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The Little House that – Signs of Weakness in 90232

I profiled this butt-ugly house on Huron Ave a while back. They had been trying to sell it off-and-on for more than 5 years.

The highest asking price was 947K as far as I can tell. It finally sold recently for 774K. Still insanely overpriced, but certainly more in line with 2004 prices on this street. I know this because I lived in a house on this street back in 2004 that sold for 805K – and it was smaller. Granted, it had more curb appeal, but it was definitely smaller in terms of square footage.

Ugly houses (and old condos) tend to show the weakness first in a market. By ugly – I mean a house that pales next to its neighbors. Why would you pay the same price for a house with nice curb appeal as you could for some hideous box? During hot markets, even the crap will sell. But during a market heading down, they will feel the impact sooner rather than later.

Another sign of weakness in Culver City is in the condo market. 5105 Summertime Lane has been on the market 129 days. They are asking 379K for this 730 sq ft “charmer” – a mere 9K more than they paid in 2005. In 2 years, if they can sell it (doubtful), they won’t even make enough to pay the agent. They are still asking significantly more per square foot than comparable properties (523 v. 486). If they drop to that level, the price will be around 355K, an equity-crushing 24K less than they paid.

And yet another sign of some weakness. I started tracking in February 4163 Jasmine in Culver City. It was listed for 869K and sold for an astonishing 875K in March. However, if you look more closely at this property, the seller must have had a loss. It was purchased in 2006 for 845K. If you figure 6% commission on the 875K sale that would mean they actually got about 825K, 20K below what they paid a year earlier.

UPDATE: Huron house sold for 774K in June 2007.

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