Pocket Listings

A pocket listing is a selling agent’s dream. The idea that they can sell a home without having to spend a dime on marketing, not having to deal with an open house and in today’s market in El Segundo walking away with a cool $40-60K in commission.

Here in El Segundo there are a lot of off-market deals. As I mentioned the main agents in town have the all the info. Who’s ready to buy and who’s ready to sell. If they can make a match they win.

It’s hard to find out until it’s too late unless you are working within the cabal of local real estate agents but often the agent likes to throw up a sold sign as advertisement after the fact. To me the sold sign also tells prospective buyers, “If I’m your agent I have access to deals you don’t even know about”.  When I was actively searching for a home to buy I analyzed the sales data for the past couple years.  I was bothered when some of the data was not complete. Why wasn’t there an original list price? Why wasn’t there a realtor associated with the sale? Turns out that was a red flag and that all of those deals indicated off market transactions. I estimate that 10-15% of sales in El Segundo happen off market.

I came across one of Bill Ruane’s sold signs at 640 Sierra St. the other day and wondered why I didn’t remember that home.  Records show it sold 4/4/17 (for $518/sqft) and two month’s later Bill is still using it as free advertisement.  (Ever notice how Bill has for-sale sign at homes and apartments strategically placed at every entrance to El Segundo???) DO NOT DISTURB OCCUPANTS!

So if you want to buy into this town and the obscene real estate prices you pay the piper and go with one of the members of the cabal.

 

It just takes one

That was quick. I’m sure it’s ruffling the feathers of some other agents with homes in the $1.4 million club but 404 Oregon St is already in escrow.  What makes this home special enough to get an offer out of all the options in that range?

Like I mentioned with the off-market dealings here in El Segundo the fact that it made it to the MLS, Zillow, et all could just be a marketing tactic but nonetheless it just takes one greater fool to make a real estate transaction successful.

Let’s revisit.

1737 square foot 3/2.5 mid-century home for $1.35 million dollars. The mid century look is deep so I can only imagine that is a selling point to the buyer?  For my million dollars I want appliances made in the past decade, but that’s just me being picky isn’t it?

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So after someone drops $270k they have the privilege of writing a check for about $6500/month to live in this time capsule.

Or you could keep your life savings in the bank and rent a bigger home (sight unseen) for less than half. 510 E Mariposa is a 3/2 2126 sqft home that is renting for $30000.  

 

 

Why using a local realtor matters

I find myself making fun of both out of town (out of touch) realtors as well as the 4-5 henchmen that rule 95% of El Segundo’s listings on the buy and sell side.

If you want to buy a home in El Segundo you have to kiss one of their rings . When we looked to buy here in town we used a family friend as our agent. Yes any agent can get you in to see a home or access to a lockbox but what we found is that the fraternity of El Segundo real estate agents had so many back and side dealings that by the time we were finding out about new listings on the MLS they were often already sold.

As messed up as that is there was more than one occasion where we went to an open house and started talking about writing offers only to find out that it was already in escrow and that any offer would be considered a backup. The open house was a charade to fill their coffers with more info and potential clients.  The local cabal of agents know who is out there willing to buy at what price, they know who is knocking on death’s door and they know who can be motivated with the right offer to cash in and leave.

Is it fair, no. Far from it but after two years of looking at homes in this town I learned my lesson. If and when you want to buy (or sell) in El Segundo you have to kiss the ring of the king.

511 Oregon St 90245 Gets a haircut

I wrote about 511 Oregon a month ago.  My take is that it is an out of town agent that’s had her hands on a handful of properties.

I guess the commute from ENCINO to show the house was taking it’s toll. She knocked off a paltry $25k off the asking dropping it from $1.4245 mil to $1.4 mil. That’s a whopping 1.8%.  Guess she isn’t that motivated despite the fact that the last owner paid $355k in 1999.

We will see how the $1.4 million dollar club shakes out.

 

Another out of towner reaching for the stars

Pricing real estate is a bullshit science. Find the MAX someone will pay and that’s the value. To find the approximate max, realtors look at similar homes recently sold in your neighborhood.

House A sold for $Y/sqft therefore my listing should be worth $Y x my square footage plus any improvements that will justify listing it for more.  (and you thought you would never use algebra again?)

Sue La Bounty out of Long Beach figured that this tiny old spanish house must be worth $1000/sqft because that’s  in the range that other local homes have sold for.  Funny enough that SHITTY spanish at 403 Loma Vista Sold for $1009/sqft!

So Sue figures this home is nicer than the dump on Loma Vista so it should command at least the same price per square foot.

521 Concord St 90245 is 1194 sqft TWO Bedroom ONE Bath. for One point three fucking million dollars. 

Let that sink in. Two bedrooms and one bath for a home that doesn’t look like it’s been updated since the 1970s.

Look, a “vintage” stove! That might be worth something on ebay.

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But Wait! “Property also offers a room off the back garage with a 3/4 bath”. You can have your very own Air BnB, or maybe just put you eldest teenager in his own unit across the lawn.

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If you pay anywhere close to a million for this house you deserve what happens to you.

 

If you first do not succeed, try again

If you first do not succeed, try again, and again, and again, and again.

You are just looking for ONE FOOL to think your house is worth the asking price. Just one.  And there have been a lot of people that have passed 400 Bungalow Dr by without giving it a second though. According to Zillow this home has been viewed 20,998 times. That’s a lot of eyeballs.

Price History

DATE EVENT PRICE AGENTS
05/31/17 Listed for sale $1,449,500-3.3%
11/18/16 Listing removed $1,499,000
05/04/16 Back on market $1,499,000
04/21/16 Pending sale $1,499,000
04/14/16 Listed for sale $1,499,000
02/05/16 Listing removed $1,499,000
07/21/15 Price change $1,499,000-6.3%
05/08/15 Listed for sale $1,599,000+23.1%
10/20/14 Listing removed $1,299,000
10/17/14 Pending sale $1,299,000
09/30/14 Listed for sale $1,299,000+58.0%
10/19/10 Sold $821,900+143% Jim Van Zanten
07/31/97 Sold $338,500

This house has been for sale off and on since September 2014! 33 MONTHS!

Hmmm, didn’t sell for $1.3 mil back in 2014, let’s pull it.

Market is crazy again, let’s jack the price 23% to $1.6 million eight months later!

No takers… let’s drop it to $1.5 mil.

No takers after 17 months so they yank it.

Market is ever crazier for sure we can find someone to take this monstrosity off our hands. Back on the market for $1.5 mil.

What the hell is wrong with this property besides it being overpriced?

On paper it sounds like a deal 6 beds, 4 baths 2943 sqft on a 5000 sqft lot. Updated within the past decade.  There has to be something very wrong here.

Because if I really wanted this house at some point in the past year I would have offered $1.2-$1.3 mil.  And if they were motivated they would have taken it. Who knows, maybe they have been taking cash out and owe $1.45 mil.

Time will tell

404 Oregon St 90245 – 8000 sqft of driveway

New to market is 404 Oregon St in El Segundo. 3/3 1737 sqft on an 8300 sqft lot priced at $1.35 million dollars.

Of the 8300 sqft lot I’d venture 50% of that is concrete. So despite the wonderful way that 8300 sqft reads on paper, unless you plan on getting a jackhammer and building a giant front porch most of this square footage is useless.

And if you don’t like the sound of kids playing you may want to skip over this listing as the green grass on the left hand side of the photo is the back of the middle school field.

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The “everything” bubble

I could be wrong.  Maybe the fact that Warren Buffet is now sitting on $100 Billion in cash is not worrisome? 

Maybe the student debt, auto loan, real estate, stock market…..bubble isn’t inflated and will sort itself out in an orderly fashion. Maybe I am completely wrong and none of these assets or unicorn startups worth tens of billions of dollars are really worth their current valuation?

I could be in my vacuum reading more of the same data that supports my thesis but just in case I’m not here’s another take on the concept of the “everything bubble”

https://mishtalk.com/2017/05/27/investigating-trends-in-median-home-prices/

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WTF Bought 403 Loma Vista?

Not What the, but Who the… 403 Loma Vista was/is an overpriced piece of crap. Two bedrooms, ONE BATHROOM 1164 home that sold for $1,175,000. 

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This home sold in August 2016 TEN FUCKING MONTHS AGO for $700k. That is close to the real value of this home.  Because as we can see from these glorious photos if the house, even did change hands in August, they didn’t do a damn thing to it. I can imagine that the $700k was a trust sale, maybe to a family member. But the real point is that some fool just paid $1.2 million American dollars for this POS.

I decided to write about it because I saw some workers at the house. I imagine this is some genius going for a flip. Good luck because you overpaid by $300k (even by today’s ridiculous standards) and no matter how much lipstick you apply it doesn’t change the fact that it’s a pig.

Welcome to your million dollar home.

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The staring contest in the $1.4 mil range in El Segundo

Look like Lynn O’Neil blinked first in the staring contest in the $1.4 million range. She lowered her listing at 734 Redwood 90245 by $24k to $1.435 million. 

As I mentioned the excess supply in the $1.3-$1.5 million range in El Segundo is going to help a couple buyers out. Since Alex Abad has several of those properties in that range I figured he wouldn’t tell one client that their house is worth less than the others, so we have Lynn dusting some crumbs off the table.

$24,000 on a $1.4 million dollar house?! Come on, you are not even trying. I imagine the owner is running this listing.  What’s even more laughable is that this is the second price reduction in the 60 days it’s been on market and Lynn has made a living off this home.

Price History

DATE EVENT PRICE AGENTS 2.5% Commission
05/29/17 Price change $1,435,000-1.6%  $35,875 est
05/16/17 Price change $1,459,000-2.7%
03/28/17 Listed for sale $1,499,000+78.5%
05/20/11 Sold $840,000+5.1% Lynn O’Neil  $21,000
04/05/11 Listing removed $799,000+59.8%
05/11/00 Sold $500,000 Lynn O’Neil  $12,500

But do these people REALLY want to sell? Because if there is a need to sell based on job change or health situation the price action on a home with $350-$450k in equity is insulting and just plain greedy.

Another interesting tidbit is that the current homeowner pays $10k in property taxes.  The new owner will pay about $17k/year in property taxes.

Inflation?  Looks like property taxes, real estate prices, healthcare, higher education and the commissions of real estate agents are just a few places where you see ridiculously high rates of inflation.