Foreclosure Row No More

Posted by Dave Fratello on Monday, November 26th, 2007 at 5:55pm.

For a while there, we had two listings in the Hill Section on the same street that were in foreclosure and up for sale at the same time. We were half-expecting a third, but now there are none.

One of the houses, 402 Larsson (first pic), is now in escrow – the cheapest Hill Section listing we've seen this year at $1.1m. With 3br/3ba and 1800 sq. ft., the home offered, shall we say, tremendous remodeling opportunities. And for the seller, a million bucks should make those bad loans go away – at last.

Only one home in the Hills has sold for less than $1.1m this year, and that was 234 Larsson, a townhome that was listed at $1.3m but sold for $1.075m.

Why the Larsson discounts? Have you ever driven on Larsson? It's the Hill Section's version of Oak Ave. in the Trees – Sepulveda-adjacent with all homes on one side of the street backed up on businesses. In its defense, we can say Larsson is actually wide enough for traffic and parked cars to share the road, unlike Oak, and it has a cute little park (the "Parkette," in fact).

Over on the "right" side of the street, for several months we've been watching 601 Larsson. This home was purchased for $2.0m in Sept. 2005, and came on the market again less than 2 yrs. later at $2.695m (March 20, 2007).

It's a distressed-seller situation, full of foreclosure notices and several scheduled auctions (all postponed, so far) and an attempt on Craigslist to get someone to take over the loans and, ultimately, a last-ditch effort to go with a short sale (at $1.899m, guaranteeing a loss of about $150k – maybe more – to the holder of the 2nd).

Alas, this home is not worth what it was 2 years ago, and demand for homes with compromised locations is minimal. Nothing has worked to sell 601 Larsson, and now it has canceled off the MLS again. Its fate would appear to be REO, in which case we could see it back next year at $1.5m-$1.7m.
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