Westside weakness? One reader sees it

Look carefully at the photo, there is a quiz below.

One of the most popular topics on this blog is the debate over what will happen to prices in higher-cost neighborhoods.  To date, they have generally held their value better than greater Los Angeles, and have not suffered large numbers of foreclosures. That said, reader e-mail from "Someday the Ants Will Eat Grasshoppers":

"Your readers keep asking why the prices are holding up on the high end Westside properties. I’m not sure what they’re looking at, but I have been tracking prices in Westwood, lower Brentwood, Santa Monica (north of the 10), and Pacific Palisades every day for past 3 months. I look at every house for sale under $2M with 3 bedrooms or more, and I look every day. Really.

"Here are the relevant numbers (calculated from my daily Redfin downloads for those neighborhoods and that price range):
"The average number of listed homes dropping their asking price per day: 1.15
"The average size of any one price drop when it occurs: $53,090.90
"The average drop across all 50-60 properties meeting the search criteria per day: $1,017.58
"Ratio of new homes being listed to homes being sold: 3.48.

"So…Westside sellers are constantly dropping asking prices, and often in large amounts (the largest I saw since Feb was $400K). New properties are being listed for sale over three times more often than listed properties are selling. With asking prices for these sub $2M properties dropping about $1K per day, only the very rich would want to buy now. I mean, if you are in that market, that’s like putting $30K per month in your pocket just for waiting.

"People have observed that comps are not lowering. However, the average selling price is about $200K less than the average asking price in these neighborhoods right now. The comps are slow to decline simply because there are very few sales right now. No one (with good reason) seems to be buying. Eventually the transactions will happen, and the comps will adjust. Everyone needs to be patient, although frankly, I wish someone would buy now and then to help accelerate the lowering comps.

"I hope you run this story (or at least selected parts of it), because many of the high earners in your fan club get less attention, and certainly less sympathy, about the difficulty of getting into the market. They deserve to know that their lot will change, too, and their hard work and patience will pay off. Life is fair."

Thanks, Someday.
Now, as promised, the quiz. The house pictured is a 993-square foot, 3-bedroom, 1-bath in the 90405 ZIP code of Santa Monica.The current Zillow Zestimate is:
a) $599,000
b) $714,000
c) $805,000
d) $917,000
e) $1.06 million

Your thoughts? Guesses? Email story tips to peter.viles@latimes.com
Photo Credit: L.A. Times

Anatomy of a Bidding War: Why This Westwood House Drew 59 Bids in Seven Days

Address: 1306 Thayer Avenue, Los Angeles
The House: 3-bedroom, 2 1/2 bath Authentic Spanish, 2,178 Square Feet
Special features: "It had the authentic arches, french doors out of the dining room, a great garden. Original for the most part, with a galley kitchen, a great balcony off the master bedroom," says listing agent Chad Lund.
Listing Price: $1.195 Million
Selling Price: $1.552 Million
Days On Market: 11 (listed on Feb. 5)
Number of Bids: 59 in seven days

Pricing Strategy: Chad Lund: "This was pretty much a one-of-a-kind property. We really sensed in January that a lot of buyers were coming out of the woodwork, and we'd seen some multiple offers in January. So we were in a unique position, with inventory low and this being a special property, so we priced it on the low side for multiple bids."

What Lund expected: The house would sell in the high $1,300,000s, maybe $1.4 million.

What happened: 59 Bids in seven days. "Two were substantially higher, so we countered those two and basically just gave them one more chance to come back with best and final. Ironically, both of those bids were cash only."

What he learned: "It's a really special property, but it showed me that on the Westside, buyers were out in droves -- they're back after sitting out last year. If they were anticipating depreciation, it didn't happen."

Comments? Thoughts? Use the comment function, or email story tips to lalandblog@yahoo.com

The View From Westwood: The Market Remains Strong

Blogging at ActiveRain, a site favored by Realtors, Scott McIntosh of Coldwell Banker argues the media has created the misleading impression of falling prices in West LA.

He writes, "A question I get asked frequently at my open house, 'When are prices going down' ... what is fueling this question is an abundance of media coverage and headlines saying that the market is in trouble and prices and sales are going down. Most of these national or even regional articles that are being reported, do not have anything to do with whats going on in the Westside market. The market in West LA remains strong."

More: "The Westside of Los Angeles is experiencing a very normal market. Some properties selling very quickly and some taking a little bit to sell. Overall the inventory level in this area is fairly low and that helps to contribute to the prices remaining stable..."

Photo Credit: UCLA