Big price cuts in Malibu, Manhattan Beach

Meaningless anecdotes or tips of a trend? Your call.

Malibu: Michael Gardner's real estate blog reports that a home in Malibu Cove Colony just sold for a huge discount. The home, he reports, was listed in late 2007 for $6 million, and just sold for $3.5 million. Gardner: "The home needed some work but has great views of Point Dume, is in the Paradise Cove Bay where it lies protected from the afternoon northwesterlies,  and is in a neighborhood of $5-6 mil. homes that rent for $40-60k per month in the summer."

Manhattan Beach: Price cuts are old news but this one is big -- a million bucks. Manhattan Beach Confidential reports that a home listed at $8 million in February has just been reduced to $7 million. MB Confidential reports the original asking price was "fairly astonishing ... Not modest. In fact, it just didn't seem serious. Smelled like a market-tester."

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: Submitted to Your Scene at LATimes.com by T Payne.

Comments

[Nelcisco]

I noticed the first two pictures of the front of the house looks like a house in a ghetto in Old San Juan, Puerto Rico.

Peter- its good reading but at the end of the day average people can care less how sit-com stars and 'A' listers live,40k a month rent in the summer when average folks are stuggling to pay 3k a mo from 1,800 the previous month as a result of their ARM adjusting well.... ,but I will say, that resturant down at Paradise Cove serves an awesome clambake

[Fred]

Of course they are tips of a trend. Peter, are you still wondering if the high-end areas will fall alongside the lower-end ones? Of course they will. The alternative just doesn't make any economic sense.

[It All Happens On The Margin]

Here's an eye-opener on the bulls' beloved South Bay:
http://tinyurl.com/58u5rn

There are 231 homes for sale in the Manhattan Beach zip code.

According to RealtyTrac, there are 25 properties in some stage of distress - that's about 10%. Not earth shattering, but a huge bump from a year or two ago.

Silver lining:
There are 2 fixer SFRs on the Redondo side of Dixon, one *asking* $625k (S08065007) and the other at $699k (S08056979). One is a probate sale, the other is in default.

On the beach? No. But an SFR in the south bay with any sort of a view under $700k hasn't happened this side of 2004. Even on the east side of Sepulveda.

These are the sort of comps that are killers for the neighbors...

ps Full disclosure: this is tealeaf with a new alias and link to my non-RE blog. I have run into a few collisions on other boards with my old alias.

[dilbert dogbert]

Here in Palo Alto a tear down rebuild house one door over on my street just sold for $6.9 and a year plus ago it started at $8. It is a puzzle why the builder did what she did. No elevator, no pool, no weight room, no home theater, no guest house or all the kinds of stuff you can get for $6.9 in nearby communities. The wife thought it was a disaster to live in. Quality was not what you would expect from the price. A lot of the stuff inside looked like they got it at Home Despot. The new owners are just moving in and it will be interesting to learn who they are and why they accepted that house. Hope they have great parties and invite the neighbors.
I hope our little 2000 sq ft rancher gets some reflected glory from that sale price.

[Arti]

Hopefully this is the beginning of the price correction in all high-end areas, not just MB. We've all been waiting for it, it's always been inevitable, but a lot of us are frustrated it took so long to start. But others have rightly pointed out that the high-end always starts falling later in the cycle, that's how the prior busts have gone down in LA.

This boom-bust, the mortgages taken in West LA are of the Alt-A kind rather than subprime, so they take longer to reset, about 4-5 years compared to the typical 2 year Countrywide special for subprimes (the big reset wave is only starting later this year and will run through 2010). The pain is about to really begin for West LA.

[WatchingInMalibu]

I'd really like to know more about what's going on with this house - anyway you could find out the real story? It's clear that sales volume in Malibu is slowing way down, and the lower end sales in Malibu ($1-3m) are seeing some discounts off asking - usually back to late 2006 selling price comparables. But it does not fit at all with what's happened in my neighborhood (MalibuPark) over the past 4-6 months, where prices are remaining very steady in the $900 to $1100 price per sq ft range. My guess is that there's some very significant damage to this house and/or permitting issues about addressing them, or the house is very small, and was way overpriced in terms of asking on per sq ft basis.

[Ginny McGonigle]

Arti - You have made some very astute reflections about the market. Are you in the real estate industry? I hadn't thought about the mortgage cycles for westla in that way but it is a good and interesting point. Since I represent buyers in that area, it is a good thing to keep in mind.

[Ann]

If the alt-A loans that you are referring to are anything like mine, don't expect resets to cause more foreclosures. Many people took out Alt-A loans not because they needed to but because they were less work and the pricing wasn't much more. My interest rates will be in the 4-5% range by the end of the year. Thank you Bernanke!

As for Malibu sales, I've owned there for twenty years and there are always unusual transactions.

[It All Happens On The Margin]

Ginny,

If you find that compelling, spend a few minutes on calculatedrisk.com and irvinehousingblog.com (particularly in the Analysis section).

Incredibly insightful, hard-hitting data that goes well beyond "I ain't paying' more than $xxx for that stucco box."