Warmer than Expected

By Dave Fratello | July 21st, 2008
The first half of July saw some big, scary developments in the mortgage market. IndyMac, a prime source of jumbo and Alt-A loans popular in higher-cost communities, imploded. Fannie and Freddie were thrown to the ropes, leading to some new guarantees of U.S. government intervention.

But MB’s RE market did alright during this challenging two-week period. This is clear in the new MB Market Update spreadsheets (click here to download the 7/15/08 edition, or use the link at the top-right of the front page anytime).

MBC previously noted that the month of June saw significant imbalance – 40 new listings and 19 sales (new escrows) that stuck. Last month, inventory of SFRs west of Sepulveda crept up to 113, the highest yet reported by MBC in a year-plus of public market tracking.

In early July, we saw a more balanced 10 new listings and 12 sales (new escrows) that stuck for at least a few days. (At least 3 new escrows failed quickly in this period.) There were 7 cancellations – more folks dropping out rather than sticking it out.

That left SFR inventory in our subject region at 107 as of July 15. (There are 5 new listings since then.)

The Tree Section, our biggest submarket, also saw the most escrows open up – 7, with 4 in the Sand and one in the Hill Section.

Among these new sales:
  • 953 9th in the Hill Section moved quickly, starting May 29 at $2.650m and cutting quickly to $2.3m, which netted a deal. Sellers were determined not to hang around.
  • 225 Homer in the South End made a deal after cutting 20% from its March 21 start price, down to $1.850m (see “Poor Homer”).
  • 465 30th, a newer Sand Section home up on the plateau that had begun at $2.799m, way out of line, but perhaps a rescue price for what turned out to be a short sale – last at $2.399m, and we’re thinking lower when it closes.
  • 3119 Valley, a 2br/1ba, 850 sq. ft. cottage whose price was right near $799k.
  • 3600 Flournoy, almost a diamond in the rough, a 4br/3ba gorgeous remodel with 2300+ sq. ft., priced at $1.425m.
  • 1901 John, a newer gem on a corner lot, which moved from $2.695m down to $2.499m before making a deal.
Let’s look at some other highlights of the first half of July, by region. As always, click any highlighted address to see pics & details via Redfin.

Hill Section

  • 222 N. Poinsettia challenges the world to define a new high for a lot price – $7.9m for a 13,800 sq. ft. double lot just up the hill from Ardmore, with ocean views. It would be no surprise if this one chopped $2m before making a deal. (See "Just Split 'Em.")

Sand Section

Just 3 new listings in the beach-adjacent parts of town. Two marginal listings (516 Ardmore and 215 S. Valley) were joined by one big-dollar, newer manse west of Highland (220 19th) priced above $5m.

Maybe the big news in the Sand was the dropouts:
  • 228 29th Place, a newly custom-built home (ca. 2007) that began last year at $3.049m, and quit after months of cuts to a low of $2.279m.
  • 224 32nd, a new (99% remodeled) home offered at $4.999m for just 3 weeks.
  • 445 30th, a very decent and spacious Spanish (3br/3ba, 2600 sq. ft.) that tried for 4 months from $1.999m down to $1.795m, but found no takers.
  • 532 6th, a warm contemporary at the corner of Valley and the 6th St. walkstreet, last at $2.35m.
  • 132 2nd, a large (4br/6ba, 4300 sq. ft.) newer home on the walkstreet at Manhattan Ave., which was rumored to have made a deal above $6m which failed, then hit the market at $6m even and trickled down to $5.695m before canceling.
Closed sales in the Sand:
  • 401 3rd (pictured), a big remodel in the South End, shaved just $15k off to get $2.670m;
  • 473 31st, a new home on the plateau, chopped 14% (-$450k) to net $2.8m; and
  • 117 7th, a couple doors off the Strand, proved a shocker, nabbing $330k more than asking to close at $4.325m for a small (2br/3ba, 2350 sq. ft.), newer walkstreet home. Wow.

Tree Section

Among the more intriguing new listings, we saw:
  • 560 35th, a delightfully designed Craftsman whose illusion breaks down only a bit inside with the 90s-vintage baths – starts at $2.425m;
  • 3314 Laurel, a sizable remodel (4br/3ba, 3450 sq. ft.) that started at $1.879m and made a deal immediately, but that didn’t stick; and
Among the closed sales:
  • 3612 Poinsettia, a little starter with a location problem, got $849k for a 2br/1ba, 850 sq. ft. home on a full lot (4480 sq. ft.), down $108k (-11%) from start;
  • 534 14th, a very odd contemporary in the Martyrs neighborhood, fell $650k (-19%) below its ambitious $3.350m start, closing at $2.7m; and
  • A new home at 3500 Blanche took fairly quick cuts, closing at $2.125m – a a total of $424k (-17%) off a start at $2.549m.

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