MB Market Update for 4/15/08, Trees

Posted by Dave Fratello on Wednesday, April 23rd, 2008 at 4:05am.

This is the third of 3 articles summarizing data in the MB Market Update spreadsheets for 4/15/08 (click to download), focusing this time on the Tree Section.

Total SFR inventory in the Tree Section as of 4/15/08 was 45, with 25 homes priced below $2m and 20 priced above $2m. (Those figures remain essentially the same at this writing, just +1 in the $2m+ range.)

Speaking of figures remaining level – there were 4 new listings in the Trees in this period, and 4 sales (new escrows). That's flat, or zero population growth, if you prefer.

Of the new offerings, 3 are all on busy streets:
  • A true "starter home" under $900k at 3301 N. Valley. For $875k, you get 2br/1ba plus another room that could be a bedroom, 1050 sq. ft. and a small (2500 sq. ft.) corner lot. Inside it's tidy and cozy, perhaps just right for an entry-level buyer.
Suffering by comparison: 3612 Poinsettia, a smaller would-be starter priced at $849k, and particularly 2505 Pacific, which is on Valley, is the same size and isn't nearly as cute, but which began at $995k recently.
  • 835 Marine (pictured) is the stylish home just off the triangular strip of grass between Ardmore and Marine near Pacific – if you drive the area you know it. It's bigger than you'd think at 3br/2ba and 1800 sq. ft., and it is really, really tricked out and modernized inside. (See pics for more.) That said, the sellers don't appear to be deluded about the location, and they're content to start at $1.250m.
  • 3011 N. Valley is a bona fide charmer that is also fairly large (4br/4ba, 3250 sq. ft.). Purchased 2 years ago for $1.9m (see "A Loss at 2 Yrs?"), now offered at $1.849m.
There was one other new listing at 850 18th, a giant 2-year-old Spanish that started at $4.6m and was snapped up quickly. (See "We Hardly Knew 850 18th.") Finally, new to the spreadsheets is 672 19th, which actually was new in the prior period (late March). (See "Be Their Guest.")

In addition to the sale at 850 18th, we watched buyers grab:
  • 738 26th (pictured), a unique and traditionally styled (if a bit quirkily remodeled) home with 4br and 2900 sq. ft. – it went into escrow in its first weekend in March, but that didn't stick and it hung around 6 weeks more at $1.799m;
  • 2309 Pacific, a longtime listing of new construction that began at $2.299m last May, and drew offers when it cut to $2.099m;
  • 2705 Palm, a short-term listing of a high-quality new home that wasn't yet complete, asking $2.699m; and
  • 3517 Elm, a nicely remodeled cottage with 3br/2ba and 1400 sq. ft.; started at $1.385m in October and was down $100k to $1.285m.
Also new to the spreadsheet is the sale at 709 35th from late March, which we hadn't recorded.

Dropping out of the race were 2 lower-end listings that tried for just 2 months each – 1708 Oak ($899k) and 3601 Poinsettia ($1.139m). We also removed 2404 Palm from our spreadsheet as the sign came down and we confirmed it's no longer for sale.

And a surprise dropout was 1144 Elm (pictured), a brand-new home in a compromised location that had drawn our notice last November as the first new construction in the Trees to start out below $2m (see "First Newbie Under $2m.")

That was news at the time, but since Elm came on, we've seen other newbies drop in price below $2m, with 3 selling below $2m (2709 Oak, 1901 Poinsettia and 3104 Pacific).

Elm tried coming down further to set a new (recent) low for new construction at $1.879m, but still had no takers. We might assume it has been rented; all we know for sure is that the listing canceled.

The most noteworthy price cuts were at:
  • 794 27th (pictured), a highly stylized Asian contemporary with the downside of a location on Pacific. It's starting to look like the current owner overpaid substantially at $2.5m in May 2006 – after a start at $2.599m in February, it's already down $300k to $2.299m, gearing up for a sizable loss;
  • 2611 Palm, new construction that we strain to call a "new" home because it's the longest-running listing of a new home in MB (west of Sepulveda) at 463 DOM as of April 15. (The overall record-holder is 2812 Elm at 580 DOM.) Its twin (reversed floor plan) was 2309 Pacific, which just sold when listed at $2.099m. So Palm took a new hit of $114k and now sits at $2.285m; and
  • 2310 John, a newer listing of a newer contemporary home, cut $100k to $2.099m.
There were 3 sales that closed in this 2-week period in the Trees:
  • 1906 Flournoy, a 4br/2ba, 1800 sq. ft. ranch-style home, got $1.7m even (recall that is sold quickly); and
  • 742 27th, a spiffed-up remodel much-discussed here after MBC ran a pricing poll (see the first story and the poll results), had begun at $2.4m, cut to $1.999m and ultimately drew more than one offer, closing at $2.075m (-$325k/-14%), a nice finish.
An even happier ending came at 2507 Valley, also much-discussed at MBC as the seller fell into default last year, tried to sell using the tactic of increasing his price, then tried to sell short and failed, ultimately losing the home at auction. The full price history:
  • The home was purchased new in Feb. 2004 for $1.54m;
  • Attempted sale prices in 2007 ranged from $1.799m-$2.249m;
  • An investor picked it up for $1.643m last October;
  • The investor tried to get $1.790m, but decided to cut losses after 90 days;
  • The investor took $1.5m to shed it from the books.
What a deal – a hair below the Feb. 2004 price!

And let's not lose sight of this fact: One man's depreciated asset is now a family's great new home.
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