Rents on the rise as home prices slip - La Times Article (Los Angeles: apartment, renters)

[Rats]

the next 12-18 months will be the best time to buy real estate in LA. If you have the income to buy residential property (doesn't matter if you live in it or not) and miss out on this, you're an idiot. the discounts buyers are getting are unprecedented. people are so desperate to sell their houses, they are accepting lowball offers of 20-50% below asking price AND paying the closing costs. There's a 3 bedroom ranch house with a massive lot in Canoga Park going for $525,000, and it's dropped $25,000 since last week. One of my friends just bought a 4 bedroom house in the SFV for $440,000. The owner was so desperate to sell they brought it down from over $600k.

Rents are sky high... I am renting a 4-bedroom house in Eagle Rock for $2500. And this house is worth probably $450,000 TOPS. That is how high rents are right now. Imagine buying a house for $450k and renting it out for $2.5k, you will still get the huge tax benefits and have almost NO mortgage payment out of your pocket. In 8 months my rental contract will be over and I'll be jumping right into this insane housing market.

[desertdawgx]

A 450k loan is well over 3000k a month payment so you will bleed cash every month, old houses in Canoga Pk will sell for well under 300k in a few years. This crash has only just begun and the deals are 2 to 3 years away.

[prim2007]

Originally Posted by desertdawgx

A 450k loan is well over 3000k a month payment so you will bleed cash every month, old houses in Canoga Pk will sell for well under 300k in a few years. This crash has only just begun and the deals are 2 to 3 years away.

I don't disagree that some good deals are still to come (depends on the location) but what I'm complexed about is the $3K per month on a $450K loan. Are you factoring in insurance, taxes, and utilities to get this amount? I guess my interest rate is better than I thought and I should be grateful for small things giving the depressing times we now live in.

[greggd]

Perfect example is on another thread from the lady looking to move to Los Angeles from PA. Budget is $350,000 which wont buy anthing more than
a small studio or 1 bdrm condo. Whats the alternative? Rent.

I think rental prices will continue to climb as real estate price ranges in more desirable parts of town are beyond income most levels.

More affordable housing may become available in the Valley, but if you have kids, then you pay it back in private school tuition.

[sabungero]

Those who have no $100k to put as downpayment...RENT is the word.

[KnoxTown]

How does condo buying work? Is the down payment just a standard percentage of total? I'm asking bc I am moving to LA in the spring after graduation, and hate renting. Paying money toward nothing is dumb; did it through school and would like to look into buying. What would be the best choice for me? I know ill have to rent for awhile, but im thinking a year or two.

[JackSparrow]

Originally Posted by KnoxTown

How does condo buying work?

From a "financial dealings" standpoint, it's the same as buying a home.

From a living standpoint, it's a whole other ball of wax.

[KnoxTown]

Originally Posted by JackSparrow

From a "financial dealings" standpoint, it's the same as buying a home.

From a living standpoint, it's a whole other ball of wax.

How so? Excuse my ignorance on this issue, its not my cup or tea. I just want to make sure I make the best decision.

[greggd]

Originally Posted by KnoxTown

How so? Excuse my ignorance on this issue, its not my cup or tea. I just want to make sure I make the best decision.

Condos are like apartments, you have to live with other people and tolerate people and things they do or dont do.

Condominium ownership can be great living and are an excellent start to real estate ownership. I think they will become more and more prevelant in Los Angeles as prices continue to increase. No yardwork, maintenance, or worries if you go out of town, generally low expenses and less restrictive pricewise than a traditional single family home.

[wildgift]

The middle class areas will stay high for now, but the base is eroding. The first to go are these high-risk mortgages, where people default because they lack the income. This causes the demand to collapse, causing prices at the low end to drop. This surplus will erode the value of houses that are a little nicer.

As the ARMs reset, and their rates go up, people will feel pinched from two sides: declining property values, and increasing mortgage payments. Some will default because they can't afford it... but some will default because it makes sense to get out of the sinking ship and hop into a lifeboat. That's the big risk - when people voluntarily damage their credit to get out of guaranteed losses.

In the 1980s, I saw the property values on my modest street climb from around 120k to 450k, then drop back down to around 140k. In the early 2000s, the prices peaked at over 600k. I wouldn't be surprised to see it drop to 250k.

I'll cya in a downtown condo when the prices are 180k.