This week there were 2 recorded sales on “The Strand” in Manhattan Beach.

First one was a lot sale at 204 The Strand, an old 1926 duplex that was sold for land value closed on the MLS for $6,100,000 last listed for $6,800,000.   They got 90% of there last listed price.  the lot was 3,332 square feet and I am told it was bought by the same buyer that is also buying 208 The Strand next door.  Word on the street is that he is going to tear them both down and put up one house.  If that happens that block will be a monster with a big corner lot home (single lot) being built on the north side of 2nd st. Then these 2 lots with one house, then the next 3 lots (which include the south corner of 3rd st.) have ONE huge house being built on it right now.  So 7 strand lots in the prime south end with only 3 houses on them, all brand new!
208 the strand should be closing soon for close to the same price as 204.

The second sale this week was 1712 the strand, a brand new custom home listed by Jack Gillespie of South bay brokers.  Sold in a very short time.  This was a 3 bedroom 4.5 bathroom Tuscan Villa with really nice finishes and an okay floor plan in a really good block.  It was originally listed for $10,500,000 and closed at $9,000,000 with an “all cash” buyer and a very short escrow.  The house was 4,500 square feet which means the buyer paid $2,000 a square foot.  This was not a spec home and did not have some of the features that the new generation of large strand homes have for example a Home Theater and more bedrooms.

Besides 208 the strand there is one other escrow at 3404 the strand last listed at $5,500,000 which should be closing soon.  For those that are not aware this is a lot of activity for the strand in Manhattan Beach, a few years ago there was not one single sale all year on the strand.

 This is 1501 9th st. Manhattan Beach, CA 90266 listed by Ed Kaminsky of Shorewood Realtors (he is also the owner of this home) MLS# S09036177

Features:

6 bedrooms, 6 baths and 4 half baths, 8,549 square feet of house, and 12,300 square feet of land (about a lot and a half). It has an amazing pool and spa, outdoor living room, outdoor kitchen, movie theater, game room, gym, and so much more.

My personal opinion is this:  It is an amazing house, I have personally been inside of it 2-3 times and there is so much detail and quality put into the building of this home it is amazing.  The floor plan is very different than your normal homes over there because of the size of the lot.  It is a very heavy Tuscan themed estate and they stay true to that theme through out, personally it is not my favorite style but they did a great job representing it.
It reminds me of the house on 13th st. and the strand (north corner) that is a very heavy Italian style house, and a lot of people hate it but those who know what it cost to build know that they spent a fortune on that place much like Ed did here.  I know Ed did not build this house to turn around and sell a year later and anytime someone builds a house from themselves there is a great possibility that not everyone will like it. So if you do not like then don’t buy it.

Now technically speaking the biggest issue with this house is its location, it sits on the north east corner of Peck Ave. and 9th st. the house is way too big compared to its neighbors and really belongs in the hill section or over by Longfellow and Terraza place in east manhattan.

Its a BIG beautiful house that is really nicely done but is going to have a lot of trouble because of its location and size in realtion to the rest of the homes in the area I feel like its an easy guess to say it will be for sale for a while at this price.

To sell or not to sell….This is the question.

Boy have we run into the sellers who want to sell and then they don’t.  They get a little taste of how the market is going and they give up quickly.  Most sellers need to sell before they buy and when they see that there are not a lot of options out there, they panic and retreat back to staying put.  You see, there are lots of properties on the market but not alot of good or special properties, which is what everyone is looking for.  The good and special ones sell quickly and so if your house isn’t sold, that seller loses. Most sellers are not willing to do what it takes to make the move with little risks but a lot of hard work.

The scenario that works best is the 2 step process.  Sell their house and then go into a rental until their perfect home comes on the market or their agent can find one for them. (Believe it or not, some are still selling quietly).  Selling and then renting is a pain but sellers should look at this as part of the job and getting a good price for their house is like getting paid for all the hassle.  Selling then renting in a declining market has its payoffs. When the perfect house comes up, they are the perfect buyer with cash in the bank and ready to go. Negotiating a better deal is likely since they have no contingency baggage.

Most sellers don’t want to do it this way and therefore all comes to a screeching halt.

Another difficulty in this market is if the seller still prices his/her property too high, the longer it languishes on the market and the more impatient everyone gets.  Having a home on the market in which you live in is a HUGE overtaking in itself.  Always having to clean and have everything perfect and organized day in and day out.  Slap a few kids in there and most sellers are ready to pull their hair out.  This is another good reason to price it to sell.

So these are a few tips and circumstances that happen in the day and the life of a Real Estate agent who deals with each and every seller with their ultimate goals.
Some sell…some don’t.

For those of you who think you might be getting a good deal on foreclosures or short sales please read the following.

First off, foreclosures and short sales are two different things.

Foreclosures are when the owners of a house have stop making payments on the loan and the the bank has gone through a long process to kick  them out and take back the property.  Now the bank owns the property and they are completely in charge and typically try to sell it quickly to get what ever money is left in the property.  Most of the time it is not enough to make them whole.  When the bank is selling a foreclosure or REO (real estate owned) property they don’t make any repairs even if the owner that was living there took everything including the kitchen sink ( literally).  Most of the time a buyer can get a “bank owned” property at a good price but you have no idea of what you are buying, you don’t know if the roof leaks, if the plumbing works, if the heater works, you have no one to tell what they have experienced while they lived before like in a normal sales transaction.

A short sale is different, it is when the owner of the house still owns the house but they can not sell it for what they owe the bank.  So they put it up for sale and get an offer and present it to the bank and see if the bank will agree to take less, which most times they do but it just depends on how much less they are willing to take.  The problem is that “approval” process takes FOREVER!  They take so long that 70% of those buyer that bring in the offer walk away from the transaction because it has taken so long.

The approval process consists of 3 things, one is the approval of the seller and their situation.  The bank wants to know are they really in a tough financial spot that they can not make their payments? Or can they sell the house and not make up the difference in the loan and the sales price with there own money.  The banks spend a lot of time looking into these things to make sure they are not getting ripped off.  The seller has to really be able to prove that A) they can no longer make the payments or B) do not have the cash to make up the short fall or C) both.

The next thing the bank looks into is the current value of the house.  They do a lot of research on whether the offer they are about to approve is with in the current value of the home and that they are not selling it too cheap. This is where the banks biggest problem is, they take too long to give an approval and by the time they approve the offer months and months go by and now that offer that was there is no longer market value because the market is declining.  I see banks loose hundreds of thousands of dollars in my neighborhood ( which adds up to millions all over the country) just because they are taking way too long to approve or deny these offers.

The last step in the process is the bank checks out the buyers, they make sure the buyer is credit worthy and that all there ducks are lined up and ready to buy this home. They also do a small background check on them to make sure there is no relationship between the seller and the buyer.

Tips for buying short sale:

The best tip is to not buy one but buy a similar house in the same neighborhood that is not a short sale but its value has been dragged down by the market and the short sale next door. Sometimes you can get just as good of a deal and it will be much quicker and smoother.  You will also know a lot more about the house because of the disclosures that the sellers are required to give you.  The sellers of short sales have to give them to you also but the bank foreclosures give you no disclosures, they do absolutely no repairs and sometimes they wont hardly sign any of the paper work so it hard to know if you even have a deal.

If you are going to write an offer on a short sale make sure you have all your paperwork ready… make sure to have a Pre Approval letter from your Mortgage person, have bank statements that show them where your money is coming from, and make sure you write a clean offer with the “short sale addendum”  that helps protect you as a buyer in many different ways.

Lastly, a lot of times you can avoid some of these wait times and obstacles simply by being next in line, if you see a home that has an approved short sale a lot of time that is when the bank has approved a certain price but the buyer walked away now you can jump in and not have to wait that long (assuming the price is a good one).

Feel free to email me any questions and I will try to answer them.

My deal of the week talks about the property at 225 25th st. in Hermosa Beach.  This was a great, great piece of property, it is located on the north east corner of 25th st. and Ozone Dr.  It’s perched up on the hill of 25th st. and has a great ocean view from the second level.  This house is zoned (currently) that if you wanted to tear it down you could and build 3 STORIES high!!!!

The house was originally built in 1939 and sits on a great 3,300+ square foot lot and is less than 2 blocks from the beach!  It has a really unique floor plan with 2 bedrooms and 1 bath upstairs along with a large living room with a fireplace and a formal dining room and kitchen.   Downstairs is a 1 bedroom 1 bath with an additional living room and fireplace along with a small kitchenette so you can have the place as a duplex if you want.  Its also was one of the only houses I have ever been in that has a bomb shelter out in the backyard.

The story from the agent was there was 3-4 offers and it sold significantly over the asking price of 1,395,000.  In my opinion it was a really good buy at their price even at 1,500,000 it was worth the money but when you start getting up higher than that it became less of a “deal” for me anyway.

The property was a trust sale (the owners had died) and it was the first time ever to be on the open market!  It was very well taken care, absolutely zero deferred maintenance. It was listen by Kevin Klien.

Ok….so now we are already almost thru with the first quarter of 2009 and the market is all over the place.  On the positive side, here is some of the “scoop” we have either experienced ourselves or we have heard thru the real estate grapevine.

A few things have gone pending on THE STRAND in Manhattan Beach.  3404 The Strand (listed by Shorewood Realtors Rosanna Libertucci) was dropped from 6,5 to 5,5 and it quickly went into escrow.  A few buyers did not act quick enough and were desperately disappointed that they lost out.  So much so, that one set of buyers called the actual buyers and asked them to turn it over to them.
Another Strand listing was on the market for a short time listed at $10,500,000 (1716 the strand listed by South Bay Brokers).  It just went into escrow last week.

Now another interesting case.  A duplex sat around in the market for a couple of months.  The seller dropped the price and BOOM here comes the buyers.  One buyer, once again, acted quickly and secured the property.  One buyer was bummed out and offered the seller a bigger price in which the seller came back to the original buyer and offered him a check to walk away. Wow….can this really be happening in this market and economy?  The buyer said no.  He wanted to stay in the deal and so all continued to go forward.

In Hermosa, there is a great piece of property located at 225 25th Street (listed by Kevin Klien).  Definitely dated but very clean.  It has an ocean view, full lot size and a very nice structure.  Priced at 1,395,000.  Decent price and in my mind not a steal but a good value.  One week later, 5 offers and we were told that 2 were over full price.
Is this 2005?  I don’t think so but it shows to go ya that special properties in the Beach areas still can draw a crowd.

The negative part of this market is the listings that are coming on and the sellers are still asking too much money for what they are.  This makes the market look like we have a glut of listings and that nothing is selling.  What sells in this market are realistic priced homes.  There are still so many unrealistic priced homes out there now that will not sell until reality kicks in.

We have had many conversations with our sellers that if you don’t need to sell, now is NOT the time to go on the market with an unrealistic number.  Some listen, some don’t.

Good Morning!

I am sure you have gotten barraged with emails about yesterdays Fed move.  What ALWAYS happens when there is a big move is that in the immediate aftermath, there is total euphoria, and there is all kinds of talk of rates going to 3% for the next 10 years.

What yesterdays move was designed to do was to signal to the markets that the Fed will do whatever is necessary to hold rates down into the current GREAT range they have been hovering around in, the low 5′s.  There had been encouraging economic news coming out, and inflation fears had already begun to surface.  Based on that, the Fed made a decisive move to hold things down, not to drive them down further, as the media will have you believe.

We saw dramatic rate improvements several times in the last year or so:  January, March, and December 2008, and then in January 2009.  All of those rallies took us into the range we hit yesterday, where you could get a conforming fixed rate loan down into the 4′s with no points.  Also, each of those rallies lasted no more than 2 trading days.  They all ended swiftly and surely, where in a 2 to 3 hour period, the improvements vanished.

The psychology behind this is simple.  The move happens, everyone believes that now everything is fixed.  Then after a little time the belief shifts to “wow it is great that happened, because things would have gotten worse without it”, and things settle back down (or up, in terms of rates).  One move won’t shift the market forever overnight.  The recovery is a gradual process and this move was a vital one to keep it moving.

After yesterdays REMARKABLE rally in the mortgage market, today it is trading in a very narrow range, with no major move up or down.  This tells me that the rally has already begun to lose steam.

I am not saying that the party is over, but huge rallies like this almost always wind up retreating at least part way, so I would not say it is prudent for people to wait for that 3.5% rate that they think is coming.

Don’t buy into the hysteria either way.  Bottom line, rates are great, prices are more affordable, it is a great time to make a move.

Regards,

Doug Smith – Stratis Financial

California January 2009 Home Sales

February 19, 2009

An estimated 29,458 new and resale houses and condos were sold in California last month. That was down 22.1 percent from 37,836 in December and up 53.9 percent from 19,145 in January 2008. Sales have increased on a year-over-year basis for the last seven months. California sales for the month of January have varied from last year’s low of 19,145 to a high of 47,138 in 2004, while the average is 30,837. MDA DataQuick’s statistics go back to 1988.

The median price paid for a home last month was $224,000, down 10 percent from $249,000 for the month before, and down 41.5 percent from $383,000 in January a year ago. Around half the drop in median is due to price depreciation, the other half due to shifts in the types of homes selling, and how those homes are financed. Last month’s median was the lowest since it was $220,000 in May 2001.

Of the existing homes sold last month, 60.4 percent had been foreclosed on in the prior 12 months. A year ago it was 29.6 percent.

The typical mortgage payment that home buyers committed themselves to paying last month was $969. That was down from $1,110 in December, and down from $1,790 in January last year. Adjusted for inflation, mortgage payments are 54.5 percent below the spring 1989 peak of the prior real estate cycle. They are 62.0 percent below the current cycle’s peak in June 2006.

San Diego-based MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

Indicators of market distress continue to move in different directions. Foreclosure activity waned in the fall but edged higher in December and remains near record levels, while financing with adjustable-rate mortgages is at an all-time low, as is financing with multiple mortgages. Down payment sizes and flipping rates are stable, non-owner occupied buying activity has edged a bit higher, MDA DataQuick reported.

Copyright MDA DataQuick Information Systems. All rights reserved.