MB Market Update for 1/15/10, Hills

Posted by Dave Fratello on Wednesday, January 20th, 2010 at 9:35pm.

The new MB Market Update spreadsheets for 1/15/10 are available online now for viewing by clicking here, or at any time by using the pull-down menu at the top of the home page under "MB Market Updates."

Conventional wisdom says that a post-holiday inventory burst comes around the time of the Super Bowl. (An American football contest having nothing to do with real estate, but plenty to do with commerce.)

This year, the Super Bowl is a bit late (Feb. 7), while the inventory burst has started early.

In the space of about 10 days, we saw 12 new SFR listings hit the market west of Sepulveda.

Some, like the much-discussed 1413 Pine, were truly new offerings this year. Several were returnees that had taken a few to several weeks off after Thanksgiving.

Inventory at mid-month stood at 66, up from 59 at year-end. By sub-region west of Hwy. 1:
Hill Section: 9
Sand Section: 32
Tree Section: 25
Most of the action west of Sepulveda was in new offerings, but there were 4 sales (new escrows) as well, 3 of those in the Tree Section. To wit:
  • 222 N. Poinsettia, the double lot with a smallish ranch house on site, discussed recently in "One Less Hill Dirt Option." Some good news, in our view: the buyers, we hear, may keep the rancher and tidy it up for a while, rather than scraping and rebuilding right away. The home was last listed at $4.950m, but watch for another discount when and if this deal closes;
  • 2405 Elm (3br/3ba, 2200 sq. ft.), a somewhat dated 1940s cottage that had started in June 2009 at $1.250m, made a deal after cutting, most recently, to $999k;

  • 2100 Pine (5br/5ba, 3100 sq. ft.), a nearly new, custom home compared to Monticello in the newest listing. It's a very delightful build (see MBC's "Monticello?" for more), but it launched much too high last June at $2.425m; it was last at $2.149m; and
  • 562 33rd (5br/4ba, 3550 sq. ft.) is newer construction (2003) near Sand Dune Park that was first offered in September 2009 at $2.199m; it had made a tiny cut to $2.149m before a deal was made. (Rumors of an immediate deal last year turned out out not to be correct.) The owners paid $1.850m about 6 years earlier, in Sept. 2003.
That's a quick look at inventory coming and going. Now we'll focus on the balance of Hill Section activity, and return soon with a post on the rest.


Hill Section

There were 4 "new" listings in the Hills, but every one of them had been offered in 2009. (See the Hill actives page.) They were:
  • 801 1st (4br/3ba, 2800 sq. ft.) (pictured) is a Cape Cod right above Ardmore, now at $1.829m after a start last year at $2.095m;
  • 952 11th (5br/4ba, 5050 sq. ft.) is a charming Spanish built in 2004, acquired in May that year for $2.150m; offered last year near $2.7m, it's now at $2.495m;
  • 201 Larsson (3br/4ba, 3900 sq. ft.) is a remodel that's not for everyone's taste, but it's high on the hill with good views; now at $2.790m after a start $500k higher last year; and
  • 617 6th (5br/5ba, 5725 sq. ft.) is new construction that actually wasn't quite finished before it was foreclosed on late last year by investors; priced now at $4.790m, about $100k above its last offering price from 2009.
So options were expanding – really, returning – in the Hills, but one offering fell away: 906 9th (6br/6ba, 5300 sq. ft.), a new home offered starting in mid-February last year, quit at $4.2m, down $600k from its start price. Rented? Returning? We'll see.

The big news in the Hills was among the closed sales. (See the Hill solds page.)
  • First was a land sale at 918 1st, where a 10,000 sq. ft. ocean-view lot went for $3.250m. That was down just a bit from the $3.4m offering price. The greater significance of the closed price is for 919 1st, the neighbor across the street, where a slightly smaller lot (8,600 sq. ft.) was offered for most of 2009 at $4.5m; if it returns, a significant adjustment would be in order.
  • Finally, 407 Larsson, a big Craftsman-inspired home (5br/6ba, 4825 sq. ft.) finally found its value, after 418 DOM and 2 agents. It closed for $2.190m, and we're willing to put that on the list of "deals of the year" for 2009, even if the sale did close this year (Jan. 4). 
This one did not quite reach a full $1m cut from the price when a printer's error caused the price to be shown in an ad as $1.949m instead of $2.949m, so that "Million-Dollar Coupon" turned out not to be, precisely, an omen reflecting the home's eventual sale price.
However, as MBC noted most recently in "More Trouble on Larsson," the sale did close far below the home's price, new, in Nov. 2005: $2.980m. The overall drop in market price: -$790k/-27% over 4 years.
We'll return soon with an update on the Sand and Tree sections.
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