Real Estate Price Predictions in Los Angeles City (Pasadena: sales, foreclosure)

[c00kies]

I'm not too familiar with San Fernando Valley, but as for San Gabriel Valley, cities like Pasadena, Alhambra, Arcadia, Monterey Park, San Gabriel, San Marino, Temple City, South Pasadena...I really haven't seen a big drop. I've seen a $1.5 home dropped to $1.3, but not a $500K to $400K.

[Rats]

Originally Posted by c00kies

I'm not too familiar with San Fernando Valley, but as for San Gabriel Valley, cities like Pasadena, Alhambra, Arcadia, Monterey Park, San Gabriel, San Marino, Temple City, South Pasadena...I really haven't seen a big drop. I've seen a $1.5 home dropped to $1.3, but not a $500K to $400K.

most of those are pretty good areas. I'm talking about Rosemead, El Monte, Montebello, etc... which are pretty ****ty areas yet you can't find a proper house there for less than $400-450k.

[goodbyehollywood]

Originally Posted by IamInShape

Prices will decline everywhere including the high end. Those that still believe there home will retain its value are in for harsh reality in the future. Values in California are unsustainable. I am also an investor---real estate in Los Angeles is way over valued and needs a BIG correction.

Prices in the most desirable parts of L.A. will stay high as long as people want to buy there and banks let them. Right now, both factors are still in play.

Banks let the prices get so high... and they're keeping them there. Banks don't want foreclosures, because there's no equity cushion. So they're doing whatever it takes to let unqualified borrowers keep their homes-- either live in them for a year or more for free or refi them at market, or below market, rates with the same documentation they used to get in them-- none.

Banks are enabling... enabling people to buy homes they can't afford, then keep them when they get upside down and can afford them even less than when they bought them. There is unlikely to be a significant correction until this stops.

The fundamentals are the same as the stock market-- a stock's price isn't going to bottom until all the weak hands are shaken out.

[Sorcerer68]

Westside luxury homes and Long Beach have taken the biggest hit and will drop a little more before we're done. Parts of LB have seen 20% price drops. Recently gentrified areas such as Echo Park will continue to appreciate. Many buyers have waited for Echo Park, Angeleno Heights and Mt. Washington to bottom out and it's just not happening. Other areas will experience stagnant sales. The biggest drops in the market are the very top and the very bottom. Condos have come down a lot and will come down more as many, many more units are being built. Sought-after areas with low inventory such as South Pasadena won't drop. The steal right now? Multi-unit residential, 5 units or less. They can be had CHEAP right now.

[PureHapa]

Sorcerer, what town or zip code are these apt. buildings? My girlfriend owns a 10-unit in Gardena and is looking for 3-5 unit building now. She lives in Cerritos and would like it to be close by (Lakewood, Artesia, etc.)

[Jonah1979]

Houses 800k and over are still selling because the rich don't care about current market conditions. If they like something they'll buy it. Everything under that will see the results of bad loans, huge markets (single parents, first time buyers) unable to qualify for loans or come up with the down payment money. I predict a 30% drop overall for the market...probably worse for condos and townhouses.

[Axiom]

Originally Posted by c00kies

IMO, if you have the money...JUST BUY IT!! I doubt at $500K home will drop $100K...not in California, nor in any other city/state/country.

I don't claim to be an expert in CA real estate, but had to comment on the bit about the big price drops in any other city/state/country

Care to take a field trip to AZ?

I can tell you that a house just down the street from us sold for $800,000 in Jan and the exact same floorplan (with very similar features/upgrades etc) a couple of streets over sold for $588,000 this month.
Neither one was out of line with comps at the time.
And we're talking about a neighborhood in a great location with excellent schools, etc. that is normally very sought after.

I also just got an e-mail from a RE friend who said he was marketing a house in a neighborhood where prices fell as much as $40,000 in a 3 month period.
He also said he had sellers who were turning away offers they thought were too low just a couple of months ago and now they're calling him begging him to get those buyers back at that price.

Of course you will also see some folks reporting that things are still rosy in their little pocket of the valley, so go figure.


Question:
The previous post says $800,000+ houses are still selling, but I swear one of the articles I read about CA real estate trends said the exact opposite.

[Sorcerer68]

Originally Posted by PureHapa

Sorcerer, what town or zip code are these apt. buildings? My girlfriend owns a 10-unit in Gardena and is looking for 3-5 unit building now. She lives in Cerritos and would like it to be close by (Lakewood, Artesia, etc.)

I concentrate my efforts more up in Northeast L.A. and the San Gabriel Valley. I will tell you that Long Beach has some sensational opportunities right now. Prices have gone through the floor. My pick is the East Arts District. It's being rapidly gentrified and has a lot going for it. There's a historic district next to it called Craftsman Village that's cleaning up as well. There's also another historic district just west of downtown around Drake Park that's rapidly cleaning up and also has cheap properties. Longtime residents are prejudiced against these areas but they are the ones currently being gentrified. If she's not adventurous, I'd tell her to look in Rose Park. I did extensive research in Long Beach until I decided (for now) to keep my business very near me if it's not in another state. I'm not aware of any Lakewood or Artesia neighborhoods currently experiencing an upswing. There may be, it's not my area.

[greggd]

Axiom, Thats interesting information about Arizona.

I briefly read an article in the LA times about a section of beverly hills, now called the golden triangle. In the early 90s, prices fell as much as 40% in this area if im not mistaken. Article was either earlier this week or last week.

Again, I am curious as to the % of homes 1 mill +, even 2 mill+ that are mortgaged on an interest only where the household is unable or unwilling to pay a fixed rate amount.

I know of an individual with with 2 kids who bought a new condo in my relatives building. The purchase price was roughly $750,000. in brentwood.
Current value after about 3 yearrs is $850-860,000. based on unit in the bldg that sold 4 months ago.
He also leased two cars and bought a 3rd. why? I dont know. A Porsche, Mercedes and Rover. His wife is friends with my relatives and has confided with them that she doesnt know what their going to do. They are paying interest only on the mortgage and the car payments are killing them. I couldnt believe it. I think this guy is not the only one in this situation.

[PureHapa]

Thanks Sorcerer.

In the early 90s, SoCal lost half a million aerospace-type jobs. Half a million. The economy of the state and the country tanked. That is not the current situation. The economy is booming here. People don't have to leave because they lost their jobs.

There's a lot of schadenfreude towards well-to-do Californians - especially among other Californians.

This is not the early 90s - in no way, shape or form. The only areas where prices are backsliding are in the areas developers built hundreds and thousands of new tract homes in the ex-urbs - the commuter alleys of Temecula, Murrietta, Corona, Antelope Valley, etc., along with the suburbs of San Diego County. In these areas there is a glut of inventory, coupled with the use of aggressive mortgage instruments targeted to hungry first-time home buyers.

This will pass. The glut will be absorbed in time. We are in much better shape than Las Vegas, Detroit or Miami.