patrick.net

I would never want to live in LA. Too many damn vampires.

http://www.youtube.com/embed/CAmQjOcplf8

nw888 says

I was hoping to buy in 2012, but maybe 2014 will be better?

my opinion 2014 will be worse. Inflation will be higher interest rates will be higher there will be more people employed and more competition.
House prices may be lower or maybe not that's anyone's guess.

The best time to buy was probably 2009 and it's gotten progressively worse since then.

nw888 says

We're looking for a $1.4-2.2M

Please provide the following information:
1. household income
2. investable assets
3. age

It is hard to comment without knowing anything about your financial situation. Do you have $2M in assets and a salary of $50K or do you have $500K in assets and a salary of $500K?

bubblesitter says

Time is on your side.

This potential buyer and anyone saying "time is on your side" should post their age... Then let average life span determine if that is really true :)

Time IS on your side. As I mentioned earlier, prices have been falling steadily in Japan for over 20 years. Anyone who bought even after prices had fallen 30% from the 1989 peak are 30% to 50% under water today.

The US could very well be heading into a multi-decade period of deflation similar to what Japan has seen. If this is the case, the numbers won't work out for anyone. Not unless their time horizon is on a 30 or 50 year range.

LAO says

This potential buyer and anyone saying "time is on your side" should post their age... Then let average life span determine if that is really true :)

Now you are trying to rationalize your decision. I just want the asset that will not go down in value the next day. I can rent the same house instead of buying. How does age matters if you are living the same house as a renter or an owner? Huh?

LA and rest of SoCal have dropped nicely...

http://www.housingbubblebust.com/OFHEO/Major/SoCal.html

http://www.dqnews.com/Articles/2012/News/California/Southern-CA/RRSCA120215.aspx

http://www.dqnews.com/Charts/Monthly-Charts/OC-Register-Charts/ZIPOCR.aspx

Southland Home Sales Flat, Prices Edge Down

Februry 15, 2012

La Jolla, CA---The Southland housing market started 2012 with slightly higher sales and slightly lower prices despite record-low mortgage interest rates. Home sales skewed toward the lower price ranges, which is normal for January, as many traditional buyers retreated and investors snapped up homes at a record level, a real estate information service reported.

A total of 14,523 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 24.5 percent from 19,247 in December, and up 0.4 percent from 14,458 in January 2011, according to DataQuick of San Diego.

Sales have increased year-over-year for five of the last six months. The sharp sales decline from December is normal for the season. Last month’s sales count was 17.8 percent below the 17,671 average for all the months of January since 1988.

A total of 669 newly built homes sold in January, the lowest number for any month since DataQuick started keeping track in 1988.

“January numbers have never been very good at providing an indication of what upcoming activity will be like. For that we need to wait until March. What we can determine is that the mortgage market remains dysfunctional. It will be interesting to see how a potential surge of refinance activity plays into the purchase market once the administration’s new guidelines are implemented,” said John Walsh, DataQuick president.

The median price paid for a Southland home last month was $260,000, down 3.7 percent from $270,000 for both December and January last year. The median was the lowest since $249,000 in May 2009. The median’s low point for the current real estate cycle was $247,000 in April 2009, while the high point was $505,000 in mid 2007. The peak-to-trough drop was due to a decline in home values as well as a shift in sales toward lower-cost homes, especially inland foreclosures.

Distressed sales made up more than half of January’s resale market.

Mikhail says

Time IS on your side. As I mentioned earlier, prices have been falling steadily in Japan for over 20 years. Anyone who bought even after prices had fallen 30% from the 1989 peak are 30% to 50% under water today.
The US could very well be heading into a multi-decade period of deflation similar to what Japan has seen. If this is the case, the numbers won't work out for anyone. Not unless their time horizon is on a 30 or 50 year range.

Today is 2012... by 2015-16 (not that far away!) will mark the 10 years from the housing bubble peak (2005).. but we see we are no where near the bottom or fixing the housing issue... so 2005 plus 15-20 years may not be out of the realm of possibilities, just to get back to the norm we once saw once before in early-mid 1990s. Yes, very much like Japans deflationary years.

The Japan comparison is informative, but only to a point, right? Japan has markedly different demographics, among other things obvious and not so obvious. I don't think we'll see a 20 year slide from here - if only bc the echo-boomers are going to need a place to live. Lots of them, especially in nicer areas, will have strong parental $backing$. I'd love to see continued price dropping, but I don't think the powers that be would allow such a slide...

LAO says

This potential buyer and anyone saying "time is on your side" should post their age... Then let average life span determine if that is really true :)

Like everthing it does take time.. education, job, career, first home, etc etc. Patients and focus pays off.

nw888 says

Yeah, it's frankly ridiculous. I'm starting to feel the same way about moving somewhere nice that is a lot cheaper. My wife and I could live in a stellar home, work 2 days a week, and then spend

I want this badly as well.

Im tired. The rat race is an unwinnable game for those not in the 0.01% It time for me to get out of the Bay Area apocalypse.

Where are all these great deals on rental homes that everyone on this site lives in? I want a million dollar home that rents for $2500 too!

Mikhail says

The US could very well be heading into a multi-decade period of deflation similar to what Japan has seen.

Unlikely. Gas, food and rent prices are increasing. Salaries are stagnant. Inflation is the only tool that the US government can use anymore - insolvent? Change the water level.

The responses in this thread are sorta off the wall. OP has a very specific situation most of us don't fall into, and the answer is relatively simple with one caveat:

OP should buy only if he is ok taking a loss when he sells.

Provided that caveat, the amount of money he is talking in San Marino and South Pas just doesn't go far. That leaves OP with three options IMO:

1.) Buy a smallish house in S. Pas anyway.

2.) Rent in S. Pas

3.) Buy in great areas nearby where your money will go farther...Arcadia or La Canada. Tremendous schools, nice upscale areas.

First: It is very hard to catch the exact top or exact bottom of any market (stock or real estate). If you catch most of the swing you are doing well. If you wait too long you miss the entire market move. Most investors or traders who try and catch the exact bottom usually end up with nothing. I have never been able to catch an exact bottom, but I can get close.

Second: It is hard to get a good price by watching just one property. You will get a good price by putting out many "ridiculous" offers until you flesh out the seller who is realistically in touch with this market.

I decided last summer to buy a beach front condo in Ventura County as a second home. I made several unsuccessful offers over the summer and fall, and had some near deals. Finally, in the dead of winter I made an outstanding deal and closed a condo at a price lower than the seller paid 20 years ago.

I have done this in many real estate market swings. I bought and sold a second home in Lake Arrowhead in the 2000 swing, and bought and still own my home in Westlake Village in the 1987 swing. I have bought and sold many commercial properties over three decades the same way.

Each time I have to spend many months making offer after offer just to find a seller. You need an agent with a thick skin, or several of them you can wear out along the way. You also need to just be patient and wait.

Each time I never knew if the market would ever recover, and each time it did. This time again, I do not know if this market will ever recover. Even if it does not, I really like the condo and will just keep it if this market is the "new normal."

Vbcoder-That's really good advice. Thank you.

Are you investing in a house or are you buying a home?

edvard2 says

a nice second tier city- like Austin TX

Dallas is better. Money goes further and you get a lot better stock of houses. I have a rental in Fort Worth.

nw888 says

Typically, people in that situation have millions to spend because they worry MORE about bubbles, where there money is going, and how their assets are doing. Not worrying about things like this is one of the reasons most people never find themselves in that situation.

Word.

But the bubble is over dudes. There is calculating risk and there is analysis paralysis. The point is this jockeys already willing to sink 2 mill for a dwelling. That right there puts you in loco territory. It's like saying you are worried that paying forty dollars for a gallon of milk instead of 34 dollars for the same gallon when you know its insane either or. I don't want to overpay too much, but I am still willing to overpay by a lot.

So no residence is worth 2 millions dollars? It could be a mansion with every posh finish and upscale add on you could possibly think of, and 100 acres of land with a pool and pool house and guest house and theres no way that residence will be worth 2 million? Some people say some really dumb things on here.

"Theres no way wood and brick can ever cost 2 million dollars!"

thomas.wong1986 says

LA and rest of SoCal have dropped nicely...

True, and a few sales occur. However, I have two more properties that have magically appeared, disappeared, and reappeared on the MLS. The higher end one, I thought, yeah, someone bought that one. The cheap one, I thought, yeah, someone bought that one. But no, the magical mystery magician whoever he or she is has made them reappear on the market.

http://www.redfin.com/CA/Encino/5301-Balboa-Blvd-91316/unit-K2/home/4777314

http://www.redfin.com/CA/Tarzana/18530-Hatteras-St-91356/unit-302/home/4061045

woppa says

So no residence is worth 2 millions dollars?

What makes something worth 2 million dollars? If I can get forty people to spend one hundred dollars on a kit kat bar, does that make kit kats worth 100 dollars? If I can sell someone the Brooklyn Bridge for 50K does that make it worth 50K?

No one single residence is worth 2 million dollars unless it is sitting on oil rich land and you have mineral rights.. Or maybe if it comes with a fleet of robots that will massage you and blow you every morning.

JodyChunder says

If I can get forty people to spend one hundred dollars on a kit kat bar, does that make kit kats worth 100 dollars?

Yes. It does :)

And to further your example in the other direction, if you have a piece of Gold in your hand that you think is worth $1000.- but nobody wants to give you 1000 for it....then its not worth 1000.-

Whatever it is...its worth what somebody is willing to pay for it. As simple as that.

When you are stuck on the island and have no food that same exact kit kat bar could be worth 2000 dollars to somebody.

:)

Really? This is an issue?:
http://www.redfin.com/CA/Redondo-Beach/638-Avenue-C-90277/home/7706089

http://www.redfin.com/CA/Hermosa-Beach/3201-Tennyson-Pl-90254/home/6705877

http://www.redfin.com/CA/Manhattan-Beach/3617-Pacific-Ave-90266/home/6708747

http://www.redfin.com/CA/Playa-Vista/13048-NORTH-ICON-Cir-90094/home/40191191

http://www.redfin.com/CA/Marina-Del-Rey/134-Topsail-Mall-90292/home/6783262

http://www.redfin.com/CA/Venice/46-Wavecrest-Ave-90291/home/6733930

These are all nice places at the lower end (or less) of what you are willing to pay.

SubOink says

Yes. It does :)

No, it doesn't. It means there is an extreme mania or exogenous factor distorting the relative equilibrium of the supply and demand curves. Historically, such extreme manias require facilitation by way of incentives or lax lending as in the case of our credit bubble from 1998-06 as desire to pay any price for something is not always enough to realize such gross distortions.

The island analogy is a perfect example of an extreme scenario. :-D

Waitingtobuy says

Really? This is an issue?:

I don't know about it being an issue, but those houses are Fugly, for one thing, and for another, they are smallish for the price and appear poorly built.

2nd one is pending in 6 days. looks like all cash

Hysteresis says

housing market doesn't care that you're impatient. it'll correct when it corrects. it's an incredibly slow process.

no, it'll really correct when politicians stop preventing the correction with all kinds of homeowners/banks bail outs.

and we have some control over politicians, it is an election year after all.

JodyChunder says

I don't know about it being an issue, but those houses are Fugly, for one thing, and for another, they are smallish for the price and appear poorly built.

I just picked out 6 random houses from RB to Venice whether they were pending or not to illustrate the point. Obviously, there are hundreds, if not thousands, of houses in LA that will satisfy the OPs requirements. As for style, that is in the eye of the beholder. And qualitywise, hard to tell from the pics, but if you really want quality, you are looking in the wrong state. Very few stone or brick construction homes in California because of earthquake codes.

I dont consider 3848 sq ft (Playa Vista) to be smallish. Maybe in Victorville, but not near the ocean.

JodyChunder says

I don't know about it being an issue, but those houses are Fugly, for one thing, and for another, they are smallish for the price and appear poorly built.

That's just silly! Those are amazing houses in an amazing location. Small? How big of a house do you need??

Definitely beats the cookie cutter style homes in Victorville that go for $120k a pop.

I only looked at the first 2...its not healthy to look at houses in that price range :)

Playa Vista, Venice, Redondo Beach??, Hermosa??, Manhattan Beach--all of these places you have listed are *not* LA. They are outlying areas that *might* appeal to some people, but Manhattan Beach and Redondo are like literally an hour to get most places actually in LA. The surface streets are dreadful during morning/evening rush hour.

LA is Mid-City/Wilshire, Westwood, Hancock Park, Beverly Hills, Culver City, West Hollywood, Hollywood, and maybe a couple surrounding neighborhoods. Santa Monica probably. These areas are the heart of actual LA, where a majority of the jobs, culture, decent food, etc. are (just look at the 10 during morning commutes or weekend traffic and you will see both directions jammed between downtown and Santa Monica). You want to live in these neighborhoods? H'wood might get you under a mill if you love the crime and retardedness. Rest of these will be easily over a mill unless you are shopping for a 1000 sqft barfy '70s condo.

Because I live and work in these neighborhoods, my "commute" is literally 12 minutes and the gas money saved not idling stupidly and time I save are extremely value-added to my quality of life.

Philistine says

LA is Mid-City/Wilshire, Westwood, Hancock Park, Beverly Hills, Culver City, West Hollywood, Hollywood, and maybe a couple surrounding neighborhoods. Santa Monica probably. These areas are the heart of actual LA, where a majority of the jobs, culture, decent food, etc. are

That's nonsense. Those areas you described are exactly where you do NOT want to live.

Decent food? LOL. We have some of the best restaurants here in Calabasas, Agoura Hills, Westlake Village, Malibu. From Indian to Thai to BBQ. And no issues to park - room to breathe.

Some people like to live in area's that are actually nice. Where you can hike out your backyard and live close to the ocean. To get to the ocean from any of the area's above its a haul, you end up never going. When is the last time you went for a walk?

Well, I say that...because I am blessed and work from home so I don't have to live in car smog. I barely drive.

Still, I know many people that commute right into Hollywood. And they all say that its worth driving home to a nice area.

Just my 2 cents...

PS: Hollywood?? Now, there is a $hithole...

Completely concur. Hollywood is a total POS. And it emblematizies exactly why LA sucks. I guess we just think places like Calabasas, etc. are bland, quasi-suburban, everyplaces.

But there is always a Chili's/Target/Home Depot shopping plaza waiting for you around every corner. Always feels like home, no matter which one of those paint-by-number zipcodes you live in.

The reason we really like the Pasadena area is that it has a good amount of architectural buildings, is more or less centrally located, nice tree lined streets, and has good schools.

I love the idea of living out in the Malibu, which has a rural feel to it, but the commute would get old.

Hancock Park is great too, but is still insanely overpriced.

No matter the price or the area, the real point is that I refuse to pay the same or more than what the seller bought it for in 2006.

nw888 says

We're looking for a $1.4-2.2M house in the Los Angeles area

Philistine says

Playa Vista, Venice, Redondo Beach??, Hermosa??, Manhattan Beach--all of these places you have listed are *not* LA. They are outlying areas that *might* appeal to some people, but Manhattan Beach and Redondo are like literally an hour to get most places actually in LA.

The OP said LA area, not LA proper.

Philistine says

LA is Mid-City/Wilshire, Westwood, Hancock Park, Beverly Hills, Culver City, West Hollywood, Hollywood, and maybe a couple surrounding neighborhoods. Santa Monica probably.

OK, how about this in Hancock Park?:
http://www.redfin.com/CA/Los-Angeles/631-N-Mccadden-Pl-90004/home/7101139

Philistine says

These areas are the heart of actual LA, where a majority of the jobs, culture, decent food, etc. are

You forgot to mention crappy schools, bad air, surface street congestion, high crime rates, and plastic people.

Philistine says

Because I live and work in these neighborhoods, my "commute" is literally 12 minutes and the gas money saved not idling stupidly and time I save are extremely value-added to my quality of life.

My commute is 30 secs. I work from home. The OP never mentioned anything about his/her commute. Maybe they can clarify where they work, if they do.

Waitingtobuy says

My commute is 30 secs. I work from home. The OP never mentioned anything about his/her commute. Maybe they can clarify where they work, if they do.

I work from home mostly, but sometimes have to commute to the movie studios, which are mainly in Burbank or Culver City. My wife can work anywhere there is a hospital. I'd like to stay close to studios, but it's not detrimental. And the only reason we don't leave Southern California is because we have a lot of family here, and that is very important to us.

I am in the Internet business, work from home, and also have to go to the studios. I arrange my client visits after 1030. Last week, it took me 30 mins from the South Bay to get to the Paramount lot. Burbank would take 45 mins-1 hr on a good day...but it depends what your definition of sometimes is..if once a month, doable. If once/week, not.

JodyChunder says

nw888 says

Typically, people in that situation have millions to spend because they worry MORE about bubbles, where there money is going, and how their assets are doing. Not worrying about things like this is one of the reasons most people never find themselves in that situation.

Word.

But the bubble is over dudes. There is calculating risk and there is analysis paralysis. The point is this jockeys already willing to sink 2 mill for a dwelling. That right there puts you in loco territory. It's like saying you are worried that paying forty dollars for a gallon of milk instead of 34 dollars for the same gallon when you know its insane either or. I don't want to overpay too much, but I am still willing to overpay by a lot.

That's a very different statement from what you said before. Not worrying about a bubble because you have millions and not worrying about a bubble because it's over are very different standpoints. The first is ridiculous, and a sure fire way for someone with millions to soon become someone 'without' millions. The second is debatable. Is the hysteria that drove prices up rapidly over? Probably. Are some areas still overpriced and some sellers delusional? Also probably true. And if the hysteria is over than that's all the more reason to avoid buying in those areas.

When I'm on a project with a studio I will then have to be there 5 days a week, so commute is important to me. More and more I want to just work from home and not deal with this rat race anymore.

I just want a nice house, with a good size yard, a pool, a 15 minute commute, and under $400 a square foot. That price to me is still insane! I remember when the average price in Beverly Hills was $250 per square foot in 1999, and now it's something like $600+ still? South Pasadena with a good piece of land-1/4 to 1/2 acre is $6-800+ per square foot. It's out of control. I refuse to pay these inflated asking prices.

Maybe I'm asking too much and being unrealistic. I wish interest rates would go up so prices would be forced to come down further, but that won't be happening until at LEAST 2014 according to the fed. Maybe a crisis will force the issue....

"Maybe I'm asking too much and being unrealistic. I wish interest rates would go up so prices would be forced to come down further"

When interest start rising this time, you will be left at the gate looking for that "dream house" The market is in "recovery" per the time magazine report. Home Depot stock soaring, New Home Starts at a 2 year high, employment up, unemployment down, rents rising.
The spring buying season around Mar 15 to May 30, will be the best in years, and your selection of houses in your price range will get smaller and smaller.