Two New REOs

Posted by Dave Fratello on Monday, May 4th, 2009 at 8:53pm.

We kick off the week here with 2 small homes west of Sepulveda offered by banks as "real estate owned" (REO) properties. Both will draw some interest with their lower-than-expected price tags.

543 24th is a little cottage in the gaslight area, right at the border of the Tree and Sand sections.

The 3br/2ba, 1225 sq. ft. home must be taken as-is, and that's pretty original and pretty dark, to judge by the pics. Still, $891k for the lot (3640 sq. ft.) is not too bad.

By way of comparison, around the corner, 539 23rd – a little bit spiffier and larger (4br/3ba, 1900 sq. ft.) home of similar vintage – went for $1.330m in late February.

We don't see much info on PropertyShark.com on how 543 24th wound up with the bank, except that the suggested minimum bid at auction in December was $1.256m. The price actually came out at $978k when the bank took it.

Next, how about west of Sepulveda for $650k? That's the deal at 958 Rosecrans.

Of course, the home is small (2br/1ba, 975 sq. ft.) and quite a bit of the 6000 sq. ft. lot is wasted space on the downslope to Rosecrans. But try to beat that price and still get your kid(s) into Pacific School.

The history here is interesting, too, if incomplete.

This offering makes for the fourth time since 2001 that 958 Rosecrans has been offered for sale. It's always one of the cheapest listings in town.

As the property history drawn from Redfin here shows, it sold for:
  • $422k in Jan. 2001
  • $580k in March 2003 (+37% over 2001)
  • $977k in July 2006 (+68% over 2003, +132% over 2001)
That last sale price was madness. Only a few months' worth of payments were ever made after that July 2006 purchase, if any were made. By March 2007, the bank had filed a notice of default, and by May 2007, the bank had swiftly taken it back at $828k.

These REO stories are always messy. The details you can find raise bigger questions. To ask just one, is it really the case that a bank sat on 958 Rosecrans for 2 years before deciding to dump it into this particularly challenged market?

Whatever the back stories, at least we can see that these REOs are being priced aggressively, unlike 2 Tree Section speckies that went back to their banks recently and came back at or above their prior list prices (2504 Poinsettia and 2509 Palm). As time is sure to show, that's not how you get 'em sold.
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