at the corner of MBB and John Street, 3 new townhomes have now been put on the market. Not only are all 3 quite near MBB, the most expensive literally fronts the busy thoroughfare.

The new THs all sport John St. addresses, which sort of masks the location for just a moment. The particulars (click address for more via Redfin; there aren't any interior pics at this writing):

• 1106 John is the smallest of the 3, at 2br/2ba, 1550 sq. ft. Starts at $1.299m. Don't forget the HOA dues of $497.

• 1108 John is slightly larger, at 2br/2ba, 1800 sq. ft. It begins at $1.450m, with HOA dues of $544.

• 1110 John is the granddaddy of the group, 3br/2ba, 2475 sq. ft., with a start price of $1.792m, and HOA dues of $640.

That's $4.5m worth of modern living right on MBB.

All of the listing writeups are a bit different, and different agents are repping each unit. But all the listings gush:

• "At last, this magnificently designed property in the Manhattan Beach Hill Section, is ready for you.

• "A 'Must See Property' in Manhattan's Hill Section, close to everything wonderful Manhattan Beach has to offer."

• "A very unique property. You gotta' see this one!"

Besides the obvious high-style modern design, the THs offer some "green" features, most notably a "Live Green Roof."

OK, we'll say it. These new condos seem like a breathtakingly bad bet. What was that phrase we remember hearing about real estate values... oh, yeah: Location, location, location.

With a crashing economy, the slowest real estate sales pace ever in Manhattan Beach and growing inventory (i.e., options), is someone really going to pay $1.8m to live on a busy street studded with commercial buildings?

Maybe if this were Manhattan, NY.

Via PropertyShark.com we see construction loans of about $3.5m (the property was 836/838 MBB) on this project. (There's that busy bank again betting on MB.)

We are going to try offering our best wishes here, as there are very big challenges facing the folks selling these new units. And even though these THs are technically beyond the scope of MBC's normal coverage (SFRs west of Sepulveda), we'll watch the progress here and update you periodically.

Local Assets

Tuesday night, the MB City Council awarded commemorative plaques to 5 homes that have been designated the city's first "culturally significant landmark" homes.

Heading up the pack is a distinctive home at 3004 The Strand, built in 1960, which features a glass and copper exterior and unique, moderne interior as well. (Pic via this Daily Breeze article.) It's said to be the first steel-constructed home on the Strand.

Just the other day, the Strand property also won designation as a state landmark.

It is only the second state-designated landmark in town, with the MB Pier being the first.

The other homes, most much older than the Strand landmark, to have received local landmark status are listed below. (Descriptions provided by MB Community Development Dept.) (Click thumbnail to enlarge photo.)




1220 N. Ardmore – Built in 1918, Victorian style with original bracket detail and wood shingles.






133 13th – Built in 1922, California Bungalow, interior crown molding, stained glass windows and original attic and cellar.






669 33rd – Built in 1937, French Normandy Tudor cottage style referred to as the "Hansel and Gretel" house, round tower, rolled edges roof.






2500 Pine – Built in 1950, adobe mud brick style referred to as "Deardens Casa Bougainvillea," beamed ceilings, wall board edges.




A few observations:

No life east of Hwy. 1: All the landmark homes are west of Sepulveda.

Corner me: All except the Strand home are on corner lots.

No stapled-on stone: Mud brick qualifies, but not stacked stone. Hmmm. And in 50 years?

The city "landmark" designation is completely voluntary – people can nominate their own properties or public properties, and the status does not interfere with property rights (i.e., restricting development). (See the MB city page on landmarks.)

There are several more MB homes under consideration for landmark status, and several other non-residential properties as well.

Our top choice among those now in the pipeline: Ercole's.

Best Deals of 2008 – Hill Section

In this first of 3 parts, we look at the "best deals" on homes purchased in Manhattan Beach in 2008.

What qualifies a home to be one of the "best deals?"

Inevitably, at least for MBC, price adjustments are a big factor, but not the only factor. We'll see comparisons to prior sales, evaluations of how some buyers made their deals non-conventionally, and we'll go with the gut on which homes just seemed great and changed hands for fair prices.

As is often our practice here at MBC, we'll look at SFRs west of Sepulveda by section (Hill, Sand and Trees). First up today, the Hills.


Hill Section

Best Deal of 2008, Hills: 808 Highview looked like it would be the deal of the year, before a late entrant from the Sand Section stole the mantle. (See our next installment.)

The particulars: This terrific, large (5br/5ba, 4575 sq. ft.) ocean-view home was purchased new in Dec. 2002 for $3.1m. It hit the market in June 2008 at $5.250m, priced almost perfectly in line with the increase in MB's median price of 69% over that period.

But there came a time after several months on the market when the sellers just wanted out. They took $3.6m – a discount of $1.650m (-31%) from start, and a markup of only 16% over the purchase price 6 years earlier. (See "High Up, But Below Trend" for more.)

Honorable mention: 911 Duncan is a slick, architecturally interesting modern with ocean views. The price adjusted about $600k (-15%) to close at $3.190m in February.

Not bad, in all, for a distinctive, fairly large (5br/6ba, 3700 sq. ft.) new home.

(For more on 911 Duncan, see "Such a Deal on Duncan" and "Fallingprice.")

Honorable mention: 914 2nd (pictured a bit below) is a sizable, newer (2000), ocean-view home (4br/4ba, 4300 sq. ft.) that sold pretty quickly for a bit less than $3m ($2.920m).

That chop was just 10% off the start price of $3.250m, but the end result was a great, luxurious Hill Section estate going for less than $700/PSF.


Not getting a formal mention: 900 Pacific qualified already as MB's priciest home of 2008. (See "High/Low Prices for 2008.") It sold for an eye-popping $9.85m, but it's easy to forget that the buyers took a very quick $1m off the asking price of $10.9m. Discounts of $1m or more seem increasingly common in these parts.

Drip, Drip

Last Summer, 215 S. Valley hit the market at $1.650m. (Click address for more pics & details via Redfin.)

At the time, MBC called that "very pricey for a 4br/3ba, 2500 sq. ft. home that needs all kinds of updating."

That start price withstood the Summer heat and even the first couple of months of the financial meltdown. It wasn't till mid-November that the listing took its first cut, nearly a token move down to $1.580m.

Now, in 2009, the price is melting away at a surprisingly steady rate.

First there was the $100k cut to $1.480m on Jan. 10.

After that, there have been 4 consecutive cuts of $20k each spanning just 2 weeks. The price has now dripped down to $1.399m.

At this rate, 215 S. Valley could be at $1.2m by Valentine's Day. That might be about where it needs to get to find a buyer. We'll see.

We stand by our first take on the house:

215 S. Valley may be a classic example of a home that's great for the family that lives there, but will have trouble finding someone else who feels the same. At $1.650m, it is very pricey for a 4br/3ba, 2500 sq. ft. home that needs all kinds of updating. The home is at the corner of Valley and Francisco (hello, school traffic), and borders the fields at Robinson School (huge back yard!).

The listing itself is confused: Are we selling the home or the lot? When the listing says, "Enjoy now and build your dream home in the future," we think they're talking about the lot.

The South End is great. Proximity to a school can be an asset.

A funky, strange house with front door that opens onto a busy street has issues. Issues get solved by price. We'll keep watching to see how this standoff resolves itself.

Hills Are Alive with Opens (1/25)

Face it, now, next Sunday you're more likely to be busy with Super Bowl festivities than with trudging around to open houses. That means this weekend is the time to get out.

In the Hill Section this weekend, we have something old and something new worth your attention.

If you happen to visit one of our recommended listings, be sure to tell the agent there that MBC sent you.

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

222 N. Poinsettia is a lot sale, although we'd take the sensibly sized ranch house (2650 sq. ft.) if the dirt weren't pushing the value so high.

We've mentioned 222 N. Poinsettia a few times previously (most recently in "Hill Happenings"), but we've never seen it post as open, as it is this weekend. Funny, because you don't really need to walk the house to "get" the value here – a double-wide lot with ocean views, despite a location low on the hill.

Drop by and find out what there is to talk about inside a (sadly) doomed home. "These are nice granite countertops – for me to bulldoze away." "A very sweet living room to scrape." "I hate backyard sports courts."

Once priced arbitrarily at $7.9m ("of course you can get $8m!"), this one is now down almost $2m to $5.995m. Open Sun. 1:30-4:30.


218 N. Dianthus (4br/5ba, 5600 sq. ft.) remains "one of the most beautiful homes ever built in Manhattan Beach," if you go for the listing copy.

As it nears a full year on the market, it is also emblematic of the sudden slowdown in new home sales in the Hills. The listing has cut $1.555m (-23%) from its start at $6.750m, now at $5.195m. Open Sun. 2-5pm.

406 Anderson (5br/4ba, 4500 sq. ft.) is a new Cape Cod/"plantation" on a pretty nice street, but one lacking ocean views.

Anderson began early this year at $3.699m.

Drop by while it's open Sun. 1-4pm, or check out this animation of 6 pics ("virtual tour") with not-so-cheezy music.

1042 1st is big (5br/5ba, 4800 sq. ft.), boasts a top-tier builder, some ocean views and nice updates.

It's a warm family home that is also at the top of the block, with only condos and commercial buildings separating it from Sepulveda.

Offered since mid-Sept., it's down $200k to $3.295m. Open Sun. 1-4pm.

511 N. Dianthus (3br/2ba, 1900 sq. ft.) draws our attention every now and then. It's among the least pricey of Hill Section offerings, now at $1.2m after a start at $1.429m last April.

This is about as sweet and clean as you get for an original (1960s) build. Nothing fancy, no monster remodel, but an inspired staging effort plus a surprisingly sweet yard with koi pond are nice assets.

Nearby this week, a bidding war broke out for a comparably sized, but far inferior home at 505 Anderson, which hit the market a dime short of $800k. (Probably sold near $900k.) That one could get scraped, but otherwise needs an expensive reworking. Dianthus may still be high, based on the interest we saw in Anderson, but how high?

A little financing help now offered by the sellers could help to find the right buyer one day this year. 511 N. Dianthus is open Sun. 1-4pm.

Where Inventory Grew in '08

SFR inventory is growing, as it does at the start of the year.

Unofficially, it's now higher than at any point MBC has previously recorded in 22 months of public market tracking. But let's stick to the data we've got from our twice-monthly updates.

On Jan. 15, we had SFR inventory west of Sepulveda of 115, just 9 shy of the highest figure yet from one of MBC's updates (Oct. 15, 2008).

Now let's take a look at how inventory grew in 2008, and where.

As this graph shows (click to enlarge), the biggest culprit in burgeoning inventory is the Hill Section. Inventory there has grown from a trifling 6 as of 1/15/08 to 29 a year later.

Throughout much of 2007, we saw inventory in the Hills averaging 12-15 SFRs, so the steady growth in inventory last Spring and Summer has really changed things.

The Hill Section is a much smaller pocket of MB, so the fact that inventory there is now nearing the levels of other areas is noteworthy. (Before you ask, no, we don't have precise breakdowns of the number of homes in each section of MB west of Hwy. 1.)

The Sand Section had a little Spring surge last year, building up to 40 by the end of April, and peaked again in Fall at 47.

By contrast, you could almost say the Tree Section has behaved. After the standard early-year re-build-up of inventory, the Trees were pretty flat, lingering near 50 offerings at a time until a dropoff near the end of 2008.

Looking at our whole subject region west of Sepulveda, inventory began 2009 substantially higher than it began 2008 – 105 this year vs. 59 last year. (See the "MB Market Update for 12/31/08.")

Comparing points a little closer to the current moment, inventory of 115 in mid-Jan. 2009 is a jump over 70 in mid-Jan. 2008. (For a more indepth analysis with graphs comparing 2007 and 2008, please see "Inventory Higher This Year" from Dec. 2008.)

The graph clearly shows that inventory rose throughout the first 4 months of last year before beginning to level off. There's no telling where we'll see the numbers go this year, but we certainly seem to have only just begun.

Low End Heating Up

For the first half of January, the only 3 sales (new escrows) that posted were all very challenged homes, borderline teardowns:

• 2500 Oak (pictured), a small (3br/2ba, 1350 sq. ft.) home in one of the worst locations west of Sepulveda at Marine and Sepulveda, last at $789k (see "A New Low");

• 539 23rd, a cramped, funky older home with tiny bedrooms (technically 4br/2ba, 1900 sq. ft.) and a long honey-do list before move-in day, last at $1.395m; and

• 612 11th, last priced at $1.199m, below its 2007 acquisition price (as discussed recently in "Hill Happenings").

Also, late in 2008, a similar home at 772 Rosecrans sold quickly, priced at $798k.

This week, 505 Anderson (4br/2ba, 1850 sq. ft.), a major fixer that hit the market at an eye-opening $799k, vanished just as suddenly with multiple offers. (For some reason, at this writing, the link still works, though the property is posted as pending.)

That's 5 sales at what must be called the low end. These are not all going to work out to be lot sales.

People want into MB. Some will take the lower-priced, old-fashioned, needs-work inventory to get in.

Now, no one is going to pretend that $800k, or $1.4m, is a trifling amount of money. But for Manhattan Beach, these are some of the lowest prices in recent memory.

Also, look back just 10 months to Kaye Thomas' story about how "starter homes" had fallen out of fashion. (See "Starter Home? No Thanks!")

Maybe something has changed.

Maybe "starters" are back. Maybe elbow grease is back. Maybe bulldozers can take a well-deserved break.

To be sure, there's a bit of action in other tiers of the market, mostly bargain-hunting, too. But if this past month's sales are any indication, small, cheap and challenged are what's "in" for '09.

Glam Dirt

We view a lot of real estate online, and it's often frustrating when a nice home offers just a single photo in the listing.

Taking the opposite approach, a new lot sale at 1708 Pine offers multiple pics of the dirt, er, the grounds!

The first 2 pics offer very slightly different views – one off-kilter – of the front of the home.

One shot features the garage in all its glory, and 3 more pics give you a very full sense of the current grassy/weedy yard-ish area out back.

Bonus points for the trash can and old motorcycle tucked away in the corner of one pic.

This lot on Pine is up at $975k, maybe a bit high – depending on what the sale comes in at nearby at 1733 Elm (still posted as active at $850k, despite plenty of talk that it's under contract).

So there should be plenty of time to get some interior pics of this 2br/1ba fixer into the listing. Or, as a compromise, maybe inside the garage?

Back to the Bank

One of the failed auction homes – the only one in MB west of Sepulveda – has now gone back to the bank that financed construction.

2509 Palm (5br/5ba, 3200 sq. ft.) has a long history, but the most recent entry was a thud.

After the failed public auction in late November, a trustee's-sale auction was slated for the courthouse steps in mid-December. But the listing remained active several days later, before it quit.

Now a sale has recorded, dated Jan. 2, 2009, with the "buyer" being a bank that was behind much spec construction in MB over the past decade. (Think grapes, lots of them.)

The price has posted as $1.504m, just a few dimes above the total of $1.487m in loans that had gone bad. Next stop, we presume, is an REO sale. Banks don't tend to like to hold onto properties like this.

Some points of comparison...

• $1.122m – lot acquisition price, Dec. 2005

• $2.449m – start price on completed home, April 2007

• $2.025m – sold price on 2509 Walnut, this home's identical twin, in July 2008

• $1.949m – last asking price before auctions were announced (see "Name Your Price?")

• $1.499m – auction start price (buyers would have had to add a 7.5% "buyer's premium," so the effective start price was $1.558m)

• $1.679m – last price on the active, post-auction listing, late 2008

• $1.504m – posted sale price as the bank acquired the property, Jan. 2009
  

We want to thank our friends over at PropertyShark.com, who notified MBC shortly after the sale posted.

For those who may fear that this sets an abominably low price for new construction in the Trees, it's significant that Palm went to the bank, not a buyer. This is not exactly a new low for newbies, not just yet.

Of course, the open market rejected Palm in the $1.5-$1.7m range, so if the bank tries much of a markup, the process could take a while. We recorded 606 DOM for the property before it went off the radar. Fortunately, no REO lasts that long.

--------------------------

UPDATE: Since posting this story, we've heard from multiple sources that buyers were waiting to pounce as soon as the bank took title to 2509 Palm. There were several bidders. It's smart to assume a price near $1.6m, but we'll see. This one won't be hitting the open market.

Hopin' Forum (1/20/09-1/26)

Not every president looks good in a bathing suit. You'll probably have to reach back to the early 1960s for the last one.

The world was different then, by a lot. And it changes again Tuesday.

You have to wonder what motivates someone to seek high office. The old curse kicks in pretty quickly: Be careful what you wish for, for you shall surely get it.

To be president now is no mere rock-star tour. It's about the most depressing possible mix of circumstances one could imagine – even without the talk of an actual Depression.

Regardless of your politics, you have to hand it to the new guy. This quadrennial ritual of renewal is just different with him taking over. He'll inspire. And he's just smart and serious enough to give people who didn't support him the sense that he might handle the job pretty well. (And if not, so much the better for the opposing party in 4 years.)

We'll ask readers here to offer up your hopes and expectations for the new administration. (Hence the "Hopin' Forum" title.) What might go right under new leadership? What's the best thing the new president can do, or not do? You can speak to politics, economics or housing – whatever strikes.

Yes, we've dabbled in politics before here at MBC and kinda regretted it. But we do know that 56% of MB voters supported the new president. And this time-honored peacetime transfer of power does allow for a few moments of less-partisan reflection. So we're giving it one more go.

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Of course, this thread is also the "Open Forum" for the week, so, as always, please use this week's "Open Forum" thread for news clips, off-topic questions & discussions of (virtually) any nature. Keep it clean.

Three to See in the Trees

We shall gradually get back into the swing of things with MBC's "Weekend Opens" feature.

This weekend we feature 3 like listings within a block or so of each other. As the year unfurls, we'll get back to section-by-section highlights.

If you happen to visit one of our recommended listings, be sure to tell the agent there that MBC sent you.

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.


Three in the Trees

In the neighborhood near Pacific School (loosely the American Martyrs area) there's a busy block – Poinsettia between 17th and 18th boasts 3 active listings, 2 of them open this weekend. Just around the corner, on Pacific, is a third that's open:

1813 Pacific gets first mention as it's the lowest-priced at $1.499m. That money gets you a classily updated, modestly sized home (4br/3ba, 2125 sq. ft.). The curb pic here is actually the last one featured in the listing; almost everything else is much more charming.

We like the flow and the tasteful back deck and yard, oriented west for afternoon/evening sun. The sellers paid $935k exactly 5 years ago (Jan. 2004) and tried last Summer at $1.599m.

The new price is still a healthy markup of $564k (+60%), ahead of the area's pace over that period, but part of that surely comes from the substantial remodel these owners accomplished. Open. Sun. 1-4pm.

1800 Poinsettia is just a bit bigger than 1813 Pacific, with 3br/3ba and 2350 sq. ft., and of course it's on a much quieter street. That's part of why it begins at $1.579m.

The lot is actually smaller than the Pacific house (4440 vs. 4800 at Pacific), but the back yard here is also a darling asset, as is the garage-in-rear setup – no garage face!

1800 Poinsettia is sweetly updated also, with a great family feel. With just 3 bedrooms, one of them downstairs, there will be issues for some buyers.

The current owners picked up this home just a bit later than the Pacific owners did, paying $1.320m in June 2004. The markup they're seeking at this time is far less ambitious, then, at +$259k/+20%. This one is also open Sun. 1-4pm.

Before we move on to the next open, let's make note of something. Both of the listings above have PPSFs near $700 – 1813 Pacific is at $702/PSF, and 1800 Poinsettia is at $675/PSF. Of some side interest is the fact that those prices are near the median for MB as of year-end (see "PPSF Peaked in Nov. '06"). More directly at issue – the competition, which we turn to now.

Third in our series is 1728 Poinsettia, the largest of this group by a lot, and not all that much pricier. After a cut this week, it's at $1.649m.

How much bigger? Try 4br/3ba and almost 3500 sq. ft. That is a big step ahead of the others.

MBC featured this one around Thanksgiving when it first hit the market. Then, we called it "a mid-80s build that's been tastefully updated over the 20 years the owners have had it. On balance, this is pretty much the whole package that many families looking in the Tree Section are seeking."

Much more square footage, not-much-bigger price – hey, how's that PPSF? Turns out it's below $500, at $473/PSF. This can't be good news for the neighbors right now. Open Sun. 2-4pm.

We can't really wrap here without mentioning the fourth listing that belongs in this story – 1608 Poinsettia. It's not open, and if you drop by you won't see a sign out, but it's a factor in this mix.

This one offers 5br/4ba, 3625 sq. ft., and is both the biggest and the newest of the 4 homes mentioned here, with a 1990 build. It's also probably the least updated, as the others have been remodeled more recently. Priced now at $1.599m.

The listing agent calls 1608 Poinsettia "[p]robably the best deal on the market in the trees," and that might be true. But there are issues. The home is a short sale and must be taken as-is. There is apparently a lender approval on a price from a deal that fell apart previously, so it might be quicker than a typical shortie.

This one has the lowest PPSF of the 4 we have discussed, at $441/PSF. Again, not good news, for now, for the neighbors hovering near $700.

Hot Potato

There's a sweet, traditional home in the South End that just can't seem to hold onto its residents.

532 1st was purchased less than 2 years ago, in April 2007, for $1.9m. The owner is now offering it up via Zillow as a FSBO for $1.999m. (Click the address for the Redfin listing, which links back to the Zillow listing.)

Two years and out is just about what transpired with the folks who bought the home in Oct. 2001. They paid $984k then, but found a buyer at $1.289m (+$305k/+31%, nice!) just 22 months later.

All told, the home has changed hands 6 times in 15 years, and would get its 7th set of residents in that time if the FSBO sale works out. (This property history comes from Redfin; click to enlarge.)

The frequent turnover at 532 1st is a bit surprising.

Though the listing doesn't offer any inside pics (yet) of the 4br/3ba, 2650 sq. ft. home, the exterior of the rancher is pleasant and well-maintained, and the listing does tout fully remodeled/updated interior spaces.

The location is OK, west of Valley near Robinson School and not far from the beach. True, 1st St. can be cramped and relatively busy, but the house is really oriented away from the street. The large 4000 sq. ft. lot allows a nice back yard – uncommon in the area.

On the same block, in mid-2008, a remodel at 437 1st (4br/3ba, 2600 sq. ft.) got $1.610m – that one had a standard-size lot (2700 sq. ft.) and no yard to speak of.

Currently, closer to the beach, 325 1st, 3br/4ba and 2100 sq. ft. with a recent, complete remodel, but just a half lot, is up on offer at $1.749m.

The folks at 325 1st are getting out after about 3 years, substantially longer than 437 1st was held by the previous owner and a year more than the sellers of the hot potato further up the block.

Lowe-ring the Price

In baseball news this week, the Dodgers lost pitcher Derek Lowe as a free agent to the Atlanta Braves.

Rumors of a depressed market for pitchers like Lowe proved untrue. He got a 4-year, $60m deal.

Knowing for certain he's out of LA, Lowe responded by dropping the price on his home, 204 19th (click for pics & details via Redfin), by $500k on Thursday.

Purchased new in Aug. 2006 at $5.0m, the home (4br/4ba, 4260 sq. ft.) is now listed at $5.2m, after about 4 months on market.

The property has also enjoyed the distinction (!?!) of being featured by the Real Estalker, in this story. (MBC readers know we don't normally name parties in RE transactions – or anyone, really – unless the names are out there anyway, as in this case.)

So how does $5.2m stack up? Nearby:

• 220 19th (5br/4ba, 4325 sq. ft., 2001 construx.) sold in December for $4.850m.

• 215 19th (pictured) (4br/4ba, 4250 sq. ft., 2002 construx.) was offered for the final 3 months of 2008 at $5.0m, but canceled around year end.

• 228 20th (5br/5ba, 4150 sq. ft., 1999 construx.) is offered currently for $3.899m.

At this moment, the only real, direct competition for Mr. Lowe's walkstreet beauty is a brand-new, much brighter Cape Cod on other side of downtown, at 224 7th.

That one's at $5.695m at the moment, in line with 3 comparable sales at $5.6m last year.

204 19th should always stay a few steps beneath 7th, pricewise (it was 5 bucks higher before this cut), but, for now, there's plenty of room between the two.

The real question, as we anticipate a sale on 19th, is whether this seller feels any urgency to unload the property, or is happy to let the innings roll on and on until he gets his price.

Big Tree Lots

The standard Tree Section lot runs 4500-4800 square feet, which nowadays allows for a home of roughly 3200-3400 square feet on the dirt, based on city ordinances.

Here and there you can find a somewhat bigger lot, and of course that will be worth more.

Early this week new owners took possession of 1900 Laurel, a 6000-sq.-ft. corner lot, for $1.250m. The location is quiet and fairly prime, a nice site to build a dream home.

That price suggests a value of about $1m for a standard-size lot in a comparable location. True enough, some lot sales in lesser areas (active and pending) are coming in lower, while livable homes are coming in at $1m or a tick higher. (We should note that Laurel sold very quickly – 10 days – but also for a substantial discount, -$249k/-17% off of list, an unusual combination.)

Another non-standard lot option is 2900 Maple (click address for more pics & details via Redfin). This is a double-lot at 9280 sq. ft. (2 x 4640). It was purchased in Feb. 2007 by an active local builder who planned to split the lots and build 2 new homes.

The location is pretty nice if you know the area, but it is north of Valley, which would normally be a factor against.

The builder paid $2.555m, but those development plans didn't pan out. He tried to unload the double-lot this year at $2.699m, and has now gradually cut down to $2,277,777, willing to take a substantial loss. (Side note: The builder, who really could use a change in luck, has set the last two prices to end in a series of five 7's.)

This 2-lot package is now down $278k/-11% from the Feb. 2007 acquisition price. If someone does plan to split 'em, the two lots are priced at $1.138m each now. (Assuming you can do the split; the builder says he's begun the process.)

We'd guess this does not look like a deal till it gets nearer to $2m, perhaps below.

In a much lesser location near MBB, 1205 Walnut boasts an unusually large 6720 sq. ft. lot at $1.149m. That's 50% bigger than the smaller of the standard Tree Section lot sizes (4480 sq. ft.).

The current list price for Walnut works out to about $760k for a standard lot, and about $390k for the bonus land.

There's one other nonstandard lot on offer, but it's not being marketed as such. Near American Martyrs church, 633 15th is a big home (6br/4ba, 6000 sq. ft.) on a lot that's twice the norm for the immediate area at 12,500 sq. ft.

15th has been lingering since last June, when it began at $5.495m. It's now down 11% to $4.895m.

For the money, the build is not impressive. (Don't even get us started on the attached "guest house.") So it has lingered, and if it were to gradually near $4m, that could be lot value.

Nearby, on the ocean-view side of the hill on 15th, regular-size lots were worth almost exactly $2m in Summer 2006, when a few were purchased for spec development. (All successful in 2007-08.)

We'd still bet on 15th finding a buyer for the home as it stands, but, for now, it's the second-biggest lot in town on offer, and some visionary could swoop in with a very different idea of what belongs at this particular address.

PPSF Peaked in Nov. '06

By the end of 2008, people were paying the same price per square foot for SFRs in MB as did buyers in late 2005.

That's one finding from a new analysis of PPSF data from the MLS.

In this case, MBC wishes to thank Kaye Thomas (again!) for posting historical PPSF data for sold properties on her blog, and a reader who volunteered to input the data to make this chart possible.

(Click the graph to enlarge.)

Monthly median PPSF data begin in Jan. 2000, and a 12-month moving average begins in Dec. 2000. (Nerdy note: We ran both 6-month and 12-month averages, but found the 6-month average to be too noisy in the 2006-07 period.)

The storied rapid, upward trend in home prices in this decade is again plainly visible in this graph. The averaged-out median PPSF doubled in 5 years, from $400 in June 2001 to $806 in June 2006. (To compare this to median home prices for the same period, see "How're Median Prices Doing?")

The already-convincing trend toward higher prices got a shot of nitro after hitting $700 in October 2005, rocketing up 22% more in the next 13 months to a peak of $856 in Nov. 2006.

It has been all downhill since then.

The median PPSF dropped below $800 by the end of 2007 and looks likely to drop below $700 early this year.

The price increases we see here are, no doubt, largely a reflection of the home price bubble that affected all of America during this period.

There is, also, an effect from new construction, which was rampant in MB in this decade. Smaller, older homes were replaced by big, new homes. But the effect on average PPSF can be the reverse of what's expected – small homes sold for lot value will actually have high PPSFs.

To take just one recent example, 3009 Poinsettia was recently sold and scraped. The 2br/1ba, 925 sq. ft. home sold for $1.190m, a PPSF of nearly $1,300.

Countering that kind of upward-pushing effect from lot sales is the fact that many lots are sold off the MLS and prices are never reported in that database.

You have to imagine that these two effects have more or less offset each other at about the same rate from year to year. However, these days, as spec construction is a sport in steep decline, if more lots go up on public offer, you could actually expect PPSFs to increase a bit in response.

What about the fact that more and more new construction means bigger average homes in MB?

At the suggestion of our reader/volunteer, we ran another analysis. This one takes median home prices and divides them by the median price per square foot. (In this case, we used the 6-month moving averages.)

The result is an inferred median square footage for homes sold in MB during this period.

As you'll see (click graph to enlarge), the median square footage of homes sold in our town has stuck pretty consistently within the range of 2000-2500 square feet. There is no clear trend in either direction.

We guessed that this graph would suggest that a home at or near the median size for a given month would also sell at or near the median price for that month. However, trying a couple of specific examples, that hypothesis did not seem to hold true. So we're curious what else MBC readers might make of this information.

Looking ahead a bit, MBC is preparing to publish year-end sales figures for MB. We might look at median PPSF by region in that analysis. However, be warned, sales were so anemic in 2008 – a new historic low – that we may not have big enough sample sizes to draw from.

Hill Happenings

It's time for a quick check-in on the Hill Section.

First, a sale, at long last. The odd "flag lot" house at 612 11th is in escrow after 11 months.

During the Spring Rally of 2007, this dated home (4br/2ba, 1550 sq. ft.) on a shared lot was offered at $975k, but sold for $300k more ($1.275m) after a bidding war broke out.

In Feb. 2008, with development plans apparently thwarted, the new owner offered to flip the lot to any willing buyer for just $1.599m. (See "Flag It As Overpriced.") By Summer, those delusions were long gone, and the seller was willing to take a loss, pricing it at $1.199m. (See "Maybe They Lost the War.")

After that big cut, the price never changed, but now they've got a deal. We'll watch to see how that ends up.

Worth noting: This is just the second new escrow MBC has seen on an SFR west of Sepulveda in 2009.

Next, a high-dollar lot sale made a big cut Monday – its second. The double-wide (106') lot at 222 N. Poinsettia chopped from $6.9m to $5.995m.

Before that, they had already cut $1m.

So it's down quite nearly $2m; -$1.905m/-24% to be exact.

Is this surprising? Not exactly. MBC called the first price "preposterous" and the second price "slightly less preposterous." (See "Chops of the Week" from Oct. 2008.)

The future for this lot sale is ambiguous – you could buy it and develop it with a suitably huge home, or split the lot and build two. (See "Just Split 'Em.") Too bad the charming ranch home there is quite certainly a goner.

No question, this is nice dirt, but not the best the Hill Section has to offer. At this point, we would not be shocked – though the sellers might be – to see another $1m shaved off before a deal is made.

What Was That Closed Price Again?

As we're trying to tie up loose ends for year-end 2008 sales data, we keep stumbling across new closed sales information.

Mainly, that's because of 2 fairly new features offered by Redfin, increasingly a favorite tool for RE info.

Redfin has now begun offering "Nearby Similar Sales" at the bottom of each active listing, and that automated search often picks up a sale or two that did not post on the MLS. (And/or which MBC just didn't catch in our manual tracking; we don't have privileged access to the MLS.) Redfin is using all kinds of inputs for its database, it would appear.

Another source: on the MB "Neighborhood Page" prepared by Redfin, you can click a tab for "Recently Sold" and scan the past 8-10 weeks' worth of sales. Again, the data does not appear to come only from the MLS, so it's more complete.

Some examples of recent finds:

305 Gull, a 2br/2ba, 1000 sq. ft. duplex on Highland near the northernmost end of town, sold for $885k in Oct. 2008. This was down $214k/-19% from its $1.099m start, after 300+ DOM. The listing we were tracking from the SFR set on the MLS simply canceled; we never saw a sale price.

2907 Pacific, a sweetly remodeled one-story (3br/2ba, 1900 sq. ft.) that hung around almost 6 months on market, was mistakenly coded as "expired" when a deal was struck late in 2007. Turns out it sold for $1.010m, a modest $532/PSF, in mid-December, down $189k/-16% from start.

3020 Alma, a cute little corner-lot Spanish home (3br/2ba, 1300 sq. ft.) that began at $1.545m in Summer, closed at $1.280m in December, down $265k/-17% from start.

Finally, we just saw that 225 39th, a failed foreclosure flip gone short (see "Failed Flip is Back, Short" from last April) actually sold pretty quickly after going short. The progression: Property went into default in early 2007, got a "rescue sale" at $1.595m in June 2007; it returned in Aug. 2007 at $1.745m after a little rehabbing; 8 months later (Apr. 2008) it was suddenly at $1.1m, short; and the final sale was $1.185m in June 2008, -$560k/-32% off the dreamy flip price.

It's hard to miss a pattern here. All of these sales closed well off their start prices.

Until now, we didn't have them in our data. As the new Redfin tools show, however, the internet is starting to give us all just a little more information than we would have had otherwise.

Open Forum (1/12-1/18)

It's often said that the Southland's big New Year's Day festivities – the parade, the USC game – are a major contributor to decisions by persons further east to move to California. The blue skies, the 70-degree weather... they draw folks stuck knee-deep in snow who watch at home.

This year, the New Year's stuff was tamer. Mid-50s & cloudy for the parade; the game is now just one of 125 bowls. You might have sensed that we dodged a bullet this year – not so many folks seeing the point of moving to our region.

So don't tell anyone about this weekend in MB!

These were days to remove layers. To sweat, nonetheless. To get wet & sandy. The only thing missing was a late sunset. But there we go picking nits.

Great gifts. Now, let's keep that to ourselves.

A casualty: MBC's "Weekend Opens" feature. It was partway under way this weekend when it suddenly became obvious... no one was going to open houses this weekend, were they?

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As always, please use this week's "Open Forum" thread for news clips, off-topic questions & discussions of (virtually) any nature. Keep it clean.

As to the new comment system: It's growing on us, as we hope it is with you. We initiated the new system to allow us to provide a "recent comments" feature on the front page; the old one broke and necessitated a change. There are quirks and issues, but it seems a positive step. More on this issue later.

Two Strand Lots Down $1m

Several weeks ago MBC noted that, after a long drought of Strand listings, suddenly, there were 4 options on public offer.

The prices then ranged from $6.9m for the most livable home (a townhouse at 2700 The Strand) to $8.2m for the priciest of 3 lot sales.

The high end is down now.

204 The Strand (click for pics & details via Redfin) has made 2 adjustments, with the second cut this week taking it down a full $1m to $7.2m.

3404 The Strand (pictured) began at $7.8m in early November, but it cut a million bucks at once just 10 days later (3 days after MBC's story), so it's at $6.8m. (We are viewing 3404 as a lot sale even though there is a large, custom home on the land now. It'd be a funky, cool, fun property for someone at $3m-$4m, but at $5-7m it's probably got a date with a 'dozer.)

The fourth property mentioned in our prior story, 3216 The Strand, went off market, last at $7.0m.

This could turn into a long-term process of price discovery for Strand lots. The one to watch is 204 The Strand, the best location, where the neighboring corner-lot property (200 The Strand) is now in advanced stages of construction on a new home. The county assesses 200 The Strand at $6.110m, apparently tied to a 2004 sale at $5.550m.

Also, there's a new home on The Strand north of the pier that's for sale, but not on the MLS. More on that one soon.

Oh Dear, John

A gorgeous corner-lot home in the Tree Section recently closed for $2.550m.

What's more, 1801 John was not a new home, it was of mid-90s vintage.

A counterexample in a weak market? Yes and no.

First, this was not your average lot – the 5300-plus sq. ft. lot is about 20% bigger than you'll find in most parts of the Trees.

The location is also pretty swoon-worthy on a quiet, tree-lined block that's nonetheless near everything. Seems like no big coincidence that 850 18th, the priciest sale in the Trees in 2008 at $4.4m, is just a few doors down.

The home itself is more spacious than today's typical new construction. The 5br/4ba home offers 4000 sq. ft., about 25% more living space than today's standard newbies. It has also been luxuriously and professionally updated.

So it's not hard to see how 1801 John would stand out amid much of the rest of the inventory in the Trees late in 2008.

Great home, great location – and a sale at a robust price after less than 2 months on market. Indeed, it was the only home in the Trees to sell for more than $2.45m since mid-July.

Because the home is so large, the PPSF was somewhat lower than we've seen recently. At $638/PSF, John ranked 17th out of 22 sales in the Trees over $2m since June 1.

But here's the surprise. The final sale price on 1801 John is just 7% above the previous sale price from 3 and a half years ago.

That's right. In July 2005, the former owners paid $2.375m, no doubt beating most new construction at that time, too.

Great home, great location, and 7% appreciation over 3+ years.

That's what's happening to some of the really great homes.

We took a look at our trusty median-price graphs for this decade (see "How're Median Prices Doing?"), and we see that 7% is just a bit off from the 10% increase in the citywide median price for SFRs between July 2005 and Sept. 2008, when this home was first listed. (We're using MBC's 6-month moving average in this case.)

And we might mention here that the sellers started quite a bit higher – John began at $2.850m, or $300k more than the final price. They were looking for a 20% markup. Fortunately for the sellers, they gave up that pursuit quickly to make a deal.

Less fortunately, they would clear just 2%, or about $50k, after 5% costs of sale.

These things, we think you'll agree, are unexpected. A great, multi-million-dollar home in a great location that appreciated less than 10% and netted the sellers about $50k after 3+ years.

When we consider our market to be strong against the tide, those numbers demand a reality check.

2008 Median Price Wrapup

It is widely understood that higher-end RE markets are coping better, to date, amid the home price crashes that make the daily news with the steadiness of a drumbeat.

Now that 2008 has passed: How much better did MB do than our region?

The first data we have for the year comes from the MLS via a frequent commenter. (It's polite when receiving gifts to say, "Thank you," and we do – thanks!)

Looking at SFRs only, we see that MB, as a whole, saw a year-over-year decline in median prices of 6.9%. (Dec. 2007 to Dec. 2008.) Not too bad, really.

There was a little increase in the median in Spring, with a low in November, giving us a peak-to-trough drop within the year of 9.4%.

These median figures are steadier than some of the month-to-month figures MBC has reported previously (see "How're Median Prices Doing?" for the most recent).

Here's why: The data show median prices for the full 12-month periods ending in a given month.

Previously, MBC has used 6-month moving averages of the monthly median prices reported by Kaye Thomas on her blog.

Our 6-month averages have run pretty close to the actual 12-month medians shown here, but we consider these new data to be better overall.

Looking at the same data for SFRs west of Sepulveda only (MBC's coverage area), prices are a bit higher, and the declines are a little bit bigger. We're down 7.4% year over year, and 10.4% within the year from peak to trough.

(Nerdy note: We have created charts that show the declines more vividly by starting the scale at $1.550m and labeling them as "exaggerated views.")

These 7-10% declines matter, but they're a far cry from the carnage in the Los Angeles region in 2008.

For instance, DataQuick figures show a decline in median prices in Los Angeles county of 32% over just one year, Nov. 2007-Nov. 2008.

The Case-Shiller index (tied to same-house sales) for the Los Angeles area declined 28% over a similar time period, Oct. 2007-Oct. 2008. (Latest data available.)

Those were falling-off-a-cliff numbers, and we've heard no reports of people falling off of cliffs in MB.

Median prices, of course, are what they are – a terribly imperfect measure of what's really going on in the market, but just about the only one that everyone can agree has some relevance to understanding trends. In other words, your results may differ.

By maintaining some greater overall price stability, MB is bucking one trend.

On another front, sales pace, MB is lagging. 2008 will be the worst year in living memory in terms of sales volume. Meanwhile, many hard-hit areas all over California are seeing sharp increases in the pace of home sales – driven by foreclosures, REOs and dropping prices.

It's clear that MB is different in many ways from the broader LA region. If we can keep our RE price impacts at 1/3rd the severity of the surrounding region, there will be plenty of very happy people in town.