How Much Are Homes Really Worth ?
Historically speaking, housing prices have tracked inflation at roughly 3% appreciation per year. This was of course until 1995, when the housing bubble was in it's infant stages. A starter home in a decent area was roughly $300,000 after the real estate crash of the early 90s. If we take that price and apply historical norms, smoothing out for stock and real estate bubbles, that same house today, increases by 56% to $467,000. With Westside starter homes in decent areas, priced from $750,00 to $850,000 today, we are still bubble priced. (a good 40%)
This method is easy to apply to any home purchased from 1995 to 1999, before the bogus loans distorted the prices of real estate. Just multiply the starting 90s' sales price by 1.03 for each year, until 2010. This will give you an idea of what the home price should be. It may take awhile, but we always revert back to historical norms.
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98 comments:
I agree. But one or two neighborhoods will be exceptions and never get to this level
Yes, but I don't think the Westside has one of those neighborhoods. The only likely candidates are San Marino and Manhattan Beach.
I agree. Both of those have something the w side lacks
Since 1995 there has been thousands of condos/apartments added to the westside. Traffic has gotten substantially worse due to the population increase from the new condos/apartments. I think that people with money that are commuting are moving here to houses, and keeping prices high.
However, as banks continue to put up foreclosed properties on the market, prices will drop.
San Marino will do better than w sid
It may take awhile, but we always revert back to historical norms.
The inflation approach gets it all wrong - buyers are not the same as 15 years ago. Professional earnings have far outstripped inflation.
An 'engineer' used to be someone who worked in aerospace for $75k and had a pocket protector, now they are a $150k 20 or 30 something with stock options and bonuses.
A 'banker' was someone who worked as a branch manager or downtown making $100k; now a banker is an I-banker or VC who makes a whole lot more.
A dentist or doctor used to be a drill-and-fill or GP; now dentists are doing $30k full restorations and specialist doctors are earning +$300k.
A better approach is x income affordability. Don't forget the HH income effect of working spouses. Even south-central supports $200k prices, which is 4x the $50k 2-3 marginally employed earners in a HH can scrape together.
"Professional earnings have far outstripped inflation."
not doctors and lawyers - you have no idea what you are talking about.
1995 was the bottom of the last cycle. The question is will this cycle also "overshoot" the "mean" on the way down as well. Hard to say...but do you want to try to time the absolute bottom or buy at a level that is reasonable compared to historical norms...all depends on (1) your living situation and (2) your risk tolerance.
I would point out though, one major point of difference as 4:53pm points out...we all know that wealth & income inequality is far greater than in the mid-90s. That, is in part, why the subprime areas/homes are down much greater 35%+ than the higher end areas like Franklin 90402 (down 15-20%).
Another major point of difference between the cycle in the mid 90s and the current cycle is the amount of government intervention to prop up the financial sector and housing sector. In the last cycle the government was willing to close down banks and liquidate them through the RTC. This time, no liquidations for the vast majority, but only propping up of balance sheets through equity/debt injections, low interest rates, removing mark to market accounting requirements, expanded guarantees, etc. Not to mention all of the support for the housing market. I don't think it is feasible for the US goverment to allow the average home to fall in price much more as it could cause an implosion in our economy. The government would rather print money and risk inflation. Do you want to only hold cash? Or would you rather have some real assets as well...
Another major point in difference is the global nature of our economy compared to the mid
90s. Yes, our real estate is expensive but it doesn't look that expensive--relative to our incomes--as real estate does in many other countries. With the dollar weakened since the mid-90s a lot more foreigners have bought in the US, and will buy more in the US. Of course, on their own, they cannot support our market. But if the market were to drop, our market would only become more attractive on a relative basis. How many young sons & daughters of wealthy Middle Easterners, Asians, etc are glad to come to LA? NYC and LA are probably the two most global cities in the US.
6:24pm...I'm not sure what kind of lawyers you are referring to. All I know is that at many of the big NYC law firms, partners--even in 2009--were averaging profits per partner of over $2m. $2m/year on average seems pretty good to me regardless of inflation--can definitely buy a $3m+ Franklin 90402 home on that kind of income...even if the spouse does not work.
San Marino is a great community. The problem is that much of the income in LA is earned on the westside (SM, Century City, BH, etc) and San Marino is just too far of a commute for many. It is also too hot in the summer time.
Nevertheless, I do think it is a great and desirable community. If you want a similar family oriented, good public schools, etc kind of community then you'll invariably end up also considering Franklin 90402 and Manhattan Beach as well.
I live a few doors away from a retired doctor in his early 80's in 90402. A lot of SM lifers over 40 years old seem to know the guy from their childhood as their family doctor.
The old guy is still sharp, but seems befuddled by the folks who are in the neighborhood - he does not understand how they earn their money. He is still locked into the idea of the doctors, lawyers, and 'top executives' of companies being able to afford the area. He calls the wealthy foreigners 'Beverly Hills' money. When I told him an anesthesiologist moved in the next block he seemed excited. The point is a lot has changed over the past 15-20 years, a lot of new money earned in new ways has entered the area. The old rules (and inflation formulas) don't apply in a linear manner.
I agree. Lots of new ways to make money are available right now
Many Dr's, lawyers, and corp execs cannot afford to live in 90402. However, many of the top dr's, lawyers, and corp execs can definitely afford to live there still and do. Top surgeons, partners at big law firms, C-level officers of public companies, many of whom are married to overachiever spouses can make $1m annually or more. Add in the mid level investment bankers or portfolio managers at the asset management firms, eclectic heirs here and there, limousine liberal multi-millionaires who prefer the Republic of Santa Monica to the more conservative Brentwood or Palisades, and you have more than enough people who can afford to buy the always low-inventory NoM neighborhood. Given it tends to be a more family oriented neighborhood, many who do buy end up staying long-term.
Obviously many on this blog are completely clueless when it comes to the compensation of professionals and executives. Doctors' compensation is significanlty less that it was in the 90s due to increased policing by the government and insurance companies. Lawyers compensation is also significantly less IN CA WHERE WE ARE due to stiff competition caused by a huge supply of lawyers. And also, there just isn't that much executive compensation because businesses aren't doing well and are leaving CA. Get a clue. Where did this money come from? Phoney baloney loans:
New figures from MDA DataQuick show that during the first quarter of 2010:
•ZIP codes with median home prices below $500,000 saw foreclosures fall by 12.3 percent from the first quarter a year ago.
•ZIP codes with median home prices above $500,000 saw foreclosures increase by 12 percent from a year ago.
7:09AM, the issue is averages & medians versus top decile. We all know that the wealth & income gap has expanded dramatically in the last 10-20 years. That is the case also for lawyers. Sure, if you are an average personal claims or divorce attorney your income probably didn't keep pace. Do you even know what the incomes are for the average partner at a large white-shoe law firm?
Yes, Dr incomes are lower on a relative basis. However, 20-30 years ago Dr's were buyers of some of the largest most expensive homes in a given town. Now, the top Dr's can afford to buy in 90402 but not Brentwood Park, and the average Dr cannot afford to buy in SM. No problem, he has been replaced by all of the people who created the wealth gap...dot commers, real estate developers who got out, hedge fund managers, etc.
So what if a few businesses that aren't doing well are leaving CA. There are many that have done plenty well and don't want to leave. The real question is will enough people want to buy the homes in 90402 that come up for sale and so far the answer is a resounding and emphatic "yes"...even in a time where people should have been scared out of their wits.
What do you think this is, NY or San Jose? Hedge fund managers? Dot commers? The wealth expansion is not with professionals, it is with the super wealthy. Only those covering their eyes don't see that Southern CA is in steep decline. And obviously enough people don't want to buy in 90402 or the Redfin statistics wouldn't show steep price declines. And yes, I know the wages of the "white shoe" lawyers. Not as much as you think. The firms have taken mighty hits lately. Business is down 20-30% but fixed costs are the same. What do you think that has done to partner incomes?
What do you think this is, NY or San Jose? Hedge fund managers? Dot commers? The wealth expansion is not with professionals, it is with the super wealthy.
Super wealthy are not in SM to begin with, but folks with +$5-$10M net worth and steady +$500k HH incomes are. I think some GP doctors and mid-level/hanging shingle attorneys are cranky about their wealthier compatriots. The top folks in the professions have created a huge gap over the past 10 years, sorry to say there is not a rising tide for everyone.
I do have to agree with the last anon.
the complainers need to read the book "the winner take all society"
The book talks about the increasing concentration of wealth in our country.
And yes at my hospital the average doctor makes less money than he or she did ten years ago, but we also have many more $1 million a year plus doctors. Who is making the money now? The neurosurgeon for one. His income is way up.
If suddenly every single house in the Franklin 90402 was put up for sale, and this happened today, I think the market clearing price would be staggeringly low. There are just not enough people who want the Franklin 90402 who can afford to buy right now.
But prices are set on the margin. Only a few of the decent $3 million + houses in the Franklin 90402 come up for sale each month. And the number of people who want to buy and can afford $3 million is a multiple of the number of houses. The result is that these houses sell pretty quickly above $3 million
in a sense, both the pessimists and the optimists are right. The pessimists say there aren't enough people who can afford $3 million to move in to the entire Franklin 90402 right now. And they are right.
But the optimists are right as well. The small number of $3 million houses in the Franklin 90402 are absorbed very quickly as they hit the market.
I get the sense that many of the pessimists that post here are doctors and lawyers living in B+ neighborhoods, saying to themselves that they just don't know anyone in their social or business life that can afford to buy a $3 million house and therefore that there just aren't enough people like that out there
My answer is that the people that can afford $3 for a house tend to hang out in different social venues than the typical doctor and lawyer.
One last thing - of all the places in Southern California where you can spend $3 million on a house, the Franklin 90402 is the most liberal.
Manhattan Beach, La Jolla, San Marino, Newport Beach - all are dramatically more republican than the Franklin 90402. In a sense if you want a republican social circle, a circle of conservative people who live in $3 million homes you have a lot of choices. But if you want a pedestrianized, social community with the political philosophy of the Franklin 90402 and $3 million homes you really only have one place. The vibe in the 90402 is hard to replicate any where else in Southern California
Just to be clear, if you find republicans totally repulsive and don't want them any where near your house and you still want to spend $3 million, you really don't have a choice. Ever look at the politics of the people in San Marino, Manhattan Beach, La Jolla and Newport beach ?
Just to be clear, if you find republicans totally repulsive and don't want them any where near your house and you still want to spend $3 million, you really don't have a choice. Ever look at the politics of the people in San Marino, Manhattan Beach, La Jolla and Newport beach ?
Totally funny and off-base... there are a lot of quiet Republicans in 90402 (they are all around me). Some actually drive hybrids and wear shorts!! Don't assume SM is a political monolith. Don't blend SMRR socialists with people who are actually making money and don't want to part with it. Maybe stay at home school moms talk the liberal stuff, but their husbands working mega-hours and sweating it our are PO'd about rising taxes and social spending.
Fair enough. 9042 is defined by people publicly professing to be liberal or publicly professing to be apolitical. If there are people who are republicans they are in the closet.
But what do you care about what your neighbors do "in the closet" or "on the down low"
it doesn't impact you
In public the only politics in the 90402 are liberal. If you don't want that public stance in your neighborhood don't live in the 90402. God knows there is already too much demand in the 90402. A few marginal people that choose Manhattan Beach or some other place is not going to impact prices
The debate isn't whether liberal, conservative, or apolitical is better. The only thing we are discussing is that some wealthy people prefer a more liberal community whereas other wealthy people prefer a more conservative community. Different strokes for different folks. If you are a wealthy person who prefers a more diverse liberal community then 90402 is probably a good fit compared to Palisades or Brentwood...and vice versa. This topic is only relevant because some posters continue to feel that 90402 is not where they would want to be if they were/are wealthy.
11:08am, I couldn't agree with you more. 9:13am, it is very easy to look up the profits/partner of the "white shoe" law firms.
Almost all of them are well above $1m annually and the top ones are above $2m annually with the top firm being $4m per partner per year in profits.
Not all of the high income professionals depend on the local business community--in fact, most don't. For instance, LA actually has a good critical mass of money managers, including several of the top leading firms. These are the kinds of careers where a mid level portfolio manager makes $1m+ annually and the best ones can make $10m+ annually. None of those opportunities depends on the local business environment--they only depend on the fact that the owners/leaders of the firm prefer living in LA versus say NYC, SF, Boston, or Chicago. You can make an argument for any city but clearly there are enough rich people who prefer LA as well. Clearly, there are enough people who can and do pay $3m+ for 90402 that the market has continued to hold up relatively well despite a near collapse at the end of 2008 in our global economy. I continue to believe it will take a "shock" of that kind of magnitude to cause a real drop in 90402 housing values. If only because it is human pyschology to not sell at a loss and so the marginal seller is inclined not to sell their home unless forced to (the pick up in forced sales caused by the collapse in late 2008 has already been absorbed with a drop of say 15% in 90402 pricing). Meanwhile, there have been enough buyers waiting on the sidelines to more than absorb that spate of forced selling and now realize the market is now getting tight again and you have the usual amount of buyers who are starting families but you do not have the trade-up sellers anymore.
9:13am, the wealth expansion gets more extreme as you climb up the wealth curve.
Nevertheless, I do believe there are plenty of working wealthy professionals...net worths of $5m+, incomes of $500k+ that have greatly benefitted while median household wealth/income has stagnated.
No one is debating the fact that there are plenty of down to earth, humble hard working nice people who want to spend $3 to $4 million on a house, want to live in a neighborhood where the other houses sell for $3 to $4 where there are sidewalks and where there are nice neighbors.
There are many neighborhoods where you can spend $3 to $4 and have sidewalks connecting you to your friendly neighbors. In San Marino the summers get way too hot and there are some republicans. In Manhattan Beach the $3 million to $4 million houses in the Sand Section are way too close together and you have republicans and USC fans (some people fall in both of those categories!) And in Newport Beach you have a crowd that is very republican. The point is that 90402 is not "better" in all ways than the alternative but it is different.
One way to measure this is to look at the number of hybrids per person. The 90402 has a higher % of hybrids as a percentage of total cars than any other $3 million plus neighborhood in all of Southern California
This blog should be called...
"Who has the Money to buy in 90402?"
Can't we discuss the merits of the actual properties for sale or have sold?????
Green you are right we should discuss the merits of each property
however, many people here question the neighborhood - in other words, a house just sold for 3.8 million and many here say - nice house but why pay 3.8 when i can pay half that in some other neighborhood
so it really does come down to why people want the neighborhood
in fact people pay 1.8 just for vacant land so the quality of the house really isn't the issue the quality of the neighborhood is
Anyone see 724 15th? Anyone have comments ?
I'd really like to see some facts in these discussions instead of reading more hypothesis about liberals vs. republicans. or santa monica for that matter. Is this a real estate blog or just a bunch of bored people waiting to pick on each other?
How about Venice for a change? - there is almost no inventory right now. why? EVERY "starter" home (re: terrible small tear down) priced under $800,000 goes immediately. 2 new townhome/modern duplexes near me priced at $900,000 each sold the day they went on the market. (To a celebrity's daughter.) And one up the street - a tiny 900 sq ft - but modern - home on a bigger lot sold quickly for $1.2 to a player for the Galaxy. This is the reality RIGHT NOW. I don't think the math is going to work to "multiply the '90s sales prices by 1.03" - prices ARE NOT going to go that far back down in my opinion. Having lived in San Fran and NYC for a long time, I see those as irrational markets that jumped and never went back down. Must be the same thing happening here finally.
9:34pm, I completely agree. I think about some of the more expensive European cities sometimes. The real estate in London, Paris, etc can be so expensive but yet the after-tax incomes there generally did not and do not match the free for all capitalism here. The issue is the supply/demand for housing. Now granted, we cannot really compare CA which has so much more land/space to a place like London...however, I do think it is instructive to think about how supply/demand ultimately determines prices. So what is the supply of homes in 90402? It isn't much. Families tend to grow up together there so once people move in, they stay if they can generally, even if they become very wealthy, some still stay rather than move into a more elite $10m+ area.
I agree with 1:04pm who observes that the global credit crisis did cause some forced sales, from those that Warren Buffet would describe as not wearing swimming trunks when the tide went out. However, this pick up in supply was really completely absorbed by demand without the expected crash in prices. Unbelievable market strength to see that even during a time when people should be scared out of their wits, people were buying in 90402, at discounts of just 15%-20% to peak. Now that the stock market and economy have stabilized from the free fall of early 2009, very little forced selling is taking place and those who would normally consider selling would rather not at these prices. So the only selling going on is those who have to move for career, estate sales, downsizing, rebalancing of assets, etc. Not enough to overcome the number of people who want to buy into the 90402 regularly in addition to all of those who waited out 2005-2008.
Not to mention that now a lot of well off people are increasingly concerned about the US dollar and inflation. What happens to building costs & replacements costs when commodities go up? Check lumber prices denominated in Canadian currency vs in USD prices. How about the cost of steel with China stockpiling commodities given their economy and future currency strength. Care to sit out a future inflationary environment?
Yes, let's forget the debate about who has money to buy in the 90402. It should be obvious now that given the lack of jumbo financing until recently yet the continued drumbeat of sales at $3m+ that there are more than enough people who have the cash and our incomes to buy mostly all cash in the 90402. Why argue it? Maybe in 2005 we could all speculate a lot of buyers in 90402 were taking out liar loans or whatever exotics to afford it. Now in 2010 it is a fact there are plenty of near all cash buyers out there. If you are really in the market you know that many of these homes are not just selling at $3m+ but doing so with multiple bidders with all cash or near all cash. That is really the end of the story. The only thing we should be debating on this blog is the future of 90402 prices and the likelihood they will crash or not and what the "fair" price should be. Our fair blogger has said 3% inflation adjusted from 1995. I respectively completely disagress given that 1995 was the bottom of the last cycle and this time as people have pointed out above, the wealth gap is so much greater, government intervention is so much greater, and our overleveraged economy is such that the only way out is to inflate the debt away.
As someone who went to Columbia Law School and currently work at a firm in Century City where partners make more than almost any firm in LA, I just want to clarify some of the crazy remarks made earlier. That firm with profits per partner of 4mil... there's only one and it's Wachtell, based in NYC. Of the top 10 most profitable firms, half don't even have Southern California offices. You're talking about an extremely small pool of lawyers making that kind of money in LA. Of the 100 partners who work at my office (most of whom are bleeding heart liberals) I can't think of any who live in 90402.
It does seem as long as you have less than 20 sales a year you might be able to hold up prices... but it's not based on people who are currently employed and paying a 2.5mil mortgage. Does anybody know what the demographics of the neighborhood is? If you have a lot of folks who either a) bought in 05/06/07 or b) who are over age 70, it's much more likely that prices will correct sharply. The other major price torpedo: rising interest rates. Then again, Citi just cut it's jumbo loan rates, so maybe 90402 will stay at mark-to-utopia prices.
"Does anybody know what the demographics of the neighborhood is? If you have a lot of folks who either a) bought in 05/06/07 or b) who are over age 70, it's much more likely that prices will correct sharply."
Not a lot of over 70 folks left in my GRS area, mostly 35-55 with little turnover. Owners who leave generally leave the LA region in a big way - retirement in another state, major career opportunity, divorce, or death. I find the more substantial folks are more likely to buy a killer second home elsewhere than consider a move-up house somewhere else in the LA area. People generally like living in the area; I see no reason to move in the next 15 years unless one of the above 'big' things happen. I am almost paid off (5 years?), and consider myself low on the local wealth tier.
"I agree with 1:04pm who observes that the global credit crisis did cause some forced sales, from those that Warren Buffet would describe as not wearing swimming trunks when the tide went out. However, this pick up in supply was really completely absorbed by demand without the expected crash in prices. Unbelievable market strength to see that even during a time when people should be scared out of their wits, people were buying in 90402, at discounts of just 15%-20% to peak."
Perhaps they were following Buffet's contrarian investing philosophy - be fearful when others are greedy, and be greedy when others are fearful...
The average 90402 buyer is not paying all cash. Half the buyers are all cash. Half need a mortgage.
Not a lot of doctors buying right now. Can't afford it
Big law .... Thanks for posting. How much per year do the young partners at your big law firm make. Can they afford the 90403?
Big law .... Thanks for posting. How much per year do the young partners at your big law firm make. Can they afford the 90403?
Yes big law, that is Wachtell but there are still more than enough partners at big law firms in LA that do make over $1m annually. It is easy to look up in the AmLaw 100...not sure if you are an associate or at a lesser firm, but even many of the LA headquartered firms (vs the NYC firms with LA offices) are over $1m annually per partner. They clearly can afford to buy in 90402 and I know at least several personally who do live there...and suspect many more who do.
Yes. Make a mil a year and if you like to be around stiff bentley drivers you buy in holmby
Like. To live among organic prius drivers then buy in 90402
To get back to the housing market, I couldn't agree more that houses are still vastly overpriced in the mid and upper tiers. Sure, there are people that have cash to burn and some are buying, but for the most part people need mortgages. There just aren't many move up buyers now, which is why prices are falling. That is, the demand curve has shifted to the left. Just check Redfin and don't argue about it. It is a fact. With the foreclosures and bankruptcies coming on, supply will shift to the right and prices will continue their downward spiral. The only worthy debate is how long it's going to take to revert to historic pricing.
we are looking for a trade up home in SM, trying to take advantage of a down market...some of my observations....
most homes are rather crappy in the 1.5-2.0 m range...needing lots of updating or just suffering from bad floor plans, bad space planning/outdoor space.
Buyers are looking for deep discounts and usually not succeeding as the sellers can't stomach it.
Lots of things being delisted and rented out rather than selling...due to bruised egos and ability to rent it out fairly quickly if they need to move. Everybody loses out in this scenario, except the renter. Brokers really get pissed. But who cares about them...
And lack of new construction...this will impact the pricing going forward too. I personally think there will not be a rush of defaulters/foreclosures in SM, but I hope I am wrong...
Lack of new construction in the 90402 means fewer nice houses for sale. What do you mean. How does this impact demand
It impacts housing stock...less available...supply and demand principles apply here.
"And lack of new construction...this will impact the pricing going forward too"
There is a boom going on right now.
I live in the area, and if you drive around the blocks during the day you will see streets loaded both sides with trade trucks, landscapers, dumpsters. etc. A lot of the remodels are major, blowing out interior walls, adding second stories, facade changes, and major backyard hardscapes.
I am getting quotes for my project, with rates in the $500 SF range and start dates late in the year into next year. No recession for the top GC's in the area.
Yes, renters are making out like bandits. It's great. The best part is that the sellers are waiting for a significant uptick (e.g., for prices to go back to 2007 levels) in the market before relisting, which we all know isn't going to be for years. Hooray for longlasting cheap rents!
I love the upgrades. You put in the money now, and I'll buy your property later. You won't get any more money for the upgrade when you sell, of course, as the market is continuing to decline, and I'll get the benefits. Super financial planning.
"I love the upgrades. You put in the money now, and I'll buy your property later."
Glad to hear you are interested, check back in about 15 years when all the kids are gone and I am ready to retire. The upgrades will be about 15 years old as well.
As for financial planning, my accountant said I can go either way...pay cash for the remodel, or finance it for the interest deduction. Considering the house is almost paid off, I might want to go the 100% ownership route. I may not be as smart as some bloggers, but I will not lose sleep worrying about housing issues (until I want to sell in about 2025).
I detect a lot of bitterness and wishful thinking on the board from my fellow bears. I have not bought and have never bought...have saved and can now buy cash in 90402. I am now seriously looking as the market strength has really surprised me. We have made a few low offers and everytime the good homes get multiple bids close to asking (sometimes just above, sometimes just below). Meanwhile, flawed inventory (right on San Vicente, crazy floorplan), or dream price, etc) just sits there. I'm beginning to feel the only way the housing market really drops is if there is a major economic shock that causes sudden fear and uncertainty again that becomes sustained because the governments of the world get their hands tied up from responding like last time. I can see this being a possibility (hello Greece / Spain and sovereign debt issues!) but then again I worry that betting on another shoe to drop is also risky...bloggers, what should I do? My wife and I are tired of renting...I wish I had bought now in 2002 or 2003 as the prices we are seeing are only 2004 at best and more likely 2005 with many sellers holding out and getting better. Can we really continue to hope for some double shock? I'm afraid the ordinary removal of government stimulus, release of more low end shadow inventory, etc will not be nearly enough to overcome the reality of the infatuation with 90402 which results in very few people wanting to move (no inventory) and many wanting to buy (lots of demand).
Just look at Redfin. Prices are continuing to fall in a big way. Now is not the time to buy. Btw, I love my rental. 5 bedrooms on a long term lease, and the price is far less than half of what the monthly payments would be. Maybe you should just find another place. Why the obsession with buying?
I agre with the poster that said that renting is better than buying in the 90402 right now. Prices in the 90402 will indeed fall. Now is not the time to buy.
That being said, I think all the people on this blog that dream about the 90402 falling really hard just aren't really convinced that in LA there are more million a year earners that would like to live in the Franklin 90402 than there are million a year earners that would like to live in Beverly Hills.
In the past, Beverly Hills was the place that these folks wanted to live. But Beverly Hills has changed very dramatically. It no longer feels like a comfortable community for young families. The same young families that 20 years ago would have chosen Beverly Hills now choose 90402
The doubters and cynics walk around Montana avenue and say that it doesn't "feel" like a wealthy enough area - people on Montana are wearing tee shirts and fleece - at the same time people on Rodeo drive are wearing more expensive clothes. The doubters and cynics don't believe that most million a year families would prefer the casual tee shirt and fleece environment to the fancy showy Rodeo Drive environment
that is the problem here, a mis understanding of what today's million plus earners really want.
I encourage the doubters and cynics to go to more of the open houses of $3.5 million dollar houses in the 90402 and talk to all the people showing up at the open houses. The worm has turned, BH is out and 90402 is in with the million plus earners.
And due to the demographic shifts in Beverly Hills I don't see it ever shifting back.
So again, don't rush to buy in the 90402 today, but don't expect nice new homes in the 90402 to be affordable to people with incomes under $1 million ever again.
If you don't see your family income reaching $1 million, give up on the 90402 and put down roots in a neighborhood that you can afford for the long term
Republicians with dough chose Bel AIr, Pasadena, Holmby, Brentwood and the Palisades...
Dems with dough chose to live in diverse, funky areas, SM and Venice
I agree with 2:21 to an extent - I mean Bel Air, Pasadena, Holmby are more republican than 90402, but it isn't a huge gap - I mean none of these areas are as Republican as Idaho.
Anyway with the stock market crash today fewer of the people struggling to parlay stock market gains in to the 90402 are going to make it - only those with incomes that support the house will make it (is that income a million plus? )
Beverly Hills always was and always will be a WORLD CLASS CITY. Having lived there for most of my life, I can assure you that everyone knows exactly what you are about when you give out your Beverly Hills address. And I'm not talking about the 'Post Office' here, the Post Office is NOT the rich heartland of Beverly Hills. My last address was on Tower Road, and I would never consider living anywhere in Beverly Hills that was not NORTH of Sunset and WITHIN the city limits. There are a couple of exceptions on the edge of the Los Angeles Country Club, but as a general rule the above applies. My current address is equally as nice as my last one. Sure, 'families' buy in certain other areas of the WestSide, but I care about 'families' as I do about the homeless: not one whit. I've seen the garbage and the filth left by the homeless in Santa Monica: it's a filthy cesspool and I'm surprised any civilized person would consider living there for anything other than sh*ts and giggles.
Oh, and regarding the 'stock market crash of today' let's see how the next few days play out. I doubt that the stock market will do a repeat of it's 2008 performance. I think the prices on the WestSide will rebound quite nicely, though it may be some time before we reach '06 prices.
11:33pm,
That is exactly the point. Beverly Hills survives based on reputation and brand with people OUTSIDE of LA. Wealthy foreigners who either don't know better or don't intent to live full time in LA buy in Beverly Hills keeping it afloat. People in LA who really can't afford to live in these areas and don't really understand these areas are impressed by Beverly Hills. However, for many of us with money who want to / or already are raising families, we would seriously consider living in Beverly Hills. The mix of people, the traffic, access to freeways, the over the top culture, lack of public school options, the lack of any real neighborly spirit, etc are all issues and what are the pro's? The pro's are you get an impressive looking mansion (if you are into such things as impressing people) and you get cachet outside with the crowds I mentioned before (if you are into such things). Sure, at some level BH appeals to some part of me...but when I look at the practical realities of living life every day and raising a family, I can't imagine it. That is why, btw, inventory sits in BH and BHPO both...and there is very little desirable inventory West of the 405. We are discussing 90402 and how little inventory there is but you can make the same statement about the Huntington in the Palisades...
I can't believe anybody would compare SM to BH. BH has always been, and will always be, a tier or two above SM. There is nothing really supporting the SM prices except for wishful thinking and a bunch of bad loans that are currently crumbling. The floodgates are already open and there's nobody coming to fix things. It's just not that great of place to live. If you want to live at the beach, both Manhattan and Newport are far nicer, and they have real beaches. BH has other amenities those neighborhoods don't have. All we have on this blog it seems are a bunch of real estate agents and wishful SM home owners. Give me a break. What a bunch of goofballs.
Sorry, I don't check this blog too often as the substance to snippery ratio is a bit low... but in an attempt to try to contribute to the information pool, I can say that I work at one of the 5 highest profits per partner firms in LA (above 2mil), where we only recruit from the top 10% of the top 20 schools.
Unfortunately, I don't know what jr. partners make, so I will share 2 other data points: a) our "counsel" (people passed over for partner, but liked enough to keep around) make around 600k and b) one of the newest partners is closing on a house... in Cheviot Hills. Of our rainmaker partners, I know one who lives in a big estate on the valley side of Mulholland and another Beverlywood.... Oh wait, I have an office directory in my desk, I'll tell you how many partners (of about 100) we have living in the major zipcodes:
90024: 4
90035: 2
90034: 4
90049: 5
90064: 3
90068/69:4
90077: 3
90210: 2
90265: 1
90272: 1
90402: 4 (2 are married to other partners)
90403: 3
90405: 1
As I mentioned, there's about 100 partners, scattered around other neighborhoods of LA, at least 20% of which are in various enclaves in the south valley.
Who cares about where the lawyers live????????????
Big Law atty, ignore the haters. You were asked to post this info and you did. And we appreciate it.
Thank you
Who cares about where the lawyers live????????????
Ultra-bears who think there is 'no one left with any money or equity' to buy on the Westside will probably pooh-pooh the data points.
The bigger picture is each industry, profession, entrepreneur group, etc. has top earners who can afford to live just about anywhere. Maybe SM gets picked 5-10% of the time? Who knows; a small number of buyers keep showing up, evidenced by multi-bid and sale activity.
9:49am, I wish you would tone it down a little...no one wants to start another one of these back and forth threads...
There are plenty of different kinds of people with money...there are rich foreigners buying for kids, 2nd/3rd/nth home buyers, trust funders, wall streeters, etc, etc.
BH and SM are almost polar opposites but appeal to different rich people. Some rich people want an impressive looking big mansion on a street full of impressive looking big mansions with name brand recognition
Other rich people want a family neighborhood where they can walk to local cafes (especially those who have lived in NYC and liked the more urban pedestrian lifestyle) and not have to get in a car and drive to go anywhere. Some people want to take an after dinner walk with their spouse and a newborn in a stroller (w/o the nanny intruding on a private family moment). You may want to send your kids to public schools for a little while to avoid too many celebrity kids, etc to instill a more diverse set of values. Or you may not like the 20-30 minute commute from Manhattan Beach or Beverly Hills if your office is in Santa Monica. You may think that BH is too far from the freeway or that there is too much traffic going West-East on Sunset. You may think that Manhattan Beach is too small a town without enough restaurants.
There are plenty of wealthy people living in BH, Santa Monica, Manhattan Beach, Brentwood, Palisades, Bel Air, etc.
However, I would say that if you look at the availability of inventory in 90402 and the Huntington Palisades you will see that nice homes there get snapped up instantly compared to the other communities.
2:41pm, it's because the law firm partners help establish a floor for the $3m+ market given their incomes are fairly predictable compared to entertainment, entrepreneurs, or finance which all obviously have considerable upside but downside as well. Maybe they can't afford the $10m homes but they definitely help set the entry level for the high end which creates the ecosystem that allows the $10m+ homes to exist. If you extrapolate 12:10pm you can see that there could be a reasonable number of law firm partners that live in 90402. If I understood 12:10's comments, there are 6 partners living there from that firm alone (or is it 4 in 2 homes?). BTW is it a downtown firm? 90402 is obviously a long commute.
Beverly Hills is SO has been. The only people who live there are foreigners who don't know better or old Hollywood types. Look at the number of homes that just sit there. Sure, every now and then someone steps up and buys a $10m+ estate (although my guess is a high proportion are out of towners) but if LA is your primary residence why would you ever want to buy in BH these days. I thought it was basically an established fact that for years now the establishment has been moving West of the 405 given the new elements in BH.
if you spend time among the young american born married couples looking to spend $3 million on a house, overwhelmingly they prefer 90402
however, these young married couples are just a small part of the $3 million market. Most foreign born people prefer Beverly Hills.
And most older people prefer Beverly Hills.
Don't generalize. 90402 appeals to a specific narrow demographic - BH appeals to a wide audience
I grew up in LA. Have been here the last 50 years. 8:28 is a clueless fool, and might I say a bit rascist. I apologize on his/her behalf for the idiocy.
Why does everyone on this blog ignore the Redfin data? 90402 is falling hard but no one wants to admit it. Foreclosures, bankruptcies, rent to buy ratios, income to price ratios, etc. Why all the resistence to reality? I don't get it. It's not even worth posting here anymore because the blog is inundated with those in denial.
Latesummer, you might as well change the name of the blog to the 90402 cheering section. It's disgusting.
9:40 is right. Bh is a global brand name
BH is a everything that is great and horrible about LA. It's all about show...it's plastic...it's impressive. Most people would prefer the Palisades or Brentwood Park. However, if you're in entertainment, if you are a oil sheik or an Asian entrepreneur here a few months a year, or the son of a billionaire who wants to party in Hollywood--it's perfect.
9:40pm is right and wrong. Yes, Beverly Hills appeals to the foreign born and some of the very older crowd. Families are the majority of the primary residence population though. It's true that a lot of 2nd and 3rd home owners who are part time might prefer Beverly Hills because of the "global brand". However, 8:28pm is right in that the communities west of the 405 (PP, 90402, Brentwood) have broader appeal to more of the wealthy who have or plan on staying in LA for the long term as a primary residence because they are more liveable for every day life. The home & neighborhood may not be as impressive but impressing people is less important when you live there all of or a good part of the year. You care about the traffic, the weather, the local community residents and vibe, etc. That is where the west of the 405 communities win out.
10pm, you are ignoring reality. Where are the foreclosures and BK's? There has been one REO so far and there might be a handful more...no short sales to date either. And that is after one of the most dramatic cliff events in our economy where we were staring down a potential depression. There are more closed sales and escrows over $3m+ then available inventory/listings. Several of the sales/escrows literally went in with multiple all cash offers within days.
Look, I think it is crazy and I can't see how this keeps on going but the reality is it is demoralizing for a bear like me that has been waiting out the bubble since I got to LA in 2002. I've been renting, saving, and waiting. When late 2008 happened I finally felt justified and figured now I will finally have an opportunity. I was never expecting 50% off...that's just not reasonable given commodity inflation, value of the dollar, etc since the mid 90s. But I certainly would never expected the market to stabilize and then get white hot at 15% off peak. I don't know what is going on other than I'm going to still wait but the reality of the market is that maybe it is fundamentally overvalued (ie rent ratios, etc) but it is technically strong (much more demand than supply). Perhaps all of this Euroland stuff will cause a second crack and then we will see more capitulation among the sellers but right now all of the move-in ready liveable family homes in 90402 get snapped up. Anything left on the market either has major flaws or are priced at serious premiums (like some of those 7500 sqft lot homes that are asking $4m+!!!).
I agree with anon 8:30 am. I have been looking to buy in North of Montana Franklin since 2003. I am glad that I did not buy in 2003, and I feel certain we will see 2003 prices again but it is sure taking longer than I expected.
On the issue of Beverly Hills vs North of Montana, they are for totally different people. If Beverly Hills appeals to you you are on the wrong blog. There are plenty of places on the web where people discuss Beverly Hills (some of these web sites are in Farsi and some in other languages)
The point is, if you think your family will be happier in BH, please move there and exit this blog.
My mother in law lives in Brentwood Park and has seen a big influx of people moving out of BH into her area. The are trying to get away from the persians, who tend to be clan-ish and not too neighborly to non-Persians. But then again...a lot of middle easteners are moving to Brentwood for the schools and getting away from BH too!
Hate to profile (but hey we all do...) but Persians are too cheap to pay for private school and stay in areas (Encino, BH, Brentwood, Westwood, Bel Air) where they can access better public schools...
Don't hate on me for this observation...it comes from 30 years of living on the westside and seeing the patterns.
I could be a friggin' ethno-demographer!
Let's just say that different neighborhoods attract different racial groups and leave it at that.
This blog is no place to express your opinions about different races.
Let's just focus on real estate.
It should be clear that the type of people who buy in BH are different from the type that buy in
MB
End of discussion
Agreed, foreigners prefer BH because they don't know better and are "brand" focused. Older people prefer BH because they are clinging to it's former heydey. The majority of the rest of us who life in LA every day prefer the less flashy vibe of the communities like Brentwood, PP, and Santa Monica. Not to mention the better schools and better mix of retail/restaurants (not just the "blinged" out choices). We would prefer to see fewer divorced 55 year olds riding in their convertible Bentleys with chrome wheels with some 20 year old bimbo...hey more power to them for having their fun but I don't think I want my kids growing up in that kind of community. BH has become a fast money/new money kind of place.
8:42am, this is 8:30am...the one thing that makes me nervous waiting for 2003 or better prices is the printing press the Fed/Treasury have now shown they won't hesitate to use. It is very hard to predict which way our economy will go...it's definitely not healthy that is for sure but it seems like 50% believe deflation is the only way out of this debt crisis and the other 50% believe inflation is inevitable. I do feel that if we have another crisis (e.g. Greece contagion, China bubble, etc) then the Fed/Treasury will quantatively ease again. It's become clear that there doesn't seem to be a strong global currency people can trust...which is why gold keeps rising even though it is well past it's intrinsic value. If you believe commodity prices are rising then you start to think about replacement cost calculations on homes and land values...any way, it has gotten a lot more complicated for me. I have been in all cash for some time, saving diligently as I watched all the craziness around me this decade after the dotcom bubble...I'm beginning to think perhaps I buy something more manageable to diversify into real assets...sigh...you do everything right and then the government!
Sorry one more thought (830am again)...I'm also thinking about energy and water costs in the future and do think that the closer to town communities such as Santa Monica are better longer term opportunities (aging baby boomers want to be able to walk and not have to always drive) than the large estate lots in further out (like the big gated communities in BHPO for instance). Also you generally want to be south of Sunset given the liquification zones if the big one does hit! And you want post 1996 construction given the building codes/permits.
Then again, I'm freaked out by CA balance sheet and potential looming pension crisis...buying a home here is buying into the balance sheet...another reason btw for Santa Monica as it is generally a better balance sheet than LA
The looming bankruptcy of la, written up in wed.. Wall st journal is important.
In the next riots do you want to be protected by lapd or santa Monica pd?
...Perhaps all of this Euroland stuff will cause a second crack and then we will see more capitulation among the sellers.
What you will see is more belief that US assets are 'safer' than Int'l assets. Don't be surprised if more foreign money pours in, including money we have yet to see from China, India, etc.
Also, I doubt any homeowners are going to crap out due to currency fluctuations. If anything, foreign goods will be cheaper, and affluent homeowners can finally travel and shop abroad like the Brits and Euros did in the US.
BH will benefit massively from devaluation of the dollar. More foreign buyers will rush in
I don't think Santa Monica will benefit from the collapse of the US economy and collapse of the dollar
only BH will benefit
If you believe in the worst case scenario buy in BH
Stop bidding on houses in Santa monica
"You care about the traffic, the weather, the local community residents and vibe, etc. That is where the west of the 405 communities win out."
Not everybody wants to be west of the 405 -- in fact, a lot of the best things about LA are from BH to Hollywood. Also, not everyone works west of the 405 (or in the valley), so living west of the 405 radically increases the commute time.
Where are the blogs that discuss something other than 90403. This blog is too limited and repetitive. I am serious: please make a suggestion of how to get good blog coverage of brentwood, westwood, bel air and beverly hills. (the westwood blog is a deadzone, btw)
I have been bidding in the 90402 for more than a year.
I am thrilled to hear from all the people above who prefer Beverly Hills to the 90402.
Anything I can do to convince you and others like you to buy in Beverly Hills and not the 90402 is a good thing for me.
Along those lines, let me point out that the public high school in Santa Monica has violent gangs that have fought each other in the past.
Beverly Hills High School doesn't have the gang problems of Santa Monica High School.
Don't forget there was a drive by shooting followed by a freeway chase recently in Santa Monica. Also don't forget that a teenager was shot to death in a park in Santa Monica in the past 12 months.
There is more gang related violence in santa monica for a number of reasons.
Also Santa Monica has a large low income housing project in which children grow up next to drug dealers and prostitutes. The children from this low income project go in to the Santa Monica public schools, including the High School. If you want to see how impoverished this project is, drive by it - it is at 2930 Colorado. The project is officially for impoverished elderly but has more and more violent and drug addicted kids moving in with their grandparents
Again, The more you know about Santa Monica the more likely you are to bid in Beverly Hills instead of the 90402. So do your research before you bid.
11:41am, the reason why 90402 dominates the discussion on the "westside" blog is that obviously where the most interest is...even our esteemed blogger has off/on run a 90402 focused blog given all of the interest. I haven't seen a BH, Bel Air, PP, or Brentwood blog.
11:54am, that's right, no one would ever send their kids to SaMoHi unless they had to. Just as no one would ever send their kids to any of the public schools in Beverly Hills. At least in 90402 you have the option of sending them to public elementary and/or middle school. 2930 Colorado is about the same distance to 90402 as Pico/Robertson area (see the gang shooting this week) is to Beverly Hills. It's basically the problem with LA...the nice areas are close to not so nice areas. Remember the 1992 riots and how that impacted Hancock Park prices for years? If you really want to get away from it you have to go into the hills or PP but then you are away from it.
The worst case for real estate is deflation. In that case the dollar is strong as cash/treasuries are preferable to assets. If we are in an inflationary environment then it is good for all assets. BH does probably attract more foreign buyers although we are now seeing some of the Chinese buyers buy in Santa Monica (they value school systems) in addition to the historical enclaves such as San Marino. We are also seeing a number of wealthy Persian buyers moving west to Brentwood and 90402 as well.
The Persians I personally know in 90402 don't mix well with some of their brethern in BH. Some sort of bad blood or class/religious issue they don't want to talk about. The wife, in her thirties, said she would move out of S Cal before she would move to BH and live near 'those people'. Go figure; they are really great neighbors, but have their own cultural issues going on (don't we all in some way).
I think that many of the persians in Santa Monica are ones that have married in to non persian families.
The persians in BH are typically in 100% persian families
I am the person that has been bidding in the 90402
I want to see some honesty here.
If you spend your 3 million in Beverly Hills and have your kids play in the parks and go to the high school your kids will not have classmates in gym that live in a crackhouse.
The real issue is that Santa Monica has crackhouses and gang wars and Beverly Hills does not.
I feel that the realtors in Santa Monica hide the truth from potential buyers.
Do not buy in Santa Monica without finding out the truth first.
Only once you know the truth should you consider bidding in Santa Monica
Our esteemed moderator knows all the positives and negatives about Santa Monica - but many here are not smart enough yet
4:35pm, you are being sensationalistic. Yes, there is some gang activity in Venice and 90405. There is also gang activity a couple miles from Beverly Hills. No one here paying $3m+ for 90402 intends to send their children to Santa Monica high school.
Why in the world are you bidding on 90402 then? Are you basically making stuff up to be a jerk or are you genuinely just exaggerating a little to blow off some steam?
The Persians I know in 90402 are highly educated professionals and people I love having as neighbors in the community. I don't think of them as Persians but as part of a diverse community of people from different cultural backgrounds who share the same values of family and education. For whatever it's worth, the Persians I see in Beverly Hills appear much flashier, driving in cars with big chrome wheels, etc...again seemingly more in tune with their flashy neighbors.
Let's stop with the racial profiling here...I think the differences we see are really the differences between people who prefer one neighborhood over the other one for different reasons.
This blog is not about 90402 vs BH. This blog is about all of the expensive Westside neighborhoods that seem to defy gravity--yet in one of the most uncertain economies we have lived through, many are experiencing all cash bidding wars again with very little inventory.
I continue to believe that the lack of inventory is partly due to human psychology. No one likes to sell at a loss especially when it comes to an emotional asset like a home...even if the rational move is to sell. I think many of those who bought $3m+ homes have overallocated their net worth to real estate but can continue to afford the holding costs reasonably comfortably and will not sell unless it is relocation, death, divorce, etc. The ones who have been forced to sell listed in 08, 09, and a lot of that inventory was absorbed by the market--the market cleared at late 04/early 05 prices or 15% down from peak. This is in contrast with the 35% down from peak the subprime new communities have gone through. I'm not sure this makes fundamental economic sense but it is what it is. Now that the forced selling has been absorbed you are seeing far less inventory as the marginal would be seller decides not to sell in a "down market". Meanwhile, a lot of buyers have held off for at least several years. They are looking at the trade off of trying to time the bottom vs getting a house they like and getting on with life.
Given the absolute focus of Helicopter Ben on avoiding deflation regardless of how much quantitative easing is necessary to do so and the significant reflation of asset values across all asset classes other than real estate, I believe the only thing that will cause real estate to decline significantly from here would be a second systemic shock to the global economy. Now, obviously we are staring down that potential barrel given what is happening in Greece and also fears of a China real estate bubble...so that really becomes the $64k question...will contagion spread or can it be contained...or will the response be just to print more money anyway. If you don't have any exposure to real estate or real assets and only to cash or financial assets probably worth diversifying some into real assets as I'm certainly not smart enough to figure out which direction this all goes.
I agree
No one buying $3 million houses will send their kids to Santa Monica High School so conditions in that school are not an issue.
Ignore them.
That being said, people buying $3 million houses may want to be able to take their kids to the parks.
That is the difference between Beverly Hills and Santa Monica.
Santa Monica has parks like Virginia Avenue where children are murdered at point blank range. Look it up. This is a park that is clean and nice and that hosts a farmers market. But a kid was just wiped out there.
Now the bulls will say, that only some of the parks in Santa Monica are dangerous and that if you are careful you can pick ones that are not dangerous. that is all true, if you are careful you can avoid the gangs in the parks.
But if you live in Beverly Hills you don't have to be careful. Just stay within the borders of Beverly Hills and you are safe.
That is the difference.In Beverly Hills you are safe from East to West North to South.
In Santa Monica you are only safe in some parts and not the others
Most of us posting on this blog fit in more in Santa Monica than we do in Beverly Hills
I think that we should all do our research before writing that bid
Everyone (or at least everyone should) knows that there is some gang activity in the area between the 10 freeway and Pico by Santa Monica Community College. It's completely irrelevant for those considering 90402 and we all know that as well. If you are considering 90405, it is for the most part irrelevant as well except for South of Pico from Cloverfield to Lincoln. If you are in the Main Street area, South of Ocean Park in the 90405 it is not an issue at all. I lived in the Ocean Park 90405 area for almost 10 years and never once felt even slightly threatened. Could gang members get in a car and drive a few miles? Yes...and a lot more gang members are close to Beverly Hills as well. I don't consider Beverly Hills any safer than 90402 in any way. They are both equally safe but not so remote from criminals that it is inconceivable. However, that comes with the territory of living in an urban area close in town. If you want to be more remote go to Pacific Palisades or better yet, Newport Beach.
I just get sick when I go to open houses North of Montana and see all these people from Manhattan, or Boston or DC rushing to bid on houses North of Montana.
They are putting in bids without any knowledge of the history of our city, and without any knowledge of our geography.
Everyone who bids North of Montana should have a map of the gang murders and gang shootings in Santa Monica. They should also know where the low income housing is.
Once they have this knowledge, if they still want to bid North of Montana that is just fine.
I am only against people from out of town rushing to bid without knowing what they are getting themselves in to.
How could you criticize the idea of bidders having the facts rather than being railroaded by their real estate brokers ?
I think many of these out of towners would choose Holmby Hills or Little Holmby instead of North of Montana if they had the facts. Holmby has a lot of what makes North of Montana nice
You don't have to live here to sense the different vibe between 90402 and other nice areas. 90402 sticks out.
note the following :
There is a whole other element to the decision whether to buy in 90402 or not - who do you want to hang out with -
i mean walk down to montana - the people are wearing flip flops - they are very casual and relaxed
it is not a stressed out hyper competitive vibe like what you find in beverly hills. it is laid back
i have to cite the following post from a few months ago - the bottom line is that the vibe on montana is DIFFERENT - there is no other place in southern cal where there are three thousand houses next to each other, with the houses changing hands between two million and five million - with a liberal relaxed progressive vibe. the one location where you get that is north of montana - i am not saying that everyone that wants to drop 2 to 5 million on a home wants that exact vibe, let's say the number is small. but if that is what you want, then n of montana is the only place to get it
respect all the posts that have come before me.
I have to dispute the one writer who said
____
The super wealthy can plunk down millions elsewhere and get a lot more, and have much richer neighbors.
_____
I guess he was saying that if you can truly afford to spend $4million on a house why would you buy in 90402 where your neighbors do not look super rich, do not dress like super rich people, do not have the mannerisms of super rich people.
I think that is precisely the point. If you live in 90402 you don't have to dress a certain way or drive a certain car. Your kids don't grow up feeling "rich" the way they do in some other neighborhoods.
All the bears keep saying that 90402 doesn't have the same vibe as Beverly Hills or Bel Air.
Perhaps the ranks of the people with $4 million to spend on a house is diverse enough that many of them don't LIKE the vibe of Beverly Hills and Bel Air.
Perhaps there is a niche among people that can afford to live anywhere that choose the 90402 precisely for what that last poster laughs at
February 12, 2008 5:20 AM
Anonymous said...
If you want to spend $4 million and be around snooty snobby people, spend the $4 million in Beverly Hills
if you want to spend $4 million and be around people who are more down to earth, wear faded t shirts, go to yoga and drive a prius, move to the 90402
it is a different culture, a different vibe. Who do you want to spend time with -
7:29pm,
Agreed, Little Holmby does similarities to 90402. It is walkable to downtown Westwood. The public elementary schools is good.
It is cheaper than 90402 as well...but in my opinion not enough cheaper. Even though I agree with 7:44pm that those who buy in 90402 are looking for a less ostentatious vibe than Beverly Hills we are talking about buyers of $3m+ homes and they do want to be in an upscale community that perhaps isn't as outwardly showy but still sends the right signals of success to the right crowd. 90402 fits the bill in that balance whereas Little Holmby just doesn't have that cachet.
While my concentration is on the Westside overall, all this talk of 90402 had me curious.
So despite living in Los Angeles my entire life, to the best of my recollection, I'd never visited.
I did today.
El Oh El.
You guys can keep it.
And yeah, more than a few people sneered at my luxury sports car. Which I find ironic since I'm quite positive several of those homes have one hiding in the garage.
I have been reading this blog since the very beginning and I have to say that 12:02 is the most delicious post I have seen, bar none.
Here is a real life example of a 90402 hater, sad because the people in the 90402 are too down to earth and unimpressed with his luxury sports car.
If you needed a data point for the difference between the 90402 and Beverly Hills Here it is.
90402 is tee shirts, fleece, and prius. Beverly Hills is prada, gucci, and luxury sports cars.
Make sure you know where you fit in before setting foot in the wrong neighborhood.
I say again, look in the mirror. If you belong in Beverly Hills like this person, then get off this blog.
Prius? How embarrassing - Audi A8 is more like it. But I am still on this blog, like it or not. Are you some sort of Hippie inheritor?
"Little Holmby does similarities to 90402. It is walkable to downtown Westwood. The public elementary schools is good. It is cheaper than 90402 as well...but in my opinion not enough cheaper. Even though I agree with 7:44pm that those who buy in 90402 are looking for a less ostentatious vibe than Beverly Hills we are talking about buyers of $3m+ homes and they do want to be in an upscale community that perhaps isn't as outwardly showy but still sends the right signals of success to the right crowd. 90402 fits the bill in that balance whereas Little Holmby just doesn't have that cachet."
The right signals of success to the right crowd ??? Did you finish high school yet?
Maybe people who live in Little Holmby prefer 8,000-12,000 square foot lots to your 7,500 lot. Or, possibly, they work east of the 405? Or, more likely, they want to avoid living next to bubblehead social climbers ....
Like anyone who buys a $3m+ home is not a social climber...
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