MB Market Update for 11/30/07

Posted by Dave Fratello on Wednesday, December 5th, 2007 at 6:15am.

The new MB Market Update spreadsheets are available for download by clicking here, or by using the link at the upper-right corner of the main MBC page. Information in this update closed Nov. 30. This and older updates are archived at our data-dump/sister site here.

Total SFR inventory west of Sepulveda was at 73 on Nov. 30, -7 from the middle of the month. That was because so many sellers quit, rather than face the holiday season lingering on the market (see MBC’s story, “A Cascade of Quitters.”)

As we’ll see, among the listings that remained, price-cutting got more serious in some cases. You have to make yourself stand out here if you mean to sell. (See “Modest House, Bold Move.”)

In the second half of November, there were 5 sales (new escrows) of SFRs listed on the MLS. (In our subject region west of Sepulveda.) In a surprise, most of those were in the glutted $2m+ segment of the Tree Section, and 2 of 3 there were new construction.

That means we closed out the month of November with 12 sales of MLS-listed homes – the same total we recorded for October.

Let’s look at our region by section:


Hill Section

There are 8 active SFRs.

We lead with news about 844 11th, which went into escrow a month ago after 540 days on the market. This giant ultramodern remodel fetched $2.50m, down $675k (-21%) from its start price of $3.175m. (See “It Only Takes One Buyer.”)

We had one escrow open briefly on the foreclosure at 402 Larsson (click for details via Redfin). That one’s still got appeal given its $1.1m price tag, but the first deal fell through.

There’s one new listing, 872 MBB (pictured; click for details), a 3br/2ba, 1275 sq. ft. remodel on a small 4200 sq. ft. lot. The garage (new!) faces MBB. That’s your curb appeal, and what a curb to appeal to. The home is tucked down below. (See “What Can Sell 872 MBB?")

The sellers of 872 MBB paid $960k just 26 months ago, meaning they’d like a 30% markup (+$238k net, with 6% cost of sale). In light of the location, poor photos and time of year, it would seem the sellers have set themselves up for a big disappointment, but MBC has no crystal ball.

Dropping out for now:
  • 601 Larsson – from foreclosure to the MLS to Craigslist and back, last seen as a short sale at $1.899m;
  • 916 9th – a nice and large out-of-the-way home MBC featured in this story; last seen at $2.9m; and
  • 869 3rd – a modern home owned by two realtors that MBC thought was shooting the moon when it came on in late July (see “Two Views from the Hills”), last seen at $3.899m.

Sand Section

There are 24 active SFRs.

Since the last report, we’ve gained one teardown (3216 Alma, seeking $1.699m) and lost two. Gone are 328 16th, which sold in less than 30 days (asking $1.867m – see “Sand Lots”) and 453 36th St., which has now quit, having never budged from the $1.795m sought in the initial listing 5 months ago.

Here’s a thought prompted by 453 36th: If a downtown walkstreet lot is worth a bit over $1.8m, then a lot on a dreary street in eastern El Porto is not worth $1.8m, not even close. (Oops, did we say “El Porto?” We meant El Norte.) If it comes back, how about a few steps down?

Three walkstreet homes joined the market within days of each other, all of them on 6th Street in the South End. (See “6th Street is Turning Over.”) However, what may have been the nicest, and clearly the most overpriced, quit in less than two weeks – oh, 532 6th St., we hardly knew ya. Still with us:

408 6th (pictured) – A funky mid-block home that, sadly, stands up and away from walkstreet life rather than participating in it. It's got 4br/3ba and 2250 sq. ft., and is upgraded inside, in large part. Sellers seek $2.625m, after paying $1.050m in July 2001.

528 6th – A sharp and severe modern home, angular and industrial, but with good light and nice details. You have to love this sort of thing to find this home appealing. Valley Drive, just one home east, is a factor. You get 4br/4ba and 4150 sq. ft. for $3.449m. The sellers paid almost $500k less ($2.995m) just 22 months ago.

There were just two price cuts, one a token cut at 225 Moonstone, and another at 4419 Highland, which came down just a skosh from the previous $1.499m list price to $1.449m.

That new price helped MBC recall something. The property was offered to investors early in the construction process this March for $1.4m. (See “Builder Rethinking Dubious Lot?”) At the time, the pitch was that you stood to make $200k, since “comps are in the $1.6 million to $1.7 million range.” Turns out, you were smart not to take that deal, and now the question is what the builder owes, since he’s clearly not going to net $1.4m.

Bonus fact about 4419 Highland: As becomes clear with the staging, the "master bedroom," which fits a full-size bed, maybe a queen, is on the 2nd floor right at the corner of 45th/Highland, with windows featuring the traffic, Chevron and the power plant. Dreamy.

Three sales closed in the Sand Section, two close to their list prices, percentagewise (2008 Highland got $2.175m, down $120k; 209 19th got $3.675m, down $275k) while one took big chops after 400+ DOM (new construction at 209 42nd, $1.835m, down $465k). (See "Buyers Save Almost a Mil.")


Tree Section

There are 41 active SFRs. Of these, 17 are priced below $2m, and 24 are above $2m.
In this report, 4 of the 5 sales west of Sepulveda happened in the Trees, and 3 of those were in the $2m+ range. Wow, that almost feels hot.

It seems so at first, but then when we look at the sales, none seem like a great deal for the sellers:
  • 3011 Elm (pictured) was purchased in July 2005 for $2.8m. It’s a lovely, large home, but it sat on the market 200 days and sold with a list price of, achem, $2.795m. Final price could be quite a bit less that what the owners paid about 2 1/2 years ago.
  • 2807 Elm was like a rocket in this market, new construction whose price started in June in the stratosphere ($2.899m) but shot down regularly and heartily to $2.299m, and we’ve heard it sold closer to $2.1m. Builder paid $1.475m for the lot in Oct. ’05.
  • 648 35th is a nice home in a poor location that got punished. Not only did it fail to get the $2.45m the builder sought at the outset, but there’s talk this is a loss at a final price closer to $2m. Builder paid $1.330m for the lot in April ’05. Last list was $2.195m.
It’s strange to see good news come with so many dark clouds. High-quality homes losing value, builders taking losses, and plenty of leftover inventory that’s now due for price corrections based on the sales that are happening.

In the less-pricey <$2m segment, the sale was forlorn 637 13th, a dated mess on a teeny lot (2100 sq. ft.) that was last at $1.355m, down $230k from its dream-price start at $1.585m. The owner paid $1.1m exactly 2 years ago.

There are two new listings in the Tree Section, one in each market segment:

757 30th (pictured) is a new home on very quiet 30th St. near Laurel, unique in part because the standard 4800-sq.-ft. lot is wide rather than deep – with a southern orientation, the home is sunny, too. It’s quality stuff even if the elements are familiar – Mediterranean, 5br/4ba and 3350 sq. ft. At $2.699m, it’s at the top of the ladder now among similarly sized new homes. What's the discount for the stapled-on stone on the second floor?

3612 Poinsettia is a very small (850 sq. ft.) 2br/1ba old-timer near Rosecrans. Eschewing hype, the listing calls it “plain jane” and notes its “average condition and no fancy upgrades.” In a different era – say, 6-9 months ago – this might have drawn substantial interest from builders. There’s the additional wrinkle of this being a probate sale, which can limit price flexibility. Starts at $957,500.

There were also several price cuts worth noting in this period.

MBC wrote about the move by 2623 Palm (see “Modest House, Bold Move”) from the $1.6m tier to the $1.4m tier. One home that felt the ramifications of that price cut was 790 Rosecrans, which we’ve previously described as “lovable” and also “awful,” jumped down almost $200k to $1.295m, now down $290k from its $1.6m-tier start.

The custom, modern home at 1313 Oak, announced as a short sale just a few weeks ago when priced at $2.199m, is now at $1.999m. (See “Getting Shorter.”)

Another listing feeling some heat: 2100 Flournoy (pictured), new construction with 4br/5ba and 3600 sq. ft., began in late August at $3.2m, and just now dove off the MLS a week and came back $300k lighter at $2.895m.

Three other lingering newbies in the Trees took token $50k cuts: 2612 Poinsettia (now $2.199m), 2509 Walnut (now $2.299m) and 2509 Palm (now $2.399m).

Almost-forgotten 570 27th (see “The High End Gets Lower”) dropped $100k to $3.199m, now down a total of $700k from its envelope-pushing $3.899m start – and hey, they finally got some new pics!

There was one closed sale in the Trees, 2615 Valley, coming in at $1.475m, down $324k from its start (see "Making it Happen (-$325k)").

And 5 homes dropped out: 3200 Pacific, 616 19th, 758 14th, 3212 Palm and 605 36th. You know we'll see some of them again, but let's hope the sellers enjoy the holidays.
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