HOUSING BOOM GOES BUST IN LOS ANGELES - Article from 1981 (Orange: for sale, real estate)

[jm1982]

Interesting NY Times article from 1981 about Los Angeles boom and bust .

Reminds me of the housing crash that started around 2008 .
It's important to read history as it usually repeats itself .

At some point prices will go down again , the question is just when .

It's amazing that interest rates went up to 18 percent back then .
--
"A word to the wise: The great Los Angeles housing boom is over. The real estate price explosion in southern California, which sparked a national boom still continuing elsewhere, has stopped. The bubble that everyone said could never burst has burst. All over Los Angeles and Orange County, home buyers can buy a property for less than it would have cost a year ago, although there are exceptions. Buyers who can pay cash can almost steal houses and real estate. The days when ordinary citizens got rich from buying houses are gone, at least for the time being and at least in southern California."


"But what a bubble it was. In the 10 years from 1970 to 1980, the price of the average house in Beverly Hills went up by a factor of almost seven. The average house in West Los Angeles, a region of by no means opulent homes, rose by almost six times. Houses in Malibu routinely doubled in value every year in the late 70's."

"Any lucky person who got in on the boom in the early 70's saw his paper profit reach about 30 times his down payment by 1980. People who had never earned more than $40,000 suddenly found that they were millionaires just from that little house with a pool in Pacific Palisades. Ronald Reagan is said to have paid $29,000 in the early 50's for a house in Pacific Palisades that is now for sale for $1.7 million and cannot be sold, which is the whole story."

HOUSING BOOM GOES BUST IN LOS ANGELES - NYTimes.com

[V8 Vega]

Heck during that boom you could buy a house, don't even bother to rent it out or fix it up any, just wait 6 months and sell it for a nice profit.

[PilgrimsProgress]

After 2008 you could get a beautiful brick house in Atlanta for $50,000. Now just add another zero!

[jm1982]

Originally Posted by PilgrimsProgress

After 2008 you could get a beautiful brick house in Atlanta for $50,000. Now just add another zero!

I remember looking at Atlanta properties back during the crash . Along with properties in Vegas and Phoenix . It was amazing how cheap some properties were being sold for . Many listed daily for under $30,000 when they had sold for over $100,000 during boom

[Astoriahoney]

We need a massive earthquake. That usually brings down the rents and sale prices of homes like crazy. Makes it affordable all around Los Angeles.

[jm1982]

Originally Posted by Astoriahoney

We need a massive earthquake. That usually brings down the rents and sale prices of homes like crazy. Makes it affordable all around Los Angeles.

Usually? Last one was 1994. Of course the city overall was different then .
I'm sure damaged homes could of been bought cheap , but i'm sure there was still good demand for non damaged homes.

Seems like the financial crisis /housing crash of 2008 was a better opportunity as it lasted many years.
From 2009-2012 or so were some great years to buy.

Do you have any data on how the last earthquake affected prices? I was living on the westside at the time and I don't remember any damage of our house...so I would think it would be local.

Of course even in Northridge it didn't destroy everyone's house otherwise all the houses there would look new. It's rare to see a home build after the 1990s in L.A

Similarly 9/11 attacks in NYC of course affected the economy..but Manhattan real estate didn't become cheap.

Another thing to think about. Would you really want to live in a city that was really destroyed in an earthquake?

[Astoriahoney]

Originally Posted by jm1982

Usually? Last one was 1994. Of course the city overall was different then .
I'm sure damaged homes could of been bought cheap , but i'm sure there was still good demand for non damaged homes.

Seems like the financial crisis /housing crash of 2008 was a better opportunity as it lasted many years.
From 2009-2012 or so were some great years to buy.

Do you have any data on how the last earthquake affected prices? I was living on the westside at the time and I don't remember any damage of our house...so I would think it would be local.

Of course even in Northridge it didn't destroy everyone's house otherwise all the houses there would look new. It's rare to see a home build after the 1990s in L.A

Similarly 9/11 attacks in NYC of course affected the economy..but Manhattan real estate didn't become cheap.

Another thing to think about. Would you really want to live in a city that was really destroyed in an earthquake?

Nah earthquake sends all these Non-Californians packing. The population depletes like crazy, traffic lightens and the inventory of rentals and homes spikes.

[Nafster]

Originally Posted by Astoriahoney

Nah earthquake sends all these Non-Californians packing. The population depletes like crazy, traffic lightens and the inventory of rentals and homes spikes.

Jesus, I hate to say it, if that's true, bring it on! Let's just get it over with if its inevitable.

[LuvSouthOC]

Originally Posted by jm1982

Interesting NY Times article from 1981 about Los Angeles boom and bust .

Reminds me of the housing crash that started around 2008 .
It's important to read history as it usually repeats itself .

At some point prices will go down again , the question is just when .

It's amazing that interest rates went up to 18 percent back then .
--
"A word to the wise: The great Los Angeles housing boom is over. The real estate price explosion in southern California, which sparked a national boom still continuing elsewhere, has stopped. The bubble that everyone said could never burst has burst. All over Los Angeles and Orange County, home buyers can buy a property for less than it would have cost a year ago, although there are exceptions. Buyers who can pay cash can almost steal houses and real estate. The days when ordinary citizens got rich from buying houses are gone, at least for the time being and at least in southern California."


"But what a bubble it was. In the 10 years from 1970 to 1980, the price of the average house in Beverly Hills went up by a factor of almost seven. The average house in West Los Angeles, a region of by no means opulent homes, rose by almost six times. Houses in Malibu routinely doubled in value every year in the late 70's."

"Any lucky person who got in on the boom in the early 70's saw his paper profit reach about 30 times his down payment by 1980. People who had never earned more than $40,000 suddenly found that they were millionaires just from that little house with a pool in Pacific Palisades. Ronald Reagan is said to have paid $29,000 in the early 50's for a house in Pacific Palisades that is now for sale for $1.7 million and cannot be sold, which is the whole story."

HOUSING BOOM GOES BUST IN LOS ANGELES - NYTimes.com

In 1976 my folks bought houses in Laurel Canyon and Mt. Olympus, each in the 300s. Mind you, interest rates have dropped over the last 30 plus years. That NEEDS to be factored in. Houses are not a good investment now looking forward 30 years.