Why are historic houses in Santa Ana so cheap compared to other places? (Los Angeles: apartments, condo)

[HyperionGap]

Originally Posted by pacific2

I just checked Redfin and there are currently two SFRs listed under contract in Aliso Viejo for under $600K. They sold for $589,00 and $599,900. There are several condos in that price range.
https://www.redfin.com/city/224/CA/A...6&market=socal

Aliso has far more townhouses/condos than SFRs.

And your point is...?

[pacific2]

Originally Posted by HyperionGap

And your point is...?

Did I misread your post, or did you state that the Jan 2015 price for a home in AV is $527,000?

[HyperionGap]

Originally Posted by pacific2

Did I misread your post, or did you state that the Jan 2015 price for a home in AV is $527,000?

Aliso Viejo Home Prices and Home Values - Zillow

The median home value in Aliso Viejo is $527,700.

I used the same data source for all the cities in the analysis in order to be consistent. If you do not agree with the data I used, I'm sure you can e-mail zillow and they can give you an explanation as to how they determined their home values.

However, in the end, you know the actual numbers are irrelevant right? It's all about the percent CHANGE in home values. So if I use whatever value you want to choose for 2015 (lets say $600,000) I'm quite sure using the same methodology would yield a higher value in 2009 and 2006. In the end how much of an impact would it have on the percentages? Not a whole lot.


So once again, I ask. What's your point?

[som3on3_10]

Originally Posted by HyperionGap

Durr? Go look up the principles of real estate valuation. Key terms to focus on would be comparable & ceteris parebus.

Hmm, so based on your logic here, if I wanted to value a home in Irvine, I would go look at comps in Santa Ana for the same sized home? Interesting...I guess appraisers have been doing it wrong all this time.

Originally Posted by HyperionGap

Ok first off, in general a home is not an investment. It's an asset. It's where you (and your family) live. I bet you don't look at it's value every so often and determine you need to sell it and move down the street to the much cheaper valued home do you? I.e. analogous to stocks. If you are solely buying it as an investment, then you can't treat it like your home.

Whether you look at it as an investment, asset, home, or 2x4's covered in stucco with a roof...would you rather own something that holds its value well or something that doesn't?

Originally Posted by HyperionGap

Secondly, lets take a look at what happened to these 3 cities AFTER the crash.



Clearly Santa Ana has a much higher beta than the other 3 cities in the analysis.

So if you were left with the option to:

A) Own something that could potentially increase in value by 36%, but also potentially decrease in value by a whopping 43%

or

B) Own something that could potentially increase in value by 20%, but also potentially decrease in value by 14%

You would choose option A?

Even more interesting...

Originally Posted by HyperionGap

And as I alluded to before, past results cannot predict future performance.

While this may be a true statement, how is one suppose to predict future outcomes? Telepathy? In general, historical results is the only information available to predict future outcomes barring any known factors.

[som3on3_10]

Originally Posted by RudyOD

If I weren't lazy to do it myself, it would be interesting to compare it to other cities/neighborhoods with solid schools/schools district, like Cerritos, Fullerton, Walnut to see how valid this is. Like you mentioned though, other variables come into play.

Here you go:

Cerritos:

-2006: $739,700
-2009: $587,700
-Rate of decline: -21%

Fullerton:

-2006: $629,580
-2009: $485,060
-Rate of decline: -23%

Walnut:

-2006: $704,100
-2009: $586,300
-Rate of decline: -17%

[pacific2]

Originally Posted by HyperionGap

Aliso Viejo Home Prices and Home Values - Zillow

The median home value in Aliso Viejo is $527,700.

I used the same data source for all the cities in the analysis in order to be consistent. If you do not agree with the data I used, I'm sure you can e-mail zillow and they can give you an explanation as to how they determined their home values.

However, in the end, you know the actual numbers are irrelevant right? It's all about the percent CHANGE in home values. So if I use whatever value you want to choose for 2015 (lets say $600,000) I'm quite sure using the same methodology would yield a higher value in 2009 and 2006. In the end how much of an impact would it have on the percentages? Not a whole lot.


So once again, I ask. What's your point?

Relax, because I'm not attacking you. My point is that the AV figure seems to be very low since Redfin shows those under contract in AV to have sold at about $723,888. Some properties, both low priced condos and a few SFRs that are not actually in AV should have, of course, been removed from the list.

[HyperionGap]

Originally Posted by som3on3_10

Hmm, so based on your logic here, if I wanted to value a home in Irvine, I would go look at comps in Santa Ana for the same sized home? Interesting...I guess appraisers have been doing it wrong all this time.

Where did I say that? To begin with, I have worked as an appraiser, have a masters in RE and currently do underwriting on a daily basis. Maybe what I'm saying is too confusing for you. If that's the case, I'm sorry but I'm not going to dumb it down as it's not worth my time.

Originally Posted by som3on3_10

Whether you look at it as an investment, asset, home, or 2x4's covered in stucco with a roof...would you rather own something that holds its value well or something that doesn't?

Yep you nailed it. When buying a home those are the only two things to consider. Whether it will hold its value or it won't. You definitely should be a realtor. You've just got me chomping at the bit to buy a cookie cutter home in Irvine. I mean who cares about where my job is, what type of neighborhood I'm looking for, architectural character, what budget I have, etc. etc. etc.

Originally Posted by som3on3_10

So if you were left with the option to:

A) Own something that could potentially increase in value by 36%, but also potentially decrease in value by a whopping 43%

or

B) Own something that could potentially increase in value by 20%, but also potentially decrease in value by 14%

You would choose option A?

Even more interesting...

So you can predict the future again can you?

Yeah those must be the only scenarios two scenarios EVER possible in real estate investment. Yet you're the one accusing me of being able to predict the future. Pretty ironic. I already told you that Santa Ana has a higher beta and I'm sure a higher cap rate than Irvine. Beyond that I'm not sure what else you want me to say.

How do you know this isn't the potential scenario? DTSA blows up in popularity and prices go up 250% while Irvine homes become older and tons of hispanics move in to get into the good schools causing white flight and the prices drop 50%. Could that happen? It certainly could as similar things have happened elsewhere. Will it? I have no idea.

Originally Posted by som3on3_10

While this may be a true statement, how is one suppose to predict future outcomes? Telepathy? In general, historical results is the only information available to predict future outcomes barring any known factors.

Rofl. May be a true statement. Can't even admit to that either?

Careful historicals analysis is certainly one of the best method to predict the future. Guess what though, picking 4 dates in history and comparing those prices is NOT a good investment analysis.

Congratulations on trying to pidgeon hole me with your really bad arguments. However, go back and read my original statement. All I said was that I would rather live in Santa Ana than Irvine, AV or MV. I'm sorry that's so offensive to you. Personally I think Irvine is a sh**hole and wouldn't be caught dead living there. You haven't even begun to change my mind.

Did I ever say I would buy in Santa Ana? No. I didn't.
I'm not sure if you realize this, but there are other places to live in Orange County that aren't Santa Ana, Irvine, AV, or MV. Possibly I live in one of those places! Shocking.

[HyperionGap]

Originally Posted by pacific2

Relax, because I'm not attacking you. My point is that the AV figure seems to be very low since Redfin shows those under contract in AV to have sold at about $723,888. Some properties, both low priced condos and a few SFRs that are not actually in AV should have, of course, been removed from the list.

Fair enough. My guess is that the zillow number also includes townhomes and condos in its analyses while you were only looking at detached SFRs.

[robertjohnson]

Originally Posted by matzoman

That is because it is LA. A cultural, vibrant star on the world stage. OC is still kind of a suburban backwater.

What the .....
Do people really talk like this ?

[Coldjensens]

We lived in a historic house in Santa Ana for 9 years (French Park). It was mostly terrific. I still live there with a former neighbor when I am in CA for business which is pretty often.

Pricing is all about timing. We bought our house in 1996 for $175,000. Sold it in 2005 for $757,000. In 2008 or 9 it resold for somewhere in the mid to high $400,000s and now it is for sale again for $600,000+. So you can make or lose money depending entirely on your timing.

The character of the city and the homes is unparalleled in OC. Orange has some nice small older homes but they are pricey.

It is cheaper for several reasons.
Prejudice is the primary reason. Aka fear. Santa Ana is mostly Hispanic and they are different from stereotypical white people (they have much better parties). Immerse yourself in their culture and actually get to know your neighbors and it can be a terrific experience. There are bad parts of the culture along with good and other bad parts that relate to poverty rather than culture. Overall it cna be a challenge but you can make it work even for a family.

Schools. Schools are so bad it is almost funny. Schools make a huge difference in price of housing. However they are not all bad. There are good schools to be found if you work at it.

Safety. Santa Ana has a higher crime rate than many places in OC. Still crime is pretty low compared to many places in the US. However, bad things do happen. If you are not selling or buying drugs guns or sex, probably not to you, but you might see or hear bad things going on. It is a city, not a suburb. It is crowded and parts are dirty. We saw some drug deals and prostitution. We had something stolen from our yard. We saw apparent gang bangers walking around downtown. One year, a kid got shot in the buttocks about a mile from our house. (However several years later, two kids got shot less than a mile from Irvine, but several miles form our house, so the "safe" Irvinites were closer to that shooting than we were in our part of Santa Ana. A lot depends on where you are).

The government and your neighbors need you. It is easy to get involved and become an important part of your community. In fact it is really your duty to do so. The good neighborhoods would not remain good without strong neighborhood participation. the City government scene is pretty welcoming as well - as long as you do not tick off the wrong people.

amenities. Not a lot of parks and open space around. very few bike trail (but there are some). Not a lot of chain stores an restaurants. It is not planned, Santa Ana evolved. neat things are all over the place, but so are bad things. You have to get to know your town to know where you want to go and where you should not go. It is exciting, but not convenient. We had more cool things we could walk to than anyone we knew in OC, but we also had more areas where we should not walk - at least not at night, and not without our giant English mastiffs.

So there is a trade off. Yes you can have a house that people walk into and their mouths drop open and they exclaim they did not know there was anything like this in Orange County. Our house was stunning. (Unfortunately the subsequent owner removed nearly all its charm and character by trying to "update" it). You can walk to groceries, live theater, cool bars and restaurants. walk to the train to LA. I even walked to work. I usually put around 4000 miles on my car, mostly for business and vacation travel. I just never needed to drive. On the other hand, your neighbors might be a home for recovering alcoholics, or a boarding house, or a business. What you will not find in Santa Ana is row after row of master planned sameness. It is eclectic and messy. That is why we loved it so much.

.