This Week's Column (June 18-19)

noreply@blogger.com (MBWatcher) — Sat, 18 Jun 2011 14:10:00 +0000

Here's the South Bay Confidential column that appeared June 18, 2011, in the Daily Breeze.

Supply and demand out of balance, except at the beach

by Dave Fratello

Summer officially starts next week, so let's take another look at how housing inventory is developing around the South Bay.

I provided the first snapshots of current inventory of single-family homes in February, right after the Super Bowl, and at the end of March. You normally expect a pretty steady upswing in both listing and sales activity in spring. One question is how balanced the number of new offerings is against the number of purchases.

Every market now offers more inventory than in early February, but one - Hermosa Beach - actually has fewer listings than in late March. Two of the most solid market regions, Torrance and the Palos Verdes Peninsula, are getting out of balance. Let's take a look at developments, market by market.

Beach Cities

Of all the South Bay regions we'll look at, Manhattan Beach and Redondo Beach compare most impressively now to their respective market states in late March. Hermosa seems to be solid, too, making the coastal areas looking to be in good shape as summer approaches. (Ready to hit the sand?)

With 83 listings, Redondo's got just two more actives now than on March 30, but there's also been a two-thirds rise in the number of pending escrows to 36. This means demand has closely tracked supply so far this spring.

Another way you see that balance is by dividing the number of pending deals by the number of offerings – at 43 percent, Redondo's got the best active/pending ratio in the South Bay right now. Finally, one big new listing has raised the ceiling in Redondo: instead of a $3.9 million property being the priciest, now there's one just short of $7 million.

Manhattan Beach has just seven more listings now than in late March, with 117, while seeing a near-doubling in pending deals to 42. The active/pending ratio is 36 percent, also a well-balanced figure. The town's priciest offering continues to be a $30 million double lot on The Strand.

Hermosa Beach inventory (49) is up by seven from early February, but down by five from late March, the only submarket with fewer single-family homes since that last update.

Torrance

In late March, I called Torrance "clearly the hottest" market in the area, but I can't say that now in mid-June.

At 227 single-family homes for sale, inventory is up 61 homes since February, and actually up more - by 73, or more than 36 percent - since late March. New escrows have not kept pace. There were seven more pending deals in mid-June than in late March, but the active/pending ratio was down to 40 percent from 51 percent previously. That's still a respectable rate, but not en fuego.

Combine the swelling inventory, slower absorption rate and the other numbers I reported last week on sale prices - with the number of sales down and median sale prices down - and we're starting to see notable weakness in Torrance, which had been a stalwart for a few years running.

Palos Verdes Peninsula

The Hill has seen a second big increase in active inventory, up to 281 single-family homes, compared with 197 in early February. This 42 percent jump in inventory is the biggest in the South Bay.

The share of pending deals was already low in late March, just 20 percent of the total inventory, and it's down now, too, to 17 percent.

As I had to say with Torrance, the Peninsula is looking slower than might be expected of a resilient market. Both of these regions are hinting at a possible slowdown to come, especially when compared with the beaches, where demand has stayed on pace so far this spring.

We'll take another look at region-by-region inventory near Labor Day to see if the beaches have held their own, or if demand has come back in line in the other areas.

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Dave Fratello is a Manhattan Beach resident who writes the www.sbconfidential.com and www.mbconfidential.com real estate blogs. He can be reached at df90266@gmail.com.

This Week's Column and Links (April 16-17)

noreply@blogger.com (MBWatcher) — Sat, 16 Apr 2011 14:49:00 +0000

Lots of grass on the blufftop lot at 511 Paseo De La Playa.

This week's edition of South Bay Confidential discusses extra-large lots in various listings around the South Bay. Here's the text of the Daily Breeze column, which appeared April 16, 2011.

Just How Much Dirt Do You Need?

I still get a little giggle each time I review a new home listing online, or on a flier, and see the data field labeled, "Horse Property."

The answer has been "no" about 95,000 times now. Often the question seems absurd. Horses? By the beach? In the city?

I'll grant you, here in the South Bay you will find a smattering of "horse properties" up on The Hill. That's great for the equestrian set, but the rest of us are expecting that our homes will be on fairly modest parcels of land. If you have space for a vegetable garden, you're lucky. If you can throw a baseball to a teenager in your yard, you're upper-echelon.

Lot size is relative. Let's see what you can do with more-than-the-average space in a few parts of the South Bay.

A half acre on the Riviera

The listing description for 511 Paseo De La Playa in Torrance's Hollywood Riviera memorably notes that there are "no buildings between you and Hawaii" from the home's blufftop perch.

Not only does the home boast spectacular ocean and coastline views, it's also got more land than you'd expect. The square footage totals more than a half acre (almost 22,400 square feet), though some of that consists of hillside that isn't of much use. What's great is the large, flat grassy patch - a yard that's uncommon among these beach-facing properties.

So not only do you have Torrance beach below for your sand- and water-based activities, you've got a yard for land sports - it might make a nice putting green, in fact.

There's also a house attached - a four-bedroom, three-bath, 3,100-square-foot home with an early-'60s build date and some updates since. The list price is $4 million, the highest price in Torrance and the surrounding area.

Note: The land is currently leased with an option to purchase in 2014.

NASCAR fans' dream home

You think big lot, you think grass and open space, right?

But some folks need a place to park vehicles. Lots of vehicles. And a professionally outfitted garage to work on them. And those folks have an option in north Redondo Beach.

2909 Spreckels Court is being pitched to "off-road enthusiasts with lots of toys." While the interior (three bedrooms, two baths, 1,150 square feet) is updated and upgraded, it's the exterior that makes the sale. The lot's quite nearly 10,000 square feet, at the end of a cul-de-sac with access to a fully paved play area where, the listing says, you could park "several RV's, a ski boat" or a few pickup trucks.

The home - and plus-size garage - are offered for $669,000.

Two are better than one

Among the priciest real estate in Los Angeles County, let alone the South Bay, are beachfront properties in Manhattan Beach. The most recent sale - a big '80s-built architectural modern at 1600 The Strand - was for $10.9 million.

It's the land value that's driving prices at the beach. Add something unique and scarce, a double-lot on The Strand, and you might see another record-breaking sale this year. Right now 2020 The Strand is offered jointly with 2016 The Strand for $30 million. Though you'll find some decently remodeled rentals on the land now, the market they're trying to find here is for buyers who just want the dirt. [UPDATE: By late June, the price was at $27 million.]

Two's the max in Manhattan Beach these days, by the way. After a triple-lot home went up on Manhattan Beach's Strand, the city changed its rules and now won't allow more than two Strand lots to be built up together.

Bring your horses

Of course, if you need a "horse property," they do exist. Up on The Hill right now there are 16 listings designated as "horse properties," ranging in size from a quarter acre to more than 6 1/2 acres. To hitch up and roam the wilds, expect to pay between $1.7 million and - gulp! - $12.8 million.

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Dave Fratello is a Manhattan Beach resident who writes the www.sbconfidential.com and www.mbconfidential.com real estate blogs.

This Week's Column (Apr. 2-3)

noreply@blogger.com (MBWatcher) — Sat, 02 Apr 2011 14:00:00 +0000

How's inventory shaping up in the South Bay now that Spring has sprung?

Here's our discussion from the South Bay Confidential column appearing in the Daily Breeze on April 2, 2011.

Inventories increase ... for the most part

by Dave Fratello

Back in early February, I provided a snapshot of current inventory of single-family homes in several South Bay markets. The goal was to establish a baseline for watching the dance between supply and demand as it unfolds through the rest of the year.

So here's our first check-in, comparing inventory just after baseball's Opening Day versus a few days after the Super Bowl.

In four of the five markets, we see the expected inventory increases. The tiniest market, Hermosa Beach, had the greatest percentage increase (29 percent), but that just means 12 more listings than the 42 seen several weeks ago.

The least-pricey market, Torrance, actually has fewer homes on sale now than it did seven weeks ago. This qualifies as a pretty serious surprise. Let's take a look at some of the developments market by market.

Torrance

Torrance is the second-biggest market we're looking at, and clearly the hottest.

Last time we checked in February, Torrance had 178 active listings of single-family homes, but that's now down to 166.

Even more impressively, the number of pending sales (properties in escrow) totals 85, more than half the number of active offerings. By contrast, none of the other South Bay markets discussed here has pending sales of more than one-quarter the inventory. By this measure, Torrance is twice as busy as any other part of the region.

Pricing is clearly a factor. Most of the deals in Torrance are on properties priced below $600,000, and about half of all the available properties are under $625,000. (Last year's median price was $621,787.)

Once again, Torrance has the least expensive of all the lowest-priced listings ($190,000 for a short-sale fixer), while the highest-priced listing in the area is up to $4,000,000 (for a traditional 60s house on a big, ocean-view lot high above Torrance Beach).

The total number of sales in Torrance rose slightly in 2009 and 2010 over a trough hit in 2008, but now 2011 is off to a roaring start.

Palos Verdes Peninsula

The Hill has seen a big increase in active inventory, up to 241 single-family homes, compared with 197 just seven weeks ago. The pace is about six more homes hitting the market each week than are being absorbed by demand (i.e., purchase contracts).

The number of pending deals pales next to Torrance's figure - just 20 percent of the total inventory, a range that's fairly normal when compared to other South Bay areas.

The Palos Verdes area's least expensive offering at this time can be had for $569,900, while the priciest remains at $12,800,000.

Even if inventory is swelling and sales aren't at the torrid pace of Torrance, we're not going to bet against the Palos Verdes area. As I've noted before, The Hill has only had one bad year recently, 2008, and 2010 saw a 16 percent rise in the number of sales over 2009. Even flat sales this year would be solid.

Beach Cities

Hermosa Beach, Redondo Beach and Manhattan Beach are up, inventory-wise, by 12, 13 and 17 listings, respectively. That's about a one-fifth jump in seven weeks, nothing very surprising, though. As previously noted, Hermosa's up the most, percentage-wise.

Once again, none of these markets matches up to Torrance in terms of the number of pending deals divided by inventory - each market is at about 20 percent, like the Palos Verdes area. No one is overheating by the beach.

The very, very high ends remain about the same this time, with one big home near $19,000,000 on Hermosa's Strand and a $30,000,000 double-lot offering - and that's all it is, the dirt - on Manhattan's Strand. Redondo's still got a $3,900,000 top-priced listing - one that's been around for roughly five years - but there's a new entry at $3,500,000 that may be compelling, a big and newer (2002) home just east of Pacific Coast Highway on a fairly big 9,600-square-foot lot.

At this moment, Hermosa's got the priciest of all the entry-level properties in the South Bay, a little 1,100-square-foot cottage on a 2,100-square-foot lot near PCH and 190th Street, asking $669,000.

We'll take another look at area-by-area inventory near the start of summer, and see whether these trends hold up.

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Dave Fratello is a Manhattan Beach resident who writes the www.sbconfidential.com and www.mbconfidential.com real estate blogs.

This Week's Column (Feb. 12-13)

noreply@blogger.com (MBWatcher) — Sat, 12 Feb 2011 16:40:00 +0000

I've found that it's difficult to monitor inventory trends unless you take a snapshot in time and then compare later results to that prior snapshot.

So in this week's South Bay Confidential column, I laid out a "baseline" for inventory in major regions of the South Bay. We'll come back to these later.

The graph here shows the number of single-family homes listed for sale as of February 9, 2011.

To read the complete column discussing these data, click here.

This Week's Column and Links (Jan. 15-16)

noreply@blogger.com (MBWatcher) — Sat, 15 Jan 2011 15:28:00 +0000

Bizarre MLS Photos Can Really Get You Noticed

By Dave Fratello

If you scan a lot of property listings online, you’ve probably seen your share of poor MLS photos.

You’ve probably also seen some goofy ones. (A daily selection of silly pics can be found at www.lovelylisting.com)

One dreadful photo I came across recently was from a listing for a 2010 sale in Redondo Beach. As you see here, the pic shows only some stray trash that’s been swept up into a pile in a vacant room.

Amazingly, it was the only photo in the listing. Not much of a flavor for the house, is it?

The listing agent told me that the property had sold off-market, meaning he was not obligated to input anything about the property into the MLS database. The sale was for a good price, though, and he wanted others to see it, so he made an entry.

The MLS required him to input a photo, and this was all he had. The agent stressed to me that in a normal listing, he’d have a pro come in and shoot the place with an HD camera and would carefully choose photos for the listing.

Fair enough, but the trash pile is still going down as one of the worst MLS photos I saw in 2010.

And then there’s the Bride of Chucky.

Late last year I was alerted to a Hermosa Beach listing that was packed with property photos featuring a life-size doll of a young girl. The doll was posed in various ways throughout the home, even lounging on the deck sipping a cold drink. After the third or fourth doll pic, the listing seemed to go from whimsical to mildly disturbing. After a dozen, it got icky.

I wrote up the listing in my real estate blog, generating a few chuckles along the way. A few weeks later, Ellen DeGeneres featured the property and its doll photos in one of her “Really Real Real Estate” segments.

Ellen said amidst audience laughter: “The house, it says, has three bedrooms. But it doesn’t matter, ‘cause you’re never going to be able to sleep.” (To view the clip, go to: http://bit.ly/dbaGmm) Piling on, Ellen moved to a graphic featuring the “Chucky” doll, of horror movie fame, as the listing agent.

By now you may think the actual listing agent was crazy to drop these pics into the listing. But maybe we should say “crazy like a fox.”

The listing has been passed around all over the internet (more than 20,000 YouTube viewings), was featured on national television and now is finding its way into this newspaper.

The agent told me she came to the property last year and found all sorts of whimsical items, including a much larger full-size mannequin. Upon seeing the little girl doll, she thought, “Let’s make it fun.” So she carried the doll from room to room and posed it. One little snap decision, and many snapshots later, and she had a mild sensation on her hands.

But here’s a surprising ending to the story. The MLS authorities recently stripped out the doll pics. Not because of matters of taste, but because the doll violated an arcane provision barring “objects” in listing photos. The photo cops were “really upset,” the agent tells me, about a photo of the doll standing atop a shoe tree. (Why is anyone’s guess – maybe it’s two “objects”?)

Alas, the doll photos are gone, but you can still see the little one in person. (941 13^th in Hermosa Beach is a 3 bedroom, 3 bath, 2300 square foot house with ocean views, offered at $1,125,000, and open Saturday and Sunday from 1-4pm.)

Oh, and the listing agent is not named “Chucky,” though the owner, oddly enough, is named Chuck.

[UPDATE: 941 13th sold in June 2011 for $900,000.]

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Dave Fratello is a Manhattan Beach resident who writes the www.sbconfidential.com and www.mbconfidential.com real estate blogs.

This Week's Column and Links (Jan. 8-9)

noreply@blogger.com (MBWatcher) — Sat, 08 Jan 2011 15:16:00 +0000

Here's the South Bay Confidential column that appeared in the Daily Breeze on January 8, 2011.

Comparing beach cities 2010 prices

by Dave Fratello

I’ve discussed the improving sales pace in the South Bay in 2010 in a few recent columns. Now that the year has closed out, we can start looking at how prices performed.

We’ll look at the three beach cities this week, then return to other parts of the South Bay in upcoming columns.

Keep in mind, I’m looking only at single-family residences (SFRs) in these analyses. You’ll see that all the beach cities saw some improvement in sales totals over last year, though only one saw an increase in median price. For each town, I’ll give an example of what you would have gotten by paying
the area’s median price.

Hermosa Beach - Down on Higher Volume

This year, Hermosa Beach saw more SFR sales (99) than either 2008 or 2009, and was just shy of the 102 seen in 2007. Like a lot of areas in the South Bay, this was a modest pickup in sales. That was the good news.

The median price, however, at $995,000, was down 7 percent from 2009, and now stands 19 percent below the recent peak hit in 2008.

Some people will be skeptical of any fluctuation in median price numbers with a sample size this small. You can argue that there’s little real difference between 2009 and 2010 in either the number of sales or prices.

Median House: 1030 8th Place is a fairly good-size custom contemporary (four bedrooms, three baths, 2,625 square feet) with a need for some cosmetic fixes. Nice ocean views, though, from a location east of PCH. Sold for $995,000.

Redondo Beach - Stable on Higher Sales

Like Hermosa, Redondo Beach saw a nice uptick in sales in 2010. With 268 closed transactions, the number of SFR sales exceeded both the 2008 and 2009 totals, though this was still well short of 2006-07. Overall this was a nice 11 percent annual increase in the number of sales.

The median price also declined a bit, from $705,000 in 2009 to $692,500 in 2010. That’s a modest drop of 2 percent. Unlike with the Hermosa data, these medians are somewhat more reliable with the higher sales volume that the area generates.

With this little drop, the Redondo Beach median price is down 14 percent from the recent peak in 2006.

Median House: 1718 Wollacott St. (three bedrooms, two baths, 1,700 square feet) is a remodeled “tall and skinny” in North Redondo by Mira Costa High School. It sold for $690,000.

Manhattan Beach - Up with Lots More Sales

Of the three beach cities, Manhattan Beach saw the greatest increase in sales volume, both in terms of raw numbers (41 sales) and in the percentage change above 2009’s totals (15 percent).

This is the market I cover most closely, and I can say this has definitely been a good year for Manhattan. The city was recently called “the most stable housing market in the Los Angeles metro area” by Forbes magazine, on the strength of three quarters of increasing prices and a very low
foreclosure rate. (Foreclosures and REOs exist in town, to be sure, but just not nearly at the rate seen around L.A. or around California.)

At $1,525,000, Manhattan’s got the highest median price at the beach, and it’s the only one of the three markets we’re looking at here to see an increase over 2009. It’s a modest 4 percent bump over last year’s total, but that’s still something. Overall, Manhattan, just like Redondo, is down 14
percent from a recent peak in 2006.

Median Houses: 2513 Elm Ave. and 1404 Lynngrove Drive
each sold for $1,525,000. Both are on the newer side (1996 and 2000 builds,
respectively) and offer four or five bedrooms and more than 3,000 square
feet.

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Dave Fratello is a Manhattan Beach resident who writes the
www.sbconfidential.com and www.mbconfidential.com real estate blogs.

This Week's Column & Links (Jan. 1-2)

noreply@blogger.com (MBWatcher) — Sat, 01 Jan 2011 15:30:00 +0000

This week's edition of South Bay Confidential looks at the top asking and sales prices in the South Bay of 2010.

To view the column online, click here.

Here are links to each of the individual properties mentioned:

Highest Sale Prices

1200 The Strand, Manhattan Beach, $7.5m

15 West Crest Rd., Rolling Hills, $5.5m
2229 Via Guadalana, Palos Verdes Estates, $5.0m
2108 The Strand, Hermosa Beach, $4.7m

3124 The Strand, Hermosa Beach, $4.5m

Highest Asking Prices

2909 The Strand, Hermosa Beach, $25m

2826 The Strand, Hermosa Beach, $15.9m

1600 The Strand, Manhattan Beach, $13.5m

3516 The Strand, Manhattan Beach, $12.999m

27 West Crest Drive, Rolling Hills, $12.8m

32045 Isthmus View Drive, Rancho Palos Verdes, $12.0m

This Week's Column and Links (Dec. 11-12)

noreply@blogger.com (MBWatcher) — Sat, 11 Dec 2010 15:00:00 +0000

Here's the complete column as it appeared in the Daily Breeze:

Homes Featured in SB Confidential: How are they faring?

As much as I like big data sets to illustrate trends, I think anecdotes are just as interesting. That's why I like to see how individual home listings fare over time.

Let's look back at some of the listings discussed in this column in recent weeks and months, and see how they're doing.

PV ocean-view strike-outs

The first group we'll look at is a bit of a disappointment. In late August, I featured three new listings on the Palos Verdes Peninsula, each with ocean views. Each had its charms, and lots of blue to see. However, none has sold yet, nearly four months later.

30379 Camino Porvenir in Rancho Palos Verdes (five bedrooms/four baths, 4,150 square feet) was my clear favorite of the three in the column, titled, "Three sea of blue visions from the hill," ranking "First-Place Views" in the writeup.

More so than views, the home also boasts a fun family game room and good space all around. After a $50,000 price cut from its start, this home is now listed for $2,175,000.

1640 Paseo Del Mar in Palos Verdes Estates (four bedrooms/four baths, 3,360 square feet) has a dated exterior but a refreshed interior. Its main charm is a location right by the bluff. Recent sales nearby seem to support a price near its current $2,499,000, a $100,000 cut from the original price, but no deal yet. [UPDATE: It's currently in escrow with a last list price of $2,399,000.]

801 Via Conejo in Palos Verdes Estates (four bedrooms/three baths, 2,845 square feet) is a cute, complete remodel in a luxury Spanish style. It started at $1,879,000, cut $30,000 but quit the market after six weeks.

Flipper's remodel sells

I was pretty surprised to find an example of a professional remodeler in action here in the South Bay. In my July 3 column, I wrote up 815 Pearl St. in Redondo Beach, which had been acquired late last year in dilapidated condition and was nearly rebuilt for the market here in 2010.

The good news is that the home, which has three bedrooms, four baths and nearly 2,500 square feet

on a big, grassy corner lot, sold a week ago for $1,000,000. That was a chop of 13 percent off the start price of $1,149,000.

But it's not clear how profitable the project was. The flipper paid $680,000 last year and told me he'd paid more than $300,000 to fix it up. That sale price doesn't leave any profit when you factor in costs of sale (i.e., real estate commissions.)

FSBO finds buyer

In one of my first columns, I looked at the for-sale-by-owner listing at 1208 Via Coronel in Palos Verdes Estates.

This one's shaping up as another success story. After seven long months and a recent price cut to $1,275,000, the seller found a buyer and posted a deal in mid-October. That price was down quite a bit from $1,499,000 last year, and down somewhat from $1,359,000 when I mentioned the property in June.

[UPDATE: The final sale price in late December posted at $1,200,000.]

Foreclosure flips are 2 for 3

This column recently discussed three active listings that had been purchased by investors at foreclosure auctions. Two have very recently gone into escrow.

2734 Alvord Lane in Redondo Beach (three bedrooms/two baths, 1,300 square feet) was bought at auction for $451,000 in May, got rehabbed a bit, and was last listed for $629,000. A buyer came just after Thanksgiving.

801 11th St. in Manhattan Beach, a newer (2004) home (four bedrooms/three baths, 3,025 square feet) that has been on and off the market from 2006-2010, was purchased as a foreclosure for $1,320,000 in June. It was last up for $1,499,000 when a buyer knocked.

2612 Poinsettia Ave. in Manhattan Beach (five bedrooms/four baths, 3,250 square feet) sold for $2,199,000 while new in February 2008, but was auctioned off this June for $1,291,654. The investor who grabbed it asked for $1,599,000 about 60 days later, but pulled it off the market. If you missed it, it's expected back in January.

This Week's Column and Links (Sept. 18-19)

noreply@blogger.com (MBWatcher) — Sat, 18 Sep 2010 13:47:00 +0000

Want to try buying a foreclosure and flipping it?

Here are some examples from the South Bay.

Here's the complete column as it appeared in the Daily Breeze:

Distress and Opportunity: Foreclosure Flips

Plenty of distress followed the popping of the housing bubble and the hard landing of the economy.

Lenders are taking hits from all directions — they lose money on short sales, and often face worse damage from foreclosures.

But as the excess paper value of homes from the bubble era is shed, and red ink on the lenders’ balance sheets grows, investors see opportunities.

They’re out there looking for opportunities to pull off what I call “foreclosure flips.” The concept is simple: Buy low, sell high.

An investor may scan upcoming foreclosures or research new bank-owned offerings to identify a property that can be purchased for well below its market value. They buy it, fix it up as needed, and try to sell it for more. If it works, the investor pockets the difference.

Foreclosure flips have been common in some of the decimated housing markets of Southern California, especially out in the Inland Empire.

Three foreclosure flips just hit the radar in the beach cities, though I’m sure there are plenty more out there:

2734 Alvord Lane in Redondo Beach (three bedrooms, two baths, 1,300 square feet) was bought at auction for $451,000 in May, got a little sprucing up, and is on the market now for $649,000, a markup of quite nearly $200,000. [UPDATE: Alvord sold for $620,000 in February 2011.]

2612 Poinsettia in Manhattan Beach (five bedrooms, four bathrooms, 3,250 square feet) is a newer (2007) home that traded for $2,199,000 in February 2008, but was auctioned off this June for $1,291,654 — yes, a paper value loss of more than $900,000. After some smart remodeling, it’s offered to the public now for $1,599,000, a markup of $279,000.

801 11th St., also in Manhattan Beach, is a newer (2004) home (four bedrooms, three baths, 3,025 square feet) that has been on and off the market from 2006-2010, apparently looking for a rescue sale. It was last seen as a short sale at $1,600,000 a few months ago, though it never sold. Instead, an investor bought it as a foreclosure for $1,320,000 in June and has put it back on the market near its last list price, asking $1,590,000, a markup of $270,000.

[UPDATE: This flip flopped. The home sold in February 2011 for $1,380,000, not enough to cover the costs of acquisition and real estate commissions. See this post at Manhattan Beach Confidential for some details, plus this post explaining how a failed short-sale attempt wound up costing the bank more.]

Of course, investors have costs in these sales. They have to pay real estate agents, and they often incur some remodeling costs in addition to the cost of holding the property. But with a big enough margin between acquisition cost and market value, the investor should profit.

Not every foreclosure flip pans out. A friend of mine now lives in a home that was snapped by an investor when it foreclosed a few years ago. Turns out, despite his vast expertise and many holdings, the investor goofed on that one. The market rejected his marked-up price and my friend took it for 10 percent less than the investor paid.

‘Huge’ in the Eye of the Beholder

A fairly new listing at 2710 Normallin St. in Torrance’s Walteria neighborhood has already made a quick cut, less than three weeks into its run on the market.

Maybe the three-bedroom, two-bath, 1,600-square-foot house started a little high at $649,000. It’s down now to $599,900, about $50,000 — perhaps more impressive as a percentage, a chop of 7.5 percent.

The listing touts this as a “(H)uge price drop,” but I suppose everyone has their own definition of what “huge” means in a case like this.

The quick correction comes, they say, because the “seller wants to sell yesterday.” And while that’s technically difficult, we get the point.

If this one doesn’t work, when’s the next “huge” cut?

[UPDATE: What came next was a 3-month hiatus for some remodeling. After that, the price came back up again to $649,000, where it stood as of late February 2011.]

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Dave Fratello is a Manhattan Beach resident who writes the www.sbconfidential.com. and www.mbconfidential.com real estate blogs. He can be reached at mbwatcher@gmail.com.

This Week's Column and Links (Aug. 28-29)

noreply@blogger.com (MBWatcher) — Mon, 30 Aug 2010 15:19:00 +0000

The view from 30379 Camino Porvenir

This week's column appeared in the "Home Guide" in Saturday's Daily Breeze (print edition), and is also available online below.

This week we look at three new listings on the PV Peninsula, each with ocean views. (The photo here is courtesy of the Breeze, the view from the back yard of the first listing below.)

To view the properties discussed in the story, use these links below to go to the property display pages via Redfin:

30379 Camino Porvenir (5br/4ba, 4150 sq. ft.) starts at $2.225m.

1640 Paseo Del Mar (4br/4ba, 3360 sq. ft.) starts at $2.599m.
801 Via Conejo (4br/3ba, 2845 sq. ft.) starts at $1.879m.

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Here's the complete column as it appeared in the Daily Breeze:

Three Blue Visions from the Hill

The more I see of the Palos Verdes Peninsula, the more there is to see. It’s a world unto itself.
There’s also a lot to see from the peninsula: specifically, ocean views. That’s what it’s all about for lots of locals.

This week I picked out three brand-new listings at different spots on The Hill that have ocean views as part of the package. I’ll discuss each home here and rate the views. Two are open this weekend — grab a look for yourself.

1st Place Views

Take your morning shower and gaze out at Catalina, dominating the blue horizon. Take a dip in the salt-water infinity pool, and feel the water blend with the ocean below. Try to get some work done in the office, but beware the distractions of passing sailboats.

That’s roughly what it would be like to live at 30379 Camino Porvenir in Rancho Palos Verdes, near the crest of The Hill. The home treats residents and visitors to grand visions of the Pacific from almost every room, including the cool rec room on the front, non-view side of the house.

The five-bedroom, four-bath, 4,150-square-foot home is part of a tract developed in the early ‘70s, but this one was chosen five years ago by an architect for a head-to-toe, personalized remodel. The fun family home now has a Mediterranean look outside with lots of custom details inside.

30379 Camino Porvenir starts at $2,225,000 and is open Sunday 2-5 p.m.

[UPDATE: Those views are great, but the price must not be right. 6 months after this column appeared, the listing had cut only $50k to $2,175,000 and was still available.]

2nd Place Views

1640 Paseo Del Mar is an early-‘70s home with nothing but its yard and a street between the house and the cliff’s edge. This opens up a panorama featuring Malibu and the whole South Bay, and ocean, ocean, ocean as far as you can see.

The four-bedroom/four-bath, 3,360-square-foot home has been remodeled to shed much of the ‘70s feel, with fully updated kitchen and baths. Ocean views are featured from the living room and dining room up front, plus the master bedroom and — get this — the master closet. Another bedroom also sees blue.

If you want to get wet, there’s a pool in the backyard, or — if you dare scale the steep, winding path down the cliff in front — a private, rocky beach beckons.

Land on this block remains precious. The $2,599,000 start price for 1640 Paseo Del Mar compares against a neighbor a few doors down (1632 Paseo Del Mar), a similarly sized home that showed all of its 1972 vintage, crying out for updates. That one’s got a buyer now; last listed at $2,299,000.

[UPDATE: The home went into escrow in Feb. 2011 after cutting to $2,399,000.]

3rd Place Views

801 Via Conejo (four bedrooms/three baths, 2,845 square feet) is just a couple minutes up The Hill from Palos Verdes Drive, closer to the beaches and the rest of the South Bay than you may expect from a higher-up vantage point. Though the ocean views at Conejo ranked third from our tour, the home itself wins best in show.

The corner-lot home is perched on a rising section of hill, with views along Torrance Beach and southward. Santa Monica’s in view on the horizon, and there are city views to the east. And while the ocean doesn’t give you much to look at after sundown, here you get the twinkling lights of the L.A. basin framed in the big windows of the living and dining rooms. Views are limited, though, to a few spots up at the front, and no bedrooms have them.

801 Via Conejo was the lushest of the homes on this three-stop tour, a complete, custom Spanish remodel of a previous home that the owner calls “just a ‘50s home” of no particular style. First-floor living spaces are wide open, with a big kitchen and island dominating the great room. The walls and curved arches give a feeling of substance and old-time Spanish adobe.

801 Via Conejo starts at $1,879,000 and is open Sunday 1-4pm.

[UPDATE: The home did not sell and was withdrawn within a couple of months.]

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Dave Fratello is a Manhattan Beach resident who writes the www.sbconfidential.com. and www.mbconfidential.com real estate blogs. He can be reached at mbwatcher@gmail.com.

This Week's Column and Links (Aug. 21-22)

noreply@blogger.com (MBWatcher) — Sat, 21 Aug 2010 16:00:00 +0000

This week's column appeared in the "Home Guide" in Saturday's Daily Breeze (print edition), and is also available online below.

The first part of the column concerns 217 Seaview (3br/2ba, 1400 sq. ft.) (pictured), a would-be flip/remodel in Manhattan Beach's El Porto section that hasn't exactly worked out as planned.

It's been on the market, on and off, for 5 years. Now it's a short sale. For more, see the Breeze or this post on Manhattan Beach Confidential.

Also, you'll recall that last week's column focused on sales data for three major areas of the South Bay: the Beach Cities, Torrance and PV.

This week we look at other major areas: San Pedro, Carson and Gardena.

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Here's the complete column as it appeared in the Daily Breeze:

El Porto Remodel/Flip Crashes

For nearly five years, on and off, the remodeled home at 217 Seaview St. in Manhattan Beach’s El Porto neighborhood has been for sale.

First, in November 2004, someone bought a tired old duplex for $945,000 with plans to rebuild it. The potential upside must have seemed great. The housing bubble was still inflating at the time.
While the rebuild was under way, a July 2005 listing for the property promised a “stunning” and “breathtaking” home that would be suited to “the fussiest of buyers.”

But the finished product, with three bedrooms, two baths and almost 1,400 square feet on a little alley street near the beach, never did attract a buyer — fussy or otherwise.

The sellers tried to offer the redone home for $1,495,000 before it was finished. They bumped it up $100,000 to $1,595,000 once the remodel was complete in January 2006. The price came down to $1,520,000 by August 2007, along with extra enticements: a “lease-option” purchase opportunity, plus seller financing.

The sellers got tenants, but no buyers. By May 2009, the home was back on the market for a little over $1,300,000. Still no deal over the next 15 months.

Last week, 217 Seaview hit the market at $849,000 as a short sale, meaning the lender who financed the rebuild could take a big hit.

This little flip wasn’t the most extreme story of failure born in the bubble years, but it may deserve a page in the book. Now someone could grab a home that’s about four years new, near the beach, for under $900,000 – less than the home cost in 2004 – with a free head-to-toe rebuild thrown in.

Five years after the house hit the market, someone may finally smell a bargain.

[UPDATE: The short sale didn't work on Seaview – a deal posted in August 2010 but the home foreclosed instead in December 2010, the bank posting a price of $810k for the repo.]

First-Half Sales in Other South Bay Markets

Last week’s column reported on sales data for three major regions of the South Bay. But a few readers quickly asked: What about other neighborhoods?

So this week we’re looking at sales in San Pedro, Carson and Gardena, all major South Bay areas with hundreds of home sales each year.

Once again, we’re looking at closed sales reported to the Multiple Listing Service from Jan. 1 to June 30 in each of the past five years. This week, I expanded the search from single-family homes only to all sales including condos and townhomes.

The chart shows San Pedro following pretty closely with the trends we saw in last week’s data on the Beach Cities (Manhattan, Hermosa, Redondo), Torrance and the Palos Verdes Peninsula. Like those markets, Pedro saw pretty good years in 2006 and 2007 — nearly equal at 318 and 314 sales, respectively. Meanwhile 2008-09 were slump years, with sales down about 40 percent. Also like those other markets, San Pedro saw a resurgence of sales in the first half of 2010, up 23 percent from last year, though still well short of the 2006-07 pace.

Carson and Gardena followed a different pattern over these five years.

Carson slipped tremendously from 2006 to 2007 and again from 2007 to 2008. The total change, from 460 annual sales to 186 over two years, represented a whopping 60 percent drop in home transactions. Just as suddenly, home sales rocketed ahead in 2009, back up to 356 transactions. That was nearly double the 2008 total and 30 percent more than 2007. Lots of foreclosures and short sales are seen in 2009-10. This year, sales actually slipped just a bit from the first half of 2009.

Gardena had fewer sales overall, so the drops and rebounds aren’t as dramatic. You see more of a steady “V-shape,” with a peak in 2006 at 229 sales, a valley in 2008 and some recovery again the past two years, up to 178 sales in the first half this year — slightly more than 2007.

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Dave Fratello is a Manhattan Beach resident who writes the www.sbconfidential.com. and www.mbconfidential.com real estate blogs. He can be reached at mbwatcher@gmail.com.

Professional Flippers Are Back

noreply@blogger.com (MBWatcher) — Fri, 20 Aug 2010 16:11:00 +0000

The front page of the LA Times on Friday said what SB Confidential reported months ago -- professional flippers are in business even today, amid a mostly challenging housing market.

The Times focused on pro investors grabbing foreclosures, especially out in the hinterlands -- the Inland Empire and beyond. They fix them up and flip them, and they're savvy.

Noting the rush of activity where foreclosed homes are sold, one investor offered this observation:

"It's just like the housing bubble," he said. "It's almost like we're in a bubble at the courthouse steps."

That's quite different from this SBCon story on 815 Pearl in S. Redondo (click highlighted address for more pics & details via Redfin). It's no foreclosure there, but we're still watching to see what happens with this total rebuild fairly near the beach.

It's still for sale, tolling almost 60 DOM by now, with a little cut to $1.149m right now.

This Week's Column & Links (Aug. 14-15)

noreply@blogger.com (MBWatcher) — Sat, 14 Aug 2010 14:45:00 +0000

This week's column appeared in the "Home Guide" in Saturday's Daily Breeze (print edition), and is available below.

This week we're looking at sales statistics for the first half of 2010 in three major South Bay regions: the Beach Cities (Manhattan, Hermosa, Redondo), Torrance (all areas) and the PV Peninsula. All three regions have seen sales exceed the totals seen in the trough years of 2008-09, but which area's performing best so far?

Earlier this week I provided more granular detail on sales within sub-regions of Manhattan Beach in two posts on MB Confidential – these were more year-to-date, covering January through the end of July. Here are those two posts:

"Giving '07 A Run So Far" – covering SFR sales west of Sepulveda

"Sales in Those 'Other' Areas" – covering Sand Section townhomes and all sales east of Sepulveda in the 90266

And speaking of Manhattan Beach, the latest news is that the MB Open volleyball tournament will go on next weekend, with no grandstands and "no bells or whistles," despite the AVP's apparent collapse. For more see this MBC post.

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Here's the complete column as it appeared in the Daily Breeze:

Local Markets Showing Signs of Life

When the housing bubble popped, the impact hit all real estate markets.

Declining prices, much tighter lending and a worsening economy put a damper on sales activity. Locally, the worst years were 2008 and 2009, with the fewest sales recorded in a decade or longer in many markets.

Now, local real estate is showing signs of life here in 2010. The graphs on this page contain five years’ worth of data for three major regions of the South Bay.

For each region, we’re looking at the number of closed sales of single-family homes in the first half of 2010, from January 1 to June 30. We’re comparing this year’s data with the same period for each of the four prior years. Keep in mind that the date of closing is often 30 to 60 days after a deal is struck, which makes this a slightly lagging indicator of market activity.

Price trends are a separate issue that we’ll look at down the road. We know that many local markets have suffered drops of 20 to 30 percent or more in home prices during the recent slump. Lower prices are a partial explanation for renewed buyer interest. One precondition for a price rebound is for demand to return, as it began to do earlier this year.

Beach Cities

The three coastal cities of Redondo, Hermosa and Manhattan Beach together had their best year recently in 2007, with 446 sales. (My own community of Manhattan Beach had a slightly better 2006 than 2007.)

The dropoff in the sales pace from there to the low in 2009 was 45 percent, fully 200 fewer sales.

Last year’s sluggish sales set up a 34 percent jump in sales this year down by the water, back up to 330 sales of single-family homes. That’s encouraging, but sales are still down by a quarter from that 2007 high, and down 16 percent from 2006.

Torrance

The many areas of Torrance make this one city the biggest, and most diverse, of local markets. In 2006, sales exceeded 400 single-family homes.

Sales later dropped almost as much as we saw in the beach cities, a 40 percent decline from the first half of 2006 to the first six months of 2008. As with other South Bay markets, 2008 and 2009 were the most sluggish, but last year, Torrance actually recorded a slight increase from 2008 levels.

In the first half of 2010, 333 sales put the city up by a third over 2009, just like the coastal towns. But the recovery was a bit more complete, with sales just 17 percent shy of the recent peak in 2006.

Palos Verdes Peninsula

The Hill had a standout first half in 2007, a time when nationally, many real estate markets were already crashing. With 296 single-family transactions, sales were up 22 percent over 2006.

The slowdown was as severe for the PV markets as Torrance and the beach cities, with a 43 percent dropoff in sales activity from the first half of 2007 to the same period in 2009, when just 168 homes changed hands.

From the look of things, PV is back in a big way. A 58 percent rise in sales in this year’s first half is the most impressive of the three regions we’re looking at. The peninsula is the only market to have 2010 sales exceed 2006 sales from January to June, and the pace after six months was only off 10 percent from the recent peak in 2007.

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Dave Fratello is a Manhattan Beach resident who writes the www.sbconfidential.com. and www.mbconfidential.com real estate blogs. He can be reached at mbwatcher@gmail.com.

This Week's Column & Links (Aug. 8-9)

noreply@blogger.com (MBWatcher) — Sat, 07 Aug 2010 14:00:00 +0000

South Bay Confidential is back after a one-week vacation with some updates on homes we've covered in recent weeks.

This week's column appeared in the "Home Guide" in Saturday's Daily Breeze (print edition), and is also available online below. (We've grabbed a screen image of the chart below from the Breeze layout; click to enlarge.)

Mainly this week we're looking back – updating readers on the status of various homes that have been mentioned in SBC in prior weeks.

The top request I've gotten has been for the Silver Spur Court auction prices, and those are now laid out in detail here. However, as the column notes, none of these are sure to be the "final" prices when the sales close. We'll have to run another update down the road when most or all of the units have sold once and for all.

The story also discusses the following properties that can be viewed online via Redfin:

1208 Via Coronel in Palos Verdes Estates, a FSBO now listed at $1.289m (down $70k since our first story);

815 Pearl in South Redondo Beach, a remodel/rebuild that's down slightly to $1.149m since our first story;

4024 Stalwart Dr. in Rancho Palos Verdes, listed at $1.159m and now sold for $1.130m.

(Clicking an address above takes you to Redfin's property display page.)

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Here's the complete column as it appeared in the Daily Breeze:

How Are They Doin'?

Several readers have asked for updates on various properties that have been mentioned in this column in recent weeks. So let’s make the rounds:

Silver Spur Court Condos

In mid-July there was a much-ballyhooed auction of 18 new condos up in Rolling Hills Estates, known collectively as the Silver Spur Court project. The entire stock of condos had failed to sell since hitting the market in mid-2008, so the developers decided to try to get them all sold at once.

On the day of the auction, the strategy appeared successful. There were multiple bidders on every unit. On July 20, the auction company announced that it had offered and sold all 18 condos. But today, two are back on the market, while 16 remain in escrow, with most slated to close by the end of this month.

We’re not going to have final prices on any of these units until they close. But the chart here describes the progress of each unit: 1) the initial market price, 2) the ultra-low teaser start price for the auction and 3) the winning bidder’s offer at the auction.

Those winning bids may or may not be close to the final prices on the units. A quirk of this auction was that each unit had an unpublished “reserve” price that the sellers would hold out for. So a negotiation opened up with several winning bidders – if the bid didn’t meet the minimum, the winners were asked to pay more. Many did. (This oddity was disclosed in advance by the auctioneers and mentioned in my column under “caveat emptor.”)

I spoke to the developer, Gregory Brown, who remains, deservedly, proud of the Spanish-style condo project for its uniqueness and quality. He believes that infill development of this kind ought to be a big part of our housing future – yes, even up on the hill.

Brown said the most limited purpose of the auction was to set prices for some of the condos – a floor, at least, so that future buyers of any unsold units would know what they should pay. If all 16 units now in escrow go through, the auction will be a huge success, measured against that goal.

The two remaining units are #4 (3 bedrooms, 2.5 baths, 2279 square feet), priced at $795,000, down from its start at $1,160,000 and up somewhat from the “winning” bid of $639,000, and #6 (3 bedrooms, 2.5 baths, 2830 square feet), priced at $985,000, down from a first offering price of $1,250,000 and up from the auction bid of $787,000.

Are those priced right? I’d wait for some of the others to close before answering that.

FSBO in PVE

The for-sale-by-owner listing at 1208 Via Coronel has made a couple of price cuts in the weeks since it was first mentioned here. It’s now priced at $1,289,000.

That’s down from a start at $1,499,000 last year, and $1,359,000 in June when the home was first mentioned in this column.

Pearl Still Searching

The snappy remodel/rebuild at 815 Pearl in Redondo Beach is still on the market, with one price cut in its six weeks on market so far, down to $1,149,000. Recall that, for that money, you get a virtually new home (3 bedrooms, 4 baths and nearly 2500 square feet) on a big corner lot that’s close to the beach, while tucked up a hill away from PCH.

815 Pearl is open today and Sunday from 2:00-4:00pm.

Strand Palace on Hold

2909 The Strand in Hermosa Beach, the South Bay’s priciest listing at $25 million when it was mentioned here in June, has gone off market for the summer. Why not? If you’ve got a giant beach palace, fill it with friends and family during the peak season, then sell it in the fall.

The listing agent says they’re still talking to potential buyers, and expect to bring the property back some time after Labor Day.

SeaView Sale

Rounding things out on an upbeat note, one of the properties we’ve featured here has sold. 4024 Stalwart (4br/3ba, 2735 sq. ft.) is a nice remodel of a 1960 original in the SeaView community of Rancho Palos Verdes, offering big blue views. It found a buyer within 10 days, and has now closed at $1,130,000, a modest discount of $29,000.

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Dave Fratello is a Manhattan Beach resident who writes the www.sbconfidential.com and www.mbconfidential.com real estate blogs. He can be reached at mbwatcher@gmail.com.

This Week's Column & Links (July 24-25)

noreply@blogger.com (MBWatcher) — Sat, 24 Jul 2010 13:07:00 +0000

This week's edition of South Bay Confidential appeared in the "Home Guide" in Saturday's Daily Breeze (print edition), and is also available below.

We discuss 4 separate homes for sale on the Manhattan Beach Strand. Here are links to those active listings:

1600 The Strand, now at $13.5 million. (The Breeze features a nice photo – see the print or "layout" version.)

3516 The Strand (pictured) newly down to $9.850m (from $14m last year).

2920 The Strand, marking about a year on market, now at $11.750m.

1804 The Strand, the newest entry of the bunch, 30 days on market, start price of $11.9m.

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Here's the complete column as it appeared in the Daily Breeze:

In the Market for Luxury and Grace?

It's summer, and that means everyone wants to be at the beach.

If you lived on The Strand in Manhattan Beach, you'd already be there.

Prestige homes on Manhattan Beach's Strand are the priciest in town, and some of the most expensive in the whole South Bay. Here's a look at a few that are currently for sale:

1600 The Strand (three bedrooms/five baths, 5,225 square feet) is a visionary 1980s modern home designed by architect Ray Kappe. Its curvy lines, concrete, steel and glass combine for a bold look reminiscent of a passenger ship.

Totally unique properties tend to have a limited audience, though. The home's been marketed since February this year - more than five months - at $13,500,000, with no cuts and no buyers yet. [UPDATE: The property has cut to $12,499,000 and is featured in this unique video.]

3516 The Strand (six bedrooms/five baths, 5,550 square feet) is a high-end, Italian-inspired home that was completed last year. They've even named it Villa Toscana Sul Pacifico and, to add an authentic feel, brought in old, reclaimed materials (bricks, beams and tiles) while having other pieces custom-made in Italy.

One thing that's not so retro: a home theater with a huge screen.

Despite its charms, 3516 The Strand has now lingered more than 8 months on the market. It began at $14 million and made a big cut this week to $9,850,000, more than $4 million below its start.

2920 The Strand (seven bedrooms/seven baths, 5,675 square feet) needs the most help among current Strand offerings. Though the design has some flair, and the home boasts a larger-than-normal corner lot, inside, the home needs updates. The layout is also chopped up, with the home built around a small pool in the center.

On the (big) plus side, the rooms up front along The Strand are generous, particularly the gargantuan master bedroom, with panoramas of sand and sea stretching up to Malibu.

The home was first listed in June 2009, recently came off the market briefly and returned at $11,750,000. The owner paid $9 million in July 2006.

1804 The Strand is the newest offering of the bunch. Just 30 days on market, but with a start at $11,900,000, it could linger a while, too.

Built custom for a family that's now moving away, the new (2010) home is both sharp and comfortable. Ocean and Manhattan Beach pier views are a big draw from the built-in table just off the kitchen and the two mini-master suites on the top floor.

Still, the main house is quite modest in size, limited because there's a small two-bedroom unit in the back, intended as guest quarters. This gives the main home less of the feel of a permanent residence and more like a second home, perhaps limiting the buyer pool.

Not For Sale

While we're talking about Manhattan Beach's Strand, it's worth noting some development at the south end of town.

Where once there were six separate lots between 2nd and 3rd streets, there are now only three; lots were combined to enable some large new homes to take shape here.

The Strand’s only triple-lot home, right at 3rd, is a charming modern California beach bungalow completed last year. Despite the fears of residents that the home would be huge and imposing, like a big hotel, its actually scaled nicely, with much of the living space tucked back away off The Strand in an L-shape.

Down at the corner with 2nd St., the scaffolding just came off another brand-new custom home that mixes a classic Mediterranean look with some modern touches.

Between those two beach mansions is a gap, for now soon to become a double-lot home.
After several straight years of construction in the area, you'll see Manhattan Beach's south end quietly become a special new island of luxury and grace, raising the bar for the rest of The Strand.

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Dave Fratello is a Manhattan Beach resident who writes the
www.sbconfidential.com. and www.mbconfidential.com real estate blogs. He can
be reached at mbwatcher@gmail.com.

This Week's Column & Links (July 17-18)

noreply@blogger.com (MBWatcher) — Sun, 18 Jul 2010 14:01:00 +0000

This week's edition of South Bay Confidential appeared in the "Home Guide" in Saturday's Daily Breeze (print edition), and is also available online below.

As Summer kicks into gear here, the column notes that the home selling calendar is getting shorter. Advice to sellers: If you mean to sell, act like it. Price it right unless you want to be stuck till the holidays.

Following up on last week's column just a bit... we discussed the auction for 18 condos at Silver Spur Court in Rolling Hills Estates. The auctioneers are still working things out, but the first bit of news is that all 18 condos did wind up with buyers.

Not every auction looks like a success right after it wraps. Consider the auction in late 2008 in Manhattan Beach/Hermosa Beach, discussed recently at MB Confidential. (See "Revisiting the MB/HB Auction.")

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Here's the complete column as it appeared in the Daily Breeze:

Acting Like a Seller

Pricing your home to sell is not easy, in part because you don’t really know what the market will bear.

I’ve been counseling some friends who are preparing to sell, but their house is unique in their neighborhood and thereby very hard to compare to anything nearby.

They deferred to the judgment of their real estate agent. In their meeting, he suggested a start price which, in his opinion, was very close to its likely market value.

My friends agreed, but shortly thereafter they were asking me:

It seems low, what if we could get more?
Shouldn’t we price it higher and come down only if we need to?
If we get a lot of interest, won’t that just mean we under-priced it and left money on the table?

My personal advice was this: Look at the calendar. It’s summer. There might be 10 to 12 good weeks left to sell this year, then we’re nearing the holidays, when there will be far fewer buyers.

Price it right now, and you should draw interest and have a real chance to sell. Price it high now, and you might be correcting the mistake in September or October. That’s when potential buyers start packing it in for the winter, maybe planning to come back next spring to search again.

For now, my friends are sticking with their agent’s recommendation for their list price. But it’s easy to see why many sellers listen to a market value assessment and then add 5 to 15 percent to their start price. Or if they don’t exactly “add” to the suggested price, they might pick the highest possible list price their agent suggests.

The calculation sellers make is that buyers who like the house will just offer what they think it’s worth, and a negotiation can take place with the sellers keeping the “high ground,” if you will. You can’t leave money on the table if you’ve added a fat cushion to your start price, right?

In reality, buyers tend to brush off overpriced listings and wait for the owners to show they are realistic — to show that they’re really sellers. Buyers often fear that offering 10 percent or more off the list price will just waste everyone’s time.

This is how standoffs are born, and listings wind up lingering for three months, six months or more.
So if you’re setting your list price, ask yourself: How long do we want to have this house on the market? Price accordingly.

As to all those listings getting stale nowadays, I have to say the same thing as I said to my friends: Look at the calendar. Time is not your friend. If you really mean to sell this year, make a move, make it bold, make it soon. If waiting around for people to drop in, fall in love and make an offer hasn’t worked, act like a seller.

How to Linger and Lose

In Manhattan Beach, the market I track most closely, we’ve had a good first half of 2010, but there are plenty of listings that are getting long in the tooth.

I’m thinking of one smallish, nicely remodeled East Manhattan Beach home in particular where the owners are relocating out of state. The sellers began too high in April. Immediately, verbal offers came in at about 9-10 percent below the start price, but these were deflected at first. The owners were feeling bold.

At this point, nearly three months into the listing, they haven’t made a price cut or a deal. I’d bet the home eventually trades for about 15 percent off their start price, partly because it’s hung around so long now.

If I’m right, overpricing and holding fast when that first flood of interest came in could cost the sellers $50,000 or more in the end.

To my mind, you’re more likely to leave money on the table by overpricing than by “under-pricing.”

The real estate market isn’t perfectly efficient, but buyers seem to recognize “deals” and move on them quickly. Listings that get old become shark bait, and sellers often settle for less.

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Dave Fratello is a Manhattan Beach resident who writes the
www.sbconfidential.com. and www.mbconfidential.com real estate blogs. He can
be reached at mbwatcher@gmail.com.

This Week's Column & Links (July 10-11)

noreply@blogger.com (MBWatcher) — Sat, 10 Jul 2010 14:22:00 +0000

This week's edition of South Bay Confidential appeared in the "Home Guide" in Saturday's Daily Breeze (print edition), and is also available below.

The story today concerns the Silver Spur Court condo project, which flopped and heads to auction this Sunday. (This photo is from one of the units with 2-story high ceilings and a frontage on Silver Spur; they say this unit could be mixed commercial/residential, but I don't quite see it.)

For more information and a brochure, see: www.silverspurcourtauction.com

Note that this Rolling Hills Estates condo auction is wrapped up with another auction in Pasadena in the promotional materials – confusing at times.

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Here's the complete column as it appeared in the Daily Breeze:

How Many Pieces of Silver for That Condo?

Condos! Condos!

Come and get your cheap condos!

That’s roughly the pitch for 18 newly built units in Rolling Hills Estates headed for auction tomorrow.
The Silver Spur Court condo project flopped when it was brought to market a couple of years ago. At the time, the units were offered for prices ranging from $930,000 to $1.7 million.

Now, the auction’s come-on prices average one-third of those long-forgotten start prices. For instance, unit 8, known also as 975 Silver Spur Road, first hit the market at $1,255,000. The auction price is $395,000, or 69 percent off that stratospheric beginning.

Whether or not you can actually get these condos for those giant discounts, there’s still something attractive and different about the complex that’s driving interest in the properties now. The Spanish-style building, launched as an ambitious luxury development four years ago, features lots of open, common outdoor spaces, including a large terracotta-tiled courtyard, grand staircases and another lushly landscaped area that feels like a private yard off a few of the units.

Every unit is different, though they share design elements: dark-stained hardwood floors, modern kitchens, snazzy fixtures, spacious rooms. Wrought-iron railings adorn the stairways. Most units have fireplaces and some kind of private outdoor space — a roof-deck patio here, a narrow and grassy yard there. A few have hillside views.

They’ll tell you that each unit cost $1 million or more to build, when considering land and construction costs.

But buyers stopped short of paying $1 million or more. In fact, none sold. It’s understandable.

For one thing, the real estate bubble popped between the green-lighting of this project in 2004 and the first time the condos were offered for sale in mid-2008.

Moreover, dense development is something new for the area. Single-family homes are the norm in Rolling Hills Estates and surrounding communities, not tight-knit condo complexes.

And the location for the new condos, at the corner of Crenshaw and Silver Spur, means that traffic is noticeable from several units. The site, formerly home to a McDonalds, also backs up to a large post office building.

Why build condos here, then? The Silver Spur Court development is part of the original “Peninsula Village” plan to turn the immediate area into a “European-style village” that combines shops and residences. (A series of mini-malls joins a full-blown mall a few blocks down the road.) Though the massive plan has been scaled back, a few residential projects remain.

Back in September 2006, when the Silver Spur project first broke ground, one of the developers told the Palos Verdes Peninsula News, “We think it’s going to be kind of a landmark for Rolling Hills Estates.”

It probably didn’t occur to anyone that every unit would fail to sell and would head to auction instead.
It’s too bad to see such a strike against this sort of infill development. Moving some “smart growth” up the hill is an innovative concept. You could see some empty-nesters or young professionals loving the urban groove if it develops fully over time. But this project was timed terribly, launching late, building slowly and finishing up during a real estate crash.

The big question is: What are these condos worth today? They’re hard to compare to much nearby.
On Sunday, we’ll find out. There are plenty of registered buyers. The sellers have set minimum (“reserve”) prices for the condos that are likely above those start prices — we don’t know, as the reserve prices are known only to the auctioneers. But if auction buyers go above those minimums, we’ll finally see the first sales at Silver Spur Court, and the first residents in the months to come.

I’ll report back after we see what goes down.

------------------------------------------------

Dave Fratello is a Manhattan Beach resident who writes the
www.sbconfidential.com. and www.mbconfidential.com real estate blogs. He can
be reached at mbwatcher@gmail.com.

This Week's Column & Links (July 3-4)

noreply@blogger.com (MBWatcher) — Sat, 03 Jul 2010 14:01:00 +0000

This week's edition of South Bay Confidential appeared in the "Home Guide" in Saturday's Daily Breeze (print edition), and is available below.

The home discussed this week is 815 Pearl in S. Redondo (click highlighted address for more pics & details via Redfin).

It's a flip, but a professional flip – not like one of those quickie jobs you used to see on cable TV.

------------------------------------------------------

Here's the complete column as it appeared in the Daily Breeze:

A Pearl of a Flip in South Redondo

It blew me away to see one of those home-flipping remodeling shows on
a friend’s TV the other day.

What, they’re still making these shows? Three or four years after the
housing bubble burst?

The last time I had seen a “reality show” featuring a home flipper was over
a year ago, and even by then the genre had changed noticeably from the go-go
days when amateurs would remodel homes and garner big profits.

The person featured in the show I saw was a first-time flipper, a clueless
woman with ridiculous remodeling plans, delusional expectations for her
resale and just one asset: a mom who kept bailing her out.

Unfortunately, they never showed how the final product fared in the market,
though I’m guessing it would have made for a grim second episode.

It crossed my mind that the whole show could have been a put-on, with an
actress hired to impersonate a naive flipper, and all of the remodeling
costs underwritten by the cable network. Hey, if the show sells ads …

You don’t see those sorts of individual flippers out in the real world very
much these days. But the pros are still profiting here and there.

For a model of how they can do it, look at 815 Pearl in South Redondo Beach
(south of Torrance Boulevard).

Late last year, word got out that the tired, chopped-up house was going to
be available. It didn’t hit the open market, but investors got word. One
jumped, paying $680,000 for the house in November.

The home needed everything. The late-1940s original had been split up into
two units, but a single-family home would be more attractive on the open
market.

So the remodel at Pearl required a redesign of the interior, upstairs and
down. Walls were moved, floors and windows replaced. There would be major
updates to plumbing and electricity, plus, of course, a modern kitchen (with
stainless steel appliances, de rigueur) and upscale baths. They even moved
the garage entry from the street to a back alley to create more yard space.
(Sound easy? Try it.)

About eight months later, the final product is a bright, open home with the
distinct feel of new construction. The three bedroom/four bath home boasts
nearly 2,500 square feet on a newly landscaped corner lot. Each bedroom has
its own bathroom — a modern luxury you wouldn’t get in a quickie remodel
like you might catch on cable TV.

Meanwhile, one artifact of the old structure remains: off one side of the
house, you’ll find a small, low-ceilinged suite downstairs. Once a part of a
second unit, it could be great for storage, a kids’ clubhouse or your
teenagers’ band practice. You have to love quirks like this.

After all that work, the pro flipper has marked up the final product by more
than $500,000 to $1,199,000.

The challenging remodel cost something over $300,000, listing agent Tony
Puma told me. The work went through some unforeseeable problems and tasked
the patience, skill and time of the interim owner, but he got it done. One
of those cable flippers would have been buried or in foreclosure by now. The
pro flipper here stands to get out with an attractive return, depending on
how buyers respond.

We’ll check back with 815 Pearl as it progresses over the next few weeks or
months.

Meanwhile, 815 Pearl will be open from 1-4 p.m. today and from 12-3 p.m.
Sunday.

[UPDATE: The home sold for $1,000,000 in December 2010.]

------------------------------------------------

Dave Fratello is a Manhattan Beach resident who writes the
www.sbconfidential.com. and www.mbconfidential.com real estate blogs. He can
be reached at mbwatcher@gmail.com.

This Week's Column & Links (June 26-27)

noreply@blogger.com (MBWatcher) — Sat, 26 Jun 2010 07:01:00 +0000

This week's edition of South Bay Confidential appeared in the "Home Guide" in Saturday's Daily Breeze (print edition). The full column appears below.

Extra treat: The Breeze features this week's column on the front page, above the fold.

The focus of the column this week is 2909 The Strand in Hermosa, a $25 million home on a double-lot that reaches 35 feet in height – 10 feet higher than you can build these days. (Click the address for more pics & details via Redfin.)

The column also mentions three recently sold new-construction homes in the Tree Section:

768 31st St. (5br/4ba, 5200 square feet) (pictured), a Craftsman-inspired home which sold for $3,200,000.

660 33rd St. (5br/6ba, 4750 square feet), a big Spanish that sold this year for $1,990,000.

645 9th St. (6br/6ba, 7750 square feet), an enormous, certified "green" house that sold for $6 million.

------------------------------------------------------

Here's the complete column as it appeared in the Daily Breeze:

More Than a Jackpot on the Hermosa Strand

Someone hit the Super Lotto jackpot a week ago, but even that $10 million prize wouldn't be much help in buying 2909 The Strand in Hermosa Beach.

With a list price of $25 million, the home's meant for someone living on a whole different plane of existence.

I recently toured the beach palace, though, and was glad to see a celebration of South Bay beach life.

Huge windows across all levels capture live action – volleyball, surf and sand. The master bedroom also gets terrific views of Manhattan's pier and Malibu to the north. The ground level's ample, wide patio is even with the Strand, creating the (temporary) illusion that the owners and their guests are literally on the same level as the passersby.

Contrast this with other pricey parts of the L.A. area – Beverly Hills, where mansions lurk privately behind tall gates; Malibu, where beaches are technically public, but don't always feel like it; or Venice, where perhaps the notion of a public beachfront sometimes goes too far. I'll take Hermosa or Manhattan.

2909 The Strand was built in the late 1990s on a lot that's nearly double-wide, and the home's also taller, at 35 feet, than most homes around it – you're capped at 25 feet now in Hermosa. What's here now can't be duplicated.

The current, outgoing owner refashioned the home with a beachy style you might call Tommy Bahama plus Four Seasons. There are 7 bedrooms and 9 baths within nearly 10,000 square feet of living space, but in my tour it was a blur of big, open entertaining spaces plus several bedroom suites worthy of a 5-star hotel. The master bath is like a glorious temple, a huge, marble room with a big skylight that opens mechanically.

Every time we saw something awe-inspiring, my guide would say, "You think this is the ultimate, but you haven't seen the best part yet."

On the roof deck, I realized what he meant. It's a resort unto itself, with space for 50 or more people, a bar, grill and hot tub. And because the home is so tall, the roof soars above all neighbors. A party up here would be like a sun-drenched helicopter ride above the South Bay.

The next-highest-priced Hermosa Strand listing today is at $16 million, and most sales are much lower.

So I had to ask: $25 million, for one house? Surely that must be inflated.

But the price hasn't dissuaded the two buyers now angling for the property.

(For more see: www.2909thestrand.com.)

Last Few New Homes Sell in MB

When home prices are in an up-cycle, parts of the South Bay start new building cycles.

In my hometown of Manhattan Beach, we saw more than 500 new single-family homes built and sold on the open market in this decade, and that's just west of Sepulveda. Mostly, big, modern spec homes replaced smaller 1950s and 1960s homes, often selling for $2 million or more when complete.

The building cycle that birthed these new homes is over now, though. The last few new homes are finally finding buyers.

So far this year, 10 new builds have made deals, including:

768 31st (5br/4ba, 5200 sq. ft.), a Craftsman-inspired home on one of the Tree Section's great tree-lined streets, sold for $3,200,000, quite a bit below the start price of $3,775,000 and well below the rumored first offer of $3.5 million.

660 33rd (5br/6ba, 4750 sq. ft.), a big Spanish that ran 16 months on market and went back to the bank, finally sold this year for $1,990,000, more than a million less than its start price.

645 9th (6br/6ba, 7750 sq. ft.), an enormous "green" house (nonsequitir alert!) that cut $1.95 million but still sold for an impressive $6 million.

They say you'll know the market is truly headed up again when the builders return. But we're still waiting for that. There are no solid reports of builders buying lots nowadays to use for new spec projects, except right at the beach, where values are always higher – though rarely near $25 million.

This Week's Column & Links (June 20-21)

noreply@blogger.com (MBWatcher) — Sat, 19 Jun 2010 07:01:00 +0000

This week's edition of South Bay Confidential appeared in the "Home Guide" in Saturday's Daily Breeze (print edition), and is available in full below.

Here are links to the 2 properties mentioned in the column:

1208 Via Coronel in Palos Verdes Estates, listed at $1.359m.

4024 Stalwart Dr. in Rancho Palos Verdes, listed at $1.159m.

(Clicking an address above takes you to Redfin's property display page.)

Our online extra this week is a few pages from the original, 1960 brochure for the SeaView development in RPV (where Stalwart is located). (Click here to download the PDF.)

Back then, touting PV as "smog-free" was cutting-edge, Marineland was where Terranea now is, and the 405 was part of a rosy vision for the future.

Here's the complete column as it appeared in the Daily Breeze:

Think you can sell it yourself?

Off and on since last August, Long Trinh has been trying to sell his house. Alone.

His home at 1208 Via Coronel (pictured) in PV Estates is a FSBO ("for sale by owner," or "fizzbo").

Trinh began last year by asking $1,499,000 for his four-bedroom, four-bath 2,850-square-foot home. He's now asking about 10 percent less: $1,359,000.

The home is a 1961 build that was overhauled in 1992, and he's updated it further since.

In a recent tour I found the landscaping sharp, the pool sparkling and the main living spaces bright, with even a little peek at the ocean. The layout was a bit choppy and surprising, with two bedrooms up and two bedrooms down, the master right off the entry and a smallish kitchen tucked out of the way.

Trinh says he's gotten calls from real estate agents offering to help him sell. For now, though, he's just looking for buyers.

Not only did he cut the price recently, he also increased his offer to buyers' agents. He previously offered them a 2 percent commission, but now he'll give the more common 2.5 percent.

That boost may help, but there's no question that a FSBO faces resistance from traditional agents. Typically they don't trust FSBO sellers and they resent taking on most of the work and liability in a transaction. Oh, and their business model is obviously threatened if people really can do it all themselves.

The home's on the MLS (and the Internet) thanks to a service Trinh paid a bit less than $500 for. He contends that with the savings he'll realize by selling the home himself (about $35,000 at today's price), he can offer it for less.

We'll check in on Trinh from time to time to see how he fares.

1208 Via Coronel is open 1-5 p.m. today and Sunday.

[UPDATE: The home sold in Dec. 2010 for $1,200,000.]

Smog-Free with 'Ocean View Supreme'

The south side of the Palos Verdes Peninsula remains one of L.A.'s most out-of-the-way locations, with some of the best ocean views you'll get.

Catalina's in sight more days than not.

At the midpoint between San Pedro (east) and the lighthouse (west), right along Palos Verdes Drive, rises a little early-'60s suburb called SeaView. They named the streets things like Schooner, Dauntless, Admirable - even Exultant. That's right, just nautical names here, no Spanish, in this pocket of the Peninsula.

From PV Drive, some of the homes have a quaint and dated look, but 50 years later, most of the original structures are still standing. Mostly they've been remodeled by newcomers, not scrapped and rebuilt.

4024 Stalwart is one good example. The home's a four-bedroom, three-bath 2735-square-foot remodel of a flat-roofed, one-story '60s modern that now beckons buyers for $1,159,000.

About the only original elements left are the solid wood closet doors - good call - and the rock fireplace. The owner has brought the home into the 21st century with a big new kitchen, and enclosed some former patio spaces off the living room and master to create extra living space. Only the smallish master bath disappoints.

The ample yard has a very low, chain-link fence, allowing unobstructed ocean views, and there's even a side yard with garden shed/playhouse.

Chatting with a neighbor, I got swept up in some history of the neighborhood, and then got a copy of the original sales flier for the SeaView development. That charming piece of propaganda touts SeaView as "fashionable," "smog-free" and "scenic," "with Ocean View Supreme."

The flier also touts the proximity of Marineland, now replaced by the Terranea Resort, as well as the not-yet-complete San Diego (405) Freeway, which - at least according to the sales copy - would "add to the easy-to-reach-convenience" of the area. The jury's still out on that claim.

4024 Stalwart is open 12-4 p.m. Today and 1-4 p.m. Sunday.

[UPDATE: 4024 Stalwart sold quickly, closing for $1,130,000 in July 2010.]

Welcome to SBC

noreply@blogger.com (MBWatcher) — Sat, 12 Jun 2010 06:51:00 +0000

We're welcoming new readers, as South Bay Confidential (SBC) gets under way.

Many of you may be coming as a result of the new column we've got in the Daily Breeze. (The complete debut column appears below.)

We're just getting under way here online, too, but if you'd like a sampling of what SBC will be about, please check out Manhattan Beach Confidential, which dates back to March 2007.

The current story there is about a selection of new listings that are open to the public this weekend.

This site will evolve in response to reader feedback. There's lots to do.

Many thanks for checking in!

--------------------------------------------------
South Bay Confidential
By Dave Fratello
--------------------------------------------------

Going on the Record About South Bay Real Estate

Everyone talks about local real estate. We dish. We tell stories. We exchange information with friends, neighbors and coworkers.

In private, those discussions aren’t polite and vague. They’re specific and real.

But there seems to be a big hang-up about going “on the record” with those observations. People in the real estate business know the most, but say the least. Many consider it rude or dangerous to even hint that a property isn’t perfect and/or perfectly priced. The market always seems to be healthy and
looking up.

It’s as if reality has no place in talking about real estate.

I set out to change that three years ago with a blog: Manhattan Beach
Confidential (www.mbconfidential.com).

I published my Manhattan Beach real estate site anonymously until this week.
For a long time, that seemed to be the only way to go. I now believe the
best way to improve and expand on my work is to sign my name to it. I still
support readers’ right to remain anonymous in obtaining information and
commenting on the issues.

MB Confidential, which has stirred some controversy in the real estate
industry, provides news, information and tools to help people understand
what’s going on in their local real estate market — and a forum to discuss
it all. My approach has been to treat homes for sale as commodities in a
marketplace, open for discussion. I have opinions and I share them, as do
the readers. Many people seem to find this a refreshing change.

Now I’ll do much the same here in this new weekly column, covering the whole
South Bay. (A new forum for South Bay real estate is starting up at
www.sbconfidential.com.)

Here in the Breeze, I’ll share stories about homes for sale and data on
trends in various markets. I’ll turn you on to open houses and dream houses.
I’ll take you to some of the various submarkets around the South Bay and
report on what I find.

There will be plenty to discuss. Every week a slew of new listings hits the
market, each with its own story. Some homes are big, some are small, some
are new and some have a date with a bulldozer.

Sometimes the seller is trying to get out for a little profit, sometimes at
a loss. Or perhaps it’s a bank cleaning up after some imploded toxic
mortgage vendor.

Real estate pricing is always a fascinating part of the story. The asking
price on each house comes from a weird stew of suggestive data, sellers’
wishes and hard realities. As listings proceed from start to sale (or fail),
they often tell you something more about the market at the same time.

I like to tell all those kinds of stories, provide data and encourage you to
think for yourself about your market.

In the past, I’ve raised eyebrows by criticizing some real estate industry
practices. I’ve dissected ads from the National Association of Realtors,
calling their stats phony and the messages insulting. I bashed the
once-widespread practice of “re-listing” properties to reset days-on-market
counts and wipe out price histories. Recently, I criticized listings that
aren’t beach-adjacent for being listed as if they were in Manhattan Beach’s
“Sand Section.”

No one likes to be called out, but I believe accurate information is the
lifeblood of a functioning market. I still warn potential buyers — many of
whom now track the market themselves using Internet tools — to take a
“trust, but verify” approach to the data they see.

I recently got myself a real estate license, but I have no specific plan to
work in the business. I may never join the Realtors’ association. I have a
day job as a political consultant that keeps me occupied. Getting the
license gives me better training and access to more tools, which should help
me improve what I can offer.

Next week, we’ll get started for real, and you can let me know how I’m
doing.