Off-market Mansions in L.A.

With a busy week I haven't had much time to write. However, I wanted to follow up on my series on the best homes for sale in Beverly Hills and Bel Air on the market with a discussion about those available off the market.

I definitely can't give a specific list on this one!

Properties available off-the-market are kept from the market for very good reasons. Confidentiality for buyers and/or sellers is one of them. Real estate agents have their own reasons.

But another reason is that many of the best homes simply don't need to be put on the market to be sold. For the very best properties in the very best areas like Bel-Air, Beverly Hills, Brentwood, Hancock Park, Sunset Strip, etc., there's often more than enough buyers. Just read this little blurb from last week from BusinessWeek.com:

• "Stephen Shapiro, chairman of Westside Estate Agency, which has the $165 million listing, said there's a shortage of homes in Beverly Hills for $30 million and more. There's little room to build more sprawling mansions without knocking down smaller ones, he said."

So yes, many of the best homes will never be on the MLS. Currently, I'm aware of great off-market homes in areas like Beverly Hills, Bel-Air or Sunset Strip available for prices ranging from $8 million to $45 million.

And no, you won't read about them here.

But I will tell you that one of the best off-the-market possibilities I like right now is the opportunity to have a custom, brand new 15,000-square-foot home in Bel Air for $27 million. To find out more, you would definitely have to talk to me in person.

Terra Firma LA featured on Curbed LA

For the second time in recent weeks, the excellent Curbed LA blog has featured Terra Firma LA in their broker blog wrap. This time it was about my thoughts on loan limits and duplexes. Last time, it was about my thoughts on the market on the Westside. With the previous post they chose to make fun of it and suggest I was ignoring the facts. However, since then the facts have reflected exactly what I was picking up on two months earlier, and now pretty much everyone has begun to acknowledge what I was pointing out: Westside real estate is weathering the Great Real Estate Bust much better. See: here, here, here, here and here -- just to name a few.

UPDATED W/ LINKS! - Top 10 Beverly Hills homes for sale

OK, I've updated my Top 10 list of Beverly Hills homes for sale with links to the properties.

I'll try it for now and see how it works.

Go to original post: Top 10 Beverly Hills homes for sale

Duplex Mania!!!

The big news in local real estate today is that the federal Office of Federal Housing Enterprise Oversight (OFHEO) announced it has temporarily increased limits on conforming loans offered by government-sponsored enterprises, Fannie Mae and Freddie Mac. Conforming loans are those that the government will buy from lenders, so the interest rates are lower sometimes as much as a full percent lower.

Much has been made about how this can help a lot of homeowners and homebuyers in L.A. The old limit for a single family residence was $417,000 and now it’s been raised to $729,500 for L.A. County.

But I think this could be even bigger news in the best parts of town for duplexes, triplexes and fourplexes.

The old limits:

One-family	Two-family	Three-family	Four-family
$417,000.00	$533,850.00	$645,300.00	$801,950.00

The new limits:

One-family	Two-family	Three-family	Four-family
$729,750.00	$934,200.00	$1,129,250.00	$1,403,400.00

To understand futher why I think this is such a big deal for 2-4 units, you just have to do the math and look at the MLS.

If you’re the standard putting 20% down on a single family home, these loan limits allow you to buy a single-family home up to $912,187. But you still won’t be able to get a great home in a great part of town for that price.

However, if you get a duplex and put 20% down, you can afford $1,167,750. Can you get a great duplex in a great part of town for that. Absolutely! I can show you plenty of them right this minute.

And the same goes for triplexes at $1,411,562 and fourplexes at $1.754,250.

For now, these limits only apply to loans originated between July 1, 2007 and Dec. 31, 2008. It may or may not be extended beyond this year. But I can tell you for sure, if I was going to buy a duplex, triplex or fourplex and put at least 20% down, this sure would make me happy. And in fact, I sent this exact information out this afternoon before posting it here to two of my own clients who are looking to buy this type of property.

Is the Westside different?

Some others are starting to take notice of a trend that's becoming apparent with Westside L.A. real estate and that I began to chronicle in January. That is, Westside real estate is weathering the storm much better than the rest of L.A. This is not to say that things are totally rosy on the Westside. If you bought a condo in 2005, it's probably worth about the same as it was then. But the flood of foreclosures that's pulled down other parts of the city just hasn't hit the Westside.

Here's a recent post from the Sweet Digs blog: Is Real Estate Different in the Westside?

And here's the link to my original January posting that puts some solid numbers to this phenomenon: Tons of L.A. Foreclosures -- except on the Westside

Terra Firma LA featured on Sweet Digs

Redfin's outstanding residential real estate blog about Los Angeles, Sweet Digs, has written a lengthy post featuring me and my advice about how to sell your home fast in this market. To check it out, CLICK HERE

Top 10 Beverly Hills homes for sale

OK, so here’s my Beverly Hills list. Location gets a big premium for me in Beverly Hills, because there’s lots of places that aren’t as nice – even north of Sunset. That said, there’s enough great homes in the best parts of BH, that eventually it becomes all about the houses.

1) $25 MILLION – 5 Beds, 12 Baths – Super English Tudor home that is just a joy to be in and around, whether you’re inside or outside in the fabulous gardens, putting green, pool or tennis court. Great library, master, theater. Totally awesome. It’s actually a bit overpriced, but in the end, I had to put it No. 1.

2) $9.7 MILLION – 6 Beds, 8 Baths – Lush landscaping for a 1920s Spanish that’s been completely updated. Fabulous details.

3) $32 MILLION – 5 Beds, 7 Baths – This is a big, elegant Country French property with a lot of outside area and super rooms.

4) $8.7 MILLION – 6 Beds, 6 Baths – Superb Mid-Century Modern that’s been updated with magnificent details and finishings. It just exudes modern sophistication.

5) $25 MILLION – 6 Beds, 9 Baths – Brand new Mediterranean that isn’t the gaudy type. It’s tasteful, classic and has amazing views and great details.

6) $10 MILLION – 5 Beds, 9 Baths – Another new Mediterranean that was over-priced but has come down dramatically in price and is now a great buy.

7) $23.5 MILLION – 5 Beds, 9 Baths – Great newer traditional with huge lawns, the kind where you can easily envision the Kennedy’s playing touch football.

8) $29 MILLION -- 10 Beds, 15 Baths – This traditional has come down quite a bit and now is worth considering. It’s a huge house with tons of land. Huge master. Huge playroom.

9) $7.3 MILLION -- 7 Beds, 8 Baths – Really great feel to this updated home with some great finishings. Downgraded slightly for location.

10) $9.2 MILLION -- 6 Beds, 7 Baths – Great flats home. Traditional architecture. Nice finishings. Nice backyard. Nice flow.

***SPECIAL OVER $100 MILLION CATEGORY***

1) $165 MILLION -- 29 bedrooms, 40 bathrooms -- Hmm, let's see. Fleur de Lis in Bel Air for $125 million or the former Hearst mansion in Beverly Hills for $165 million? I know which one I'd pick (and why), but you'll have to ask me to get an answer.

Top 10 Homes for sale in Bel Air

The Best of Bel Air. Here are my current Top 10 homes currently for sale in Bel Air. This is obviously personal preference. But they are evaluated for what you get for the money, including interior, exterior, location, and more. Obviously, with an $85 million home you’re getting much more than an $8.5 million home. But are you getting 10 times more. Sometimes you are. But sometimes you aren’t. That’s why I put together these lists. And for the first time ever, I’m publishing them on the internet. So here goes.

1) $9 MILLION – 6 Beds, 7 Baths – Great, lower Holmby Hills location. This traditional estate is newly constructed and has beautiful finishings and really fantastic master baths. Overall, just a great feel and a great combination of features.

2) $10 MILLION – 6 Beds, 8 Baths – New Mediterranean home is really 1A, with great details, great pool, but a small lot.

3) $40 MILLION – 33 Beds, 41 Baths – This 1980s Mediterranean is a bit ostentatious, but is a great deal now that the price has returned to earth. You just might want to tone it down a bit.

4) $24 MILLION – 7 Beds, 12 Baths – This super cool estate has amazing features and really feels like classic Bel Air with an amazing den, koi ponds, 9-hole putting green, tiled pool, onyx floors, a cabana and more.

5) $7.4 MILLION – 7 Beds, 11 Baths – I love this house. Great rooms. Huge wine cellar. You’ll have to love 1990s style, and be able to deal with the location. But otherwise, you’ll get a lot for your money.

6) $6.2 MILLION – 5 Beds, 7 Baths – Great 1990s Mediterranean that has a lot of style without being gaudy. Great pool, but the lot’s a bit small. Love the kitchen and the entryway.

7) $6.5 MILLION – 5 Beds, 7 Baths – French chateau has some really special rooms, waterfalls, nice landscaping. I think the back patio needs some updating, though.

8) $9.7 MILLION – 7 Beds, 9 Baths – This Bel-Air Crest Mediterranean feels a bit cold to me, but it’s got a lot of great stuff for the money.

9) $19.8 MILLION – This one could be higher. It’s nice enough. It’s just not special and is a bit overpriced. If the price comes down it could rise rapidly.

10) $85 MILLION – 10 Beds, 13 Baths – Make no mistake, you are paying for land with this one – 7 acres of it. The house is nice enough, but not stunning and a bit outdated. Lots of land, though.

***SPECIAL OVER $100 MILLION CATEGORY***

1) $125 MILLION – 12 Beds, 15 Baths – Great place. I thought it deserved to be in a class by itself, frankly.

Selling Fast in a Down Market

Selling quickly in this market can be very difficult. But it can be done. I did it this week once again. 3 weeks -- and we got nearly full price.

The key is to know your competition in the neighborhood and value your comps differently.

Right now, the inventory is so large, and there's so few buyers. To sell QUICKLY, your home must stand out. The No. 1 way to make it stand out is price. When there's too many homes on the market, price trumps all. Everybody's looking for a bargain.

To do this, you must have a seller who not only wants to sell fast, but is willing to look at comparable sales in a way that reflects the current market realities.

What do I mean? Two things.

First, in the case of the condo I sold this week in West Hollywood, recent sales suggested the condo was worth somewhere in the $370s. But there were already tons of similar condos available in that price range that weren't selling. If we had priced it around there, we would have had another condo that wasn't selling. Plus, we knew it was a declining market so we knew any recent sales were instantly outdated (see below). So we priced it at $349,000, where we were the only game in town. We got tons of showings, several potential buyers, and got nearly full asking price in this gloom-and-doom market -- and we did it in 3 weeks.

Second, we know that the value of a property is a completely fluid and an entirely relative thing. There's no one way to determine the "value" of a property. And in a market like this, you have to look at comps differently than you did in a rising market.

For example, if the market in a neighborhood is generally sliding at a rate of about 10 percent, you have to apply that 10 percent looking forward. And you have to do it twice. So, if recent sales suggest that your house is worth $2 million, then your house TODAY is really worth 10% less, or $1.8 million. Those sales were in the past. Your value is now 10 percent less. But it's worse than that, really. You aren't selling your house today, you're selling it in the future, so your value going forward is really 10% less than that, or $1.62 million.

Obviously, that is a very generalized view. And again, there's no hard and fast rule for how to look at a property. And I'm telling you this to sell your property QUICKLY. Yes, it stinks. But remember how this principal worked almost exactly in reverse when the market was rising. People who looked at recent comps, knew their property was already worth more than the old comps. And then they priced it even slightly above that -- and many times they got it! Now, the reverse is true.

Again, this is about selling QUICKLY. If you don't price looking forward, the result is usually that the home will sit and will have to endure several price reductions before you sell. If you're willing to wait, you can sometimes get more for the house. But sometimes you'll get less. It's a gamble. And it takes time. Again, this is general and does not apply to every property or every neighborhood in L.A.