Real Homes of Genius – Sherman Oaks enters correction phase. $1,200,000 home now selling for $720,000 in Sherman Oaks. Prices coming down faster in prime California cities.
If you want to see a city that still has the traits of a housing bubble you can shift your focus to Sherman Oaks. Like Culver City or Pasadena this is a coveted area in Los Angeles County. Like many cities in L.A. it is incredibly overpriced and by that I mean it resembles a massive bubble. Living in California I think people use the term overpriced as a way to mitigate the fact that an area is in a bubble. Any way we slice and dice this market produces incredible data of a city that really still reflects every aspect of the housing bubble. We’ll dig deep into the data and see why this market is overpriced even after correcting lower. The toxic mortgage leverage of the last decade still lingers.
Today we salute you Sherman Oaks with our Real Homes of Genius Award.
Sherman Oaks is an interesting market. The MLS lists 426 homes for sale and the shadow inventory has 286 homes. For the last month of data, 24 homes sold in Sherman Oaks. Of the 426 homes listed publicly, only 7 are listed as foreclosures. So in total, you have a real inventory of 705 homes.
705 homes / 24 sales = 29 months of inventory
Sherman Oaks is the prototypical bubble denial city. Take a look at the median price for these two zip codes:
91403:Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $810,000
91423:Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $965,000
Keep in mind both of these zip codes were solidly over $1 million at one point. In fact, the 91403 was up to $1,199,000 just in April of 2008. But let us look at some recent trends here:
Source:Â Redfin
The number of homes sales has fallen drastically. Back in July of 2009 91 homes sold in the 91403. For August of 2010 only 21 homes sold (a stunning decline of 76 percent). Keep in mind July and August home sales are usually both strong. But what is happening in this market exactly? What is happening is the mid-tier market is finally breaking because of the growing amount of backlogged inventory. The levies are now splitting open in some markets unable to support home sellers that are delusional about prices. Keep in mind that out of the 426 homes listed in Sherman Oaks only 7 are in foreclosure. So the bulk of sales are coming from non-distressed sellers hoping for sky high bubble prices. What then happens is buyers balk and the inventory just grows and grows. Yet foreclosures know how to get inventory moving by massive price cuts.
Let us examine how prices correct quickly once reality hits:
4216 GREENBUSH AVE, Sherman Oaks, CA 91423
Beds:Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 2
Baths:Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 1
Square feet:Â Â Â Â Â Â 1,609
Built:Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 1939
List Price:Â Â Â Â Â Â Â Â Â Â Â Â $608,000
Sale history
April 1968:Â Â Â Â Â Â Â Â Â Â $25,000
April 2007:Â Â Â Â Â Â Â Â Â Â $836,363
This home last sold in April of 2007 for $836,000. The home is now listed at $608,000 (a decrease of 27 percent assuming it sells at the current price). Interestingly enough, on Greenbush Avenue near this home you have a place in pre-foreclosure and another scheduled for auction. Why would anyone rush to buy with so much inventory in the market and prices still clearly inflated? The shadow inventory game played by banks has created a backlog that appears to be leaking out into the market. Now that banks have squared up their sources of income and bailout funds elsewhere, they seem to be letting out more and more properties into the market.
We also get a nice garbage can photo on this place:
$600,000 for a 2 bedroom in Sherman Oaks. Do you think that is cheap? This place was built back in 1939. I pulled up tax data for the 91423 zip code and for 2007 the adjusted gross income (AGI) was up to $93,000. In other words, this home which would be categorized as a starter home should be at $300,000. I know many in these niche markets think that is absurd but that is what the local area incomes can support. Heck, even the Hearst mansion once up for sale for $165 million is now down to $95 million. The theme is clear and that is California real estate is getting cheaper. I pulled up data for the 91403 zip code just for reference and the AGI is up to $131,000. Interestingly enough, the median home price last month was cheaper for the 91403. The number of homes sold is low so the sample can be skewed by anomalies (i.e., foreclosures etc).
You want another example? Take a look at this major correction:
4469 STANSBURY AVE, Sherman Oaks, CA 91423
Beds:Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 3
Baths:Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 3
Built:Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 1945
Square feet:Â Â Â Â Â Â 1,967
List price:Â Â Â Â Â Â Â Â Â Â Â Â $720,000
Sales history
June 2005:Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $683,500
February 2006:Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $850,000
June 2006:Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $1,200,000
This place sold three times in one year and doubled in price during that time! Did this home suddenly find itself over a flowing river of gold? This home is now selling for 40 percent off its peak in Sherman Oaks! This is a 3 bedroom 3 bath home in very good condition:
Think the correction won’t hit prime markets? Wake up, it is already hitting.
Today we salute you Sherman Oaks with our Real Homes of Genius Award.
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79 Responses to “Real Homes of Genius – Sherman Oaks enters correction phase. $1,200,000 home now selling for $720,000 in Sherman Oaks. Prices coming down faster in prime California cities.”
But at least you get to have lots of friends living next door in that big apartment building!
And on the second one, I hate those cheesy fake French windows. That says remodel done on the cheap.
Yeah, I’ve notice some list prices finally drop in area. However, even a $550,000 a mid century house too expensive to qualify for most buyers. And you are only talking about a house that less than 2,000 sq ft, 3 bedroom, 2 bath. And it might be dated and need some maintenance. Finally, what happens when rates go to the historically 7% to 9% range.
L.A. is not the only over priced market. My friend lives in Portland,Ore. The homes on his street were all built around 2002, priced from $190K to $210K.
Several homes on the street are now for sale. Prices range from $278K to $310K.
Prices are justified by “everyone wants to live here”, “Portland is different”.
With a terrible,wet overcast spring, and record setting cold summer, (coldest on record),and second highest income tax in the country, it is indeed different.
Bubble pricing is alive and well in Oregon.
Just this weekend, I got in a debate with a family member about this “we’re special,” bit. My sister teaches elementary school up in Calistoga and, like every city I can think of, the school she works at is funded by local property taxes. “We’re fine,” she said, “Calistoga is a desirable place to live.” I told her she was being extremely short sighted. Sooner or later, it will happen to her, too, if it hasn’t already.
I’ve heard that “we’re special” line so many times, I have to wonder, what place [i]isn’t[/i] “special?” What city isn’t different?
Stockton???
Is Stockton the only city that’s affected and the rest of the west coast is somehow immune by virtue of being “different?”
People need to wake up. The longer we refuse to face reality, the longer this thing will draw out. Sellers shoot themselves in the foot by living in denial. We all want to be proud of our neighborhoods and homes, but at some point, we all need to accept the sobering truth that our neighborhoods and homes are not special.
HA, thats funny “special”! I Live (rent) in Coronado Ca. I hear all the time how “special” the housing market is here. There was a very loonnngg list of foreclosed homes and the people who stopped paying for their mortgages, but it magically disappeared….hmmmm. Check out the prices here 92118. We live here for the neighborhood and schools but as for owning..hahahah.
Calistoga prices have dropped a few hundred thousand.The thing is, that most residents don’t realize it yet.Calistoga is a quaint little town.Heck,it’s a tourist attraction!!.The high cost of building ,coupled with the lack of available land for building prevented Calistoga from over building,so many people don’t know the virus has hit their neighborhood.The people in Calistoga that know are those that have lost their house to foreclosure or short -sale.Yes,it’s happening there already.I have a friend that paid 650k a few years ago for a Bungallow.He had to short sell it for almost half that not long ago.Another friend build 3 of those few new houses in Calistoga.They went on the market for 900k.Last I herd the price was down to 600k.I owned a house in the special town of Angwin (about 10 miles from Calistoga) that was never supposed to depreciate.The house was appraised for 575k at one point.I bought it a few years earlier for the “bargain price “of 325k.Last I heard the house was on the market for 200k.Yes..I went under water and lost the house.I also build a house in Hidden Valley Lake(north of Calistoga on the other side of Mt. St Helena.).I bought a lot for 100k and built a house(yes..I built a Custom House)) appraised at 475k. in a private gated (Hidden Valley Lake has its own zip code) community.You can go there tomorrow with 5k and buy a lot.The house I built was sold for 220K by the bank in December 2009.Yes…I lost that one too.I now live in a 2 br rental in the city of Napa.I hope she bought a long time ago in Calistoga,did not get a home equity loan,and is planing to live there for a long time.If that’s the case theyre in good shape.If not..they’re in for a world of pain.Having said that Calistoga and Saint Helena as well as Napa are still overpriced.I could almost hear the response..”you can’t compare Angwin with Calistoga!!! or worst yet “Calistoga” with Hidden Valley Lake,it’s in Lake County for crying out loud”.
Don’t forget your high serial killer rate and the fact that summer is only 8 weeks…
Last statement was in Re to Portland, Oregon.
Everyone thinks his or her city is somehow unique. The Bay Area is somehow different because of its large tech industry, and LA is different because it is the entertainment and media center in the world. Here in San Diego, I always hear about how we have the best climate in the country. The thing is, even if these things were true (and they are), they don’t justify the high house prices.
300K for a house in Portland seems somewhat reasonable to me, but that’s probably because I’ve been living in Southern California for too long. Portland seems like the kind of place that many white, middle class Californians flock to in order to escape the housing bubble malaise. They should have known — there is no escape!
In Portland, the sun doesn’t shine much, unless it is “liquid sunshine”. San Diego has sun. San Diego prices are worth it. Portland and Seattle people are more overweight due to the weather. In San Diego, people get out more, and run along the surf and beach.
Given a snapshot of this immediate moment, that pricing might not be insane. With current rates and a 20% down, monthly payments would run about 1400-1600. It would be tight, but an income of 60000 could carry that.
The scary part is that for each percentage point that the APR is increased by, the amount serviced by the same payment drops by about 10%. So assuming wages stay more or less the same and interest rates climb from the absurdly low 4% to a historically normal 8%, that payment on today’s $300000 mortgage would service a mere $175000.
then your 60k down would be almost 35%of the price.
Low interest rate is really only good for refinancing.
Trulia (9/21)shows 503 homes for sale and 328 foreclosures and 194 sold for Sherman Oaks. http://www.trulia.com/real_estate/Sherman_Oaks-California/ Do the math. The inventory is not that bad. Cheer up folks. The average price per sq ft is down 10%. (probably bigger homes) Sales are down 22%.
Don’t take Trulia as the word from God. If you look at RealtyTrac, you get different numbers and a different picture.
Trulia should be called Falsia. If you have access to County Records you can quote sales but they never (at least not in the three areas I have branch offices in Kern County, Ventura County, and Antelope Valley) have accurate listing information. This is a pay to play bait and switch lead generating system and the public should not count on it for accuracy. Great advertising venue though.
My experience with homes as old as these is that they have deficiencies in plumbing and electrical. The garage door appears to be one of those old dangerous spring wind rollups on that picture. There are questionable windows. I’d guess the one with the apartment looming is priced high because another apt could go there in a tear down…. a $100k would be too much for the 1st two. Maybe the 3rd is OK because of quality interior improvements but sheesh $720k???!!!!
I don’t think it’s a distortion of the photographic process but don’t the walls of the carport and garage seem to lean off plumb to the left?
The carport does lean and the entire house is a total mess. I know, I live down the street, in an apartment of course.
I’m talking about the first house- in fact the garage IS leaning to the left look at how the garage door fits in its frame.
But, living there is ‘special’ just like the rest of the town and the entire state..
so, who cares about a garage that is about to sink into the marshy ground ?
People envy us, living in this ‘special’ slum..
What is next to that house on Greenbush (and I really mean next to) it looks like a prison.
It is a very hideous condo building. It looks even worse in person. I was shocked when they unloaded those.
Watching them get smashed here in Seattle too. Same story, seeing multiple places selling for less than 1/2 of their peak sales price.
Still not in a hurry to buy as foreclosures are still at a record high and it takes time to process the homes through till they actually hit the market.
Things may be reasonably priced in the future, feel a little sorry for those buying now.
Given that the classic rule of thumb for affordability is to spend 3x your annual salary on a house and that peak median prices in bubble states reached 10-15x their local median incomes, it should be expected that the equilibrium prices should end up between 1/5 and 1/3 of their peak “values.” I’ve seen quite a few that have run down to 40-50% peak pricing but are currently being supported by the low interest rates. When those rates rise, we will see the final drop to proper equilibrium prices (though probably not a bottom. The pendulum always swings past equilibrium)
Does anyone have input for the Huntington Beach/Fountain Valley cities of Orange County. We are poised to purchase, but I feel that home prices are still at bubble levels and may decline 10 to 20 percent more over the next year.
Valerie,
What size house/range are you looking for in HB/Fountain Valley?
Lower end condos you have to watch out for as there are some with land leases.
SFR’s and those in associations are coming down. There seems to be a “cartel” of realtors here that we’ve followed for so long that their habits are predictable.
Over putting down the actual square footage, trying to create a sense of urgency, etc. there are other examples. There doesn’t seem to be a great amount of inventory. We’ve waited several years and have looked at quite a few houses. We finally found an REO in good shape that we are in escrow for now. We are okay with the price even coming down as a lot of the upgrades are already done and we would have paid for that. We intend to hold for a long time as the schools are good here and we like the area.
I think HB/Fountain Valley are still in bubble-land. I’ve been looking in those areas for almost 2 years as well as Garden Grove, Tustin, and Westminster. It is outrageous what people are still asking for modest 3/2 homes. Half-million bucks for a fixer-uppers? The market in OC is going to be screwed up for a long time. Think post-bubble Japan with 15 years of stagnant/declining home values. I gave up on buying and house and starting putting money in stocks. So far I’ve been doing a lot better than my friends who bought homes. My friends have lost anywhere from 20 to 60% in some cases.
Do the math Valerie…buying a house is not an investment. Use your head and rent for awhile. Don’t let your indoctrination that home ownership is the be all end all. It isn’t; especially at this time. You will be committing a grave error if you enter the ownership market at this time. Take a deep breath and wait…and wait…and if you have to, wait some more. There’s an abundance of rental inventory to choose from. No property taxes, no major upkeep, no sweating the fact that you will owe more than your house is worth as soon as you close.
Che – “you will owe more than your house is worth as soon as you close.” True, but also true of a new or used car. This is not a reason not to buy a house, but the other ones (still in a bubble, etc.) are ok.
I encourage everyone to go to this site just to see what an absolute dreamworld that LA Basin folks are living in: http://realestate.yahoo.com/search/Arizona/Fountain_Hills/homes-for-sale?sortBy=&p=Fountain+Hills%2C+AZ&type=classified&priceLow=0&priceHigh=8000000&bedrooms=&bathrooms=&proptype=
Fountain Hills is one of the most-desirable Phoenix suburbs. Just compare!
No thank you, I love L.A.!
Phoenix is still having 100+ degree temps. Need to have AC on 24/7.
Summer there runs from January through November.
Not good, sorry.
That first house featured should be condemned. For 600K you get a house that looks like bulldozing it might be the best option…and don’t forget about the big apartment complex on one side of the zero lot line. You just can not make this stuff up, kool aid real estate intoxication has become an epidemic here in California.
Can someone explains to me what would happen to the housing market if Interest Rates go up to 9 – 10%? I understand I will be able to purchase less. Thanks in advance for your response.
Generally, for each percentage point increase in the interest rate, the same monthly payment can afford about 8-12% less. Assuming California tax and insurance rates and no PMI, A $1500 payment at 4% an afford a $240,000 loan. The same payment at 8% will cover a loan of $140,000. Assuming a 20% down payment in both cases would reflect purchase prices of $300,000 and $175,000. If the $60,000 down payment from the low rate/high price scenario is applied to the high rate/low price counterpart, it can justify a $200,000 purchase.
Home prices are influenced by interest rates and desire to own a home. There’s a tax deduction as well. But as prices dont rise for the next few years and perhaps the interest rates rise, people will start to not want to own homes. That’s when the real fun starts.
Hawaii was also “special”. There are still several old web sites quoting agents in
2007, that the real estate crash will not effect Hawaii. Good for a laugh.
Currently, foreclosures are growing by leaps and bounds. So much for “special”.
Check out 20860 S. Springwater, Estacada,Or.97023. Purchased in 2001 for $295K.
Current asking price $699K.
No bubble there.!!
Hey Ron, several of our family members have moved to Portland Ore. Over the past several years and they just love the change from living in So. CA.. They love the mountains, trees and beaches, fishing, people seem nicer they claim.
This may seem a bit simple minded, I tried asking this before and got no response. Has anyone ever placed a reversed realestate Addvertisement – let’s say I want to purchase a home in a specific area. I’m willing to negociate within a price range of …. Min. To …. Max. Cash, single story, … (Including as much detail as reasonable). So please contact: House Guy at: “reversehomesaleguy@internet.Com†( example only – not a real site ).
I want to let all these Seller’s know I’m out here with Cash, can move in tomarro, … For a price that “Comps†well, plus inspections that work for me. Then I’ll run this through my realtor at half thier normal fee to protect myself. Any thoughts? Or is this just Stupid? If I copied the add all over the Internet, local papers, mailers to homes that interest me. Please talk me out of this before my wife finds out I’m this desparate for us to move.
I have bought CA houses on the courthouse steps for fixing and resale, Owned homes and sold real estate. My first home was bought in 1968. One thing I learned. the supply of houses is endless. Never fall in love with a house and have to have it. I think you are much better off to just get on with your life. Whatever you do, remember : when you own you are stuck in one place, the commitment is huge, and homeowning is very labor intensive and expensive. If you haven’t owned you cannot imagine what a sinkhole for money owning can be.
@ Somis: We did just that, distributed a computer written letter to 52 homes in the tract we were interested in, offerring to split the 6% commission on their sale. This was of course pre-internet. We transacted the sale for the cost of a RE attorney’s time, and have been realtor free since. It only takes one seller who can see the advantage of it.
RudyRudy – I hope I’m not speaking out of turn but when we bought our first house in the early 1980s, prices dropped as interest rates increased. We were lucky to get a loan on our $100,000 starter home in Camarillo locking in at 9% (Ouch!) but we were young and foolish… (it was a nice House, just a horrible bunch of neighbors!)
good luck!
4216 GREENBUSH AVE – since it’s next door to apartments, it would make sense to knock it down and build a small apartment complex there, maybe 6 units. The units would probably rent out for a good price in Sherman Oaks. Course it would take a lot of bucks to make that happen…
I would assume there was some fraud on the 2nd house. $350,000 gain in 4 months is pretty unrealistic. Did they discover oil underneath the house????
What probably happened was that someone bought the house, then they flipped it to someone else with great credit that had no intention of making the payments. The seller and the new buyer split the $350k and the bank ends up holding the bag.
why not just sell the house to a normal buyer during the bubble and keep the profit for yourself?
Wish Dr. could do one for Glendale/La Cresenta area, another giant big bubble over there. Probably bigger than Pasadena and Burbank. Price seems only drop less than 30% from peak, cannot believe it.
Portland is a great place to live, if you have no career ambitions. Good jobs are EXTREMELY hard to come by, unless somebody retires,or dies. Weather is crappy most of the time, but if you live in the office and the mall, who cares.?
Fine dining consists of Olive Garden. Most of the natives are born, live, and die, all in a 10 mile radius.
Something bad happened to you there and you are blaming the place for it. PDX is one of THE BEST cities in the nation except for the weather.
I lived there for 30 years, til 1999 and would still be there if not for the weather.
I lived in the inner s.e. area and love it to this day.
PDX has many many pluses and few negatives. PDX has one of the highest “college educated” populations of large cities. Why would so many college grads end up there? There must be a draw perhaps?
And most of those “smart” college educated Portlanders voted for Obama. They also support a mayor who groomed a seventeen year old boy for sex. Portland is a fun city where you can see teen-age boys being led around on dog collars by middle age men. Portland is a sewer.
What I find amazing that anyone would want to put themselves in debt for thirty years for any of these two homes, even if their prices were reduced down to $300.000. I mean does anyone get excited thinking how great it would be to move into either house? And unless your still in your twenties and thirties and have thirty years of working life left–assuming you are never laid off, fired, or get sick–another words banking on thirty years of good luck–you will be working until you die just to live in one of these dreary hovels. All of you who still think L.A. is special and is worth these kinds of prices to live here, knock yourselves out bidding for either of these two concrete boxes. I will look elsewhere where I can find a house that actually excites me a bit when I think of living in it.
I don’t care how fantastic the weather is in CA. These places are dumps for that kind of money. Damn ~
I’m with you. That’s what I said we I saw those houses. “Damn.”
Just a brief economic observation. I just spent a week in a small town near Charlotte, NC. The drive from the airport was interesting. I was surprised at the number of businesses shut down. It wasn’t just one area. The 20 mile drive revealed business after business closed. Since I was traveling on the company dime, dinner priceses weren’t an overriding consideration. Without fail, every dinniing establishment was mostly empty. We never made a reservation and had our choice of seating. I would ask the waiters/waitresses if business was normal or slow and without fail, they complained that things are really slow these days.
Hmmmmmmmm, so now in the first pic we see how any greedy want to be landlord can destroy a neighborhood and put up an apartment building that might increase the value of the land a bit but puts tenants in a single family neighborhood.
The second pic shows a very uglyish house for an incredible 720,000, well maybe with 10,000 in monthly income.
In nearby Studio City, a house that I was watching that went for $1.19M in Dec. 05 sold a couple weeks ago for $620K. In Apr. 04 it went for $990K.
It’s 11685 Laurelwood Dr.
Strange thing about that house I just mentioned: according to Zillow, Prudential removed the listing a couple days after the sale date, but it’s not indicated as having been sold. Are they trying to hide sales that would hurt valuations?
red fi shows that it sold for 620 on 9/1 http://www.redfin.com/CA/Studio-City/11685-Laurelwood-Dr-91604/home/5242736
Can’t say that I’m familiar with Sherman Oaks, but come on! These homes are a complete rip off!!! Note the ugly apartment building next to the first house – and the house is 2 bedroom, built in 1939 for $608,000. NO THANKS. The second house is cuter but it’s 3 bedroom, built in 1945 for $720,000. DITTO (NO THANKS).
Get a grip people! (I realize than most people reading this blog are more educated).
What caused prices to go sky high was the criminal banks handing out loans to every TOM, DICK, HARRY & SALLY that walked through their door. It was like throwing chunks of meat into a pond of hungry alligators.
These prices are prices a Hollywood Superstar should be paying for a house in Beverly Hills, not prices the everyday person should be paying for these very ordinary homes. JUST SAY NO, HELL NO, TO THESE INSANE, BANKER-CAUSED EXORBITANT PRICES.
Worst yet we all did kind of buy this house as the Banksters off laoded it to Fannie-Fredi-Mac….and we are trillions in dept thanks to them being asleep at the wheel…
Yah the banksters go to the bottom of this..
This article and all the comments from various sheeple in California shows that the ruling elite and the gangster banksters have suceeded beyound their wildest dreams in getting these same sheep to think that it is “normal” and “deserable” to support a gigantic six figure mortgage for 30 years or more. The banks have suceeded in this gigantic heist and many sheeple are now just finally waking up. This is why the housing implosion will continue unabated for many years to come.
I live in Ohio and while it is truly one of the armpits of the country, at least living is somewhat affordabel. I bought three houses — first for 24K, second for 35K and the one I live in now for 84K — four levels, 4 bedrooms — 2 baths — an acre of ground and yearly taxes less than 2900. One of my coworkers was bragging in early 2006 about how his son, who had a 100K job, just bought a 750K house and had a 600K first mortgage plus a second 50K loan which was his downpayment loan. I told him he was nuts. Oh well, people are finally waking up. Tom
Bog is right, you have to look at the wages given in PDX, they are typically the $&^# wages, very close to min. wage. A $300000 house there is a rich person’s house there. Having lived there, I am also aware that people with roommates, and lots of them, is a typical situation, sort of like the Korea Town district here in LA.
For giggles I went to an open house here in Sherman Oaks this past weekend. MAN ALIVE was the agent glad to see me! I was her only visitor (I saw the sheet) and the place was on a cute little cul-de-sac, 2 story, with a pool. The sellers were NOT motivated at all, the place looked like a dump. They didn’t even bother picking up shoes or getting the dishes out of the sink. I’m surprised they bothered to flush the crapper. So the whole idea that people are trying to sell to get the big money may be a little off, I think people are half-heartedly trying to sell because they know they are underwater and they need to get out of that situation. But if not, *sigh* they will just let it foreclose.
Also, just walking or biking around my “hood†91423 I’ve noticed that a LOT of the houses look like they need paint, yard maintenance and maybe some support structures for their walls. The shadow inventory is not that difficult to spot.
I’m a renter, and the turn-over in tenants is really high these days too. I’m more excited by the prospect of finding a cheaper apartment than I am of paying for a house in this neighborhood. Also, I think the AGI is reported here as a little high. The last time I looked it was in the 76-80K range. ???
My landlord is a lot like this. They inherited the place, which is in the best area of town, but also a very old part of town, and this house was the first on the block. It’s probably about 100 years old, with plaster walls and all that, but is stable.
The guy they inherited it from was extremely eccentric. The ceiling in the living room looks like something out of a elementary school classroom from the 1970s and I’m pretty sure there is not a doorknob in entire house that is from the same decade.
But the house itself is solid. Solid, and in the absolute best place in town, within walking distance of just about everything.
And the landlord is about as motivated as a dead cat, both to sell, and to rent. they are responsive and always help when we ask, but they leave all the maintenance and upkeep to the guy in the granny unit. When our stove broke, for instance, they just had him rummage Craigslist.
I know they would love to dump it, but the sheer amount of work involved to get it even presentable makes it not worth it to them.
But then, I’m thinking, hey, I’m single, good with my hands, and willing to do some serious work. Maybe I could take it off of them for dirt cheap and turn it around? Just on the location alone, you could probably bulldoze the place, build a new home, and turn a profit in the long term.
Is this viable?
“Bog is right, you have to look at the wages given in PDX, they are typically the $&^# wages, very close to min. wage. A $300000 house there is a rich person’s house there. Having lived there, I am also aware that people with roommates, and lots of them, is a typical situation, sort of like the Korea Town district here in LA.”
Just because you lived in a part of town that may have been that way it is ridiculous to claim the whole city is that way, it is not! It is a great city with bad parts of town just like many places.
Portland has a few bad parts of town, unlike San Diego where I currently live where it is the complete opposite, there are a few good parts of town and many many areas that look like Mexico.
Just because PDX never became the bubble California did it is also ridiculous to claim that the poor inbreds in Portland consider a 300K house a “rich persons house”.
I guess what it boils down to is your social class and who you hang around with.
And if you missed my comment before, I would still be living in the Rose City to this day if not for the miserable weather.
I’ve lived in Portland for 21 years. Ever so thankful that I sold my house near the peak in 2007 and became a renter. In some ways it does seem to have avoided the serious drops that much of the country has experienced, but I think it just need some more time to catch up with the downturn.
It seems many people come here from more expensive markets thinking they’ve gotten a great deal in sinking their nest egg into a cheaper house. Perhaps they did but if you look at the median incomes in the neighborhoods they certainly don’t support the 300-400k prices that still abound. Last time I checked my neighborhood had a median household income of 32k, not nearly enough to afford the average 2bedroom bungalow that was running around 299k.
Prices are just now coming down, and I think they’re going to a go a whole lot further. Raise the interest rates to a normal rate and you’ll see the equivalent to a nuclear bomb go off.
I’m moving to Taiwan next week, would like to forget this madness for a while. Btw, that comment about the best food option being the Olive Garden is ridiculous. Portland is overflowing with great, cheap restaurants and all the self righteous foodies you can point a stick at…
I’d like to know one piece of information that probably is not available anywhere.
If a house sells 3 times in one year and doubles in value doesn’t that just reek of colusion? Was the buyer a relative or friend of the owner and were they just robbing the bank knowing full well they would eventually foreclose in this wonderful non recourse state of ours. Other states don’t allow you to drop off the keys and they don’t have bubbles like ours. So what percentage of the bubble/forclosures were bank robbers taking advantage of the easy credit and legal loophole?
I know someone in Carpinteria, that bought a house around 2004 for around 500,000.00, then took out a home equity loan for 400,000.00 or 450,000.00, used that money to live on for years, and has been in foreclosure for over 3 years living rent free. They filed Bankruptcy, which temporarily stopped the Auction, but they plan on trying to stay in this status for as long as they can to live rent free further out then the already 3 or so years they have been doing so. When they finally get kicked out, that is when I will buy a home. 🙂 The bank is doing nothing to kick them out as the wife runs around doing nothing all day. Oh and they have their kids in private school.
Not to worry. Iran is going to bail us out. Creative solutions from the thugocracy that brought us stimulus…you cannot make this up…at the link…
shaktipalooza (above) said: shaktipalooza
(September 22, 2010 at 6:35 pm)
“Prices are just now coming down, and I think they’re going to a go a whole lot further. Raise the interest rates to a normal rate and you’ll see the equivalent to a nuclear bomb go off.”
Very well said! It’s amazing that the housing market is tanking with incredibly low interest rates. If rates went up to where they should be right now (probably 7% or higher), the housing market would look like Hiroshima after the A-bomb. Toatal disaster!
I would never buy that Sherman Oaks House. The marble tiles in the entryway, excuse me, foyer, are obviously 15″ x 15″ and I want nothing less than 23″ x 23″.
The poetic ring of “gangster bankster” is exquisite.
You Californians who think $300K in PDX is reasonable haven’t been listening to Doc at all these past nearly five years.
Look at these figures for median income and unemployment in Oregon, then tell me how the hell $300K is “reasonable,” unless you are someone who is escaping the state you already ravaged and plundered with free-for-all debt standards (i.e., CA).
http://www.ers.usda.gov/data/unemployment/RDList2.asp?ST=OR
rose
Dr. Bubble here and you housing bashers here are just unreal. You complain about median home prices being over 3 times the median income. Most of America, and even California, is very cheap and affordable compared to many other countries. In India and China, the median income in their metros is less than $5,000.00 per year, and yet even a small apartment costs $200,000.00, a multiple of 40. Small single family homes there cost over $500,000.00, a multiple of 100. Needless to say, American homes are far superior in quality, infrastructure and cleanliness, and yet are vastly undervalued compared to even third world countries like India and China. For those whining about homes being too expensive in America, be fools and rent and waste $ 25000-30000 per year in rent. Also, note that you can always buy manufactured homes for $10,000 to $20,000, which is less than what you will pay for rent in just one year. And of course, there is always camp sites that you can live on for less than $1000.00 per year. These camp site tents will still be better quality than the milllion dollar homes in India and China.
The comparison to India is not valid. The supply and demand situation is skewed due to infrastructure issues and bad real estate laws. They have had no real middle class until recently. Why should accept a falling standard of living here because of the situation there? It’s because of this logic that we allow the fleecing of the middle class here?
Rob – you must be a banker, or you own a LOT of real estate. FYI Robbie – the prices would never have gone sky high without the banks handing out that IMAGINARY MONEY, aka credit, to every donkey who walked through their doors during the housing frenzy.
God god what a sorrowful joke! What dumps! So much for the Calif dream–thank goodness for the other 49 states and normal house prices–you all keep making those silly-ass movies and TV shows and living that myth and I’ll continue NOT to watch them and thank God I’m not a part of the disaster of California–whew! Maybe Lindsay Lohan will buy one of those dumps–if she can stop ponying up Bail every few months!
LOL Idiocracy at work. Only a fool would live in Kalifornastan………………
http://www.ricorealty.com/rico438a.htm
Hey Raj, What supply and demand are you talking about when over 90% of the population in India and China has no chance whatsoever to afford something that is 50 to 200 times their income? There are more than enough homes already to meet the demand of the 10% that has a remote chance of buying these homes. These kind of excuses like “growing middle class” or “demand and supply” just do not make sense with such ABSURD prices. In America, there has been 60% home ownership for the past several decades because of very affordable homes. Most people in India live in makeshift huts, which cannot be considered homes, so home ownership there is probably less than 10%.
Rob,
Your comment makes absolutely no sense. I’m sorry the real estate business is going bad for you. Try to get a different job.
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PDX is full of trust-funder hipsters with a college education working at minimum wage. I know people who live there who fit this definition and those that don’t fit it who had to move to find work once the Depression hit. I know a recruiter there who said to avoid PDX like the plague if you want to find a job.
The bottom line is that wages support home prices.
Rob
Comparing lifestyles with India and china is ridiculous. They are buying more houses because their standard of living is going up. For their middle class.
Bottom line is affordability. Incomes here cannot sustain current prices, period.
No matter how many rubbish incentives are offered. I refuse to drink the realtor cool aid
I still wouldn’t pay $608k for a small home so close to an apartment complex that if you had one bad run in with any of the tenants (party too loud, dog peeing on your lawn, etc) they could hit you with a spit ball on your porch from their bedroom window every time you walked outside.
Husband and I, newlyweds, have been searching for ah honestly priced home in the areas of Pasadena,CA for a year and a half now. We earn a combined 73k, have our full 20% for a downpayment and our emergency fund in place. We cannot find a realistically priced home anywhere in L.A. Homes are still overpriced. It is cheaper to rent and if we buy at current prices, we will be throwing away thousands of dollars every year. So we’ll rent. Sellers get real.
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