What is really selling in our local market?

After months of grim news of lower median home sale prices and growing foreclosure rates, Los Angeles Times reported recently that the market may actually have hit bottom, and the “housing index hints at upturn.”

What does this mean for our local market?

Here is my analysis of some recent transactions in our area:

Santa Monica: Condos

• Second Quarter of 2009, there were 103 sold listings, with average Days On Market (DOM) of 56 days, and an average price per sq. ft. of $584.
• Comparing the same time frame of 2006, there were 136 sold listings with DOM of 37 days and an average price per sq. ft. of $630. It is taking longer to sell, for a price about 7% lower.

Brentwood: Condos

• Second Quarter of 2009, there were 43 listings sold with DOM of 96 days, and an average price per sq. ft. of $444.
• Comparing the same time frame of 2006, there were 59 listings sold with DOM of 38 and an average price per sq. ft. of $528. A drop of almost 16%.

Clara’s note: The statistics usually provide a very general picture of a big market. Every building and property is unique in its way, since the Westside is not a cookie cutter community with relatively newer development. So when I provide my broker price opinion (either to the bank or homeowner), I take into consideration not just the recent comparable sales, but also the individual building and unit’s unique attributes. That is where experience and expertise come into play to provide a more accurate assessment of pricing.

As for the single family residence market, I really don’t think statistics give it a fair assessment for pricing. Every street and every home is special in its own way. Here are some facts and my interpretation:

Brentwood: Houses

• Second Quarter of 2008: 51 properties sold, with DOM of 59 days and an average price per sq. ft. of $897
• Second Quarter of 2009: 55 properties sold, with DOM of 90 days and an average price per sq. ft. of $712, a drop of 20%
• July 2009, listing on 594 Moreno Ave, a three bedroom house (about 2848 sq. ft.) on a 11,340 sq. ft. lot, sold for $2,725,000. This same house sold for $3,305,000 two years ago—a drop in value about 10.3%

Pacific Palisades: Houses

• Second Quarter of 2008: 56 properties sold, with DOM of 79 days and an average price per sq. ft. at $889
• Second Quarter of 2009: 44 properties sold, with DOM of 92 and an average price per sq. ft. of $704, a drop of 20%
• 15248 De Pauw Street: a 5 bedroom house, 3632 sq. ft. of living space on a 7,500 sq. ft. lot. Sold for $2,415,000 in May 2009, which is very close to the 2004 sales price of $2,467,500. The home is very near the Palisades Village. Recession or not, a family still needs a good house to live in.
• 1609 Casale Road: a completely remodeled 5 bedroom house with 5,600 sq. ft. of living space with a 15,600 sq. ft. lot. Sold for $3,900,000 in May 2009, compared with a sales price of $5,145,000 in October 2005—a drop of 22%.
• 609 Amalfi Drive: 8000 sq. ft. house in the same Palisades Riviera area, sold for $7,050,000 in Aug 2009, compared to the sales price of $8,227,082 in March 2006—a drop of 14%.

Malibu: Houses

As the price range of houses are so wide and the average number of sales per quarter is only about 20, it will be very inaccurate to do a statistical analysis of the area. The high end home in Malibu really holds its value. See examples like 22355 Carbon Mesa Road—amazing Mediterranean gated compound with La Costa beach rights; listed for $7,950,000 and sold for over the asking price at $8,500,000 in April 2009.

Beverly Hills: Houses

• 1435 Loma Vista Drive: 4,238 sq. ft. of remodeled home, sold for $5,500,000 in July 2009 compared with its more original conditioned sale price of $3,060,000 in Dec 2007. A very nice and chic renovation still generated good returns in a good neighborhood.
• 521 N. Alpine Drive: 3,321 sq. ft. house on a 12,430 sq. ft. lot sold for $3,695,000 in March 2009; almost the same price as in April 2006.

Santa Monica: Houses

• 327 Alta Ave: a 3,742 sq. ft. house on a 10,440 sq. ft. lot; sold for $3,600,000 in May 2009—more than an 8% appreciation over its sale price of $3,295,000 in March 2005.
• 854 23rd Street: a 4,272 sq. ft. house on an 8,000 sq. ft. lot; sold for $2,800,000 in May 2009—a drop of 20% from its sale price of $3,500,000 in April 2006.

Mar Vista: Houses

• There were 54 properties that sold within the price range of $700,000 to $1,200,000 from January to July 2009. Twelve of them sold either very close to asking or above asking, making it one of the strongest real estate markets on the Westside.

Again, every house on every street is unique in its way. I don’t think just applying the price per square foot method is an accurate estimate of home price.

If you are a homeowner, and you are interested in knowing how much your home is worth in today’s market, please call or email me to request a no-obligation home analysis.

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Property showcase

Dream a Bigger Dream

The most expensive residential listing in the U.S. – Candy Spelling’s Holmby Hills mansion, listed for $150 million. (source: LA Times)

The mansion consists of 56,500 sq. ft., looks like a French chateau, is slightly larger than the White House, and is the largest home in Los Angeles County. The house is described as the “greatest entertainment house ever with a kitchen where you can cook for two or 800.” The house is believed to have more than 100 rooms.



For me, a bigger dream would be owning a house on the Santa Monica beach.

972 Palisades Beach Road, a five bedroom European Villa on a double lot of almost 11,000 sq. ft., right next to the sand. The house is listed for sale at $15,999,000 and leases for $65,000 per month








The investment that makes $ sense

When I travel, I always like checking out properties that are easily managed (like with full service maintenance crew in the building), well priced and yield a reasonable rate of return. I am happy to say that we have a “winner” on the Westside that fits all these requirement.

The Azzurra del Rey, built in 2003, offers luxurious high-rise living in the Marina. It features guest valet parking, concierge, rooftop sky-lounge, pool, hot tub, fine art collection, professional fitness center with Yoga/Pilates studio, and close proximity to LAX and the beach. Some units offer city light views, some offer marina and ocean views.

The one bedroom ranges from about 850 sq. ft., and has been selling in the range of $400,000. Even the monthly HOA (maintenance and management dues fee) is about $900 per month. It generates a return of about 5% or more, as it usually can be rented out for about $2800 per month, depending on the size of the unit and its view exposure.

The two bedroom ranges from about 1200 sq. ft., and has been selling at around $600,000. It could be rented out for around $5000 per month, again depending on the size of the unit and the view exposure.

The larger floor plan consists of a three bedroom unit with about 2,200 sq. ft., on average selling for about $1,800,000 and renting for around $9,000 per month. This is still a return of about 5%.










What should be included in your Buy and Hold Portfolio?

Definitely apartment buildings in great neighborhoods. In the current market, buyers of multi-family units will benefit from historically low interest rates and much lower prices as compared to a couple of years ago. Owners/investors who can afford to purchase now can expect both price appreciation of the investment and rental income increase as many people won’t be able to qualify to purchase their homes, thus tightening the demand and forcing up rents.

What qualifies as a “great neighborhood” for me, besides a low crime rate and close proximity to the beach? I look at average asking rents and vacancy rates. Santa Monica has a good combination of high rent (average $2400) and low vacancy rate (about 3.4%).

Among all the available properties, I like one on 12th Street in Santa Monica, located north of Wilshire Blvd and South of Montana Ave, only 12 blocks from the Ocean. The address also falls within one of the most popular school districts, which many residents are willing to pay a premium for. This is a two building complex with 9 units (mainly one bedroom, 1 bath) listed for $2,575,000. The net operating income per year is about $144,955, yielding a rate of return of 5.6%. Units have hardwood floors inside and some even have private yard areas.









Buyers – If you are interested in receiving more detailed information and additional photos of these properties, please email or call Clara.