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Crumble crumble crumble

By CovfefeButDeadly following x   2011 Dec 20, 12:49am 16,863 views   48 comments   watch   nsfw   quote     share    


LA is a lot like the Bay area in terms of home prices. The first places to decline hard after the 2006/07 peak were the rough neighborhoods and the outlying places. Then slowly prices in nice older areas with commutes started to fall.
For Los Angeles, this meant much of the SFV, and places like West Covina, Whittier, Hacienda Heights, and Lakewood...all places with 45 minute to 1 hour rush hour commutes to DTLA.

Yet safe, trendy, or gentrifying neighborhoods within a 45 minute or less commute to DTLA or the Westside remained stubbornly high.

This is starting to change. The first change was in Woodland Hills/Tarzana. Then Encino. Then Sherman Oaks. The one factor those areas share is that they are close in distance but far in drive from the Westside. One factor they also share is subpar schools(except WH which is furthest drive).

As such, the areas with good schools and a close rush hour drive to job centers still stayed in a bubble. My understanding is that this is also the case with the SF Bay Area.

No longer.

http://www.redfin.com/CA/Burbank/1900-N-Screenland-Dr-91505/home/5318080

I do realize this was an all cash sale, and that the buyer is almost guaranteed to be a flipper who is going to chuck this back on the market at $500K or so. Nonetheless, thats one heavy fall from the peak, and theoretically dropped the pricing back into the range where a middle class family...say a family of 4 with a $90K annual income...could afford to buy it. In a safe neighborhood with good schools and a reasonable commute to job centers.

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9   JG1   ignore (2)   2011 Dec 21, 5:10am   ↑ like (0)   ↓ dislike (2)   quote   flag        

OP's house was a short sale, also, FYI.

And while there are surely many who care about how close one is to the west side, personally, I don't, there are plenty of jobs and nice areas away from the west side, and the traffic over there is horrible and getting worse, something I am reminded of when I venture over the hill. (Oh, and last time, there was also a crazy guy walking up and down the street shouting in everyone's face as they walked by, something that is a rare occurence to say the least where I live in the SFV.)

As evidence I am not alone, I wish I knew where I could easily locate it, but there was a report a number of years back (in LA Times?) about outlying counties in the area - e.g., Ventura - gaining population, while LA County lost.

10   edvard2   ignore (1)   2011 Dec 21, 5:13am   ↑ like (0)   ↓ dislike (2)   quote   flag        

I'm not as familiar with So-cal, but it seems to me that you all have gotten much steeper price declines than we in Nor-cal have- at least in regards to places like Silicon Valley and environs as well as SF. I have some friends there and it almost sounds like you can get a halfway decent place and pay a good 100k less for the equivalent house in the Bay Area. Could be due to LA not having as healthy of an economy?

11   PockyClipsNow   ignore (0)   2011 Dec 21, 6:40am   ↑ like (1)   ↓ dislike (2)   quote   flag        

thats it i'm finally ignoring 'Repo4Sale' OMG, no idea wtf he is ever talking about. Him and ArtimusMaxtor are both ignore permanently.

Historically I think LA has always been cheaper than SF/SillyValley. Every once I a while I meet people who move down here and think LA is a great bargain.

12   JG1   ignore (2)   2011 Dec 21, 6:53am   ↑ like (0)   ↓ dislike (2)   quote   flag        

Historically I think LA has always been cheaper than SF/SillyValley. Every once I a while I meet people who move down here and think LA is a great bargain.

Yes, I had some friend who had done just that. After living in a crack ghetto in SF they came down here and thought $2,500/mo for a 1 BR in Santa Monica was a bargain (it wasn't, landlord got lucky on them).

13   David9   ignore (0)   2011 Dec 21, 6:58am   ↑ like (0)   ↓ dislike (1)   quote   flag        

I agree. This property in Tarzana, where I rented for 5 years in the early 1990's just came on the market for 114K (not interested and using just as an example) This is down from 150K + for the last two years for a similiar property. I get email updates every day. These properties sold for around 100K for two decades that I know of. I'm not going to be the first to bite.
http://www.redfin.com/homes-for-sale#!market=socal&max_price=300000&region_id=2692&region_type=1&sf=1,2,3,4&status=1&uipt=4,3,2,1&v=6

14   thomas.wong1986   ignore (3)   2011 Dec 21, 6:59am   ↑ like (0)   ↓ dislike (2)   quote   flag        

PockyClipsNow says

Historically I think LA has always been cheaper than SF/SillyValley. Every once I a while I meet people who move down here and think LA is a great bargain.

Its actually the other way around. LA was more expensive historicaly than SF Bay Area... The only ritzy part of SFBA one could have compared to LA was Marin. Med price in Marin was around $350K back in 1997. Besides LA had more TV time exposure for decades vs SFBA. BayWatch.. need I say anymore ?

16   thomas.wong1986   ignore (3)   2011 Dec 21, 7:13am   ↑ like (0)   ↓ dislike (1)   quote   flag        

Prices! down 6-8% in SoCal... not yet finished !

Southland November Home Sales Rise; Median Price Still Below Year Ago

December 13, 2011

http://www.dqnews.com/Articles/2011/News/California/Southern-CA/RRSCA111213.aspx

17   edvard2   ignore (1)   2011 Dec 21, 7:20am   ↑ like (0)   ↓ dislike (2)   quote   flag        

thomas.wong1986 says

Its actually the other way around. LA was more expensive historicaly than SF Bay Area... The only ritzy part of SFBA one could have compared to LA was Marin. Med price in Marin was around $350K back in 1997. Besides LA had more TV time exposure for decades vs SFBA. BayWatch.. need I say anymore ?

I'd maybe agree with that- historically. But not these days. The Bay Area for all practical purposes has more or less turned into what LA used to be: LA used to have all the movie star glitz. Now we have Silicon Valley. Personally if not for fact that I'd have a hard time finding work down there I'd consider it because the weather is better down there.

18   SiO2   ignore (0)   2011 Dec 21, 7:44am   ↑ like (0)   ↓ dislike (2)   quote   flag        

"Its actually the other way around. LA was more expensive historicaly than SF Bay Area... "

It depends on what "historically" means I guess. In the last 20 years, LA was cheaper than Silicon Valley. I don't really know before then as I lived in the midwest.

Some people also think that nice houses in Palo Alto cost $300k in the mid 90s. That would have been a good deal, if it had actually been the case.

19   PockyClipsNow   ignore (0)   2011 Dec 21, 7:54am   ↑ like (0)   ↓ dislike (1)   quote   flag        

wow that Tarzana condo shows the disparity in price crash that exists between SFR and apt style condo.

That 1 bed apt style condo sold for 70K in 1989 and THAT WAS A PEAK before the cold war ended/defense bust crash 89 to 96.

So to be going at around 100k 25 years later means alot. If you bought it you could live there for about 700 a month (300 HOA+400 mortgage payment)
But it would rent for 1400 a month probably.

20   thomas.wong1986   ignore (3)   2011 Dec 21, 7:56am   ↑ like (0)   ↓ dislike (1)   quote   flag        

SiO2 says

Some people also think that nice houses in Palo Alto cost $300k in the mid 90s. That would have been a good deal, if it had actually been the case.

Yes, typically around $100-120/sq ft so $300K was a very sizable home in SCC.

Palo Alto ? There are better places than that elsewhere.

21   David9   ignore (0)   2011 Dec 21, 7:57am   ↑ like (0)   ↓ dislike (1)   quote   flag        

PockyClipsNow says

wow that Tarzana condo shows the disparity in price crash that exists between SFR and apt style condo.

That 1 bed apt style condo sold for 70K in 1989 and THAT WAS A PEAK before the cold war ended/defense bust crash 89 to 96.

So to be going at around 100k 25 years later means alot. If you bought it you could live there for about 700 a month (300 HOA+400 mortgage payment)

But it would rent for 1400 a month probably.

All true except I pay $950 rent for a bit smaller one bedroom 2 blocks away :-)

22   JG1   ignore (2)   2011 Dec 21, 8:46am   ↑ like (0)   ↓ dislike (1)   quote   flag        

David9 says

PockyClipsNow says



wow that Tarzana condo shows the disparity in price crash that exists between SFR and apt style condo.


That 1 bed apt style condo sold for 70K in 1989 and THAT WAS A PEAK before the cold war ended/defense bust crash 89 to 96.


So to be going at around 100k 25 years later means alot. If you bought it you could live there for about 700 a month (300 HOA+400 mortgage payment)


But it would rent for 1400 a month probably.


All true except I pay $950 rent for a bit smaller one bedroom 2 blocks away :-)

Absent other factors, based on the math, you should buy! Even Patrick might agree?

23   David9   ignore (0)   2011 Dec 21, 8:58am   ↑ like (0)   ↓ dislike (3)   quote   flag        

"Absent other factors, based on the math, you should buy! Even Patrick might agree?"

I could if I wanted too. I would prefer to buy a 2 bedroom 2 bath condominium. I have a good job in Ventura county, so, Woodland Hills, Tarzana, and Sherman Oaks is about it.

I still have a nearly paid for property in Dallas, yes, much in part to this blog, by not buying in a bubble area in 2006. So, it is currently vacant, I have been 'working' via a hired manager to redo the counters, paint the unit, tile the floors, and the next and final project is too carpet so I can rent that unit out until it is more of a sellers market (if ever, I know)

Also, I would actually prefer to buy in that complex as they had earthquake insurance after the 1994 Northridge quake and spent $2 million retrofitting. There are third floor units with city light views. That is what I really want..

But yeah, that complex could fetch at least $1,000 a month for a one bedroom.

24   thomas.wong1986   ignore (3)   2011 Dec 21, 9:02am   ↑ like (0)   ↓ dislike (1)   quote   flag        

edvard2 says

I'd maybe agree with that- historically. But not these days. The Bay Area for all practical purposes has more or less turned into what LA used to be: LA used to have all the movie star glitz. Now we have Silicon Valley. Personally if not for fact that I'd have a hard time finding work down there I'd consider it because the weather is better down there.

Certainly true that SV has replaced LA with the glitz. But SV has been around for decades. 1975-2000 were indeed the boom years given we grew to over 400 public companies, but now declined to 200 with a shrinking local work force.

25   CommenCents   ignore (0)   2011 Dec 21, 9:16am   ↑ like (0)   ↓ dislike (1)   quote   flag        

The hard part about predicting is that the market is rigged. In the end fundamentals always win. But it can be frustrating to wait for market fundamentals to kick in.

Houses will bottom and begin to increase when the following happens.

- Income begins to go up and unemployment goes down. Currently 11%+ in L.A. The Medium household income in Burbank was $66k in 2009. With a meager 3.5% down you could barely afford a $300,000 house. So the market would tell us that's where prices are going.

- Pending REO, and foreclosure eg: Shadow Inventory need to be cleared out national. These are home that banks won't sell or foreclose on. I read that Beverly hills has like 100+ Properties that could be sold as reo's or at auction, but only like 5 were sold.

The banks are trying to prop up the market but it won't work. And don't forget you need cash to get a mortgage now. 20% is standard. You can get away with lower DP but it's getting harder.

And also notice that these are cash buyers. Speculators and bottom feeders trying to time to the market. Meaning that one wiff of crises and they are gone.

A few BS points. It's laughable that Silicon Artificial alley thinks they are some how isolated. Most of Silicon Valley wealth is held in stock and if you think your industry is not hurting just look at the recent failed IPO's of Zygna and Groupon.

More BS points. When a house drops in value I always hear really dumb arguments, like well it's close an airport, or hey our schools are better, or well that house is not on the westside. Pure Realtor propaganda taken right of the NAR handbook. This house dropped $293k since 2006 so take the value of your Million dollar burbank home and minus it by 60%. Period. This house sold for a price per sq foot of $229, any Appraiser or Realtor will use this house to comp other houses with in a 1/4 to 1/2 radius.

26   JG1   ignore (2)   2011 Dec 21, 9:28am   ↑ like (0)   ↓ dislike (1)   quote   flag        

CommenCents says

This house dropped $293k since 2006 so take the value of your Million dollar burbank home and minus it by 60%. Period.

Do you have any examples of houses in Burbank that were $1 million in 2006 and are now selling for $400K?

27   HousingWatcher   ignore (4)   2011 Dec 21, 9:56am   ↑ like (0)   ↓ dislike (1)   quote   flag        

CommenCents says

And don't forget you need cash to get a mortgage now. 20% is standard.

No, not really. FHA is only 3.5% down.

28   CovfefeButDeadly   ignore (5)   2011 Dec 21, 10:01am   ↑ like (0)   ↓ dislike (1)   quote   flag        

JG1 says

CommenCents says

This house dropped $293k since 2006 so take the value of your Million dollar burbank home and minus it by 60%. Period.

Do you have any examples of houses in Burbank that were $1 million in 2006 and are now selling for $400K?

His posting was rife with hyperbole and you want to act like you have a "gotcha" based on one of the exaggerations?

29   David9   ignore (0)   2011 Dec 21, 10:52am   ↑ like (0)   ↓ dislike (1)   quote   flag        

"Do you have any examples of houses in Burbank that were $1 million in 2006 and are now selling for $400K?"

um, yeah, almost. Took me 3 minutes on redfin searched for 400 - 550k did a quick scroll down.

asking 490k, sold for 859k in 2007 (What an idiot, Burbank adjacent too)

http://www.redfin.com/CA/North-Hollywood/5437-Clybourn-Ave-91601/home/5295590

Also, so true... "The hard part about predicting is that the market is rigged" ...

30   JG1   ignore (2)   2011 Dec 21, 11:03am   ↑ like (0)   ↓ dislike (1)   quote   flag        

David9 says

"Do you have any examples of houses in Burbank that were $1 million in 2006 and are now selling for $400K?"


um, yeah, almost. Took me 3 minutes on redfin searched for 400 - 550k did a quick scroll down.


asking 490k, sold for 859k in 2007 (What an idiot, Burbank adjacent too)


http://www.redfin.com/CA/North-Hollywood/5437-Clybourn-Ave-91601/home/5295590


Also, so true... "The hard part about predicting is that the market is rigged" ...

OK, except it hasn't sold yet and is a short sale, which are notoriously listed low to attract offers to get approved. (Quick and dirty Redfin comps seem to indicate FMV is mid $500s.) Since it is not listed as an approved short sale, I assume the bank has not signed off on this sale price, and it may in fact sell for less or more than that amount. Also, as you point out, isn't quite in Burbank - although very close - and isn't a 60% haircut either, even at the list price. Also, it's listed as a multi-family.

My point is I was looking to possibly buy in Burbank not all that long ago, and my price point had me looking at plenty of houses which were about a million at the peak - and none of them were selling for $400K - more like $650-800K.

31   propmgrjay   ignore (0)   2011 Dec 21, 12:37pm   ↑ like (0)   ↓ dislike (2)   quote   flag        

John Bailo says

With Cali prices coming down to the range of "regular places" the next generation could start waxing up their surfboards and figuring...hey, I could have my cheapass suburban home AND year round sunshine and the beach.

I wouldn't count on that being a long term trend... We're running out of places where we still have room for more urban sprawl... And although the recession/housing collapse, as much as it has hurt us, has also provided some great pricing opportunities, if the Sacramento gets their way and forces higher population densities across the state, the idea of affordable single family homes in California will end up going the way of the dinosaur...

32   CovfefeButDeadly   ignore (5)   2011 Dec 22, 12:23am   ↑ like (1)   ↓ dislike (0)   quote   flag        

propmgrjay says

John Bailo says

With Cali prices coming down to the range of "regular places" the next generation could start waxing up their surfboards and figuring...hey, I could have my cheapass suburban home AND year round sunshine and the beach.

I wouldn't count on that being a long term trend... We're running out of places where we still have room for more urban sprawl... And although the recession/housing collapse, as much as it has hurt us, has also provided some great pricing opportunities, if the Sacramento gets their way and forces higher population densities across the state, the idea of affordable single family homes in California will end up going the way of the dinosaur...

LOL are you srsly using the "They aren't making anymore land" argument?

33   David9   ignore (0)   2011 Dec 22, 1:01am   ↑ like (0)   ↓ dislike (2)   quote   flag        

General response on my part. Having lived in Southern California most of my adult life, and being away only from 2006 thru 2009, 2 years ago, there were plenty of apartments to choose from, and 1 year ago, there were plenty of apartments to choose from. Currently, the complex I live in is trying to rent apartments for less than what I am paying. I have been there over 1 year and they have not raised my rent. A first in my life.
Not that traffic is 'good' by any means, but to me it does not seem as gridlocked. In my general view, there seems to be a bit less people here, so, yes, we can probably manage a few more surfers.

34   thomas.wong1986   ignore (3)   2011 Dec 22, 1:30am   ↑ like (0)   ↓ dislike (1)   quote   flag        

dodgerfanjohn says

LOL are you srsly using the "They aren't making anymore land" argument?

Sure sounds like some are still pushing that nonsense..

35   thomas.wong1986   ignore (3)   2011 Dec 22, 1:39am   ↑ like (0)   ↓ dislike (1)   quote   flag        

JG1 says

Do you have any examples of houses in Burbank that were $1 million in 2006 and are now selling for $400K?

Crap happened in the past and will happen once again, except this one will be much larger...by 2015-17 we will be much closer to the tally of losses and there wont be much of an appetite to overspend on housing.

County Home Prices Down Nearly 20% Since 1990
VENTURA COUNTY ROUNDUP
October 10, 1995

http://articles.latimes.com/1995-10-10/business/fi-55491_1_county-home-prices

"Among the communities hardest hit were parts of Hollywood, down 45.1%; Santa Monica, off 39.6%, and Beverly Hills, down 37.8%."

36   CommenCents   ignore (0)   2011 Dec 22, 3:38am   ↑ like (1)   ↓ dislike (1)   quote   flag        

JG1 says

This house dropped $293k since 2006 so take the value of your Million dollar burbank home and minus it by 60%. Period.

Do you have any examples of houses in Burbank that were $1 million in 2006 and are now selling for $400K?

http://www.zillow.com/homedetails/1314-N-Cordova-St-9761-Burbank-CA-91505/20062462_zpid/

Our good friends at Zillows said this home was worth $1.2 Million at the peak of the market. The house just sold for $544K. This house is a mile south of the Airport house above. Price per Sq is even less at a ridiculous $157 a sq. Wow.

Banks, appraisers, and even Realtors will have no choice but to take these comps into consideration when setting price. The schools district hold an API score in the high 800. That's almost in the top 10tenth percentile. This is a place where people want to live. And still you see prices crumbling.

This is truly a game changer.

37   JG1   ignore (2)   2011 Dec 22, 4:43am   ↑ like (0)   ↓ dislike (0)   quote   flag        

CommenCents says

http://www.zillow.com/homedetails/1314-N-Cordova-St-9761-Burbank-CA-91505/20062462_zpid/
Our good friends at Zillows said this home was worth $1.2 Million at the peak of the market. The house just sold for $544K. This house is a mile south of the Airport house above. Price per Sq is even less at a ridiculous $157 a sq. Wow.

Thanks, but if you're going to rely on Zillow, they also say it's worth $700K today, regardless of what, or under what circumstances, it sold for. Redfin quick and dirty comps say it's worth even more than that. I note it's a multi-unit, not SFR, and it and its immediate neighbors are visually unappealing from the street view. (E.g., this isn't a place I would have included in my aforementioned house search.) I'll see if I can pull the title report and see if there was anything unusual about the sale.

38   thomas.wong1986   ignore (3)   2011 Dec 22, 8:11am   ↑ like (0)   ↓ dislike (0)   quote   flag        

CommenCents says

Price per Sq is even less at a ridiculous $157 a sq. Wow.

Instead of ridiculous, i would use the term 'more reasonable'. Consider what prices were before the bubble and factor in inflation may well get you to below $160/sf. Actual results are below.

Prebubble price say $280K + 30-35%% = $363K
http://www.westegg.com/inflation/

Price History
Date Description Price % Chg $/sqft Source
10/20/2011 Sold $544,500 94.5% $157 Public Record
03/24/1999 Sold $280,000 -- $80 Public Record

39   JG1   ignore (2)   2011 Dec 22, 9:53am   ↑ like (1)   ↓ dislike (0)   quote   flag        

CommenCents says

http://www.zillow.com/homedetails/1314-N-Cordova-St-9761-Burbank-CA-91505/20062462_zpid/

Our good friends at Zillows said this home was worth $1.2 Million at the peak of the market. The house just sold for $544K. This house is a mile south of the Airport house above. Price per Sq is even less at a ridiculous $157 a sq. Wow.

Except that it appears your or I could never buy this property. It was never on the MLS, and I pulled the deed - it was sold from Person X, Successor Trustee of (Deceased) Person Y's Trust, to Person X. All in the family.

Any other 60% drops from ~$1 million in Burbank anyone found?

40   CovfefeButDeadly   ignore (5)   2011 Dec 22, 10:27am   ↑ like (0)   ↓ dislike (1)   quote   flag        

JG1 says

CommenCents says

http://www.zillow.com/homedetails/1314-N-Cordova-St-9761-Burbank-CA-91505/20062462_zpid/

Our good friends at Zillows said this home was worth $1.2 Million at the peak of the market. The house just sold for $544K. This house is a mile south of the Airport house above. Price per Sq is even less at a ridiculous $157 a sq. Wow.

Except that it appears your or I could never buy this property. It was never on the MLS, and I pulled the deed - it was sold from Person X, Successor Trustee of (Deceased) Person Y's Trust, to Person X. All in the family.

Any other 60% drops from ~$1 million in Burbank anyone found?

I don't think anyone really cares about your "gotcha" pulled from an over the top posting rife with exaggeration.

41   JG1   ignore (2)   2011 Dec 22, 1:42pm   ↑ like (0)   ↓ dislike (2)   quote   flag        

dodgerfanjohn says

I don't think anyone really cares about your "gotcha" pulled from an over the top posting rife with exaggeration.

Then focus on my other posts, "Be Nice Or Take It Outside", or assume I was addressing the exaggerating poster, and not you.

42   B.A.C.A.H.   ignore (0)   2011 Dec 22, 2:14pm   ↑ like (1)   ↓ dislike (1)   quote   flag        

thomas.wong1986 says

But SV has been around for decades. 1975-2000 were indeed the boom years given we grew to over 400 public companies, but now declined to 200 with a shrinking local work force.

It is different This Time. As China gets more politically unstable, more elites from over there have eyes cocked on Fortress Communities on the Left Coast. Hong Kong was a small city-state "kinda place", not really big enough to make that kind of stampede the 1990's. But one in five in the world nowadays live in China, with a lot more elites to stampede into places like The Fortress compared to only Hong Kong in the 1990's.

So the shrinking local work force is not entirely relevant for The Fortress.

43   wjw   ignore (0)   2011 Dec 22, 3:42pm   ↑ like (1)   ↓ dislike (1)   quote   flag        

Graph above is great. Remember, more trouble due, as boomers in the midst of retiring, then dyin', the next generation's status as virtual jobless (Starbucks a job?). Where's the demand support. Good luck y'all.

44   JodyChunder   ignore (3)   2011 Dec 22, 9:45pm   ↑ like (0)   ↓ dislike (1)   quote   flag        

B.A.C.A.H. says

So the shrinking local work force is not entirely relevant for The Fortress.

BACAH buddy I have been around probably longer than you if you counted your years up in dog years and than took that and times it by 2. I can tell you that all life looks like to me FOR SURE is one big loopty loop. nothing changes. toys are better.

45   B.A.C.A.H.   ignore (0)   2011 Dec 23, 2:53pm   ↑ like (1)   ↓ dislike (1)   quote   flag        

JodyChunder says

ACAH buddy I have been around probably longer than you if you counted your years up in dog years and than took that and times it by 2

If I understood your math, I would doubt your assertion. But I don't understand your math.

46   JodyChunder   ignore (3)   2011 Dec 23, 2:55pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

i am old thats all. you seem young and slick to me in some of the stuff you say.

47   B.A.C.A.H.   ignore (0)   2011 Dec 23, 3:08pm   ↑ like (0)   ↓ dislike (2)   quote   flag        

Jody, I turned 50 last month. Maybe you think that's young and slick. I dunno.

48   JodyChunder   ignore (3)   2011 Dec 23, 3:40pm   ↑ like (0)   ↓ dislike (1)   quote   flag        

i apolofize bacah. you struck me as a young cavelier sort. take it as a compliment.

i still have many years on you.

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