Pacific Palisades House drops 47% in 2 years
It appears that even Pacific Palisades has started to crumble. According to Redfin, we have a serious comparable showing a $650,000 or 47% drop in just over 2 years. Appraisers may find this sale troubling, and it would definitely affect the neighborhood values. Here are the details:
17050 Livorno Dr., Pacific Palisades CA 90272
3+2, 1748 sqft, Lot size 6969 sqft
YB 1950
SOLD on 6/5/07 for $1,395,000
SOLD on 6/29/09 for $745,100 (-47%)
If anyone has any particular information about this house, please let us know.
Lastly, take the poll to the right and guess what you think a starter house in Pacific Palisades will be at the bottom.
Posts
52 comments:
Drove by it, but didn't go in. It's a good start on the road back to sanity.
This is a vacant lot, vacant since mid 2007 after the existing fixer was bulldozed. It just sold at a fire sale price at a bank foreclosure auction last month with well over a million on the outstanding loan note. Original purchaser in 2007 was a developer who lost his/her construction loan and everything else. Sorry to burst anyone's "bubble" but, don't expect to snap up decent/habitable Palisades homes under $1 mil anytime soon unless your idea of living is pitching a tent or parking the trailer. A home three houses down from this lot just sold last month for around $2.9 and some change, about $100K under ask. Another house four up on the other side is in escrow with an original ask of $2,750K. Oh, and both are on Sunset Blvd. to the south with no direct ocean view. Sorry gang, but it is never as dire as one would like to have it appear. It would be great if it was though, huh?
Must be an early bird. The median is still 1.7M as of July 09. In other news, Hancock Park area 90004 is down 59% in median y/o/y.
http://dqnews.com/Charts/Monthly-Charts/LA-Times-Charts/ZIPLAT.aspx
These pocketed areas are difficult to figure out. Certain areas of Mar Vista are only off slightly, such as about 10% below where they were a couple years ago. This is a rough estimation, but if you look at the homes that sold btw Centinela/All (E/W) and Washington/Short (N/S), homes on streets like Stewart, Neosho, Chase, etc., have sold for an average of 620K (plus/minus). I'm not factoring the homes on Short Ave (busy).
IMHO, that area should be PRIME for serious price corrections. Three years ago, however, homes were selling for 700K, so 620K is about a 10% drop.
Shouldn't this area, which is stocked with many tract-style 2+1 homes, be ripe for 20-30% off of peak prices?? That would mean that homes in the region should be selling for 500Kish. Sadly they are not! (yet anyways).
At this rate, they will never hit the golden 50% reduction from peak..
Signed,
Jon "The Impatient One" ;-0
Thank you, Anonymous at 11:17 am, for clarifying that this is an empty lot. Indeed, the devil is in the details.
You got it Anon 8:40. It always is, isn't it. Interestingly, the new owners according to the Property Activity Report just resubmitted plans for approval. Originals were already stamped. Looks like a new mini mansion will be born. And yes, so long as the market continues as it has in this lower Marquez region, they will make their money and then some easy profit so long as they keep construction costs below a million.
I hate to bust your bubble Anon 11:17 but, if this lot sold for $745K 2 years after someone paid $1,395K as a teardown, that means lot values have been cut in half.
$1,395K / 6969 sqft = 200 / sqft
(+ demolition cost)
$745.1K / 6969 sqft = 107 / sqft
$107 / $200 = 53% or (-47%)
Also that house that closed for $2,900,000 up the street was:
Brand new, 5+5 BR, 5260 sqft on a 7260 sqft lot.
At $107 /sqft, the lot is worth $776,212. That means the new owner paid $2,123,788 for the house, or $403 / sqft of construction. Could be a bit high for a house that size on a 7260 foot lot.
Sorry to say, a "fixer" in that area is probably already under $1,000,000 and dropping.
Point well taken Late Summer, but, my bubble burst long ago when I loaded up on JDS Uniphase among others. Now that was a bursting! Ouch! Again, this was a foreclosure and auction - they were practically giving it away as the default had been outstanding for over a year. If we simply evaluated the few foreclosures and short sales as market indicators, an unrealistic picture would be painted. As one who looks pretty closely at the Palisades market, I just don't see the huge drops everyone expected or wishes for. Those of us arm chair RE analysts in the Palisades know the under $1.5 dogs - easy to ID based on DOM, there are about half a dozen other properties that would fall into that category. The turn key starters (minimal fix - roof, pipes and electrical already updated) simply don't seem to budge below $1.2 +/- $50K. It may happen, but I just have not seen it. A minimal fixer just sold a block up from the lot - on Bollinger for right around its $1.2 ask. If priced right, they sell rather quickly as that one did. It's the folks that still think they can get close to $1.5 for a 3bd/2bath that are out to lunch, and they still persist.
Now interestingly enough, the other property a couple of houses up from the lot I noted which appears to be closing escrow around $2.750 originally went for approx $3.25 in mid 2007, so that is a substantial decrease. Original owners will have walked away from at least $500K in under 24 months or so. And that was not a short sale.
I don't have a dog in the fight w/regard to where property values go, my experience walking the streets tells me that the dust will settle somewhere in the middle. I am sitting tight and enjoying my humble homestead waiting to see if Malibu/Topanga sellers (agents?) ever get the message as those markets should somewhat adjust parallel to the Palisades but have yet to meaningfully correct at all. I see less reality in those areas than even you and your readers see in the Palisades or north of Montana. That said, I don't think either markets will drop to the desired 02 or earlier levels contemplated by many on the RE bloggs. But, one never knows.
Sounds a lot like the classic "not in my neighborhood" psychology. The PP and SM will fall more. These areas are the first to rise and last to fall, but fall they will.
No one knows how low prices will fall, but the 2002 speculators might be right on the money. Only time will tell.
"Now interestingly enough, the other property a couple of houses up from the lot I noted which appears to be closing escrow around $2.750 originally went for approx $3.25 in mid 2007"
You have no idea what you're talking about anon, which is pretty obvious given your idiotic comments and rantings about empty lots vs tear downs (actually, an empty lot is more valuable than a tear down lot, think about it for a while). But just to clarify, that property is 17028 Livonia and it just closed escrow for $2.567MM. But you're right, the crash isn't happening in PP. Whatever.
Hey hot shot, I said "around", never said the exact sales price, which I have no access to, or that prices were not coming down further. Fail! Also never opined about teardown value vs. lots, etc. Thanks for clarifying though and demonstrating a level of reading comprehension and vitriol which probably explains why you are, well where you are. Oh, and the street is Livorno, not Livonia. That's a city in MI. "Idiotic?", "Rantings?" and, the rest of your comments . . . um ok. You got me sweetness. Sometimes the jokes truly just write themselves.
I know I got you, your post makes some big deal of the fact that it was a vacant lot. So what? It was a teardown when it sold for almost double, now it's a vacant lot for 50% off. WTF was your point then, smart guy? Seriously, I'd like to know what great point you were trying to make.
Sorry I got the street name wrong, I copied it from a realtor who sent me an email about the sales price. Does that change the fact that it sold for about 25% off? No it doesn't, which goes to your other point about the crash seemingly not happening in PP. So yes, you are indeed an idiot.
easy fellas...you don't have any skin in the game, so relax.
One thing on this property is the fact that construction financing has all but dried up...so a vacant lot is more of a liability in this market. No crappy house to rent out for a while so you can coordinate plans, permits financing, etc.I would expect a vacant lot to sell for a lot less than 3 years ago because of this.
the turds keep claiming that north of montana real estate is a good investment -
Someone that\ bought a piece of land north of montana paid 900 thousand bucks exactly 20 years ago
after 20 years they are up to about 1.5 million
that is means the value has gone up only 2% a year - you could have done better in T bills -
inflation went up faster than 2%
the real return to buying in the GRS has thus been negative for 20 years.
it is not just this recent correction - the 20 year track record is terrible
More reason you should buy as a home....not as a investment.
Just saw Case Shiller. LA went positive for the first time in 3+ years. Even the seasonally adjusted series is up. On the low/mid/high series, high end is also up seasonally and non-seasonally.
So are we discussing that here or are we ignoring it, hoping it goes away. Just curious...
It will not be addressed by the more agro-prone readers (not including Late Summer, who will probably address at some point soon) or will be invalidated and found non-applicable to the cases at point (or the areas desired) by such readers, and you will be branded a "realtard" or one with some grand agenda for even bringing up any positive market info in the first place, as opposed to one just offering new facts to add to the market picture.
So true....If you DARE to point out some positive housing news in the Westside.....you get your ass kicked by the fence sitters, who are very happy to sit there til 50% peak pricing....sigh.
The Case/Shiller numbers for June showed that Los Angeles (Which they describe as LA and Orange Counties) increased 1.1% from May 2009 to June 2009. This is expected in a busy summer month. They ALSO decreased 17.8% From June 2008 to June 2009 (YOY). So we aren't declining by a 19% clip anymore (YOY), but pretty close to it. Keep in mind, 2008 was an awful year and still we have declined by almost 18% more. Also, LA and Orange Counties are a huge geographical area, with many micro markets. I don't see any evidence of the Westside market recovering at this point. If anything, it is getting worse.
And what about all the foreclosures starting to pile up at banks, owners underwater, loan resets coming and homes that went off market, because they are zombies(underwater with no chance of selling)?
I don't mind acknowledging positive information on Westside real estate. The problem is it is difficult to find these days. However, I will admit we are sinking less rapidly into a deeper hole by about 1% right now (YOY). Woo Hoo!!
The results of our poll on "What a Palisades Starter Home at the Bottom" are in:
$300K - $399K (11%)
$400K - $499K (21%)
$500K - $599K (22%)
$600K - $699K (25%)
$700K - $799K (9%)
$800K + (12%)
That puts a starter house in Pacific Palisades around $600K at the bottom. That's a good 30-40% off current pricing.
Hope that some of you who know WLA/CC area well can provide some color here. Who are these folks living in the 650k-700k 3/2 modest starter homes in CC/Mar Vista? Are there really that many tens of thousands of ppl who have a combined income of 200-250k who want to live in a very modest, middle class neighborhood? It is very hard for me to imagine a family making 200-250k+ settling for a modest starter home in Culver City. I know a couple who just bought a 700k condo in Brentwood, and when I asked whether they’d consider buying a house for that prices in CC, they asked me is CC safe? I know there are some fancy neighborhoods in CC, but I am not talking about those. I am more focused on the neighborhoods with the 650-700k modest starter homes. Look forward to hearing what you guys think.
"They ALSO decreased 17.8% From June 2008 to June 2009 (YOY). So we aren't declining by a 19% clip anymore (YOY), but pretty close to it."
You do realize that we will hit bottom long before that YOY number goes positive.
As an example - lets assume the following is a seasonally adjusted series of prices:
2008
Jan 100K
Feb 100K
Mar 100K
Apr 100K
May 100K
Jun 100K
Jul 100K
Aug 100K
Sep 100K
Oct 100K
Nov 100K
Dec 100K
2009
Jan 95K (-5% YOY)
Feb 85K (-15% YOY)
Mar 70K (-30% YOY)
Apr 60K (-40% YOY)
May 65K (-35% YOY)
Jun 70K (-30% YOY)
Jul 75K (-25% YOY)
Aug 80K (-20% YOY)
Sep 85K (-15% YOY)
Oct 90K (-10% YOY)
Nov 95K (-5% YOY)
Dec 100K (flat YOY)
Can someone tell me where the bottom was? Im sure some of you are thinking, no, its a realtard trick, seasonality, etc. etc.
Before you come back with any of that, calm down, think it through carefully. Look again at the numbers - the bottom was the point of peak YOY decline.
Now thats not always the case (hence the reason it can be a realtard trick), but it isnt always. In my hypo, the bottom was the point of maximum YOY decline.
So was that true for Case Shiller LA? Well, if you look at the seasonally adjusted index (not just the headline one the media reports) - it looks like we really did bounce. Just FYI
Uh, 8:17... the declines don't all take place in one year so yoy is a meaningless stat. Thanks for the work though.
Anon 8:17, perhaps the worst YOY declines are over and the market is turning, but would you still buy in this market when prices have dropped 17.8% from last year? I wouldn't. It is not a bottom until we actually go positive.
You know what is so crazy about all of this back and forth banter, other than making for some lively entertainment, is that the post of the month has to be by Annon 3.23:
"More reason you should buy as a home....not as a investment."
How true is that. Unless one is tapped out and looking to sneak into the deal of the century (which is fine), chances are most home buyers, myself included, will buy the home which meets their needs, in the time frame their circumstances call for, irrespective of a $50-100k one way or another if the home is truly the "right home" for their family.
Trying to go nuts over how low or how high a home could go, regardless of what side of the fence you sit on seems ridiculous. Yes, one definitely does not want to buy at the peak or anywhere near it, but . . . many of those who purchased in the higher regions in my Palisades neighborhood intend to stay here, raise their kids, etc. for the next 10-15 years. And thus far none of these people were ones mortgaged to the hilt. I have yet to meet a family that moved in to the neighborhood with the intention to turn a profit or was overly concerned about "paper losses" - though some do discuss their purchase prices with a little remorse. A few will feel a major burn where they have to turn over the property due to some unforeseen consequence in the near future, but most should be ok as they did not purchase the home under any "speculating" initiative.
As to would I buy now? Sure . . . if the right home showed up. But that answer comes with a lot more criteria attached to it than price. Especially with a family with young children. IMO, the "right" home for ones family - location, size, floor plan, adjacent properties, sidewalks, etc. - far trump nailing the market at its trough. But, that is just me, many still do see it as an investment, which as has been demonstrated, certainly over the past 20 years could be a very risky one! Nice weekend all.
"Uh, 8:17... the declines don't all take place in one year so yoy is a meaningless stat. Thanks for the work though."
Then add Year 2006 where the prices were 150K even 2005 where they were 200K - doesnt matter - the point still holds. Think it through carefully.
Anon 11.33 - Are you saying that the market has bottomed?
I'm 'thinking it through carefully', and they still look like erroneous calculatuons...
Other than bad stats, what gives you the impression that we're at a 'bottom'?
"but would you still buy in this market when prices have dropped 17.8% from last year? I wouldn't. It is not a bottom until we actually go positive."
Again you arent thinking it through. Ok let me try to answer your objection (and the earlier anon's objection by drawing this out some more:
2007
Jan 100K
Feb 100K
Mar 100K
Apr 100K
May 100K
Jun 100K
Jul 100K
Aug 100K
Sep 100K
Oct 100K
Nov 100K
Dec 100K
2008
Jan 95K (-5% YOY)
Feb 85K (-15% YOY)
Mar 70K (-30% YOY)
Apr 60K (-40% YOY)
May 55K (-45% YOY)
Jun 50K (-50% YOY)
Jul 45K (-55% YOY)
Aug 40K (-60% YOY)
Sep 35K (-65% YOY)
Oct 40K (-60% YOY)
Nov 45K (-55% YOY)
Dec 50K (-50% YOY)
2009
Jan 55K (-42% YOY)
Feb 57K (-33% YOY)
Mar 59K (-16% YOY)
Apr 61K (+2% YOY)
May 62K (+13% YOY)
Jun 63K (+26% YOY)
Jul 63K (+40% YOY)
Aug 64K (+60% YOY)
Sep 64K (+83% YOY)
Oct 64K (+60% YOY)
Nov 65K (+44% YOY)
Dec 65K (+30% YOY)
Again, the point of lowest prices was Sept 2008 at 35K (-65% YOY). The very next month prices moved up (again remember these are seasonally adjusted numbers like Case Shiller SA index), yet the YOY decline was still hugely negative.
Now if we were to follow your logic and "not buy til prices are YOY positive", that would put us in at April 2009 (61K). Thus by your reasoning you bought at 61K versus the bottom at 35K - meaning you were late by a long shot and missed the bottom by 40 some odd percent.
Again, this is going to be a revelation to some of you - thinking "thats impossible" or "thats a trick" or whatever. I thought so too till I ran out a bunch of combinations myself. Turns out, its flawless.
Again though this only works perfectly with seasonally adjusted numbers. Thats the inherent danger with the Case Shiller Seasonally Adjusted index going up MOM but yet staying way negative YOY.
Im not saying this is the bottom, but ignore the fact it moved up at your peril.
Just to drag out the series longer let me add 2010. Again find "the bottom" in prices. You tell me...
2007
Jan 100K
Feb 100K
Mar 100K
Apr 100K
May 100K
Jun 100K
Jul 100K
Aug 100K
Sep 100K
Oct 100K
Nov 100K
Dec 100K
2008
Jan 95K (-5% YOY)
Feb 85K (-15% YOY)
Mar 70K (-30% YOY)
Apr 60K (-40% YOY)
May 55K (-45% YOY)
Jun 50K (-50% YOY)
Jul 45K (-55% YOY)
Aug 40K (-60% YOY)
Sep 35K (-65% YOY)
Oct 40K (-60% YOY)
Nov 45K (-55% YOY)
Dec 50K (-50% YOY)
2009
Jan 55K (-42% YOY)
Feb 57K (-33% YOY)
Mar 59K (-16% YOY)
Apr 61K (+2% YOY)
May 62K (+13% YOY)
Jun 63K (+26% YOY)
Jul 63K (+40% YOY)
Aug 64K (+60% YOY)
Sep 64K (+83% YOY)
Oct 64K (+60% YOY)
Nov 65K (+44% YOY)
Dec 65K (+30% YOY)
2010
Jan 66K (+20% YOY)
Feb 66K (+16% YOY)
Mar 66K (+12% YOY)
Apr 66K (+8% YOY)
May 66K (+6% YOY)
Jun 66K (+5% YOY)
Jul 66K (+5% YOY)
Aug 66K (+3% YOY)
Sep 66K (+3% YOY)
Oct 66K (+3% YOY)
Nov 66K (+2% YOY)
Dec 66K (+2% YOY)
So per my example, the timeperiod from 2007 to 2010 represents a total 34% drop in real estate - perhaps not too far away from what we will see. But still look at when bottom hit in this seasonally adjusted index. The answer was Sep 2008 back when the YOY rate of decline was still heavily heavily negative.
Not saying this is, but the Case Shiller Seasonally Adjusted index just went positive (even though way down YOY) - not a good sign.
"I'm 'thinking it through carefully', and they still look like erroneous calculatuons..."
Speedingpullett - think it through again. Find the flaw in my hypo. And dont come back with another hypo. Im not saying this IS what is happening, im saying it could be. Again, find the flaw (and remember seasonally adjusted). Good luck
Anon 12.19 Sorry mate, I'm still not sure what it is you're trying to say.
If you're saying the bottom has been reached, and prices are expected to rise like they did, then I'm right out of luck in being able to afford to buy in SoCal within my lifetime.
Me and a few million other people, I'd hazard a guess, because even on our combined salaries, $750K is still to expensive for us. And we're up there in the top quartile of CA earners...
BTW you haven't actually put forth a hypothesis ie a carefully worded statement (hopefully) predicting what your calculations will show.
And, for the record, neither have I.
Full disclosure: I worked as a statistician for well over a decade, and even taught Stats 101.
While I like your enthusiasm, I'm still not sure what you're trying to show me..... ;-)
Everyone needs to step back from fuzzy math and understand what the data really mean. "Going up"; "Going down"; just relative comments.
What CS simply shows is that homes are crossing at price levels seen in mid 2003 (low-tier) to early 2004 (high-tier).
In other words, if you're looking for a house, you shouldn't pay any more than 2003/2004 comps/levels. Assuming you believe prices are stable and not going to fall. For what it's worth, I think values will still decline to mid.
Anyone who is using recent CS data as justification to accept a modest discount to a recent listing price will be burned.
I too am having a difficult time with your hypothetical example. Let's take some real world numbers and put it to the test:
Let's say we have a house worth $1,000,000 in June of 2008.
In June of 2009 at -17.8% (YOY)
It is now worth $832,000
Fast forward to June of 2010 and let's say it drops -15.0% (YOY)
It is now worth $707,000.
In June of 2011 at -10.0%
It is now worth $636,000, yet the RATE of decline is less or appears to be bottoming.
Sorry to say, I too have a hard time with your reasoning and the perception that the Los Angeles real estate market is bottoming out.
Again, All, the only point I was trying to make was, Late Summer was looking at the case shiller YOY rate and saying "its going down less slowly". Thats not correct when you are talking about SEASONALLY ADJUSTED numbers.
Latesummer - even better than a seasonally adjusted index - is to use your real world example, except I will fill in some numbers along the way:
2008
June 1MM Your number
Jul 990K
Aug 980K
Sep 960K
Oct 940K
Nov 920K
Dec 900K
2009
Jan 880K
Feb 870K
Mar 860K
Apr 850K
May 840K
Jun 832K (-17% YOY) Your number.
Jul 820K (-17% YOY)
Aug 810K (-17% YOY)
Sep 800K (-17% YOY)
Oct 790K (-16% YOY)
Nov 780K (-15% YOY)
Dec 770K (-14% YOY)
2010
Jan 750K (-15% YOY)
Feb 740K (-15% YOY)
Mar 730K (-15% YOY)
Apr 720K (-15% YOY)
May 710K (-15% YOY)
Jun 707K (-15% YOY) Your Number
Jul 690K (-16% YOY)
Aug 680K (-16% YOY)
Sep 670K (-16% YOY)
Oct 660K (-16% YOY)
Nov 650K (-17% YOY)
Dec 640K (-17% YOY)
2011
Jan 630K (-16% YOY)
Feb 620K (-16% YOY)
Mar 610K (-16% YOY) THE BOTTOM
Apr 620K (-14% YOY)
May 630K (-11% YOY)
Jun 636K (-10% YOY) Your Number
Jul 640K (-7% YOY)
Aug 645K (-5% YOY)
Sep 650K (-3% YOY)
Oct 650K (-2% YOY)
Nov 650K (Flat YOY)
Dec 650K (+2% YOY)
2012
Jan 650K (+3% YOY)
Feb 650K (+5% YOY)
Mar 650K (+7% YOY)
So again, where is the bottom?
Hate to get in the way of a math food fight..
Anon@ August 28, 2009 11:06 AM:
I grew up in the SM Canyon, and have lived in the PP my whole life. My parents left me a bunch of money, so I've been a bum. Seriously. I'm 45 and I haven't worked for years. That is besides the point, but pertinent b/c I spend a LOT of time hanging with my neighbors. I also speculated on a bunch of properties (mostly profitable, with a few painful exceptions).
In my meanderings, in many cases I have found that people in the PP ARE underwater. They took considerable equity out of their homes between 2004-2008. They are now stuck and, in some cases, are really worried about their loans adjusting up. Many of them are not making what they used to. When they refinanced their bonuses alone constituted half their yearly pay. Now they are lucky to have a bonus @ 10% of what they were receiving..
I've built a few homes in the Alphabet streets, and helped others find good contractors for remodels. I currently live close to El Medio, and I personally know people in my neighborhood who are in a big financial pickle and are looking at walking away from their home as an option.
Your premise that a family isn't concerned about a 100-200K (minimum) price difference as long as they find the right "floor plan" is pretty simplistic and, with all due respect, naive.
There is a continual slide in home prices currently under way. In the PP it may become an avalanche (or not- my crystal ball is broken) but we will most likely see very flat prices for a long time. Therefore, paying 100K more is tantamount to throwing money into a fire.
Phil
Anon @ 2:33 LOL! Nicely done. I hadnt thought about it before but you are right. All our resident permabears who thought you only buy when its YOY positive are crapping in their pants right now!!!
Not convincing in the least. More like the permabulls are desperately trying to motivate people back into buying on the Westside. These realtards are crapping all over their lack of income...
"Not convincing in the least."
Really? Find the bottom in that series. Just sayin...
the other problem with yoy is that it is an average which is inherently a poor measure. For example, 3 million dollar houses could sell for 1.5 and still raise the average.
All should note that Redfin currently shows this property sold again on August 18 for $925,000. So our back and forth on extreme price drops has been at best academic and out of date with respect to this vacant lot. If we are going to analyze the extreme price drop, we should utilize the most accurate and recent price as of the posting date Aug. 20. which actually increased by a nice percentage.
Speedingpullet,
To say that you will never be able able to afford a home for $750,000 therefor you will never be able to buy a home in So Cal is ludacris. There are plenty of nice homes in So. Cal for $250,000. They just aren't in West LA. We can't all afford live in the wealthiest areas no matter what we envision. I know I can't.....
Thanks for the kind words Jeff - but I guess my point is.... that's insane ;-)
We work in entertainment, the Husband and I - we're the lifeblood of L.A. Apparently, along with rich foreigners and savvy investors, we're the kind of demographic that keeps this city afloat...
We're both paid roughly twice the median income for L.A County - and yet - when the question of actually buying a place in the same city we work in comes up - general guffaws all round...
We're not talking about jonesing for a palace in Holmby Hills or Malibu Colony, or a double lot North of Montana- I'd be happy for a well-maintained Ranch in the Encino Hills - which is still unaffordable on our not inconsiderable salaries.
If the people who work here can't afford to live here, then what kind of future does L.A have?
I guess I'm feeling a bit 'Big Picture' about it all today - if people can't afford to live here, what's to stop them from going to cities where they can afford to live, and taking their expertise and talent elsewhere?
Oh and here is a nice one to rain a little, just a little, on the "let's toss the last dirt on the Palisades value grave" and go get us some under priced - mass Palisades exodus - fire sale properties.
http://876iliff.com/
I don't know how this happens, why this happens, but . . . between this and the Livorno $2.9+ noted above both going in the past month, it is very clear, people still pay MILLIONS, even now, to live in the Palisades nay sayers be damned. And Pullet has a point, these are definitely not "normal" upper middle class folks who buy $3.2 million dollar spreads on baby lots with 1100 sq. ft type bungalow neighbors up and down their street. What gives with this, new construction or not! That is a considerable amount of coin to reside, well in the Alphabets!
I stay because I grew up here, my family lives here, and I'm still very close with the same guys I went to elementary school with. Sure, I'm priced out atm, but things are looking better each month for me and my family.
I moved out of state and found, after 5 years, that my friends and family meant too much to me to be in another state.
If you are from another state/area, it really makes no financial sense whatsoever to live in West LA. Unless, of course, you are extremely wealthy, or, as is the case with many new home buyers here, your parents are.
Most of my friends are solid middle class, none making more than an upper limit of 150K. I'm lucky (and have worked very hard) so I make well above that; sadly, my parents never had a dime and I did not have the good fortune of parents footing a down payment on a home. I have many childhood friends who own in Santa Monica, MV, PP, etc., and in almost all cases their parents put 20% down for them.
No complaints here, in fact I am proud that my wife and I now have enough for a sizable down payment. I'm just trying to be patient and let the market correct before I jump in.
The wait is killing me! ;-)
For every one or two houses that sell at stupid amounts, I can show you 5 houses that are similar that haven't. It's not about one or two houses, there will always be some sales and some people who don't care. I'm in the same boat as 3:58, I'm waiting and every day on the whole it's getting better for me to buy more house at a lower price. In the end I will save a fortune and 15 or 20 years from now it will be a HUGE difference in dollars regardless of what the realtors who cannot grasp 5th grade math will tell you.
On the whole, PP is down 30%+ to late 2003 early 2004 prices. Teardowns are basically not selling, things you can move right into and/or are new are selling a little better but the number of escrows open in August (the realtors new favorite misleading and untrackable stat) fell off a cliff. At every price point down some small number of people will buy, but prices are still falling and won't stop until they reach sustainable numbers.
Speedingpullet
thanks for your comments.
you asked
"" If the people who work here can't afford to live here, then what kind of future does L.A have?
""
to answer you I would ask you to go visit Manhattan or San Francisco - it used to be that normal professional families could buy a family sized home in a safe area of Manhattan. It used to be that normal professional families could buy a normal professional size home in San Francisco.
those days ended a while ago. Talk to your friends in NY and SF - I bet all of them have already thrown in the towel on living there
Young married couples in NY and San Francisco are honest with themselves about their choices
(1) do not have children, and thus be able to live in a small apartment in the safe part of the city
(2) have children and move to a place that is an hour commute from their jobs
That's it.
Why don't you face facts of the situation? Young couples in NY and San Francisco have faced up to this - go look up the birthrates among professionals in those cities?
It is only in Los Angeles where people like you think they should be able to afford kids, afford a family sized house, and still have less than an hour commute to jobs. Sorry, but the numbers just don't work.
In New York and San Francisco people have been threatening to move away from the cities for years due to the high cost of housing. Know what? Millions of people have moved away but both cities are still very vibrant - the grownups who move away have been replaced by kids right out of graduate school who are happy to live crammed in with roommates.
Those cities are now known as the place for ambitious professionals to move to right out of grad school, live for a few yearsa all cramped in, and then for those professionals who won't have kids, those professionals settle in to a small apartment for life. Those that do want kids move to the distant suburbs
So, speedingpullet, if and when you move to another city, there will be dozens of other people whose skills are only a little weaker than yours who will move to the west side to take your place. That is the natural evolution of the best cities - people who want kids move out and people who are happy to live with no kids move in.
6:54, I encourage you to learn about population density before you make idiotic, repetitive posts. SF is about 7 square miles. Huge amounts of business are down the Peninsula where prices are falling rapidly. I also have friends in NYC who are 30%+ underwater in their apartments... so same applies, if you don't buy in the bubble, you'll do better.
Thanks 6.54 - as a native Londoner, I'm totally unfamiliar with the socioeconomic workings of other big cities ;-)
Speedingpullet - if you visit London occaisionally you will see that London is substantially more expensive that the West Side -
I mean, there are thousands of people who grew up in London expecting to be able to afford a family home in a nice safe part of London that have been priced out - Educated sophisticated professionals are taking on commutes that they never would have dreamed of years ago.
Bottom line, big cities will not provide a family sized home to all of those people that want to live in them. If you want a family sized home with a back yard get used to a one hour commute - whether in West LA or London.
Speedingpullet - only realtor scum would advise you to buy today. Find a neighborhood you like and rent - the bubble is crashing - who knows in a few years you may be able to afford to live in Santa Monica (with the rest of the British expatriates)
Ah, mate, you are Comedy Gold.....
I know the guy that lost the lot. Yes it did have an older house that was torn down and he had plans to build but could not get financing. There were approved plans for the project. As far as I know, the plans were used by the new buyer and the exact house was built. Drove by it on 7-16-10 and it looks like it is almost complete. It had an ocean view now that it is a 2 story and even better view with a 3rd story lookout tower. The house looks exactly like the plans I saw for it a couple of years ago.
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