The foreclosure ‘discount’: 45% in Glassell Park

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

I just finished putting together another collection of foreclosure listings for latimes.com, and it includes the house pictured at right. This one really tells a story. Details:

2117 W. Avenue 33, Los Angeles 90065. Built in 1922, three bedrooms, one bath, 978 square feet on a 2,500-square foot lot.

Prior peak sales price: Sold for $510,000 in February 2007.

Current listing price: $279,900.

Discount from peak sales price: 45.1%.

Agent’s description: ‘Bank owned ... House sits high above street level ... Nice quiet Glassell Park street. Raised foundation, hardwood floors.’

The Zillow ‘Zestimate’ on this house is $420,000. It’s going to sell for a lot less than that. I don’t mention that as a knock on Zillow -- I happen to believe their estimates are about as good as computer-driven estimates can get. I mention it to demonstrate that prices are falling so rapidly in this neighborhood that there is no way for Zillow’s computers to keep up. The information that this house is worth somewhere around $280,000 is still unknown to Zillow’s computers. It is still unknown to DataQuick. It is a shoe waiting to drop on this street, where people -- making the same calculations Zillow’s computer makes -- might still believe their homes are still worth in the low $400s, or the high $300s. This is a meltdown happening before our eyes.

Update: Reader Brady Westwater weighs in: ‘Both you and Zillow missed the point of this sale. This house is on a 2,500-foot lot (which is a substandard-sized lot) -- while all the other comps on are 6,000 - 7,500 foot lots. ... To say this shows the other houses have also declined to that price, when they are are on lots two and three times the size of this lot, is a clear factual error and should be corrected.’

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.