Three little Inner Loop housies bow on their exit. Backstage visits, anyone?
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Residences
- 1131 Oxford St. 77008 (new construction by Whitestone Builders)
- 6413 Stillman St. 77007
- 1811 Bonner St. 77007
Photo of 1811 Bonner St.: HAR
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I know we’ve discussed the financial health of some of the Heights developers before but does anyone know how Whitestone is doing? Their property nearest me, http://search.har.com/engine/dispSearch.cfm?mlnum=9017674, has been on the market for almost a year now and has dropped in price from $1,058,000 to $875,000 in that time. That sort of price drop can’t be good for the bottom line.
Jimbo,
I’m still wondering how they and other builders are still demoing and building new structures with the amount of inventory available.
They either have a lot of cash on hand or something is just lending away money to them…
I know they have one or two pending now that they have really started slashing prices. However I’m not sure whether they are really making a great deal on these properties at these prices. The home I linked above is 4118 sq.ft. At $150/sq.ft for construction plus maybe $240,000 for the lot which they bought at the height of the boom that is over $850,000 already. Add in property taxes for the last couple of years and running costs and it doesn’t seem like a great business proposition.
Still, it could always be worse. I saw in the LA Times this morning that Guaranty Bank is tearing down brand new completed homes in the high desert in CA because it is cheaper than trying to maintain and sell them.
Haven’t ya’ll heard? The Houston market is fine. It’s not tanking like the rest of the nation. I’m sure the builders are just fine! ;-)
While that’s partially in jest, some cash is still flowing into the market because it’s not as bad as other places. Makes it ‘attractive’ in a sea of suckage. Perhaps we’re seeing the tail end of the ‘dumb’ money that’s run out in other markets migrate here, keeping local developers afloat… for now.
The market is fine in pockets all over the country. Whilst we all hear about the disastrous market in SoCal that is really only in the high desert where they were putting up enormous new subdivisions. Homes in well established or up and coming neighborhoods in or near LA are still the subject of bidding wars and are still generally selling for well above list price.
@Jimbo,
et al,
On the other side of the country, in S. Florida communities, property-owners’ assessment dollars are increasing going toward maintenance of EMPTY units (to forestall mold/mildew/slab cracks while the property sits: For Sale) in order to protect mean prop. values instead of paying for fish re-stocking & attractive grounds-keeping, like the retiree-buyers expected & were promised…
Tax record says the loan to buy the property was $645,200 in july 2007, still, as noted by Jimbo, carrying costs must be adding up.
Guess they are doing it with smoke and mirrors
@Jimbo and others – I too have wondered about the financial health of builders like Whitestone and have hoped that at least one silver lining of the recession would be to slow down the Heights Demolition Derby.
Re this house on Oxford, I have it from the neighbor that this one is actually a contract job from the current owner of the property, to tear down their old house and build a new one, so it’s not spec.
Homes in well established or up and coming neighborhoods in or near LA are still the subject of bidding wars and are still generally selling for well above list price.
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Not in the “Platinum Triangle” of Beverly Hills/Holmby Hills/Bel-Air and I can’t imagine any neighborhoods more established than they are. Average devaluation in the past year is about 30%. In some sections of Bel-Air it’s close to 50%. And that is pretty much across the board all over Los Angeles including the Valley. I can’t imagine a bidding war going on anywhere in Southern California unless it’s at the auctions. I guess you could call a reserve a listing price. Some of the homes at auction aren’t even getting offers for the reserve. Developers are now tearing down housesin some areas. It’s cheaper than trying to maintain them since they’re not going to sell. But if it makes you feel good they have a good market, go for it.
http://www.latimes.com/classified/realestate/news/la-fi-cover3-2009may03,0,1360420,full.story
In case this is what you are referring to it has a number of Realtors rolling on the floor going “I wish” because it just doesn’t reflect the reality.
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Mark down Nicky and Bunny DeMarinis as frustrated. They offered about $1 million for a 3,300-square-foot traditional in the Los Feliz area. Though it boasted a magnificent view, the house was an ode to passe, with cheesy frescoes, gold trimming and 1970s-era kitchen appliances, they said. For all the updating it required, the owner came down only a fraction from his $1.7-million asking price and passed on the DeMarinises.
The couple, who own Nicky D’s Wood-Fired Pizza in Silver Lake, have seen about 50 houses so far. They don’t know where to vent their anger: lenders demanding higher down payments and less-favorable terms, talking heads distorting the market with oversimplifications or listing agents itching for bidding wars.
“You get out there and think you can grab something at a fantastic price, but that’s not the case,” Bunny DeMarinis said. “Each time we look at a house and see these inflated prices and our offer is rejected, we feel rejected too. We had an unrealistic portrait of what was really happening. It’s disillusioning.”
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In reality the $1.7 million is a deflated price for Los Feliz. A year ago before the bottom finally fell out the house was probably worth around $2.5 million. So the $1.7 million is reflective of the average 30% devaluation in the past year.
And just in case you miss this at the end of the story:
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Banks are an even bigger X factor, and not just because of their stricter lending requirements and bailout havoc. USC real estate professor Tracey Seslen said she’d heard that lenders were carefully timing the release of homes they’d repossessed to avoid further flooding the market and driving prices down more. Those institutions also know that a fresh avalanche of foreclosures from people with resetting loans may be looming.
“So the banks are playing this game too,” Seslen said. “They’re keeping prices artificially high.”
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And that probably is happening all around the country. Everyone trying to keep prices artificially high. Including everyone in Houston.
All I know is that when I look at listings in Pasadena, Eagle Rock, Altadena, Glendale … all neighborhoods I have owned or lived in the prices are still high. They are also right about Culver City and the near East side which continue to increase in value. This has also been confirmed to me by the realtors that I know in those cities. The fact that banks are tearing down homes in Victorville has very little bearing on Pasadena. Whats more surprising is that anyone wanted to live in Victorville in the first place.
It is still about location. My sister is looking to buy a second home in SW FL, and there are tons to be had in the 50-75k range, but Miami Beach is still doing well. Out of curiosity, I check HAR.com and dang!— we have plenty on the market under 75k rat cheer in Houston, too. As a real researcher might say, it is far more granular than averages might infer.
All I know is that when I look at listings in Pasadena, Eagle Rock, Altadena, Glendale … all neighborhoods I have owned or lived in the prices are still high. They are also right about Culver City and the near East side which continue to increase in value.
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Prices are still high in Bel-Air as well. Just not as high as they were a year ago. If you want to argue with a professor, be my guest. Most of the top producers in Los Angeles agree with her. Some of whom are still making a good living. Just not as good a living as they were a year ago.
Anyone who has bought a home in Los Angeles for more than what it was worth on the market a year ago is 1) desperate to have a home and 2) has bought in a neighborhood where the “bonus to buyer” is a pair of Rottweilers trained to kill on command.
This conversation looks like a good place to put in a plug for one of my favorite RE blogs, Ben Jones’s Housing Bubble Blog, which has been running since before the MSM recognized or acknowledged the bubble.
Great comments here. I remember jogging through Silverlake with the On-On clan in 2005 – the area had a smug feel that likely hasn’t dissipated. An “affordable” jewel is probably what owners think they have.
I faced owners in my latest purchase in Dallas 2 months ago that needed to be educated. My own buyer’s agent suggested a liquidity (sales) – inducing price 4% under list, I went for 10% under list and closed the sale.
In Houston I have an affordable jewel/teardown that builders continue to bid on weekly for 30% off of assessed value. There is money still out there for them somehow.