Double bubble California properties – Mar Vista home sells for less than 1989 peak price and on pace for three lost decades. Culver City condo listed for half of 1989 peak price.
Southern California has experienced its share of housing bubbles in the past. In the late 1980s many Southern Californians bought into the “real estate only goes up†mantra and overpaid for housing just like we have seen in the last decade. It is interesting the amount people paid for housing but also for condos back in the late 1980s. We don’t hear much about this because the tech bubble and the current housing bubble wiped out many of the horror stories from this era. Those that sold out do not have an incentive to share their story of real estate failure. But thanks to the proliferation of data we can actually go back in the real estate time machine and see some of the bad deals made in areas like Mar Vista and Culver City. I find it amusing that when I used to bring up a discussion of a lost decade in California housing values during the boom people found this notion preposterous. Now these same people are ignoring the possibility of two lost decades.  So how about we look at two real life case examples in Mar Vista and Culver City to show that lightning does strike twice in some areas (hat tip to a reader for these).
Mar Vista – Selling below 1989 price
4263 SAWTELLE Blvd
Culver City, CA 90066
BEDS:Â Â Â 4
BATHS: 2
SQ. FT.: 1,610
$/SQ. FT.:Â Â Â Â Â Â Â Â Â Â Â $394
LOT SIZE:Â Â Â Â Â Â Â Â Â Â Â Â Â 5,380 Sq. Ft.
PROPERTY TYPE:Â Â Â Â Â Â Â Â Â Â Â Â Â Multi-Family
STYLE:Â Â One Level, Ground Level
YEAR BUILT:Â Â Â Â Â Â 1946
Mar Vista is part of the Westside of Los Angeles and is definitely a mid-tier market. There is nothing “prime†about the above home or area. With that said, the current median price of a home in Mar Vista is still above $600,000. But believe it or not, the above home sold for over $900,000. When? In 1989:
Source: Â Redfin
Someone in 1989 actually paid a stunning $937,500 for this place. Keep in mind that there wasn’t the level of toxic loans like option ARMs back during this time so this is literally someone going all in with some skin in the game. Of course the market imploded and the home had another recorded sale in 2003 for $529,000. Today it is listed at $635,000. Two lost decades (possibly three on this home).
Culver City condo action
5651 WINDSOR Way #101
Culver City, CA 90230
BEDS:Â Â Â 2
BATHS: 2
SQ. FT.: 967
$/SQ. FT.:Â Â Â Â Â Â Â Â Â Â Â $289
LOT SIZE:Â Â Â Â Â Â Â Â Â Â Â Â Â –
PROPERTY TYPE:Â Â Â Â Â Â Â Â Â Â Â Â Â Residential, Condominium
STYLE:Â Â Traditional
VIEW:Â Â Other, Yes
YEAR BUILT:Â Â Â Â Â Â 1968
COMMUNITY:Â Â Culver City
Digging back looking at old articles for whatever reason, there was a condo fervor in the late 1980s bubble as well. People seemed to believe that condos would hold the same value as housing. Even in places like Culver City this is not the case. The above home is another example of a home that has gone through two lost decades in price:
Source: Â Redfin
This 967 square foot condo actually sold for $417,000 in 1989! That is pure madness. At the bottom of the bubble burst it sold for $116,500 which seems like a more reasonable price. In 2000 it sold for $150,000 which still seems okay given the area. It is currently listed at $279,500. Another place that is set to have three lost decades in price.
I’m sure if you dig around you will find countless examples like this where homes sold during the previous bubble peak in Southern California and bring up the reality that yes, it is very possible to have two lost decades in prices. How many people bought at the peak and are sitting on similar type homes? We don’t have to guess since we know hundreds of thousands of Californians are currently in the same predicament. When you look back in 2020 don’t say you weren’t warned. I call this the double-bubble and given the current magnitude of this bubble, we can expect it to burst even louder than the last bubble:
Any other double-bubble California examples?
*Update:  Note that these homes were provided by a reader to the site and the data was pulled from Redfin. You can log in to the Redfin site and pull these up and see these same figures. So either Redfin’s data is wrong or something else is going on here. A few people have e-mailed me stating that some of the older data is harder to pull up on sites like this. I’ve sent Redfin an e-mail and will let you know what I hear back.
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29 Responses to “Double bubble California properties – Mar Vista home sells for less than 1989 peak price and on pace for three lost decades. Culver City condo listed for half of 1989 peak price.”
condos suck…you don’t have enough money to make me live in one. I can’t believe they exist.
No one is forcing you to live in a condo. However, the existence of condos does not require any belief on your part, no matter how important you think you are 🙂
But, but… you miss out on the PURE THROWAWAY known as HOA fees… not to mention living under the totalitarian rule of cranky retirees who have time to run the HOA.gov… ;^)
I concurr 100%, but at least you don’t have to own a lawnmower, and you get to follow rules. Sheeple love rules!!
I don’t see the endless rows of old stucco boxes on tiny lots in Mar Vista holding up. Every fixed-up house just screams massive debt, and the rest are borderline tear-downs at this point.
I used to work in Mar Vista in grad school, at a little mental institution tucked on a lovely little street. Tucked in by yucky Venice Blvd. and I forget the other really busy street. ew. Mar Vista. I wouldn’t pay 100k to live in that home
Link: 11.1 million households, or 23.1 percent of all mortgaged homes, were underwater in the October-December quarter
WASHINGTON – The number of Americans who owe more on their mortgages than their homes are worth rose at the end of last year, preventing many people from selling their homes in an already weak housing market.
CoreLogic says about 11.1 million households, or 23.1 percent of all mortgaged homes, were underwater in the October-December quarter. That’s up from 22.5 percent, or 10.8 million households, in the July-September quarter.
You sure those aren’t data errors on the 1989 prices?
Bound to be a few recording errors in a HUMONGO state like PRKali… OR it could be DrHB stumbled on a few cases of MORTGAGE FRAUD! Remember Silverado S&L? Though the 1988-90 bubble was much smaller, it had the virtue that over 1,000 banksters ACTUALLY WENT TO PRISON for their scams.
The two sales highlighted here might be where local mortgage broker and local RE broker went in cahoots on a pump-and-dump w/ cash “rebates” off the books. ;’)
STINKS anyway you look at it.
In ’89 was it a double or tripple lot?
I call bullshit on those listings.
The bubble in 1989 was big but it wasn’t that big. Not even close. Those are either typos or part of multi-property sales.
Here are some 1989 comps within a block or two of the Sawtelle listing…
$324,000 1989 sale…
http://www.redfin.com/CA/Los-Angeles/11378-Tenino-Ave-90066/home/6728875
$285,000 1989 sale…
http://www.redfin.com/CA/Los-Angeles/4161-Minerva-Ave-90066/home/6737918
$180,000 1993 multifamily sale…
http://www.redfin.com/CA/Los-Angeles/4279-Sawtelle-Blvd-90066/home/6728847
Feel free to search Redfin all you want for past sales and you’ll see that in the mid 90’s you were under $180,000 on the same street.
$174,000 1996 sale…
http://www.redfin.com/CA/Los-Angeles/4273-Sawtelle-Blvd-90066/home/6728846
I shouldn’t even have to pull up comps for the Condo to further make my case.
Bogus sales prices. Period.
$520k would have had a one of the nicest homes on Arden in Larchmont Village at the peak of the 1988-1990 bubble.
http://www.zillow.com/homedetails/408-N-Arden-Blvd-Los-Angeles-CA-90004/20782825_zpid/
Seems accurate on Redfin:
http://www.redfin.com/CA/Los-Angeles/4263-Sawtelle-Blvd-90066/home/6728844
I’m wondering where this data comes from? Redfin states it is pulling from public records. The condo is listed here:
http://www.redfin.com/CA/Culver-City/5651-Windsor-Way-90230/unit-101/home/6651059
When they say public record what do they mean? Surely these figures have to come from some source.
As I said…I’m betting that they were multi-property deals. I didn’t even need to cherry pick my comps to support my point. Feel free to do your own research.
Same thing happened with condos in NYC in the late 1980’s. You could understand it in Manhattan at that time. Just about everyone there lives in an apartment anyway. But out here, you got to be kidding.
Here are 28 of the past sales for the Condo listed.
http://www.redfin.com/search#!lat=33.985741&long=-118.382553&market=socal&parcel_by_property_id=6651141&sf=1,2,3,4&sold_within_days=36500&status=131&uipt=2&v=6&zoomLevel=16
There is no way that the DrHB’s data is correct here.
Here is one that sold for $102,000 in May of 1989 and $135,000 at the peak of the bubble in April 1990…
http://www.redfin.com/CA/Culver-City/5651-Windsor-Way-90230/unit-305/home/6651122
Here is another that sold for $130,000 in September 1989…
http://www.redfin.com/CA/Culver-City/5651-Windsor-Way-90230/unit-109/home/6651084
Here is one that sold for $80,000 in 1988…(and $340,000 near the peak of the most recent bubble)…
http://www.redfin.com/CA/Culver-City/5651-Windsor-Way-90230/unit-105/home/6651067
Need any more proof that this is a GIGO post?
I think the point is that these are recorded on Redfin sales data. Anomaly or not, this is in the system of Redfin where tens of thousands of people log in to gather data which is even more disconcerting. So to your point, either Redfin has bad data or there is something going on here like fraud. People can pull these properties up and it is publicly there to view.
Like the NAR overstating sales records for years and everyone making decisions off that data. Turns out it was all wrong.
I bought in Mar Vista in November 1989. Couldn’t have picked a worse time. %20 down payment with %11 interest rate. 3bed 13/4 bath built in the 1950’s for 330k. Today worth maybe 650k.
Tried to refinance in the early 90’s. Had to bring 28k to the table and buy mortgage insurance to get %73/4.
So those prices are not correct.
EconE – exactly!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! I have alway told my daughter “don’t believe everything you read or hear on TV or the newspapers.” I call BS on this too!!!!!!!!!!!!!!!!!! No efffin’ way! (no offense to DHB). When I saw this, my first thought was “only someone with schitt for brains would buy that at that price.” Fact is, no one ever bought it in ’89 at that price!
Pwned
March 9, 2011 at 6:51 pm
I agree with you. I don’t even see any residual value for the lot after the “home” meets its new “home” in the landfill. The days of urban renewal (where entire blocks are razed) are gone. Fully-depreciated individual “stand alones” like this have only their “shelter value”, if that.
You have two things happening here. Either Redfin pulls up bogus data which defeats the purpose of the previous examples (where do they get this data from?). Does some real estate agent have an ability to simply make up data?
Or, you have common run of the mill fraud. I’m surprised people are shocked when these things pop up. You had people in homes worth $1 million refinance out to $2 million or even higher and simply walk-away. Not very common but does happen.
You have many larger families or groups that purchase homes for market value, nothing special like the places listed above and then sell at a very high price and during bubbles banks get more easy on the money as we all know. This also explains the very low price second sale which is likely a post-foreclosure sale. These happen all the time and we have many fraudsters out in California just like other places. These odd sales do take place.
Either Redfin posts bogus data or this is a case of fraud. There shouldn’t be typos if this is being pulled from tax records on automated systems similar to Zillow.
Sure looks like some sort of outlier. Doesn’t mean the general thrust is not true, but looks like some sort of anomoly, either fraud or data entry error.
…has to be fake…?…wait…this was in 1989…? i bought my home in 1990 and it was close to 400% off it high price. remember, houses never lose value. they only go up and now is always the right time to buy….
The exception is not the norm. These are clearly two cases but we don’t have all of the details. I am sure we can find more examples of homes selling above 1989 prices. But it sure does make a good headline to say “homes selling at 80’s levels”.
Either way – it looks like a dump today and probably looked like a dump in the 1980’s.
Two lost decades in Los Angeles County? Don’t have to look to far:
15833 NEWMONT AVENUE Lancaster, CA 93535
List price: $80,000
1989 sold for: $99,000
40581 E 161ST ST Lancaster, CA 93535
List price: $70,900
1993 sold for: $69,000
421 E AVENUE J15 Lancaster, CA 93535
List price: $69,900
1996 sold for: $58,000
But of course, hard to believe homes can sell for prices last seen 20 years ago.
The banks power-grab was completed today. No wrongful foreclosures…
http://www.dailykos.com/story/2011/03/10/954883/-The-Federal-Reserve-Finds-No-Wrongful-Foreclosures-by-the-Banksthe-Coup-is-Complete
also
\
http://www.huffingtonpost.com/2011/03/10/fed-reports-finds-no-wron_n_834010.html
The banks let the squatters stay without paying because the banks know in the end nobody has any sympathy with a squatter.
Squatters are losers by their own short-sightedness.. If they had moved out and stayed at homeless shelters the public would have been on their side. Squatting makes them look like deadbeats.
Have you guys seen zillows new rent estimate? Pretty interesting for the inland empire. Houses are essentially renting for 50% more in payments than it costs for a mortgage. I realize that mortgage cost may not include HOA/Property taxes, but you can easily rent out a house at +20% cash flow for what the mortgage is. At some point either rents need to come down (which I think they do) or house prices need to go up.
If someone paid that much in 1989 someone was paying off the sellers for some big favor.remember how congress people were paid off for corporate favors – something like that. No sane person would have paid that much in 1989 or in 2006 for that matter.
The house on Sawtelle is actually a duplex and it is within Culver City.
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