Westside- townhome under 400k? (Los Angeles, Santa Clarita: short sales, real estate market, apartments)

[dactylo]

Originally Posted by EscapeCalifornia

Don't write it off completely as being run down. I know someone who lives there, right off Firestone Blvd., and when you turn into the tract it's like another world. I was really surprised how nicely kept the houses were. Of course these are single family homes and not townhouses which tend to have more problems. The big problem I see with Downey is that it's surrounded by crap and of course you wouldn't want to drive to your job from there. I wonder if you realtor has some listings there he/she is trying to unload on you.

Okay maybe there are good and bad parts. I'd need a good part within walking distance of the station at 12801 Lakewood Ave.

My realtor grew up in Downey. I don't think she has many listings outside of Westchester, it just came up in our last conversation. I'm open to the idea of living somewhere east if it's a nice area and I get a great deal on a house. But I'd need more time than a couple weeks to get familiar with the area.

[JohnG72]

Originally Posted by dactylo

Of course that would still suck if I was underwater for more than a year or so.

Are you serious?

Where do you get that your will be underwater for only a year or so? Try ten.

[808n310]

Originally Posted by JohnG72

Are you serious?

Where do you get that your will be underwater for only a year or so? Try ten.

Oh jeez, prices in the basin have stabilized dramatically over the past 6 mos..., especially in the markets closer to the coast...

OP there are some townhomes in Redondo Beach that are under 400k currently, and as the area is pretty much built out and very established, you can expect more stability than somewhere out in the sticks (not that you were considering or asking, just to put certain pricing decline fears into perspective)...

Also, yes, you should look for places with low HOA dues, but, sometimes it can backfire as well...I own a condo back in HI that is currently in a nightmarish situation where apparently our HOA dues were too low for the past, 10 - 12 years, and now suddenly we, the 300 owners of that complex, need to find several million dollars to repair foundation pads and things like that....so that's going to ding us all about $150 bucks extra per month going forward....part of why I bought that place a few years ago was that I was attracted to the fact that the dues were only $200 / mo for a 2br...so in the end it didn't really help....so watch for stuff like that....

On the flip side, a lot of condos in RB are triplexes of quads on a lot, so I don't think you have lots of CAM issues that face larger complexes...

Good luck!

[dactylo]

Originally Posted by JohnG72

Are you serious?

Where do you get that your will be underwater for only a year or so? Try ten.

Well I've looked at a lot of graphs the past month but for example, graphs of historical inflation-adjusted home prices. Why do you say 10 years specifically?

[dactylo]

Originally Posted by 808n310

OP there are some townhomes in Redondo Beach that are under 400k currently, and as the area is pretty much built out and very established, you can expect more stability than somewhere out in the sticks (not that you were considering or asking, just to put certain pricing decline fears into perspective)...

Also, yes, you should look for places with low HOA dues, but, sometimes it can backfire as well...I own a condo back in HI that is currently in a nightmarish situation where apparently our HOA dues were too low for the past, 10 - 12 years, and now suddenly we, the 300 owners of that complex, need to find several million dollars to repair foundation pads and things like that....so that's going to ding us all about $150 bucks extra per month going forward....part of why I bought that place a few years ago was that I was attracted to the fact that the dues were only $200 / mo for a 2br...so in the end it didn't really help....so watch for stuff like that....

On the flip side, a lot of condos in RB are triplexes of quads on a lot, so I don't think you have lots of CAM issues that face larger complexes...

Good luck!

Thanks! Sorry to hear about your situation- at least you have 300 people to share the cost.

I'd feel safer buying in RB. Both depreciation-wise and physically safer. But haven't seen any RB townhomes listed on the MLS for under $400k. I see 3 between $450-$500k and 2 of them have pool/spas, which I'd prefer not having. I drove by the one that doesn't and it looked pretty dumpy from the outside. Maybe I'm too picky. Anything nice is probably getting several offers atm...

[CaliYork]

Prices in LA haven't stabilized, they're still dropping.

[R6Guy]

if you are going to be working in el segundo, you want to try and stay within a 5 mile radius of there b/c traffic is terrible. Downey is not too bad, Cerritos (neighboring city) is good too. However, that 105 freeway to work is enough to pull your hair out!

[JohnG72]

Originally Posted by dactylo

Well I've looked at a lot of graphs the past month but for example, graphs of historical inflation-adjusted home prices. Why do you say 10 years specifically?

-Prices are way out of whack compared to average income. This will do two things. It will make it more difficult for people to get loans. It will also create a situation where people are overpaying for their home and if one income is laid off or whatever, the home will go into default and be foreclosed on. It doesn't take too much of this happening to put downward pressure on the market. Right now unemployment in LA County sits at over 12%. There is a lag effect created because unemployment pays a HUGE amount(cash equivalent of someone making $35K a year or so) for 18 months. So it will take a while for this all to shake out.

-More foreclosures on the way. Even if its only 5% of the mortgages from 2004-2006, it will create continued downward pressure on the market.

-Banks thus far have been propped up by the fed and have been unwilling to foreclose on many houses while this is going on. At some point, the market will no longer be artificially restricted.

-Empty homes. Lots of investors sitting, trying to rent or just leaving the homes empty. They have the same mindset as you...that the housing market just has to rebound because it was so high in the past...a line of thought that is based on nothingness..just utter faith that because prices used to be at a certain point that they will return. Well here is the real news....rents on smaller homes in decent but not great parts of the Valley and West LA have dropped 10-20% over the last year. Stuff that was $2500 a month a couple years ago is now $2000. At the $1500 point, investors start turning to section 8. That will push things down more. At some financial point, the disincentives begin. And the houses will be sold simply because the investor loses too much by holding on to the property.

-Deflation. If you haven't noticed, this is where we are. Things are dropping in price. Wages will follow, particularly amoungst public sector employees. Less money = less money to purchase a home.

Dr. Housing Bubble Blog

[JohnG72]

Originally Posted by 808n310

Oh jeez, prices in the basin have stabilized dramatically over the past 6 mos..., especially in the markets closer to the coast...

I question your judgement when you are unable to distinguish a short term seasonal adjustment from a long term trend particularly when you ignore:

-12%+ unemployment rate.

-Restrictive lending practices.

-The impact of Option ARM's that are resetting from 2010-2012.

Bottom line is that short of massive intervention from the federal government, significant areas of the Los Angeles market will continue to experience plunging real estate prices. No you will not be able to buy in a tony SM neighborhood for $800K. But you might get a Culver City house for $350-500K.

[808n310]

Originally Posted by JohnG72

I question your judgement when you are unable to distinguish a short term seasonal adjustment from a long term trend particularly when you ignore:

-12%+ unemployment rate.

-Restrictive lending practices.

-The impact of Option ARM's that are resetting from 2010-2012.

Bottom line is that short of massive intervention from the federal government, significant areas of the Los Angeles market will continue to experience plunging real estate prices. No you will not be able to buy in a tony SM neighborhood for $800K. But you might get a Culver City house for $350-500K.

Your own argument above is about to explain mine...you say, "significant areas of the Los Angeles market"

You did not say ALL of the Los Angeles market, nor did you DEFINE which areas.

Let's make this simple. Do you honestly believe that the percentage of total homes in areas such as West LA or the South Bay, that will go through the short sale / foreclosure / REO process will be equal to the percentage in areas such as the IE, Lancaster / Palmdale or even the Santa Clarita Valley?

Markets which will experience significant downward pressure will be the ones that are 1) highly leveraged 2) less desireable areas 3) where large percentages of total housing stock is for sale / in foreclosure / REO

Obviously, most of the South Bay and West LA do not fall into those categories....you cannot compare a 3 year old community in Corona to Redondo Beach. That three year old community was 100% purchased and financed in 2006 - a lot I'm sure via 'non traditional' financing, meaning it will have tons of foreclosures, short sales, and REO properties pushing the market lower and putting a lot of downward pressure on transaction prices. On the flip side, how much of Redondo beach actually turned over at the peak of the market, maybe what, 10 - 20 percent at most?? And do you honestly think that the ratio of 'non traditional' financing was equal in Redondo Beach as it was in the IE?? In any case, when a significantly smaller percentage of homes are 'at risk' so to speak, the downward pricing pressure likewise, significantly lessened. Please also don't forget, beign located on the coast, relatively close to downtown LA (vs the IE), and being an established, upscale community will also lessen downward pressure....

And if you still don't get this argument, please, take a drive to some 5 year old community in Corona, or Lancaster, and please note how 'for sale' signs dot the place like palm trees. Keep that in mind and go meander through Torrance and RB, HB and MB....quite a different picture.

And, yes, we all wish that homes in Culver City would drop to 350k, but sorry, it's not gonna happen. Please keep that hope alive while the rest of us buy low and cash out our equity in ten years when the market is back at 05 levels...k thanks,


Oh, and for the OP, there are 15 condos priced under 400k on realtor.com for Redondo Beach. There's also 12 more priced between 400-450k. Good luck!