A $1.3m 'Starter Home'

Posted by Dave Fratello on Sunday, March 18th, 2007 at 5:53am.

In a way, I hate to pick on one listing. But I was struck silly reading the language pitching a 1,200 sq. ft. 3br/2ba bungalow at 3521 Elm listed at $1,279,000.

The listing begins: "The perfect Tree section starter!"

(Sigh.) A "starter home" for $1.3 million. So many questions.

How did we get here? Why is this considered normal? And, though it is surely the case that a "starter" like this did, at one point, command $1.3m in this area, is that still true?

Somebody might walk right up and pay the list price, or list -5% ($1.2m), and all the realtors and active buyers will nod their heads and say, yes, it's still ON, and we'll all just continue like normal... Or that might not happen, and these sellers may hang around a while and take $1m when the deal finally gets done. (They paid $685k in 2001, so don't cry for them.)

As I said, it's not fair to pick on this one house. There are perhaps a dozen homes in the price range west of Sepulveda that qualify as "starters," but they aren't being pitched that way. It's the honesty of the language here that causes MBC to single out the Elm listing.

Zillow, which usually seems to guess high in MB, says this one is worth $1.180m, or $100k less. A neighbor, at 3613 Elm, quite recently got $1.180m (exactly) for a fixer with 1,300 more square feet (2,500 total). In fact, for about this price -- more or less -- you can lock into much larger, nicer, better-located homes all over MB west of Sepulveda.

MBC is not a big fan of Elm. The block in question qualifies only technically as the Tree Section. Parts of Elm are quite nice (esp. between Ardmore & Marine), but here the phrases "steps to Sepulveda" and "steps to Rosecrans" ring out. You are otherwise isolated, you might have a view of the Chevron refinery, and you'll be driving wherever you go.

To pay $1.2-$1.3m to live in a tiny house here seems like a desperation move. Here's betting that today, in 2007, with lending standards tightening and some real churning in the marketplace, nobody pays that for this particular "starter."


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UPDATE: March 19 - 12 days after going on the market, the listing price was reduced $40k to $1.239m. Sort of a bogus drop.
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