by stillrentinginLA ➕follow (0) 💰tip ignore
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Here is the redfin link.
http://www.redfin.com/CA/West-Hollywood/960-Larrabee-St-90069/unit-319/home/6817985
This one in the same neighborhood sold for $616 p sq ft in September.
681 sq ft $420,000 plus a $395 a month hoa fee
http://www.redfin.com/CA/Los-Angeles/1230-N-Sweetzer-Ave-90069/unit-313/home/7117870
Doesn't seem out of line compared to rents.
IO part of the mortgage is $900/mo., other costs run ~$500, for $1400/mo carrying cost.
Hollywood isn't something that's going to be offshored so I don't see it falling back to 90s pricing.
Odd that it didn't sell for $150K back in June I guess, something skeevy about that listing history.
NB: my "carrying cost" calculation doesn't include principal repayment, which I consider a form of savings.
Are you saying you should count an interest only mortgage payment when calculating rent vs. own?
Ignore the principal?
That's the exact same kind of crazy math that got us into this situation.
This condo would only rent for about $1200 right now. The HOA alone is $300. And its only 430 square feet, not even a separate bedroom.
Also, Hollywood is being off-shored. Do you know how many movies are going to Canada? Also hiring locals in places like New Mexico and Michigan where they have tax incentives. Most of working class Hollywood is unemployed.
LOL! What can you expect from glamor Hollywood? Bought at $100K sell at over $200K.
Maybe we all should send a well written letter telling the seller 'we all hope you gets ass cancer'.
It seems that the California Asses of Realtors (CAR.org) does exactly that.. counts only interest loans ARM in their affordability matrix.
I don't count principal repayments because when you sell the house you generally get that money back (unless you are underwater).
Which is why I consider it a form of savings. I made this mistake in 2000-2001, comparing full repayment vs. renting, and it dissuaded me from buying then. Ooops.
Curious.
Is anyone else out there in the Patrick.net universe not counting the principal repayment when calculating mortgage vs rent?
Ummm, not sure I would count principal as savings until 7-10 years in, since you are paying mostly interest up front. If you are selling the house in 5 years or less--which is many buyers--you barely break even. Depending on loan terms, you could sell in 10 years and still barely break even. Dont forget commissions and closing costs associated with the buy and sell transactions. All things that do not affect you if you rent.
And if you bought in 2003-7 you are probably losing some of that "savings". Which means the principal is not really savings at all, but an "investment," which is the dirty word that made housing what it is today.
LA is still full of itself. Prices are holding steady here--if not actually increasing. I hypothesize that there is a recent flood of 2007-fantasy-priced shadow inventory coming back on the market.
Not sure what stuff is actually selling for, other than my coworker just paid $495k for 900 sf. in the rattier part of West Hollywood (Fairfax area).
Oh, and we are like ground zero for unemployment in this country, so I guess LA LA Bucks must be paying for all this over-priced housing. I guess this really is the city of dreams.
Every dollar of principal you pay is one less dollar you owe, ie it goes directly to your net worth.
Just as a dollar of savings does. Plus it's one less dollar you're paying mortgage interest on.
I'm a proud renter and will be for the foreseeable future. Just sayin' that when doing rent-vs-buy calcs you shouldn't count principal repayment as a cost of buying, since unless you default on the loan you'll be getting the dollar back someday.
Give it time. The rental market here in L.A. didn't implode until the past few months. Before then, landlords refused to budge on rents, and units sat empty on my street for up to a year. One unit in my building has been empty for 7 months, and the landlord already dropped the price by $300. Trouble is, there are similar but better equipped units within a block that are already listed for $100 less, and they aren't moving either. To move the unit, he'll likely have to drop the price to at least $1450, which is actually about what it went for in 2000.
There are two foreclosed houses in my immediate vicinity, one that's been empty for about 14 months. A third apparent REO just vacated too, and now has a "sale or rent" sign up. And yet a block away, a flipper bought an ugly little house for $600k a few months back, and now he's trying to sell it for $1.2 million. Many buyers here are still simply deluded and detached from reality, and it will likely take a whole new round of buyers losing their shirts to finally drive home the fact that housing is not going to "rebound" any time soon.
In the mean time, enjoy the low rents. With 14% unemployment in L.A., they're likely to fall even more drastically as the new year starts (January is traditionally a big month for rental turnovers here) and landlords grow increasingly desperate to fill vacancies. I've lived here since the mid-90's, and I've never seen a rental market anywhere close to this one. So if you are trying to gauge rent to own ratios, the rental portion of that equation just keeps going lower.
Give it time. The rental market here in L.A. didn’t implode until the past few months....
I just did the math and my rent fell by 10%(for 1st year) just by moving out. 1 free rent + bigger place + better neighbourhood. Just go out and negotiate.
Not sure where you all live but the bubble is alive and well in Los Angeles. WOW, only 600 per sq ft!
960 Larrabee St, #319
Price: $259,000
Days on Market: 12
Beds/Bath: Studio/1 bath (430 sf)
Pitch: "If you're renting in WeHo, you can now afford to own. This completely renovated light and bright upper unit studio is in a prime pied-a-terre location."