As many of you readers know, I like to blend my blog posts a bit from cool things to do on the Westside, real estate stuff, some video for flavor and occasional goings-on in my neighborhood that I think other people should know about.

I got really excited about doing this Santa Monica real estate based post and it took me a couple of weeks to work it all out – between the video, the keynote presentation, the audio flubs, and not to mention – the real estate analysis.

Attached are the screen shots from the presentation and check out my video for a complete explanation of what’s been happening in the Westside Real Estate market these past ten years.  You might be surprised to learn that your neighborhood held up better than the one next to it, or even the rest of America, because lets face it, real estate is a local thing.  What is happening half a mile away, or even on the East Coast may have no effect on what’s going on in our back yards.

Let’s look at the stats:

Santa Monica real estate is a fluid and efficient engine that seems to be in constant flux. If you are considering selling your Santa Monica home or buying a Santa Monica deal, check out this video for info on Santa Monica absorption rates and what is happening in our local market.

Venice Beach California not only has some of the most incredible selections of Venice real estate, it has one of the biggest tourist draws – Venice Beach boardwalk.  On the south end of the beach, is the Washington Pier and as you cruise on up north, like in this video, you can take in the sights.

If you are visiting Venice CA California, I would say that Venice beach is an absolute must do.  If you are looking for other fun things to do in Venice Ca and the Westside of LA, please like my fanpage on Facebook for updates.

If I were thinking of buying and holding for five years minimum, looking for a potential recovery and turn-around in the real estate market, I would look in the following areas:

• 90016

• Mid- Los Angeles

The average price per foot is below current construction costs.  If you ask any contractor worth their salt, they can reasonably build for about $250 a foot.  Even $200 is really cheap and you’d get Home Depot or even less quality kind of finishes in the house.
Investors have been flocking to the Mid City, Inglewood, and South Central neighborhoods and flipping homes in distress.  Many of these areas are now saturated with professional flippers who’se margins are being squeezed by small time investors who want to get into the game.

A good friend of mine is a professional flipper and has been quite successful at it, yet complains about the relative difficulties in finding the right deal that doesn’t have tons of risk and tons of competitors on each and every property.  He’s actually considering moving to a buy and hold position for cash flow and for the inevitable housing turnaround.  It’s anyone’s guess as to when that will be.

I don’t care if you are seasoned or a newbie.  DO YOUR RESEARCH.  This is not a market to dabble with your life savings – it has been fluctuating rapdily and right now is a unique opportunity.

If you want to discuss strategy, call me.  You know where to find me.  Thanks for reading.

People are always asking me about pocket listings and quiet sales and the fact of the matter is that in this market, not a lot of pocket listings get sold.  However, I believe that there is a higher percentage of properties being sold off market, quietly that don’t show up in the MLS.

Here’s my reasons why:

It is estimated that 65% of American home owners are short sale candidates.  If you reference my last blog post about the relative declines in real estate prices from the peak of the market, you will see that most of the westside has declined, but not as much as other, less desirable areas.

Who lives on the Westside?  Its celebrities, high profile artists, creatives, entertainment industry people, athletes and anyone who can afford the price tag of admission.  And what do you think happens when they buy at the top of the market, and are suddenly falling on hard times – they can’t sell that script, bonuses aren’t what they used to be, that $9000 a month mortgage is killing them while they watch the value of their property go down, week after week, day after day.

For most homeowners, we would consider a short sale, where we can get out from under the house with no cost out of pocket, and a small ding on our credit and avoiding a foreclosure.  But if you are a celebrity or hold a high profile job, do you think you want people knowing that you short sold your house?  Do you think it would cause a public perception problem?  You bet it would.  So, I believe that more homes will be sold quietly off the market to interested parties either in short sale situations without public marketing to that effect, or at a cash equity loss due to the seller’s financial situation.
Seem far fetched?  I don’t think so.  Are you thinking about that as a possibility for you?  Let me know and I can discreetly share with you options that may make sense for your financial and real estate situation.

As always, I’m working hard so you don’t have to – I’m looking forward to hearing from you.

I just got an email alert about a proposed mega-center multi use project in Santa Monica that will have ramifications on a lot of things happening in Santa Monica.  Santa Monica real estate aficionados may want to make note of the date and the proposal.  Check it out if you can.

Dear david bruce,

Bergamot Transit Village Center

Tomorrow night, Tuesday March 22, 2011, the Santa Monica City Council will consider the development agreement for a mixed use project at 1681 26th Street: Agenda Item 8-B: Proposed development agreement for a mixed used project at 1681 26th Street by the Texas-based Hines Corporation (former Paper Mate site).

The Bergamot Transit Village Center is a proposed mixed-use project (retail, residential, and creative office space) that would add 960,000 square feet, with building heights up to 81 feet (7 stories). To put that in perspective, the Water Garden across the street totals 1.2 million square feet with building heights up to 84 feet.

This project, along with other projects planned in Santa Monica east of 26th Street, and between Colorado Ave, and the I10 Freeway, will add over 2.25 million square feet of development and an estimated 30,000 additional car trips per day to an area already gridlocked during peak commuting hours. Surrounding neighborhoods will also be negatively impacted with additional car trips on already busy streets.

What can you do to ensure that the Bergamot Area Plan does not make traffic worse than it already is?

Become informed!

Read the overview of the Bergamot Area Plan:

http://www01.smgov.net/planning/bergamotplan.html

Read the four page Executive Summary of the Planning Department report on the proposed Paper Mate development, Phase 1 of the Bergamot Area Plan:

http://www01.smgov.net/cityclerk/council/agendas/2011/20110322/s2011032208-B.pdf

The Executive Summary of the above report concludes with:

“Overall, the project still does not meet community expectations as envisioned in the LUCE and expressed at community meetings for the project and Bergamot Transit Village Area Plan. At this time, staff seeks direction from the City Council to guide negotiation points and necessary revisions to the proposed project.”

What can you do to influence the Council’s decisions on this matter?

Attend the Council Meeting, which starts at 6:30 PM, and voice your concerns for this massive, poorly designed project during the public comment portion of the meeting.

Send an email to the Council if you cannot attend: council@smgov.net

Several Council members have accepted large campaign contributions from the developer. Can we count on these Council members to vote against their developer benefactor and listen to residents’ concerns?

I’ve been hearing a lot about us being at the bottom of the housing bubble and Santa Monica homes for sale seem to still be a valuable and sought after commodity. Alright, maybe commodity is the wrong word – sometimes people buy Santa Monica homes because they want to live near the beach, be in a good school district, or have an incredible Santa Monica lifestyle.  Regardless, it got me thinking on a bigger picture.

A lot of clients of mine are cautious buyers as of late. Considering what has happened in the market over the last ten years, I can understand why people want to make certain that they get the best value at the best price, just in case the market should stay flat or god forbid, deflate. So, often what I am hearing from my clients are comments like, “If we had to be here for ten years, this home could really afford us…(fill in motivation for buying a home)” OR “This is such a good deal, even if the market goes down a bit, we’ll be ok, because we are getting a really good value in this home.” I love hearing these things – its such a pragmatic way to look at what is arguably your biggest purchase in life.

So that being said, I took some time this morning to look at the past decade’s worth of Santa Monica real estate data to see what kind of discounts buyers could expect from the peak of the market.

Real estate is like the price of gas – it sometimes goes down, but usually goes up. Here’s an interesting chart from the New York Times at the height of the market in 2006 that illustrates the boom and bust cycles.

I particularly like how there has always been a recovery fairly soon after the peak booms.  The right side of the graph illustrates the top of the market in 2006.

Obviously, we have come way down from the peak, so lets look at a micro-market, Santa Monica Homes for Sale.

Since there is some difference of opinion about when the height of the market really was, I did two analysis as the peak – one for 2005, and one for 2007.

You can see here that the price per square foot cost in Santa Monica seems to have stabilized in the last year and that the average price of a home has corrected itself from the drop in 2008.

It occurred to me to take into consideration Days on Market (DOM) and the average sales price in relation to the average list price.

Days on Market is defined by the number of days it takes for a property to be listed on the market and then go into escrow.  These days, it is usual for a 30-45 day escrow to close once going under contract.  You’ll see that in the peak years in the middle of the decade, homes were selling at a much brisker pace than they are today.  So that tells us it takes longer to sell a Santa Monica home now.

However, saavy sellers in this market can take an aggressive approach to listing their home by listing it under market value, and still going into multiple offers.  Often times, it is this strategy that attracts strong buyers who compete for the home, often driving the price up.  Consult with WestsideDB if you are looking for a deal or just looking at a property to see if its priced to sell quickly.

The average sales price vs list price also tells us something.  Those middle years in 2004 and 2005 people were getting full price and sometimes over on average because the market was so hot.  That’s not the case today.  In 2010, 95% of list price is the average that homes are selling for.  This means that on average, buyers can get a discount if you have a good negotiator on your side.

So if we are looking at today’s pricing off of the peak of the market,we see that there are fewer homes that sold and that the average price has dropped back in line.  Overall, I believe that this is telling us a few things:  That fewer homes are selling in Santa Monica and at a lower price from the peak.  Also, it is taking about twice as long for them to go into escrow.  And finally, that the average price per foot has dropped about 6%.  I would say this is actually a pretty good indicator that the residential market here on the Westside is pretty good and if you are looking to invest or sell your home, you have a great indicator that the market here is a good one.

(Please note, your results may vary if you hire anyone other than WestsideDB!)

Whatever you decide to do, whether it be selling your home or buying a home in Santa Monica, make sure you are well informed and have a real estate agent on your side you actually cares about you and your needs.  Someone like WestsideDB.  Contact me today for more information and for a free consultation to help you achieve your goals.

See you in the neighborhood.