Close the Books on the 6th St. Moderns

A blog on local real estate can provide a little collective memory that we might not otherwise share.

Consider this update on 2 home sales that took 15 months to wrap up.

Back in November 2007, MBC took note of the dearth (then) of South End walkstreet listings, and called attention to 3 that had all gone on public offer near the same time. They were all on 6th St. (See "6th Street Is Turning Over" – a title that now looks a bit optimistic, in retrospect.)

Two of those listings, which we'll discuss here, were neighboring moderns built at the same time (2005) on designs by the same architect.

532 6th (4br/4ba, 2700 sq. ft.) was the smaller of the 2, situated on a trapezoidal lot on the corner with Valley and the 6th St. walkstreet.

Over the months that followed, MBC noted many times that the design was surprisingly warm for a contemporary and made pretty good use of the limited footprint to make a good family home. (Smallish kid bedrooms aside.) Views smartly steered away from Valley and toward the greenbelt and even treetops to the west.

The issue that kept 532 6th from selling, as is often the case, was price. The home had been purchased for $1.818m in March 2005, and tried starting at $2.7m, a 49% markup. After a 6-month break, it returned at $2.35m in June 2008, but ambitions shrank and the listing sliced repeatedly before making a deal.

532 6th closed last October, almost a year after first being offered, at a final price of $1.820m, exactly flat against that March 2005 price.

528 6th was the larger of the 2 moderns on 6th, with 4br/4ba and 3890 sq. ft. It was also clearly the showpiece.

The home is in the news here at MBC this week because a sale just closed, but, as it happens, the architect, Hermosa's Dean Nota, is all over town right now on the cover of the Easy Reader's glossy Beach magazine, distributed Thursday.

528 6th is ultra-contemporary, so you have to like the style, but it makes nice use of light, offers a snazzy roofdeck (how'd they sneak that in?) and had the kitchen redone entirely by the most recent owners.

The home's style clearly limited the buyer pool over the past year-plus but, again, so did the price.

Out of the gates in 2007, the sellers were seeking $3.449m. That was a markup of $454k (+15%) over the Feb. 2006 acquisition price of $2.995m. That price did not change while the listing lingered for months before finally quitting.

In Feb. 2009, the sellers acknowledged they'd be losing money on a sale, starting it at $2.799m. They found a buyer. This week, 528 6th closed for $2.6m, nearly a $400k (-13%) drop over 3+ years, and an even bigger hit after the costs of the kitchen remodel and costs of sale are factored in.

The reversal of fortune at 528 6th was particularly stark: the sellers apparently began by thinking, "let's get out of this house and make some money while we're at it," and wound up spending a great deal to get out.

Since we are looking at these 2 homes together, we'll back up a ways for some history of the properties that came to mind when reading the Beach magazine piece on the architect. The article includes this observation:

Almost every home Nota has designed is still inhabited by the people who commissioned the homes – these are not real estate "flips," but carefully conceived places for people to truly reside.

528 6th was one of the exceptions that proved the rule. It was built for a client who wound up holding it only a short time before selling to those owners above who paid $2.995m in Feb. 2006.

The original owner actually bought two lots that each stretched west-to-east and ended at Valley, then reconfigured the land to create one new north-south walkstreet home (528 6th) and two smaller lots fronting Valley (532 6th and 513 Valley). The plan was to develop all 3 together with new moderns, but instead the new lot at 513 Valley was sold off and became someone else's Cape Cod.

The result of all that buying, selling, building and maneuvering was 3 new homes where there once were 2, including a new street-to-alley walkstreet home that wasn't part of MB's original layout. That's a net plus to the neighborhood, even if the peak buyers of 528 6th might be excused for focusing on the negative at this time.

Askew Down South

Listings in the South End of the Sand Section are becoming clogged with tiny, spiffy remodels held less than 2 years.

• MBC has already discussed 325 4th at some length (see "When We Say Walkstreet..."). That one's a 2br/1ba and 650 sq. ft. on a half lot with no garage or street access. It began at $899k and remains there. Purchased in Jan. 2008 for $718k before the spiffing up.

• This week, another half-lot walkstreet home joined the mix: 316 9th (pictured).

The home is officially smaller that 4th St. (1br/1ba, 600 sq. ft.), but there's a separate office out back. And at least there's a garage, and street access via Crest – the home is on the corner lot.

But oh, is the price higher: $1.299m. Yes, for 1br/1ba and 600 sq. ft. on a half lot.

This is a markup of $349k over the April 2007 acquisition price of $950k, reflecting the remodel.

• Finally, 420 1st has just dropped in. It's the "biggest" home of the bunch we're mentioning here, 2br/2ba and 800+ square feet – including the space in a separate, rear guest house.

At 3300 sq. ft., the lot is much bigger than the others above, but it's got none of that walkstreet caché. Instead, the property backs up to a school and abuts a parking lot. (The parking lot is pitched as an asset; you decide.)

When this home was offered in Oct. 2006, it began at $1.350m and was marketed as a teardown. The current owners took it for a nice discount, $1.075m, in June 2007 and cleaned it up instead, saving the little cottage.

Now, the listing says of the marked-up price of $1.275m: "Property is listed for lot value but is livable and rentable." If that were literally true, the land value has increased 19% in the past 2 years. Mmmmm...

It would appear that the memo has not reached the South End.

Short-term holds of very small houses should not be expected to be profitable here in 2009.

We'll grant you that each of these homes has been upgraded from its prior condition to some degree. But the market has been moving down at the same time, so markups of 19%-37% on these listings appear completely out of touch. Does anyone even talk about "flipping" houses anymore?

Who are the buyers for these Sand Section cottages?

Entry-level MB buyers have almost a dozen options below $1.3m in the Tree Section, all of them bigger – some much bigger. Only the 1st St. house has a chance of accommodating a family, and even then, it's tight.

The 4th St. house is offered for rent, and the 1st St. listing says the seller "may consider" renting out instead. If they don't want to take losses, that may be the best option for both sellers.

Meanwhile, all 3 listings are helping to feed the perception that our market is slow because sellers refuse to acknowledge reality.

Back from the Bank

It has been a wild year for the new, different house at 2504 Poinsettia.

Early in May 2008, this new home burst out of the gates, advertising itself as "Not your typical cookie-cutter home!"

And it's not.

The 4br/4ba, 3200 sq. ft. home is essentially an Asian-inspired contemporary. We've never seen this particular layout, which puts all 4 bedrooms downstairs, 3 of them dormlike, boxy, on the north (shady) side.

And we might not see this layout again, given what's transpired.

With unbridled enthusiasm, this newbie was priced at $2.499m last year to begin – which proved to be preposterous.

Over time, listing agents changed and prices changed – reaching as low at $1.649m earlier this year. Default notices were filed, and, in February this year, the home went back to the bank.

The lot was acquired for $1.280m in Feb. 2006, and the bank took it back for $1.575m 3 years later.

Here's guessing that the new build cost somewhat more than the $295k difference. Yes, a bath has been taken already.

Now 2504 Poinsettia is back at $1.659m, a nit above the last offering price MBC recorded prior to the trustee's sale.

That's a fairly good price for unique new construction in the Trees, but we're also thinking it'll get better.

Beauty Calls

Amid a sea of stale listings and mega-dollar properties, there's one new, sensibly sized offering up on the plateau that's generating all the buzz.

464 33rd is cute – a word MBC uses sparingly, but did just dish out a week ago for 1600 Elm.

Offering 3br/3ba, 2540 sq. ft. and slotted near the end of a cul-de-sac street, the remodel drew mobs over the weekend. Start price of $1.599m seems about right today.

Your blog author has missed out so far, but the home drew raves from MBC readers, including:

• clean, feels bigger than its 2500 square feet, and has a decent roof deck to boot

• Awesome pad!! For the house, location and price....very solid deal. I could see this one getting bid up. I've looked at a lot of properties over the past 2 years in all parts of MB and this one is a steal at this price point.

• It's a sweet house.

• the best combo of price, location and features in a long time

So what happens when an inspiring listing comes along at a price that many view as fair?

Another Week, Another Titan

A couple of years passed here when we saw virtually no Strand listings, and certainly no spec homes. That's changing.

Back in late 2007, 1212 The Strand (4br/5ba, 4600 sq. ft.), a gently used modern, went for $10.7m. (See "Highest Sale Prices of 2007" or "And Then There Were 4.")

This year, besides the growing number of Strand offerings of many kinds, we also have seen 2 speckies:

• 1712 The Strand, which recenlty sold for $9.0m (see "The Strand for a Mil, or 10"), and

• now 3516 The Strand (pictured), which begins at $13.999m.

That's the second Strand listing in a week priced over $13m, the other being last week's Titan, 1800 The Strand, at $13.5m.

At 3516 The Strand, the home's got a name, even though it's not quite yet complete. It'll be "Villa Toscana Sul Pacifico."

The home "resembles an authentic Tuscan style home among the rolling hills of Italy's countryside," we're told by the listing, though MB's dunes don't really match up too well as a setting. (There are seaside cities in Tuscany that provide a closer parallel.)

Ribbing aside, the 6br/5ba, 5550 sq. ft. home is on another level entirely with its ambition.

They're jetting in reclaimed materials from old Tuscan homes, 600-year-old fountains and sinks from Cyprus, old ceiling beams and roof tiles. Some of the other parts are being manufactured in Italy as well.

It's not your cookie-cutter speckie, in other words. Not that it should be. Not on The Strand. And not for $14m.

Weekend Opens (4/25-4/26)

First things first, we're making a small change to the comment system – disabling the "threading" that was initially an attraction of the new system.

They've done some "upgrades" recently to the system, and you know what that means: bugs.

As to actual real estate news, though there are plenty of Hill Section offerings this weekend, none are new, so if you're interested in the Hills, we'll just refer you this week to the complete list of opens published in the Beach Reporter, which you can find at any time using 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 – or any open houses – to also report back in the comments here. Tell us what you see, what you like and what you don't like.


Sand Section

501 4th (5br/5b, 4100 sq. ft.) just got a mention Friday, too. It qualifies as a must-see this Sunday.

The home is a newer build (2005) down in the quiet South End, on a corner along Ingleside. Offers big bedrooms, nice outdoor spaces and a bright kitchen.

Purchase price in June 2006: $2.750m, now at $2.599m.

Open Sun. 2-4pm.


Tree Section

599 26th (5br/4ba, 3525 sq. ft.) is less than 10 years old (2001 build) and has lots of charm, but its corner lot also abuts fairly busy Blanche Rd. That'll be a problem.

A fantastic great room heads the list of our favorite parts. The lot's a bit bigger than the norm (5120 sq. ft.) and that affords a little more outdoor space, which is nice, if shady.

Pricing is interesting: acquired new in early 2001 for $1.275m, which was a lot back then. Now begins at $1.995m. Open Sat. & Sun. 1-4pm.


3528 Palm does not look like much, by profile.

Officially, it's 2br/1ba, 840 sq. ft. That's what $925k buys?

The listing explains that there's more to it – 2 additional structures that can't be counted, officially, but which you can enjoy nonetheless: a "large separate back house" and a "zen room."

Wow, a cottage had babies. Open Sun. 2-4pm.

Newest Below '06 Prices

Further evidence is now in – just in case it was needed – to show that 2006-08 prices are but a memory, and MB is probably somewhere around 2005 or 2004 prices now, depending.

New on market, and priced below acquisition to begin, is 501 4th (5br/5b, 4100 sq. ft.) down in the quiet South End, a corner lot nestled against sleepy Ingleside.

The home is newer (2005 build) with big bedrooms, nice outdoor spaces and a bright kitchen. That increasingly common must-have feature, an elevator, is part of the deal, too.

Purchase price in June 2006: $2.750m, before the owners did some additional customization. Start price now: $2.599m, and a pretty amazing $640/PSF.

881 10th (5br/6ba, 4000 sq. ft.) is a big custom home labeled "French" in style, due in part to the distinctive turret entry. Great kitchen and study.

The corner location on Poinsettia – non-ocean-view side of the Hill – and lack of a real yard are proving to be part of the challenge for this property. One open-house visitor reported back that the home seemed cramped simply from being over-furnished.

Sellers paid $2.8m new in April 2006 and started at $2.889m early last month. Now at $2.699m.

Meanwhile, over in the Trees, 636 29th (4br/4ba, 3250 sq. ft.) has been priced below its Sept. 2005 acquisition price ($1.890m) since it launched in February. (It was mentioned in "Not Worth Their '05 Prices?") With a new cut, it's now down to $1.699m.

Those are just 3 listings down $100k-$200k from their late-2005/early-2006 prices. Now where will they settle?

Open Forum (4/23- )

Whose schools are being bailed out by whom?

School finance in California is about as complex as you can get, except for all the other methods.

In MB, it's actually a little bit simpler than in some other parts of LA, or the state.

We get the standard allocations, but not much extra. Private nonprofits (i.e., parents) pay for a lot.

And now the city is in on the deal, big-time.

It was somewhat necessary last year. A few hundred k in direct assistance from the city to the school district.

This year: $1.3 million, direct from city coffers, er, reserves. (See the Daily Breeze story.)

Can MB afford it? Actually the city will now run a $5m deficit, which is supposed to be of little concern because we've got those reserves. (For some more detail, see MBC's story from 2 months ago, "What the City Expects.")

But you can see where this is going.

Absent a return to the go-go days in the economy, to keep our schools at the level where we are accustomed to having them operate, parents, the city coffers and all residents are going to be asked for more.

Not that there's anything wrong with that. A wealthy community probably should step up and help the schools however it can.

So how are Whittier, San Pedro, Lawndale, and the wild mix of other communities in L.A. dealing with similar shortfalls for their schools?

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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.

Bits from the Week

No big trend story here, but a few notable changes on some listings:

Cheap in the Hills: 402 Larsson (pictured), a smallish (3br/3ba, 1800 sq. ft.) fixer on the "wrong" side of Larsson, has a deal – last at $875k.

Big in the Hills: 511 Pacific, a huge home (5br/8ba, 8300 sq. ft.) that we've pointed to a few times this year (see "2 Classy Hillies Down $2m") has canceled about 6 months after first going on public offer. Last at $5.995m.

Dropping in the Hills: 717 N. Poinsettia (4br/5ba, 4175 sq. ft.) is now at $3.449m, down $1.2m from start last November. You're now looking at a unique, incredibly landscaped and private corner-lot home priced $100k below the recent acquisition price of the equally sized lot next door. (Construction now at framing.) Listing now says, "Seller wants property sold!" Watch this one.

Dropout in the Trees, Part I: We really never paid any mind to 2504 Pine, a new home (5br/5ba, 3600 sq. ft.) one door off Marine that first hit the market almost a year ago. Began at $2.149m, last at $2.095m – and no, they were not moving much with the market. It quit this week and who knows what's next there.

Dropout in the Trees, Part II: MBC did recently call attention to 3619 Poinsettia (pictured), at the corner with Rosecrans, a 1950s cottage (3br/3ba, 1350 sq. ft.) that was purchased during the Spring Rally of 2007 for the surprisingly low price of $925k. After a substantial remodel, it was being offered for $1.149m just 2 years later. (See "Flipping for Rosecrans?") The listing has quit after less than a month.

Dropping in the Trees: One of the homes featured in our Tree Section-focused "Deals or No Deals?" story a couple weeks ago is now down a bit. 1813 Pacific has chopped to $1.399m. Not sure if that would have moved it up the list (see the results story), but here's guessing that if it had run at that price in 2008, instead of the $1.599m it began at, there'd have been a line at the door. Meanwhile, the new price puts pressure on comparable 1800 Poinsettia, purchased in June 2004 for $1.320m, now at $1.499m.

Another Strand Titan

There's nothing like a corner lot on The Strand, a signature MB location.

Santa Monica: No Strand. About 10 homes on the sand.

Venice: Yeah, but...

MDR/PDR: Well-kept secrets.

Redondo: Condos.

Hermosa: Second only to MB.

Yeah, we're feeling provincial because a place like 1800 The Strand justifies a little civic pride.

This 5br/6ba, 5325 sq. ft. contemporary is now on offer at $13.5 million.

That's more than $2,500/PSF, but how do you measure that location?

Nearby, a new home at 1712 The Strand (3br, 4500 sq. ft.) recently sold for $9m, about $2k/PSF, but that was mid-block. (See "The Strand for a Mil, or 10.")

1800 The Strand is, incidentally, at the junction of 2 of MBC's "Great Streets," The Strand and 18th (see "Great Streets: 18th St. (Sand)"), which the listing calls "arguably the best corner lot on the Strand."

Oh, but the listing gushes much more than that, calling this home: "Quite simply the best Strand home to ever hit the market."

Sometimes listing copy is all useless hype. Sometimes it's close to dead-on.

Double Deal

With a new cut Monday morning, the double-lot at 2900 Maple looks like the best deal on dirt in MB.

The bucks are still many – $1.749m to be exact – but that will net you dirt equivalent to 2 full-size lots (2 x 4640 sq. ft.) with an aging rancher on the property. (The pool looks inviting this week.)

A local spec builder grabbed 2900 Maple for $2.555m in Feb. 2007, clearly intending to split the lot for 2 new cookie cutters. (Price paid was equal to $1.277m per lot after a split.)

Now, 2 years later, the new price is a drop of $806k (-32%) from that height. No wonder, then, that this is now posted as a short sale.

The most recent, comparable lot transaction we saw in the Trees was at 1900 Laurel, a plus location offering a larger-than-normal 6000 sq. ft. lot and a corner. That went for $1.25m in January. Also, 1205 Walnut, a 1.5-size lot (6700 sq. ft.) too close to MBB, closed for $985k in late March.

2900 Maple is north of Valley but otherwise counts as a decent location, midblock on a quiet street. With a couple more slices off the $1.7m range, it might even be a nice acquisition as a fixer. Imagine a sensibly sized home (3br/3ba, 2250 sq. ft.) with more than enough back yard – that's rare in the Trees after all the redevelopment of the past decade.

Inventory Recedes a Bit

Remember the quiet we were talking about last week? A near-blackout in new listings for early April?

That had an effect on overall inventory.

A little burst of sales and cancellations dropped SFR inventory west of Sepulveda for the first time in a 2-week period this year.

This is clear at the end of this graph (click to enlarge) and in the new MB Market Update Spreadsheets for 4/15/09 (download by clicking the link here, or at any time using the link in the upper-right corner of the front page).

The year 2009 began at 105 listings, we ended March at 155 SFRs, and the figure was down to 147 by mid-April. (At this writing, we're back to 151.)

The first part of April saw just 5 new listings, but 7 sales (new escrows) and 6 cancellations, for a total -8 hit on inventory.

(Side note: For those of you wondering how our little poll/contest regarding new listings last week wound up, we counted 7 new listings in the 7-day period Monday-Sunday, so the folks voting 5-8 new listings (29% of all) were right.)

So have we peaked for the year 2009?

Take a look at our chart above. Inventory began 2008 at 59 and climbed to 96 by the same point last year, growing at a steep clip before Spring became Summer.

However, that wasn't the end. Over the next 6 months, inventory grew by a net of 28 listings (+29%) to an Oct. 15 peak of 124.

Were we to see inventory of SFRs west of Hwy. 1 grow this year at the same pace, we'd be at a cool 200 by late September.

Of course, past results are no predictor of the future.

For now, we can say we've seen a little tapping on the brakes. Now here comes Summer, when everyone wants to be at the beach.

Weekend Opens (4/18-4/19)

There's a minor explosion of opens this weekend, after a quiet weekend last week for Easter and despite a dearth of new listings.

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.


Hill Section

877 8th (6br/6ba, 5000 sq. ft.) is a short-term hold, a newer Cape Cod (2007 build) purchased new for $3.650m in Sept. 2007.

This one hit the market this year at $3.599m and is down already to $3.399m. That would be a loss.

Available for public viewing for the first time we've seen. Open Sun. 2-4pm.

509 N. Dianthus (3br/3ba, 2250 sq. ft.) is a mid-60s home that has been completely redone and resembles some newer construction. Began recently at $1.35m, now at $1.199m. Open Sat. 1-4pm.


Sand Section

132 2nd (4br/5ba, 4300 sq. ft.) is a newer home fronting the 2nd St. walkstreet and running along Manhattan Ave.

This one was the subject of a story at MBC a month ago (see "A 2nd Try on 2nd") that noted, among other things, that the sellers had a deal last year at $6.225m that failed before coming to market at $6.0m later.

Now at $4.5m, still +$1m from the April 2005 price. Open Sun. 2-5pm.

2719 Manhattan Ave., a fairly big (4br/5ba, 3450 sq. ft.), high-concept modern was also purchased in April 2005, just like 132 2nd, in this case for $4.3m. We've seen this one around for a while, but this weekend appears to offer the first look to John Q. Public. Sellers now seek a nice $1.7m markup to $5.999m. Open Sun. 2-5pm.

468 33rd (5br/5ba, 4250 sq. ft.) is up on a friendly block on the plateau. This one has been on and off the market for the better part of 2 years, last at $3.4m before a long break, now at $2.890m. Open Sun. 2-5pm.

132 El Porto (2br/2ba, 1200 sq. ft.) has been marked down 25% over a few months, and is now among the cheaper and more charming beach-close offerings at $899k. Open Sun. 1-4pm.

FREE LUNCH DEPT.

If you're walking or driving to the beach Satuday, plan your route strategically and pick up a free lunch (per the Beach Reporter) at 229 24th, a lush new home that chopped this week to $4.999m. There are restaurants all over town that didn't cost that much to build. Open Sat. 1-4pm.


Tree Section

1600 Elm (3br/3ba, 1975 sq. ft.) is just plain cute.

A 50s cottage with some 80s additions, this one has some nice throwback appeal, and just. enough. space... almost. Open Sat. & Sun. 1-4pm.

Not picky on size, but just want the MB address?

How about 1301 Oak (3br/1ba, 1000 sq. ft.), rated a "starter" by the listing, well below $1m at $865k. Sellers paid $605k in Jan. 2003. Open Sun. 2-4pm.

2808 Maple offers lots of space (5br/3ba, 3600 sq. ft.) in an updated late-80s home. This one calls to mind 1728 Poinsettia, about the same size and vintage, which closed for $1.6m in early March. Maple has a tad more space, but the location is less desirable than Poinsettia's. Maple starts at $1.675m. Open Sun. 2-4pm.

Another Flopped Flip

Back in Fall 2005, it may have seemed like a decent get.

For an even $1.6m, a pair of investors picked up 505 3rd, a tired, 4br/3ba, 2600 sq. ft. house with an odd layout, but a good location in the quiet South End.

The market was heating up, and if you could buy and hold this property a while, some day there'd be profit in it. Rent it out in the meantime, cover the expenses, and flip it when the time is right. Good plan.

We now know that 2005-06 was pretty much the peak around MB, depending. And with a new price cut this week to $1.599m, the would-be sellers are acknowledging for the first time that this bet on the local RE market won't pan out.

MBC has tracked 505 3rd on and off for 2 years, starting in June 2007 when the listing first came up at $1.949m. Yes, that was a markup of $350k (+22%) after a hold of about 21 months. (See "What's Right for 505 3rd?" from Aug. 2007.)

That price never seemed to make sense. But they did post one, and, we think, two separate escrows on the property within months of listing it at that markup. Those deals failed.

MBC last took note of 505 3rd in Aug. 2008 when it quit the market at $1.798m. (See "Recent Dropouts.") The sellers were still trying for $100k each.

But now, it's unloadin' time – if they can find a buyer.

What's the value these days for a dated South End home? The listing notes:

Recent lot sales in the South End of Manhattan Beach have gone for more...

So this is a deal because it needn't be scraped?

Nearby 437 1st, cleaner, fresher and comparably sized (4br/3ba, 2600 sq. ft.), sold for $1.610m in June 2008 after a substantial remodel. We'd be surprised if that one's worth $1.4m now.

Know who got the timing right on 505 3rd?

The gentle soul who acquired it for $889k in Aug. 2000 and got $1.6m (+$711k/+80%) just 5 years later. It's worth a visit to a clifftop on Maui to hear the story.

Nary a Trickle

About a fifth of the voters (19%) in this week's short poll thought this week would see just 0-4 new listings among SFRs west of Sepulveda.

That looks like the smart money now.

If a listing isn't announced by midday Thursday, it's generally not coming out in a given week.

And by Wednesday night, the tally was rather limited:

• 1 bogus re-list (229 24th, began at $5.495m in Feb., now $4.999m);

• 1 new offering that began in escrow ("backup offer" status) – 2107 Valley at $1.099m; and

• 1 bona fide new listing, super-cute 1600 Elm (3br/3ba, 1975 sq. ft., $1.339m).

Of course, we'll only count 2 of those toward the week's total of new listings.

The crickets chirping in the background represent new territory for MBC. We may be seeing a stalling-out of sorts here.

Easter Week was one thing – you expect less activity.

Implied in our poll this week was the question of whether you think lots of potential sellers are quitting before they begin, or whether "normal" RE activity was simply held back by the holiday, coiled up, ready to spring.

Data so far support the "quitting" theory.

We struggled with this subject, by the way. News that there is no news is, well, a bit boring. Mrs. MBC propped us up. She said, in short, "If nothing is happening, that means something, doesn't it?"

If new sellers refuse, en masse, to enter this market, that might be nice for those who remain, even if inventory is quite high. Buyers may be bored, but those who are serious will find increasingly good deals. And that, at least, will be news.

We won't call Spring dead yet. Those high winds the last few days have made a lot of things seem screwy. Before you know it, we'll be in Summer and MB will shine. It may even be a great time to buy.

Open Forum (4/15-)

Tax time.

We go long periods without thinking too much about what, exactly, our tax dollars go to.

This year it seems different.

There's the state budget mess, where they're raising taxes (in a recession) but still cutting teachers. So what are we getting there?

Locally, we've got a city that's headed into the red but confident, because we've got reserves. Great while you've got 'em.

As to the feds, we all know a chunk of this year's taxes is going to bailouts, and when you've got less money to your name, that stuff starts to sting.

Maybe next year the feds will start to save money on one of the wars, but they're expanding another. And then there's a couple of new nuclear states and pirates (!) and national healthcare to worry about. Anyone predicting lower costs on the horizon?

Don't forget the hidden costs of the truly massive, quinto-jillion-ballistic-HUGE interventions in the economy in the form of new, free money from the Federal Reserve. Don't worry, they're not spending your money, just your currency. Seriously, it's different. Enjoy those 4%+ rates for a little while longer...

In those boom years, you paid what you paid and if you had a gripe, it could be a polite disagreement. Increasingly, you wonder: they're spending my money on what?

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Admittedly, the April 15 taxes column is a perennial. See any good ones this week? Share them here. (Use tinyurl.com for links when possible.)

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

Craigslist Craziness - Update

It's been 3 solid weeks now since 432 24th absolutely had to be sold "by end of next week." (See "Craigslist Craziness.")

According to the current Craiglist listing, it now must be sold "by end of next week."

Or "by Tuesday" (today?!?) according to this listing of the same property – at $150k less.

Act quicker, same more!

Just about the only thing that has changed in 3 weeks is that the listing has dropped off the MLS. It would appear to be a Craigslist exclusive at this point. If that sounds obscure, at least there are still the constant, serial postings, several per week.

By the end of one of these weeks, they may even have a deal.

How Many Listings This Week?

It was striking how slow Easter Week was in terms of most local RE activity.

MBC noted 6 sales (new escrows) in the first part of April in "Lovely Vistas." That total was pretty decent.

But few lisitngs adjusted prices, open houses were limited, and, by our count here, just 1 new SFR listing west of Sepulveda debuted last week (Monday-Sunday), and it was actually a retread.

468 33rd (pictured) has been on and off the market for the better part of 2 years. (It's been months since we last saw it – near $3.4m back then – while it's down now to $2.890m.)

Consider that March 2009 saw 32 new listings, leaving MB (WOS) at 155 SFRs on offer. (See our MB Market Update for 3/31/09.)

You can't tell us that the whole month April is on pace for 4-10 new listings.

As a parlor game of sorts, we'll ask you to guess how many new SFR listings will enter the market this week (Monday-Sunday). Please vote in the poll in the left-side column.

Poll closes quickly, Weds. morning at 11am, to minimize influence on votes from data.

We'll use Redfin's MB page as our guide, watching for how many truly new listings hit the market in the period of 12:01am on Mon., Apr. 12, to Sunday, Apr. 18, at midnight.

How much was supply artificially held back during Easter Week?

Are we headed for the 190 SFRs by the end of April, which MBC contemplated as possible way back in January?

Or have potential sellers gotten the message that this is a rough time to try, and are staying out as a result?

A Few Sat. Opens (4/11)

It's a holiday weekend, and relatively few opens given the vast inventory of homes for sale.

All will be busier next week, we're sure. Below are just a few interesting options for Saturday.

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.


Hill Section

612 John is one of several prestige homes in the Hills that went months without bothering to open up to the public. (At least as far as the BR listings go.)

Now, after 200+ DOM, this huge (6br/7ba, 7400 sq. ft.) home is available for touring and ooohing and aaahing.

Grand home, big yard (nearly 10,000 sq. ft. lot) and ocean views – what you expect up on the hill. Splendid.

Purchased new in 2000 for $3.3m, this one began at $7.3m and is currently at $6.3m. Open Sat. 1-3pm.


Sand Section

217 2nd is two units, a main 3br/3ba, 2400 sq. ft. home with ocean views plus another 2br/2ba, 1000 sq. ft. rental. On a corner on the 2nd St. walkstreet west of Highland. Purchased in Dec. 2003 for $2.1m, tried last year as a FSBO if we're not wrong, currently at $3.495m. Open Sat. 1-4pm.


Tree Section

Nothing really new caught our eye so we'll point at one of the lovelier offerings this weekend, 2600 Poinsettia. This is newer construction (2000) with 4br/4ba, 3200 sq. ft. and great atmosphere, lots of custom touches. The quiet, private patio, with stone and lush plantings, is a well-realized outdoor living space with an "outdoor kitchen" featuring a terrific BBQ.

This one began last year at $1.899m, way high, and is now at $1.599m, getting close. Open Sat. & Sun. 1-4pm.


BONUS EASTER LISTING

If you lived at 647 15th, you could be walking just across the street to church. This 4br/4ba, 3670 sq. ft.) Craftsman-inspired home was purchased for $2.8m in May 2006 and is offered now at $2.999m. Open Sun. 2-4pm.

Lovely Vistas

It is one heckuva slow week in local RE, this being a break for many.

Very few new listings, few price chops.

Some sales are happening here and there. Here's a list of SFRs that have gone into escrow recently (highlighted addresses are in "backup offer" status and can be viewed now):

• 1015 Boundary Place, rumored before to have a deal, now under contract, last at $1.579m;

• 316 8th, a double lot sale last at $2.45m;

• 2616 Highland, an ocean-view home that is also, well, on Highland, at $2.199m;

• 333 3rd in the South End, last at $1.7m;

• 1828 Walnut, a serious fixer on a corner, priced at $975k; and

• 3600 Elm, a little cottage at $1.095m.

So that's something good to say about Easter Week... People did not ignore their obligation to buy MB RE.

What's giving us a chuckle or two is the pics in the listing for 3611 Vista.

This is a TH that made a cut this week to $1.499m. It began at $1.699m this year but we recall it being somewhat higher last year. (No records at MBC, this being a TH.)

We love the pic of the oil tanker, so well centered in this vista drawn from the very first pic in the listing.

You know, the money shot. The one that is supposed to take your breath away and invite you to come see the rest of the house.

An oil tanker.

A later pic, attempting to draw Malibu into the frame, also draws in another form of transportation: a jet taking off from LAX.

Aren't we trying to convey serenity, tranquility, nature, etc., by showing the bay views? So why the big machines?

For what it's worth, 3611 Vista is not only offered for sale, but also for lease at $6,750/mo.

You don't hear a lot of renters being all fussy about views. The $1.5m+ set, sometimes, yes.

Some Recent Closings

There's been no rush recently to make or wrap up a ton of sales, but we've seen some interesting closings:

• 755 11th (pictured) (5br/5ba, 5200 sq. ft.) in the Hill Section, "The Georgian" to those who knew it, sold for $2.5m as a fixer, down from a start at $3.399m (-$899k/-26%). The oversize lot features a cool, large sports court. The interior featured blue shag. But not for long. How about $480/PSF in the Hills?

• 429 31st (4br/5ba, 3800 sq. ft.), a dandy Cape Cod up on the plateau, went for $2.160m ($330k below its May 2005 acquisition price).

• 3505 Pacific, a delightful family home (4br/3ba, 2850 sq. ft.) on a nearly double-wide lot, went for $1.299m. Worth noting: purchased for $1.350m in Jan. 2004... received multiple bids this time, but went precisely for the initial asking price.

On different notes, how about some overbids and some Strand dirt?

• 405 21st (pictured) (3br/2ba, 1450 sq. ft.) got a couple notices at MBC, especially after its fast sale (see "That Was Quick"). It went for $90k above asking, at $1.239m.

• 112 19th Pl., a clean, if somewhat dated, cottage (3br/2ba, 1500 sq. ft.) right along Ocean near The Strand, was listed at $1.299m but got bid up to $1.4m.

• 208 The Strand (dirt, 2700 sq. ft.) closed for $6.7m recently. Neighboring 204 The Strand was also sold to the same buyers (price undisclosed). Those sales create a new double lot on The Strand at the South End, immediately abutting the giant 3-lot home they're building just to the north. (The 3-lot Marriott?)

To the south, along 2nd, another new home is framed out and has walls and is starting to look real. The whole, short block will really be something by 2012.

More MBB Surprises

Not quite 2 weeks ago, they posted a new escrow at 1110 John, the biggest of the 3 brand new, ultra-modern townhomes right on MBB.

(Click for pics & details via Redfin; also, see "A Surprising Development on MBB" for our first look at the offerings.)

That deal – the first for the group – is off.

And here's a shocker: The price, after return to market, is a huge jump down. It's now priced lower than the start price on the smallest unit from just 9 weeks ago. All 3 units are down substantially.

1110 John (3br/2ba, 2475 sq. ft.) began at $1.793m, chopped to $1.525m at the time a deal was made, and returned Tuesday at $1.250m, a total chop of $543k (-30%) in about 9 weeks.

You might imagine that the deal they made was near that $1.25m price – the first indication of what the market really is for nice, new condos on a busy street that are fairly isolated from walkable services. If so, they're using the information they have to try to draw in another buyer at the right price.

The other 2 TH's are down big-time, also:

• 1106 John is the smallest at 2br/2ba, 1550 sq. ft. Started at $1.299m, but is now at $989k (-$310k/-24%).

• 1108 John, the middle child, is slightly larger than 1106, at 2br/2ba, 1800 sq. ft. It began at $1.450m, and has chopped to $1.050m (-$400k/-28%).

These MBB condos are among the wackier projects pursued at the peak of the local RE bubble, and therefore an irresistible subject here at MBC, even though THs are mostly off our beat.

You don't often see sellers concede that they were off by 25-30% within a couple of months. Spec homes may linger for a year or more at the price point that penciled out back when the project was green-lighted, even though it's no longer realistic.

So credit the group that developed these modern condos with this much – they're trying to find the right price in this tough market, and quickly.

The commercial space and the housing units all are offered for rent, too, so they may take whatever they can get. Wouldn't you?

Open Forum (4/7-4/13)

Time for another Open Forum thread... your chance to launch new topics, share news, etc.

Baseball-specific notes, on account of Opening Day:

Former MB walkstreet resident Derek Lowe threw 8 shutout innings in his debut Sunday with Atlanta, surrendering 2 hits and no runs. A nice performance, but his house at 204 19th (pictured) remains for sale at $5.2m after almost 7 months. (See "Lowe-ring the Price.") Someone is doing his job, and someone else...

Current MB resident Nomar Garciaparra had no hits in 4 at-bats in his debut for the Oakland A's today, playing down in Anaheim, er, Los Angeles. Meanwhile, his former home (sold last year) at 120 16th (5br/5ba, 4070 sq. ft.) is for sale at $5.795m after being acquired in May 2008 for $5.6m in an off-market sale. (Click here for a brief, narrated virtual tour; not yet on MLS.) Yes, a markup after 1 year.

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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.

MB Market Update for 3/31/09, Overview

The year is not off to a great start here for local RE.

Now that we've got 3 months' worth of data in the hopper, the big picture is getting clearer, and it's: growing inventory, slower sales and price erosion.

MBC's own MB Market Update spreadsheets for the 2-week period ended 3/31/09 can be downloaded by clicking here, or at any time by using the link in the upper-right corner of the front page.

We'll check in first with our now-obligatory reference to another new record in SFR inventory west of Sepulveda (spanning MBC's 2 years of public market tracking).

We wound up March at 155 SFRs west of Hwy. 1.

That's +10 from the end of February and +58 (+60%) over the end-of-March figure for 2008. (See the MB Market Update story for 3/31/08.)

Inventory broke down this way by sub-region:

Hill: 38
Sand: 59
Trees: 58

Overall stats for March: 32 new listings, 15 sales (new escrows) and 8 cancellations.

By those measures, March 2009 didn't look much different from March 2008 (then: 34 new, 13 sales).

But year to date, the picture ain't pretty.

Kaye Thomas has run the numbers from the MLS database, and she's showing both a big dropoff in sales pace over 2007/08 and a huge median price drop YTD for 2009. (See her post, "Manhattan Beach: First Quarter Sales, 2007-2009.")

Number of SFRs sold west of Sepulveda:

2007: 58
2008: 35
2009: 28

Whoops, 2009 sales are running at 48% of the 2007 pace, and 20% behind the 2008 pace – while inventory is up 60% year over year. (Factors that are not unrelated.)

Keep in mind, the sales pace of 2007, overall, was the worst on record (20+ years), so dropping from 2007 to 2008 was a bad sign, and a bigger drop to 2009 is even more concerning. (See "Maybe It Can't Get Worse," regarding the record-low sales pace in 2007.)

One effect you'd expect amid greater inventory and slower sales would be lower prices for the properties that do sell.

That's what you see in MLS median-price data for SFRs west of Sepulveda.

MLS data in Kaye's story show a quick drop of $522k (-28%) in our sub-market's median price from 2007/08 – when it was at $1.850m both years – to 2009, when it stood at $1.328m.

To soften the blow, we can at least say that the small number of sales in this quarter warrants a yellow flag on those data, even if they are consistent with a theme.

And talk about adding insult to injury, Kaye observes:

West of Sepulveda seems to have been hit far harder than East of Sepulveda.

Aw, Kaye, you're saying there's more life east of PCH?

Maybe next you can go tell someone their kid is ugly.

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UPDATE: Kaye's original post gave 24 sales, instead of 28, west of Sepulveda for the Q1 2009, but she has revised it to 28, as she explains in a comment below. Related changes were made in this story.

Weekend Reading (4/4-4/5)

This week two of the edgiest real estate agents around got the limelight.

The big time: Leo Nordine got extensive treatment in the April 6 edition of The New Yorker.

Nordine is an LA-area REO specialist who lives nicely in Hermosa and is all over MB and the South Bay all the time. But the article focuses in part on the ugliness of Nordine's work dealing with destroyed properties in marginal neighborhoods, and not a few shady characters.

The ugliness of the mortgage-finance bubble is the backdrop. The opening example: A woman purchased a South Gate home for $170k in 2001 and re-fi'd with New Century in 2006, pulling out $440k before walking.

Nordine's business is built on the volume of foreclosures/REOs in downbeat areas, but he recently worked on an MB property abandoned by a professional athlete. He decided he needed to do more in higher-end areas. "New focus, high end, quality, not quantity," he scribbled on a note pad in the wee hours.

Nordine thinks his time is coming soon for MB. He says:

The foreclosure business goes in waves, and now the next wave is heading west to hit the rich folks in Manhattan Beach. I'm just riding it.

Yikes, is that a threat?

Nordine was featured by the LA Times late last year in this article (still free online), from which MBC culled this quote:

Don't sell unless you absolutely have to. Don't buy until 2010, when prices should be at 2000 levels. And apply every spare nickel to paying off your debt, including mortgages.

As to the feature in The New Yorker, if you don't yet subscribe, we'll recommend you grab a copy at a newsstand (or library!). An online version is available to subscribers through the archives page here, or you can subscribe or purchase the article at newyorker.com, but frankly, that system did not work well for us.

The front page: San Diego-area RE agent Jim Klinge is the author of bubbleinfo.com, quite possibly the best real estate blog anywhere. He got front-page treatment in the LA Times this past week. (Photo by the Times.)

Jim's blog is analytical, it's local, it's big-picture, it's funny, it's honest and Jim has added increasingly effective uses of video to flesh it all out. Those who know the site know what a joy it is.

Because the author is (very) active in the current market and very dedicated to blogging (half his clients started as readers), the site has snapshots of reality that few can capture.

Why blog? The Times asked, Klinge answered:

He knew the market was headed for a crash, he said, one day in July 2005, when he had just come home from a family trip to Disney World and answered the phone. The woman on the line had seen a house that Klinge was selling.

"Up until that point, the only thing buyers wanted to know was how much over list they needed to offer. All of a sudden this lady was being critical of everything, the property, the price. I hung up the phone and told my wife, 'It's over,' " he said.

A few weeks later, he started blogging. His wife, Donna, who helps manage the family brokerage, was nervous. "He was really pushing the envelope with the blog, taking people on, naming names," she said. "I took deep breaths. I didn't know how it would turn out."

It's turned out well for Jim. He's a now a successful realtor with street cred, and really, who else can say that?

It's almost gratuitous that the Times writer labeled Klinge the "Hunter S. Thompson of real estate." (Uh, yeah, without the drugs and guns. C'mon, is any sharp-elbowed writer Hunter?)

Our congrats here to Jim for the new fame.

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Looking for open houses? How about one, and only one, for now:

717 Poinsettia (4br/5ba, 4200 sq. ft.) in the Hill Section, a Saturday-only listing.

This is a very classy newer home on a double corner lot. Instead of views you get gorgeous, lush landscaping unmatched in most of MB (huge plus in our book), and a big, secluded south-facing back yard. Currently at $3.999m after a recent cut. NOTE: Open Sat. only, 2-4pm.

Interested in the rest? Check the Beach Reporter's list of opens for the weekend.

Poll Results: Deals or No Deals?

The other day MBC asked if any homes among 6 in the Tree Section priced near $1.5m were "deals" or not.

Mostly, readers said "not."

Almost two-thirds of respondents (62%) chose "No Deals" instead of any of the homes listed.

On the brighter side, a bit of a consensus emerged. If a home on the list is a deal, however qualified, it's 3210 Ardmore. That's because it's big (5br/4ba, 3500 sq. ft.), down about 25% from its start price and a great home.

If Ardmore were priced any lower than $1.525m it might have done better than 21%.

The runner-up here was 1800 Poinsettia, doing a bit better in the poll, at 12%, than the rest of the bunch, which really generated no enthusiasm.

What's potentially interesting about a poll like this is the snapshot in time it provides. How were certain homes priced in Spring 2009, and what happens next? We'll watch.

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UPDATE: After a skeptical comment on this post, we've decided to watch for some specific outcomes with the 6 homes listed in the poll. If 4-5 of them quit or sell for 10% less than their list prices at the time of the poll, we'll consider the responses to have been "right." If most of these sell and go for discounts of less than 10% off their prices at the time of the poll, then the mass of voters was "wrong" on this one. There's something specific we can track.

When We Say Walkstreet...

You say you like the walkstreet lifestyle. Down in the South End, where they're flat.

A giant sidewalk separates homes – no cars allowed.

Your front patio opens out to the neighborhood. You meet and greet the neighbors, maybe run an impromptu pot luck from time to time.

For the kids, it's a dream. It's safe to walk the streets, leave your toys out, run over to a neighbor's house without any question.

Yeah, you don't just like the walkstreet lifestyle, you love it.

Now what if we gave you a chance to get in for less than a million bucks?

That's 325 4th. It's up now at $899k. (Click highlighted address for more pics & details via Redfin.)

And now we're going to test your commitment to that walkstreet ideal.

Remember when we said "no cars allowed"?

325 4th is just a half lot. It's the front half, along the walkstreet, which is the right half to have.

But there's this tricky question of where mom's and dad's cars go.

Even if you've gone green and taken the fam down to one Prius, here's hoping you didn't get the plug-in kind. Because, well: no garage.

Really, we're not sure where you park. At least El Porto (er, North Manhattan Beach, er, El Norte) has a public lot where you can get permitted spaces. In the South End?

Looking at this home in particular, of course, 2br/1ba and 650 sq. ft. is not going to accommodate a large family, or maybe anything more than a very intimate young couple. Maybe you'll just have 1 car's problems.

This home was obtained for $718k in Jan. 2008 before a spiffing up. (The listing says "pottery barn perfect," and here we are wondering if Pottery Barn is still in business.) Dare we call this a flip?

You know you love the walkstreets. Don't worry about your car. Sell it! Work at home! Walk to work! Walk everywhere!

We're talking less than a million, folks. Any takers?

President to Regulate Real Estate, Set Prices

News item: President Obama continued his economic housecleaning Wednesday by removing the board of the National Association of Realtors and installing Yale University economics professor Robert Shiller to lead a restructuring of the group, which was seized by the government in an unexpected move late Tuesday evening.

"We need to be honest, now and always, with the American people about house prices," the president said. "Home prices can and do go down. Damn, ain't that the truth? Professor Shiller will bring a fresh perspective to the NAR and will help us retool the industry, which is so vital to the American economy."

Aides to the president, speaking on condition of anonymity, said the Obama administration is exploring several options to regulate the real estate sales industry.

Most plans under discussion would prohibit the payment of sales commissions in real estate transactions.

One would replace traditional salespeople with employees of a newly expanded Federal Housing Administration, who would each be required to be neutral processors of paperwork whose advice on transactions would be limited to how to fill out forms.

An alternative, lobbied for heavily behind the scenes by representatives of the legal profession, would substitute lawyers operating on a flat-fee basis for salespeople in most transactions.

A loud debate continues behind the scenes as to how, exactly, willing sellers might find willing buyers in a market without commissioned intermediaries.

President Obama himself explained the rationale for the administration's plans. "We are not going to point fingers or say anyone did anything wrong," said the president. "That's not how we'll move forward in fixing our economy."

"What we need now," the president said, "is a real estate sales force that will help us to stabilize home prices, according to specific regulations and price points set by my administration. We need to take the emotion and the exuberance out of the process. We need predictable, orderly prices and guaranteed returns, at a specific and pre-identified rate, for people who make the decision to purchase a home during these difficult economic times."

President Obama concluded, "I regret to say that the free market failed us when prices rose too far, too fast, and it is failing us now as prices sink too low. That has been bad for our economy, and I'm telling you today, it's over."