Los Feliz Market Round-Up: February - April 2009

2440 Vermont Avenue

37 homes sold in Los Feliz in the February – April 2009 period. The median sale price was $950,000.

The Los Feliz MLS area includes two different markets – Los Feliz and Atwater Village. In Los Feliz, seventeen sales were recorded over $1,100,000; in Atwater Village, there were 4 REO sales, and six sales of $600,000 or less.

The sale of two trophy properties shows that the best-quality homes are trading hands. 2440 Vermont Avenue, the Bixby Estate, a Mediterranean Palazzo from 1919, sold for $4,000,000, $5,000 above the asking price, in fifteen days. This sprawling home has four bedrooms, four baths, and 5,919 sq ft of living area on a 35,658 sq ft parcel (four-fifths of an acre.)

5200 Linwood Drive

5200 Linwood Drive, a 1933 manor featuring the best of Cal-Medieval English design, sold for $3,250,000, $51,000 above the asking price, after eight days on the market. This manor has four bedrooms, two baths, 4,866 sq ft of living area – including a drawing room worthy of Hearst Castle – and is situated on an 18,300 sq ft lot.

4403 Camero Avenue

REO properties have allowed some buyers to get into central, desirable neighborhoods at an affordable level. A bank-owned 1910 Craftsman house a few blocks east of Hillhurst, 4403 Camero Avenue, sold for $555,000. This bungalow retains much of its original character and has three bedrooms, two baths, 1,255 sq ft of living area and a 6,750 sq ft lot.

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Although some high-end homes are selling, many are not. Job losses, dwindling bank accounts (despite the current stock market rally, which has erased all of 2009’s 25%+ losses) and stringent jumbo loan underwriting requirements have dampened the demand for Loz Feliz homes over $1 million, and the percent of these in contract has trended to a two-year low.

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This downtrend contrasts with the uptrend in the number of properties in contract in Los Feliz priced $1 million and less, which is nearing a two-year high of 25%. These homes can be bought with interest rates at 50-year lows and in some cases with an $8,000 first-time buyer credit.

What we’re witnessing across the city is a competitive market on the low end, and near-moribund sales on the high end. (The break-point between “low end” and “high end” is close to $850,000 - $900,000, largely defined by the maximum jumbo-conforming loan limit of $729,750 in Los Angeles County).

The recovery on the low end of the market will inevitably help lead to the recovery of the high end of the market. But, because of new lending rules and the recession, homes funded by jumbo loans and jumbo bank accounts are going through an asset “repricing”.

A $2 million property sold in a bidding war in 2005 where a buyer could rely on stated income and a scant 10% downpayment is very different from a $2 million home sold today with documentable income, a 30% downpayment, and very tough lending rules.

Unless there are major changes in lending or improvements in the economy, expect the high end to be under downward pricing pressure for a long time to come.