Housing prices rebounding? (Los Angeles: for sale, real estate, insurance)

[drunk on kool aid]

I'm not in the market for a house so I don't really follow home prices, but, recently I've heard on the radio that L.A. prices have ticked up the last couple quarters, and then a little over a week ago in the Los Angeles Times there was an article describing the hot, house flipping market in South L.A.:

Flipping houses is back in South Los Angeles - L.A. Times

"Flipping was also given a boost in February when the Federal Housing Administration temporarily suspended its "no flip rule," which prohibited people using FHA loans from purchasing properties from sellers who had owned the homes less than 90 days."

But it seems that the trend predates the suspension and that these houses are being flipped for pretty impressive prices to blue collar buyers who are attracted to the central location which is convenient for commuting.

Granted, this is a narrow sliver of the housing market but I was surprised to read about this while also reading that prices have yet to hit bottom.

[West of Encino]

Gentrification and revitalization are probably the answers to the rising house prices in South LA.

[BRinSM]

sales have stabilized (if not increased) in the lowest priced neighborhoods. however, there have been significant declines across the entire spectrum. as prices in the higher range have fallen, it is skewing the median upward as more buyers are flocking to prices that haven't been seen in years. prices aren't really going up in these markets though, although government intervention has stabilized the price decreases (at least for the time being). my guess is now that the government home buying credit is over, we'll see another slight drop in prices and prices should hover around that level for some time to come. unless another liquidity crisis happens and banks are forced to unload their backlog of shadow inventory (90 day+ late mortgages), things will probably remain stagnant for some time.

[smokingGun]

Hopefully the housing market won't stay in the doldrums for years and years like the last downturn. When the bottom dropped out of the RE market in the early 90's it took nearly a decade for many zipcodes in LA to regain their lost value.

[majoun]

Originally Posted by smokingGun

Hopefully the housing market won't stay in the doldrums for years and years like the last downturn. When the bottom dropped out of the RE market in the early 90's it took nearly a decade for many zipcodes in LA to regain their lost value.

The upside of that was that the low RE prices and particularly rents helped L.A. to recover from the horrors of the early '90s and L.A. from about 1997-2002 or so (from when the economic recovery finally hit L.A. to the beginning of the RE bubble) became a more pleasant place to live than it was in the early '90s and has been since.

How soon we forget that the RE bubble did considerable damage to the livability and quality of life in Los Angeles, because of how devastating its crash has been. At least the turn of the century offered some stability - something that has been missing since. And the cultural infrastructure of L.A. was still intact.

[SOON2BNSURPRISE]

You will see a decline in prices now that the government is not subsidising the purchase of homes. Everyone wanted to buy before the $8,000 subsidy that you and I will be paying for ended. Now that it is over lets see what happens to the market. The LA metro area is still 10% to 20% overpriced depending on who's crystal ball you are using. Remember we still have a lot of unemployment in the region. Who will be buying these homes that is going to create this rebound? Things will get back to normal when the unemployment rate drops to between 3 and 4%. Prices will decline untill the economy revives and people are working at jobs that will allow them to buy homes. Remember also that the days of easy credit are over. Even an FHA loan requires a down of 3.5% for someone with great credit to 10% down if you have less than great credit. If you are a first time buyer and you have bad credit expect to have to come up with 10% or more in some cases.

[GypsySunworshiper]

I was just looking at real estate in southern california where the action is at and look what I found at bargain cost by LA standards.

2063 Wattles Drive, Los Angeles CA - Trulia

2966 Passmore Drive, Los Angeles CA - Trulia

2740 Woodhaven Drive, Los Angeles CA - Trulia

3133 Deronda Drive, Los Angeles CA - Trulia

7275 Mulholland Drive, Los Angeles CA - Trulia

In short it looks like there is no change according to these deals and based on location.

Though I could be wrong.

[jbunniii]

For what it's worth, PMI Mortgage Insurance Co. assigns a risk factor to each metropolitan area in the U.S., representing the likelihood that house prices will decline further over the next two years. They gave LA a 99.9% risk rating, the same rating as Las Vegas and Miami:

Economic and Real Estate Trends (ERET)

[Mr. Fantastic]

This thread must be a joke.

[harhar]

The only 'rebound' I can see would be stimulated by the state tax credits.

Solely artificial.

I see opportunistic flippers snatching up cheap properties in poor areas, grabbing whatever remnants they can of the bubble; using short cuts, cheap materials. Granite counters with poorly fitted kitchen cabinets. Pisses me off to see classic homes, half finished now in short sale.

Have you seen Redfin? In south L.A.? There are thousands of properties for sale, many under 100k. There is no doubt in my mind that opportunists would try to make a quick buck.

Geographically south L.A. is desirable. But you wouldn't catch me living there. There may be nice "pockets," but schools? Gang Violence? Have you seen LAPD COMPSTATS? I wouldn't buy a nice house there for $100k. Let alone $300K+.

Plus as others have mentioned: Bank's shadow inventory, unemployment and stricter credit/loan approval are just some of the factors showing that this isn't over.