Real Estate Price Predictions in Los Angeles City (Long Beach, Glendale: rental market, mortgage broker)

[JackSparrow]

Originally Posted by lacad

Yes but in West LA (90025 zip ) only 3 houses sold - statistically this is not much to show price changes.
This is also less of a high-end area.

Check Beverly Hills, Westwood, higher-end parts of SM -that is where there is less inventory than last year, more sales and typically higher prices when comparing to last year's dataquick data.

Stop trying to confuse these "people" with the facts. And inventory schminventory, The-Sky-Is-Falling™

[greggd]

There was a new home constructed in 2007 in Brentwood. Place is about 5,500 sq ft and was on the market for 6.2 million. Sat for about 3 months. Developer reduced the price to 5.9 mill. (10% reduction) 1- 2 months later, house sold. Not sure of the exact sale price but it did sell.

I know the sale price of the prior home/land, which was torn down, and estimated the construction costs. I would rough estimate developer made under a million, my guess is $750,000. He has another house up the road, smaller but same basic design & floor/yard plan, listed about a week ago.

With the ability to buy an existing home, tear it down, re-build, and sell for a profit all within 3 years, the westside market seems to be pretty strong.
The only difference was the 10% reduction he took and length of time it took to sell.

After the first house, he has the plans, which he is using, and he has some capital to use if he so chooses. It can only get cheaper to do the same thing.

I personally thought the house was overpriced. I did several walk throughs while it was going up and after completion. BUT, there are buyers that
will pay this amount AND as long as they exist, the market in West LA will
remain strong.

My question is how many people/% of homeowners bought in West LA on an interest only loan with the intent of living in a home they normally could not afford and flip it when the rate adjusts.

This is not a rich vs. poor comparison. It's about determining if interest only loans were used across the board... from a guy buying a house in van nuys for $400,000 when he really could only afford a $250,000 condo on a fixed rate, to a family who bought a $2,000,000 home that could really only afford a $1.2 mill house or even $4-5 mill when they could only swing a $2.5-3.5 mill house on a fixed mortgage.

[desertdawgx]

Comparing the health of the LA market to Beverly Hills is the dumbest thing i have ever heard.Less than 1% of the people in the world can afford Beverly Hills and I am pretty sure they don't blog on this board.Sales will be down 75% going forward as all the toxic loans have been elininated,this will crush the LA market.Homes in Compton been selling for 500k.Can you see FRAUD.

[Sorcerer68]

Originally Posted by desertdawgx

Less than 1% of the people in the world can afford Beverly Hills and I am pretty sure they don't blog on this board.

I can afford BH, I just don't like it. Why wouldn't we blog here?

[Axiom]

You also have to wonder how climbing rates on Jumbo loans will play into all this. I'm not all that familiar with the LA area, but I assume they would be the norm in some of the areas you're talking about now.

Rates on treasury bonds have been falling (and mortgage rates generally follow suit) but take a look at the numbers for Jumbo loans, they were running about 6.5% mid May, 7.1% last week, and 7.34% last check.

Hmmm... perhaps lenders have found a way to subsidize some of the mess they've gotten themselves into by jacking up the rates for their prime borrowers. So even folks with excellent credit ratings and large down payments may end up being squeezed out, or may opt out when they realize the nonsense that is being pulled by lenders.


I would assume that would put at least some downward pressure on upper end homes. I'd certainly think twice before signing on the dotted line and agreeing to a jumbo loan right now. But who knows, maybe folks with the really big bucks take it in stride.

[greggd]

Originally Posted by desertdawgx

Comparing the health of the LA market to Beverly Hills is the dumbest thing i have ever heard.Less than 1% of the people in the world can afford Beverly Hills and I am pretty sure they don't blog on this board.Sales will be down 75% going forward as all the toxic loans have been elininated,this will crush the LA market.Homes in Compton been selling for 500k.Can you see FRAUD.

Desertdawgx,
I am the one who started this thread and it was in reference to west los angeles. Not a comparison of west los angeles to LA county or So Calif.

The last post was an example of a home in brentwood and a repost of my original question open for discussion regarding ARMs in the west los angeles area.

You should re-read the 2nd topic of my last post, which is a re-statment of my original/first post. I am not comparing Los Angeles County to the West Side in the way you are stating. That appears to be a side argument between You, Winkleman, Jack, and a piece of the sky.

[desertdawgx]

Prices fell in the last RE bust in the early 90s no area is special,West LA will crash as well.

[Sorcerer68]

Originally Posted by desertdawgx

Prices fell in the last RE bust in the early 90s no area is special,West LA will crash as well.

The areas worst hit in the 90's had to do with the collapse in Aerospace. The same conditions do not exist now.

[desertdawgx]

Wrong RE crashed without the loss of jobs in aerospace,prices rose beyond fundamentals and corrected back to historic values.It is a cycle and it repeats very 10 to 15 years.No area is special,yes palmdale may lose 60% but it rose 500%.West LA will lose 40% but it doubled.Pick your poison they all go down alot when bubbles burst.

[desertdawgx]

In terms of dollars the more expensive areas will lose more as they cost so much.60% of 100k is 60k,40% of 2 million is 800k so which is the better investment?