Open House Visits Last Weekend

This is my totally unscientific view of the Los Angeles housing market based on visiting three open houses.

Last weekend as my Fiancee and I were driving around in search of the perfect church for our wedding, we couldn't help but notice the barrage of "Open House" signs littering the streets of Los Angeles.  So, of course, we stopped at a few of them.  Here's what we found.

The first one was just for kicks.  We were heading west on Santa Monica Boulevard through Beverly Hills, and followed one of the "Open House" signs pointing north.  We continued to follow signs past Sunset, and into the hills.  Up and up we went.  When we finally reached the top we pulled into a little cul-de-sac and found some parking on the street outside the gates.

"How much do you think?"  I asked before we entered the gates.

"You first," she said.

"$2.8 Million," I guessed.

"$3.3 Million," she replied.  It was something of a Price is Right tactic.  She figured that I was too low so she went just a little higher.  At least she didn't guess $2.9 Million.

As we entered the gates I noted that the entry area was a little dated, and there was a four car CARPORT!  Seriously, not a fully enclosed garage, but a carport.  Seeing this I said under my breath, "we guessed too high."  Little did I realize how much I underestimated the power of a Beverly Hills address.

We approached the front door and the realtor was there ready with flier in one hand and the other extended for a shake.  My eyes darted right to the bottom where the list price will usually be found.

Before I give you the price, let me give you the scene in the entry way.  Lots of marble, views from the entry way of the pool and the city views behind it.  Done high end all the way, but a bit dated.  Like this place was the freaking bomb in 1982!  Still pretty magnificent, but not the impact that I'm sure it once had.

It's a 4 bed, 5 bath 5,264 square foot house on 20,000 square feet of land.

All this could be yours for only $5,995,000!  Check out the listing on realtor.com.  As we arrived another couple in their late twenties/early thirties were just leaving.  Also lookiloos.  Oh, and this house has been on the market for only 435 days!

As we were leaving two families were arriving at the same time.  I would be surprised if the house was sold to anyone we saw going in or out that day, but at least there was traffic.

That's more than I can say for the two other open houses we went to.

The next one was in Santa Monica.  It was on an older street about twenty blocks inland from the beach.  I expected overpriced, but when we pulled into the driveway, I was a little surprised at how rundown the property was.  We walked up the the front door and were greeted immediately by the young realtor.  Again, she passed the flier with one hand and held out the other for a shake.  Standard move, I suppose.  As usual my eyes darted to the ask price.  $1.25 Million!  What the F?  This place looked like a small two or three bed 1940s house.

Well, it turns out the property is a five unity property on 7,000 square feet.  We were just seeing the front unit, which was recently made vacant due to the passing of the tenant.  The other four are still occupied, so were not viewable.  We didn't find out how much the current rents are, but I'm sure they are very low for the one and a quarter million asking price.  Santa Monica has rent controls.  "Two of the tenants are very elderly," the realtor explained.  "The units may become vacant pretty soon.  You know?  I'm trying to put this delicately"  She means they will die soon and I could raise the rents to new tenants.  I get it.  Not impressed.  I'm not about to buy an investment property that is bleeding money until the elderly tenants die.  Jeez!

By the way, there appeared to be no other interest in the time we were there.

The third place was down in North Torrance.  If you are familiar with the area, you know that Torrance is surprisingly expensive.  North Torrance is the cheapest part of the city, but still over priced.  We pulled up, and again appeared to be the only ones looking at the place.  Same deal with the flier/handshake.  Tiny house.  You walk in the front door and five feet in front of you is the coat closet door.

It was pretty clear that much of the house has been recently remodeled.  Wood laminate flooring, which looked pretty cheap.  Granite countertops and new cabinetry in the kitchen.  New paint and lighting fixtures throughout the house.

I don't remember the price, but it was in the mid $600k range.  Small house, appx 1,400 square feet, 3 bed, 2 bath.  Strange layout.  The master bedroom didn't even feel like a bedroom.  Way over priced.  The realtor even looked a little dejected.  When I pointed out some things that I didn't like, like the coat closet and the weird master bedroom, she kind of shrugged and said, "well, you can always change it."  Why would I over pay for a "newly remodeled" house when I would have to make changes immediately?  No thanks.

Last observation, unrelated to the open houses, but related to the rising inventory environment in Los Angeles (like everywhere else).  I have a search that I have saved in ziprealty.com.  It's for Pasadena, and it includes 2+ bedrooms, 2+ bathrooms.  Single Family Residence, Condo or Townhouse.  The price range is $275-$650k and the cities are Pasadena, South Pasadena and San Marino.  A year ago this search yielded ninety something results.  About two months ago it had edged up to 100.  By late July the numbers had reached 120, and today it hit 138 listings!  It's a fairly narrow search, and stays with my theme of "unscientific" but a nearly 40% spike in two months is insane!

Comments

[udandi]

I had posted once that I like looking at the MLS to see in people's houses. Another game I play is "what I won't get for my money" and pick the most expensive house in a coveted location and try to guess what decade they decorated it - the 90s are pretty popular!

See you at Target for our shopping spree :)

[financial freedumb]

Waiting sucks...but it seems to be the best place to be right now. You know that I want to buy already...

[jason]

I drove through Downey this weekend, car shopping. The amount of For Sale signs out in those neighborhoods is astonishing.

[lamoneyguy]

Jason,
I know Downey pretty well. That is a community that has benefited greatly from the housing boom. It was full of aging homes and apartments, and developers and flippers flocked there and made everything brand new. Values definitely rose, but the size of some of the houses boggles the mind. It's a middle/working class community, and $1mil+ homes were developed.

[S/100/30]

I'm totally confused. As an atheist who had an outdoor wedding, I always assumed that religious people got married at their church of worship. Not the case?

[lamoneyguy]

hey s100, well not my area of expertise, but she is Catholic by baptism and culture, but does not have a church of which she is a member of the parish. That pretty much leaves it open for any church that fits our liking.

[Scott]

Yeah, things are looking pretty tough for sellers in LA. I think homes will sell if people lower their expectations on asking price. I'm in the process of listing my townhome in Sherman Oaks, and I'm not very thrilled about how long it might take to sell it.

[David]

I loved your post. Everything is so funny and I can relate almost exactly to it.

“When I pointed out some things that I didn't like, like the coat closet and the weird master bedroom, she kind of shrugged and said, "well, you can always change it." Why would I over pay for a "newly remodeled" house when I would have to make changes immediately? No thanks."

I had the exact same thing happen to me in El Segundo. There are these so called "artist’s lofts" condos starting at $800,000.00+ Plus HOA does. Bill Ruane (pronounced "ruin") is the Realtor. These are located at 1225 East Grand, El Segundo, CA 90245. They are less than ½ mile from the sights sounds and smells of:

1) LAX (24/7 noise/shaking walls.)
2) Boc Gases. They synthesize Xenon, Krypton, Neon and You DON’T even want to know what else. Take a deep breath.
3) Chevron Oil refinery. I love artificial clouds. Nothing like the smell of burnt tar from your friendly neighborhood smokestacks.
4) LA Sewage treatment plant. How many people live in Los Angeles again?

This is just the start. Your “backyard” is next to a Metal Grinder company. Buzz. Buzz. Grind. Alarm clocks are so overrated.

Really cramped weird layout. No view up to the 2nd of third floors. Fake oriental interior with Granite counter tops and cheesy 1970’s “new” living room style.

But there is no loft at all in this loft. JUST A MISSING WALL between the garage and my new living room "office". When I said I wanted a wall in the garage and they said:

"The missing wall in the garage is what makes it a loft”

Huh? A missing wall in the garage is a loft? Go figure. Well I want a wall in the garage. To this they shrugged their shoulders and said:

"Well you can always change it." and “You can install the wall yourself”.

Whoa! Why would anyone grossly over pay for this white elephant in the first place AND THEN would have to make an instant expensive installation change? The arrogance to even suggest such a thing. I guess if you have to ask then you can’t afford it.

Basically these lofts are beyond a complete joke. Even at half the price. They have a huge SOLD sign outside of one of these units. So you better snatch the rest. These lofts are hot. Oh by the way - guess what?

IT HAS NOT EVEN BEEN SOLD.

That’s right. False advertising 101 anyone?