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Old 12-01-2007, 04:42 AM
 
1,297 posts, read 3,705,059 times
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does anyone recall about 3 years ago... there was the "great sell off" where many longterm real estate owners were advised we were at the top of the top and things were going to bust very very soon. It was like a panic sale.

Well 3 years later and better parts of la are still appreciating. Sorry, I am talking about areas I am familiar with, west la and coastal real esate.
Antelope valley and san fernando excluded.

As we speak, there are investors buying real estate in la and turning them into positive cash flow properties.

If you base real estate pricing and affordability on the premise of having no money, no legal documentation, zero to minimum down payments, no money management/leverage savy, or no cushion for unexected events, then real estate is a big gamble and renting is your ultimate destination and safe harbor.
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Old 12-01-2007, 11:50 AM
 
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I get so amused reading these posts.... Here is the one I actually was imperessed with:
http://finance.yahoo.com/real-estate/article/103872/Real-Estate:-Buy,-Sell,-or-Hold (broken link)
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Old 12-01-2007, 03:16 PM
 
Location: Santa Barbara
627 posts, read 2,064,312 times
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Exactly. Just last month I believe November or late October a property in my area listed at 1.5 (tear down). It sold in 11 days for $150,000 over asking. I am in the Brentwood area.

I can guarantee if real estate was tanking on the westside I would be out there with my check book instead of sitting in here typing. Many of us wouldn't even wait for a bottom we would just snatch that stuff up and increase our wealth base considerably by doing so.

No matter what the west side of LA is still and always will be some of the most desirable real estate in the world. One would have to live here to fully understand this and why it attracts the wealthy, but it beckons not just nationally but globally. Also with a weak dollar if the Americans didn't rush in during some percieved tank (driving up the pricing even further and market) the foreign investors would and do. Tanking on the westside, for all intensive purposes, is an impossibility especially in the long run.

Quote:
Originally Posted by greggd View Post
Antelope Valley, parts of san fernando, la inner city.. Yes
Pacific Palisades, Malibu, Brentwood, Bel Air, Beverly Hills.. No

The median income affordability figures for the entire county is too vague to be of any use. Each area of los angeles has its own set of variables that will influence housing prices.
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Old 12-07-2007, 09:34 PM
 
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Quote:
Originally Posted by greggd View Post
Two homes went up within the past 3 weeks, both are now in escrow.

3rd house is up across the street. We will see what happens to all three.

I suspect they will all close escrow.

Ocean Views are not options in sprawl of Antelope Valley.


Well, within these past 2 weeks all three homes that I mentioned above have gone into escrow. One has closed. The last home above was on the market for about 2 weeks. 1.5 million in the palisades, very limited ocean view, now looking for backup.

Real estate may be taking a nose dive inland, but its going pretty strong here in west la especially when the properties are properly priced.
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Old 12-10-2007, 08:52 AM
 
830 posts, read 1,837,094 times
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Quote:
Originally Posted by Ultrarunner View Post
LA WAS a great place to invest. There isn't a single property in the LA area right now that would cash flow at current prices. Rents are significantly below what you would need to cover a mortgage, unless you put down a huge amount, which then wouldn't make it a good investment. Again, if you bought a few years ago, you're fine for now. But you're going to take a large hit on your value. You'll still cash flow, but you won't have the equity you think you do now.

You need to look at residential properties of 200 or more units or large commercial buildings...

Investors don't buy these properties with a negative return on investment... why would they???

Many of these acquisitions are based on the hope that future rents can rise enough to make them a good investment. Historically this isn't at all how large deals like this were financed. They had to cash flow now, not later, which is just more evidence of how irrational this market is.

Many of these deals are making a return of 1% or less. In some cases actually a negative return. Again, the buyers were betting on the ability to raise rents enough over the next few years to turn it into a good investment. That isn't going to happen. People, on average, are already maxed out on rent.

Why would people do something like this? Because people are irrational. Even smart money can be dumb.
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Old 12-10-2007, 09:54 AM
 
Location: Phoenix, AZ
1,046 posts, read 1,952,656 times
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Quote:
That's interesting, because around $250,000 is what the median income in the LA area supports.
The idea that salary and wage scales equivicate to relative housing costs is a myth. In SoCal, the Northeast, Chicago and other areas there is a gap between median incomes and housing prices making it impossible for otherwise middle class folks to own a home. This gap has been a fact of life in SoCal for decades and even with the current downturn that will not change. SoCal rela estate has gone thorugh cyclical down turns before.
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Old 12-10-2007, 10:05 AM
 
1,831 posts, read 3,601,375 times
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Quote:
Originally Posted by mommabear2 View Post
Time makes L.A. real estate a worthwhile investment - history has proven this.
I'm not one of those LA haters but ... we're now seeing a demographic shift that probably hasn't happened before that might change that history.

For the first time in recent memory ... more people are moving out than moving into LA. Maybe that will be corrected as housing gets more affordable again but, it is a bit of a disturbing trend.

On the other hand, the lure of Hollywood will always be there so ... who knows but ... I wouldn't totally assume that the market will come back to the way it was.
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Old 12-10-2007, 10:33 AM
 
830 posts, read 1,837,094 times
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Quote:
Originally Posted by _Charles_ View Post
The idea that salary and wage scales equivicate to relative housing costs is a myth. In SoCal, the Northeast, Chicago and other areas there is a gap between median incomes and housing prices making it impossible for otherwise middle class folks to own a home. This gap has been a fact of life in SoCal for decades and even with the current downturn that will not change. SoCal rela estate has gone thorugh cyclical down turns before.

You are correct in that housing will always be a little pricier than in other areas of the country. However, historically the differential between owning a home and renting has been about $600 per month, meaning it cost about $600 more per month to own a place rather than rent a place. At the peak of this bubble that differential was about $1,800 per month, or three times the long-term historical differential.

If you apply that $1,200 difference to a mortgage equivalent, that equates to about $190,000, which would put the median price around $310,000.

$310,000 is still about 5 times the median household income, which is still about 25% above traditional affordability measures simply based on the median. That does support your thought that pricing is not necessarily in-line with the median in more populated areas like California.

However, another fact is that nationwide affordability is roughly 50%-60% of households can afford the median priced home. In California, that number is less than 15%. You can probably always assume the numbers in California will not be in-line with nationwide figures; however, to be that far off is not supportable. Again, there aren't enough people that make that kind of money. Not every home owner in California can be a top 10% nationwide wage earner, which is what you have to be to be able to afford a median priced home.

Last edited by motoman; 12-10-2007 at 10:53 AM..
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Old 12-10-2007, 03:02 PM
 
Location: West LA
723 posts, read 2,177,530 times
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Quote:
Originally Posted by greggd View Post
Well, within these past 2 weeks all three homes that I mentioned above have gone into escrow. One has closed. The last home above was on the market for about 2 weeks. 1.5 million in the palisades, very limited ocean view, now looking for backup.

Real estate may be taking a nose dive inland, but its going pretty strong here in west la especially when the properties are properly priced.
Yep. Prices in the markets I have been watching haven't started to drop yet. I have seen a few stragglers that have leveled out in the crappy areas.
(see also: Palisades bowl, Heathercliff Ave.)
[See Also ALSO: trailer homes. hahaha]
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Old 12-10-2007, 04:49 PM
 
1,297 posts, read 3,705,059 times
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Quote:
Originally Posted by JackSparrow View Post
Yep. Prices in the markets I have been watching haven't started to drop yet. I have seen a few stragglers that have leveled out in the crappy areas.
(see also: Palisades bowl, Heathercliff Ave.)
[See Also ALSO: trailer homes. hahaha]
I'd take palisades bowl over the san fernando valley and other inland areasanytime.

Talk about cheap westside housing.
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