Off Beachwood and Vine: Touring A Couple of Vintage Homes in the Hollywood Hills East in the Rain

This is a post by Luke Jones. The Hollywood Hills have a certain allure and will always attract buyers. However, it’s harder these days to sell vintage homes that have not been upgraded. With financing hard to come by, many buyers are loathe to carry out major renovations and are seeking something that is “plug and play”. However, sometimes you spot a house with loads of charm and think, “someone’s going to make a project of this.” That’s the first home I’ll describe, 2769 Westshire Drive, in the Hollywood Hills East.

 

Located just east of Beachwood Canyon and a stone’s throw from the Beachwood Café, 2769 Westshire Drive has spectacular views and is in the very heart of historic Hollywoodland. This 1926 original Spanish Colonial has 4 bedrooms and 3.5 baths with an unusual rotunda entryway and a hexagonal dining room and matching room below.  The house is 3,262 sq ft with a 6,200 sq ft lot.

The kitchen needs to be entirely replaced, the interior needs modernization and the exterior of the back of the house could do with some work, but the home has tons of character with fabulous natural light throughout. It’s priced at $1,395,000 and may need a couple of hundred thousand to bring it back to its former glory. However, it’s one of a kind and is just waiting for that perfect buyer to come along.

Alternatively, sometimes you walk into a vintage place that’s “done done done” and still retains its character and you think, “awesome!” 2701 Creston Drive, in the Hollywood Hills East high in the hills above Vine, with fabulous views over the city and to the sea, is precisely one of those homes.

  

These roads are a nightmare in heavy rains, but the view is the payoff! The 2,900 sq ft house has 4 bedrooms and 3.5 baths with a beautiful master boasting two decks, one overlooking the city and the other looking over the spacious yard with infinity pool. The lot size is over 10,000 sq ft with ample room to develop. At $1,849,000 it’s not cheap – but as I say – if this is your cup of tea, you’ll love it.

Sunset Strip - Hollywood Hills West Luxury Homes Selling for $690/sq ft - Feathered Nests in Bird Streets Command Top Dollar

What's been happening in the high-end home market in the Hollywood Hills during the past few months? Properties of all prices have been selling, and some big-ticket homes that had been marketed for some time finally reached their clearing price. Average is $690/sq ft for those sales above $1.5 million.
The biggest sale was 9444 Sierra Mar Place. This home has 3 bedrooms, 5 baths and 5,913 sq ft of living area. Originally listed at $7.9 million, it closed 668 days later at $5.4 millionn, 32% off its original list price. Located in the desirable Bird Streets area.
A little further east, in the Sunset Plaza neighborhood, 1305 Collingwood Place sold for $4.95 million. This home has 5 bedrooms, 4.5 baths and 4,586 sq ft of living area. The house was marketed for 228 days and sold at a 29% discount from its original list price of $6.95 million.


But don't conclude that the market is subject to a 30% discount. 1400 N Doheny Drive (also in the Bird Streets) with 4 bedrooms and 5 baths, sold for $4.08 million, $30K above its asking price, after a brief 24 days on the market.

1232 Sunset Plaza Drive in lower Sunset Plaza sold at a 25% discount to its original $5.0 million asking price, closing at $3.775 million. This home has 8 bedrooms, 9.5 baths and is a development opportunity set on more than one acre.
2366 Astral Drive, with 4 bedrooms, 4.5 baths, 3,400 sq ft of living area on a 13,464 sq fot lot, sold for $2.765 million, just below its $2.90 million asking price, after 58 days on the market.
Finally, anyone doubting the exuberance of the market should look no further than 1117 Sierra Alta Way. This home in the Bird Streets has 3,352 sq ft of living area and a 10,890 sq ft lot, and was listed at $1.495 million. Sound like a deal? Apparently, the buyer felt so. They were in contract 4 days after the house came on the market and paid $1.75 million, 17% over the asking price.

Median Sale up 18% in Los Angeles Neighborhoods Since January 2009 - Sales Velocity Increasing - Market in Strong Recovery

We periodically like to take a snapshot of the home market and to see how sales are trending in the Beverly Center - Miracle Mile, Hancock Park - Wilshire, Hollywood Hills East, Los Feliz, Silver Lake - Echo Park, Sunset Strip - Hollywood Hills West and West Hollywood neighborhoods.

The charts above and below focus on the percentage of houses in contract, which in our mind is a barometer for sales velocity -- the degree to which available properties are being purchased.

In the over-$1 million sector (above), we can see a defined low in approximately January 2009, during the worst throes of the financial crisis. Since then, the percentage of homes in contract has increased consistently, experiencing a defined bump in March 2010 when more than 12% of homes were in contract. Overall, the over-$1 million market has been on the slow upswing for over a year.

The under-$1 million market shows a similar trend. Sales reached a low point during the winter of 2008 - 2009 and have been increasing steadily since that time. These sales velocity charts tell a story that parallels that of the economy in general: month by month, since the financial maelstrom took its toll, the local housing market has been in recovery.

Pricing trends mirror those of sales velocity. The median sale price in these areas reached a low of around $880,000 during January 2009. Since then, the median sales price has been increasing steadily, attaining $1,040,000 in March 2010. This amounts to an 18% increase in median price in just over a year.

The data for this segment of Los Angeles fail to support the voices of doom about housing. The median sale price in a big chunk of LA is over $1 million and rising, sales velocity is increasing, and the oft-repeated comment that LA is a very expensive place to live is becoming more and more true each day.

SoHo House West Hollywood to Open Doors March 8 - Sophisticated Digs Brings Old Hollywood and English Gentleman's Club Just in Time for Oscar Season

At long last, the wait is nearly over. At 9200 Sunset Boulevard, at the border of Beverly Hills and West Hollywood, the Los Angeles outpost of SoHo House is finally emerging from a cloak of cranes and construction and will open its doors March 8, just in time for Oscar.

The Waldo Fernandez-designed 20,000 sq ft penthouse at Luckman Plaza will include 360 degree views, a bar, a rooftop garden lined with olive trees, and beautiful scenery in and out.
In case you want to keep tabs on the activity at SoHo House you might consider some very fine real estate in the Doheny Estates - Bird Streets neighborhoods, such as 1260 St Ives Place, pictured above. This 5 bedroom, 8 bath, 8,644 sq ft Mediterranean-style home is located at the end of a cul-de-sac and offers privacy, comfort and lots of sky.

The views are panoramic from Downtown to the ocean. SoHo House and the Sierra Towers are right at your feet. The house was just listed this week at $7,895,000.
Just down the road, you'll also find 9066 St Ives Drive, a jazzy contemporary home with 3 bedrooms, 5.5 baths, and lots of living area on multiple levels. The house has been on the market since last June and its price has been drastically lowered to $6,595,000.

Another prime home is close enough to SoHo House so you can invite a few friends over for a swim after hours. 1424 Tanager Way was listed last month at $8,695,000. With 3 bedrooms, 4 baths, an 80' infinity pool and a 1,000 sq ft master suite, you'll find plenty of comfort and luxury to wile away the hours.

SoHo House West Hollywood -- opening March 8, 2010

Los Angeles High-End Homes On Chopping Block: Price Cuts Inevitable as Buyers' Ranks and Means Thin

Price reductions were once the province of only low-priced homes that were forced to compete with foreclosures.

Not anymore. The bubble has burst in a big way and now high-end properties are competing with high-end foreclosures, short sales, and properties whose owners are in distress.

Over-leveraged high-end homeowners who had pushed themselves to the limit of affordability are also finding they have to sell in time when a dollar (or a million) has been revalued.

To take a few examples in the Sunset Strip area:
1380 Mockingbird Place - Listed for $29,500,000 in March 2009. Now $21,950,000. 26% reduction.
1235 Sierra Alta Way - Listed for $22,000,000 in October 2007. Now $9,900,000. 55% reduction.
1754 Sunset Plaza Drive - Listed for $19,800,000 in April 2009. Now $13,995,000. 30% reduction.
9066 St Ives Drive - Listed for $8,495,000 in June 2009. Now $6,595,000. 22% reduction.
1162 Sunset Hills Drive - Listed at $8,500,000 in April 2009. Now $5,895,000. 31% reduction.

Although high-end properties are notoriously difficult to price, they become doubly so during the current market because of a lack of sales comps and a dynamic market that seems to be heading in only one direction.

Sellers who don't price aggressively run a serious risk of "chasing the market down" and always remaining above the current market price, even after a price reduction.

Many well capitalized buyers will be able to weather the storm and not sell at distressed levels. Others won't be so lucky.

[See "High End Home Sellers Lower Their Sights", from Saturday's Los Angeles Times.]

Where's The Los Angeles Home Market Heading? Prices Coming Off Bottom - Tightening Market over $1 million - Under $1 million Market in Full Swing

To get an impression of where the Los Angeles home market is heading, we took a look at the combined statistics of seven Los Angeles neighborhoods: Beverly Center - Miracle Mile, Hancock Park - Wilshire, Hollywood Hills East, Los Feliz, Silver Lake / Echo Park, Sunset Strip - Hollywood Hills West, and West Hollywood.

Our assessment? The worst is behind us. In terms of pricing, the bottom may have been reached somewhere in the 1st half of 2009.

This is a broad market, covering everything from bank-owned shacks to gilded mansions. To further break it down, we separated the market into the under $1 million and over $1 million segments.

Over $1 million market. For much of 2009, job and portfolio loses, coupled with jumbo loan underwriting hurdles, created a challenging environment for residential real estate. Data show that the percentage of homes under contract has been trending up since December 2008. As bad as the news has been, it hasn't arrested the sale of houses priced over $1 million.

Under $1 million market. The under $1 million market has been tightening up since it reached its most flaccid state in the 1st half of 2008. Now, nearly one in five homes under $1 million is under contract, compared to one in ten homes for much of 2008.

Conclusions: This central area of Los Angeles, which has always had high barriers to entry because of price, will still continue to have high barriers to entry because of price. The median sales prices is trending up. The market, in all ranges of the price spectrum, is experiencing increased sales activity.

Some unknowns remain in terms of how many owners in distress will get foreclosed upon, elect to do short sales, or negotiate loan modifications. But in terms of current dynamics, the market is in an upswing and the bottom is behind us.

Homes Prices in Hollywood Hills at 2004 Levels - But Market Bottom Behind Us - Still Some $10 Million Sales Above Sunset Strip

High above the city, from the Bird Streets to the Hollywood Knoll, lie the fabled Hollywood Hills West. Since the days when Sunset Boulevard was a dirt road heading from the Beach to Hollywood, the Hills have never gone out of style. The Hills proved its eternal draw even in dire times -- in 2009 there were three sales of over $10,000,000.

But like other neighborhoods, the Sunset Strip - Hollywood Hills West has gone through some seismically shifting times during the recent real estate heyday.

From 2004 to the peak of the market in 2007, the median sale price in this area rose 36%, from $1,125,000 to $1,525,000. From 2007 to 2009, the median sale price fell back to earth, dropping 25%, back to 2004 levels.

Sales volume dropped an amazing 60% from 2004 to its low point in 2008. In 2009, there was a 16% increase in sales off the 2008 bottom.

The market bottom in sales activity was in approximately October - December 2008, during the prime of the financial crisis. The percentage of properties under contract lagged at around 3% for months. Sales activity picked up in 2009, and current sales activity is at a level seen in the early days of 2008.

Conclusions:

• Easy, available money, contributed to the huge run-up in prices from 2004 - 2007
• The sales activity "bump" in 2009 was due to the large number of well-priced bank-owned properties (REOs) that hit the market
• An increase in sales activity in 2009 is a sign of a stable market
  
• Many buyers who purchased homes from 2003 - 2008 have "negative equity" -- or are "upside down" -- whereby they owe more on the mortgage than the the value of the house
  
• Homeowners with negative equity who fail to get loan modifications will "walk away" from their houses, even if they can afford their monthly payment
  
• Look for short sales and foreclosures to "make the market" in 2010
  

Tiffany at Target Prices - Median Sunset Strip/Hollywood Hills Sale Price $1,000,000 in November 2009, Down from $1,425,000 for 2008

The median home sale price in the Sunset Strip - Hollywood Hills West neighborhood in November 2009 was $1,000,000. It has been declining steadily since 2007 ($1,525,000) and 2008 ($1,425,000) and trailing down over this year (July - $1,237,000 ... August $1,130,000 ... September $1,125,000 ... October - $1,053,750).

The usual culprits -- job losses, unavailable financing, and an abundance of REOs and Short Sales -- have created a drag on the market. Look for the median sale price to continue declining in 2010.
There were, nevertheless, some big ticket sales. 1457 Blue Jay Way in the Bird Streets sold for $5,000,000. This 6 br, 7 ba, 6,600 sq ft house sold for $5,000,000, below its $5,750,000 list price.
8400 Grand View Drive up Laurel Canyon sold for $3,875,000, about $500,000 below its asking price. This high-end modern remodel has 3 br, 4 ba and 3,550 sq ft of living area.
8967 Shoreham Drive, located just north of the Strip, was another home that sold for over $3 million. This 4 br, 4.75 ba home has 4,000 sq ft of living area and sold for $3,200,000, about $800,000 less than its asking price.
9023 Hopen Place, a refurbished modern on a quiet cul-de-sac in the Bird Streets, sold for $2,900,000, about $1,100,000 off its asking price. The home has 3 br, 3 ba, and 2,616 sq ft of living area.

Not everthing has a million dollar price tag in the hills. In fact, a few sales are less than the price of many 1 br condos in the area. 8174 Laurelmont Drive, a foreclosure, sold for $440,000 -- $260,000 less than the original asking price. It has 3 br, 2.5 ba and 1,539 sq ft of living area.

Even some non-distressed properties sold at what seem like discount prices. 8416 Ridpath Drive, with 2 br, 2 ba and 1,248 sq ft of living area, sold for $475,000. (There are likely some owner profits -- the house sold for $189,000 in 2007). With 20% down and a 30-yr fixed mortgage, monthly payments are about $2,550/month -- close to the cost of renting.

Sunset Strip - Hollywood Hills Market: October 2009 -- Best of Hills sells at $815/sq ft -- Median Price $1,112,500

37 houses sold in the Sunset Strip - Hollywood Hills West area in October 2009. The median price was $1,112,500, nearly unchanged from the median price in September of $1,095,000.
The highest priced sale was 1899 Rising Glen Road, which sold for $4,500,000. This house in the Doheny Estates neighborhood has 5 bedrooms, 7.5 baths and 5,522 sq ft of living area and closed at $815/sq ft.
1485 N Doheny Avenue, in the same neighborhood, sold for $3,595,000 after a brief six days on the market. This Paul Williams traditional, which has 3 bedrooms, 3.5 baths, and 4,440 sq ft of living area, sold for $810/sq ft.
Now let's take a look at how values have declined over the past few years. 2767 La Cuesta Drive, a 2 bedroom, 2 bath mid-century home with pool sold for $1,200,000 last month. The previous sale was for $1,450,000 in May 2007 -- or a decline in value of 17% in two and one-half years.

7615 Jalmia Place, with 4 bedrooms, 4.5 baths and 3,300 sq ft of living area sold for $1,112,500 in October. The previous sale was for $1,470,000 in June 2004 -- a decline of 24% in 5 years.

One distressed property sale shows how much values have gotten whittled down. 1784 N Orange Grove Avenue, in a central Hollywood location, sold for $570,000. The house has 2 bedrooms, 2 baths and 1,035 sq ft of living area. This is a condo alternative, with a condo-type price. Gone are the days when everything in the Hills starts at a cool million.

Sunset Strip - Hollywood Hills Market: September 2009

Twenty-five homes sold in the Sunset-Strip Hollywood Hills West area in September 2009 with a median sale price of $1,095,000. One house sold for over $3 million, three houses sold for $2 - 3 million, and nine houses sold for $1 - 2 million.

But consider this -- there are currently 68 homes priced over $3 million in this area, and at the current sales rate there is almost six years of inventory.

This begs the question -- what is a $10 million Hollywood Hills house worth these days? Or an $8 million house? Or even a $5 million or $4 million house? It's hard to know since few properties are trading in this range.

The lack of comparable sales means even appraisers cannot value these properties, so if they do go into contract, deals are thwarted by appraised values that do not jibe with contract prices.

Short sales and foreclosures are just beginning to assert their impact on the high-end as over-leveraged homeowners fail to pay their notes due to job loss, income reduction, or the sentiment that the albatross of an "underwater" home is not worth hanging on to.

Prices are crashing in this multi-million dollar range and in this broker's opinion it will be years before values hit bottom.

Listings that start over-priced run this risk of "chasing the market down" as eventual price reductions fail to keep up with the continuing price declines.
The whittling down of prices is evidenced by the highest priced sale, 8444 Harold Way in the Sunset Strip neighborhood. This house, with 2 bedrooms, 3 baths, 3,653 ft of living area on a 6,650 sq ft lot was originally listed in March 2008 at $6,995,000. It eventually sold eighteen months later for $3,500,000 -- a 50% reduction from its original asking price.
2807 Nichols Canyon Road had a similar fate. This home with 3 bedrooms, 3.5 baths, 4,642 sq ft of living area on a 20,400 sq ft lot, was originally listed for $4,999,999 in March 2008. It sold eighteen months later for $2,825,000 -- 44% off its original listing price.
The sale of 2073 Outpost Drive illustrates the kind of short sale scenario which is becoming increasingly common with properties bought at the market's peak. This 4 bedroom, 3.5 bath home with 3,550 sq ft of living area on a 51,401 sq ft lot sold for $1,902,000 in May 2007. It was relisted in February 2009 for $1,999,000 and eventually sold as a short sale for $1,492,700, 22% off its sale price of 28 months ago.

The lowest end of the market is being made by distressed properties ($585,000 for a short sale, and $529,000 for this foreclosure above.) 2251 Stanley Hills Drive was originally listed in December 2008 for $899,000. This home with 2 bedrooms and 1.5 baths in the Laurel Canyon neighborhood sold last month as a bank-owned property for $529,000, a drop of 41% from its original listing price.

Sunset Strip - Hollywood Hills West Market Round-Up: August 2009

Nineteen homes sold in the Sunset Strip - Hollywood Hills West neighborhood during August 2009, with a median sale price of $1,130,000. Three of these sales were foreclosures.

Five of these sales were over $2 million; six of these sales were between $1 - 2 million. There is currently a 24 month supply of inventory in this neighborhood priced $2 million and over, and a 21 month supply of inventory of homes priced $1 - 2 million.

The highest sale was 1424 Tanager Way, which sold for $3,850,000. This fixer in the Bird Streets has 3 bedrooms, 3 baths, 4,400 sq ft of living area on a 12,709 sq ft lot. Marketed for the first time since 1972, it was originally listed at $6,999,000, and sold for 45% less after 352 days on the market.

Some homes in this area, when priced right, are selling quickly. 8135 Laurel View Drive, with 4 bedrooms, 3.5 baths, 2,946 sq ft of living area on a 13,180 sq ft lot, sold for $2,550,000, slightly below its $2,679,000 asking price, after 35 days on the market.

But there still seems to be a trend of over-pricing that ultimately leads to price reductions. Take 8605 Appian Way. This 3 bedroom, 3 bath, 3,188 sq ft house on a 54,885 sq ft lot high off Sunset Plaza Drive was originally listed at $2,899,000 and sold after price reductions for $2,175,000 (25 % off the original asking price) after 317 days on the market.

Foreclosed properties are still very much part of the Sunset Strip - Hollywood Hills West Market. One sale, 7338 Woodrow Wilson Drive, illustrates that bargains are still to be had. This 3 bedroom, 3 bath house with 2,251 sq ft of living area on a 21,379 sq ft lot sold for $875,000 -- not a bad deal considering the previous transfer in early 2004 valued the property at $1,300,000.