The condo alternative pitch: Tiny homes in Pasadena continue to hit the market for first time home buyers.
There is a heavy premium that is placed on purchasing a single family detached property. In the past, condos were seen as a fine entry point into the housing market before trading up to a single family detached home. But with current home and condo prices, people are looking at making their first purchase stick. Since there appears to be a slowdown in the housing market, we are seeing some interesting marketing on how properties are pitched. One of them is the condo alternative pitch on smaller properties. These homes are targeted to those desperately trying to get their foot into the housing market even if the home is smaller than a condo. I’ve seen a good amount of these properties hitting the market in Pasadena. I would imagine that many buying these places are planning on leveraging up in a few years and going with a bigger property, especially if they plan on having a family given buying a home tends to set the stage for kids. Let us take a look at a current property in Pasadena that fits the bill.
Tiny home in Pasadena
Pasadena is a lot bigger than people tend to think. It is 23 square miles with more than 140,000 people. There are tough areas of Pasadena for those that know the market. But many potential buyers want to get in at any cost just to claim they live in a certain city. You would have people buying a garbage can in Santa Monica just to say they live there and pretend they live on beachfront property.
Take a look at this place:
1508 N El Molino Ave, Pasadena, CA 91104
2 beds, 1 bath, 750 square feet
750 square feet is small. Most apartments are larger than this place. The place looks like it is in good condition, at least structurally: Take a look at the ad:
“Built in 1923, this charming Bungalow Cottage has fantastic curb appeal and is the perfect opportunity for a buyer who wants to build a little sweat equity with a few upgrades to the home.â€
Looking at this place you can see some potential for a flipper. Right off the bat you can update the bathroom, tear out the carpet in one of the rooms, and put some HGTV love into the kitchen. I’m sure this is the thought process that many flippers undertake before buying a property. How much will these upgrades cost and how much will I make when I flip?
The thing is, this place is small. Here is a street view picture:
You have a street light right in front of the place. How much lighting will go into the home at night since this place is small? I also found it interesting that this place has undergone foreclosure twice:
What happened in 1998 and 2000? The list price of $349,000 might seem like a bargain in the SoCal housing market especially when it comes to Pasadena. The Zestimate on this place is $419,873 which shows you how inexact of a “science†real estate can be. We don’t really need a Zestimate since the place is on the real market right now for $349,000. This place was also built in 1923 so you are likely going to need to do due diligence since the place was built nearly a century ago.
A couple of blocks away, you have a condo that is more than twice as big going for slightly more:
The HOA on the condo is $150 per month. Would you take either of these places for the current price? I’m sure that people will bite at the $300k range given that both of these places are in Pasadena. What is more telling is that you are seeing $300k properties on the market in Pasadena.
Did You Enjoy The Post? Subscribe to Dr. Housing Bubble’s Blog to get updated housing commentary, analysis, and information
Did You Enjoy The Post? Subscribe to Dr. Housing Bubble’s Blog to get updated housing commentary, analysis, and information.
Subscribe to feed
38 Responses to “The condo alternative pitch: Tiny homes in Pasadena continue to hit the market for first time home buyers.”
Some people will consider a street light shining upon the house as a burglar deterrent, and therefore a plus. My mother certainly thought that way.
And my Santa Monica condo is only 680 square feet. Some Manhattanites would consider that spacious. I’ve a friend in Manhattan whose studio co-op is smaller.
yeah and 680sq feet is at least twice as big as my 330sq ft bedroom I grew up in as a child…
And don’t forget, Harry Potter grew up in a cupboard under the stairs. I’m sure that’s tripled in worth since then!
““An ongoing criminal enterpriseâ€: Why America’s housing disaster is back and wreaking terror”
http://www.salon.com/2014/11/18/an_ongoing_criminal_enterprise_why_americas_housing_disaster_is_back_and_wreaking_terror/
To put things in perspective (in terms of price and cost of living), for you potential California cottage buyers, this is a house I bought in downtown Wilmington, NC (“Hollywood East”), earlier this year, for $33,000. I put $6,000 into renovating it, and it is under contract, with $6,400 non-refundable earnest money, for $64,000. It is currently rented for $750. It is walkable to Wilmington’s award winning riverfront. This is a rare house flip for me, because, nine times out of ten, I build or renovate to keep these houses as rentals. Here are some photos from a magazine that offered to do a small spread on the Key West style 1920 cottage:
https://www.dropbox.com/sh/8mipbptde8s7wjt/AADi5b2_nfNzmDDViV1nhFJLa?n=134868037
Looks like someone threw up rainbow sherbet all over it.
That would be me. It’s a Carolina beach town, but the same type of thing can be found in Key West. This is what buyers and renters will pay up for in southeastern beach town communities:
http://4.bp.blogspot.com/-1mT9JC6g9ek/T2jPJrntpVI/AAAAAAAACaA/88yVmbMXCHI/s640/home.jpg
And here’s what someone did to a singlewide:
http://tours.uniquemediadesign.com/public/vtour/display/270243?a=1#.VGF6qz33zBQ.facebook
House styles are regional
And this is what a little bit more buys in the dry part of WA in a town who made it in the top 10 of Sunset Magazine:
http://www.wallawallarealestate.com/residential/404coyoteridge/404coyoteridge.html
But it’s still in North Carolina. This Northern California native was forced to live in that state for two years when I was a teenager. I almost slit my wrists. You can keep it at ANY price.
Dude (or Dudette) why do you do this? Why do you post self-congratulatory messages about what you did in another state, on a blog about southern California housing? And I live in another state, not in California, so the fact that I think you are a little odd has nothing to do with defending California.
Seriously, Rah Rah for your fixup project success. Now can we get back to analyzing the market in Socal? Thanks.
Just by looking at the chart for the condo, there are warning flags … 2 foreclosures, a short sale, and a 134% appreciation in 14 years, a roughly 10%/year rise. Those all signal either a speculative or troubled market, property, or area! Obviously the person who bought this property in 2000, if they get their asking price, will have pocketed a nice profit. And that should be the lesson here … if you have a significant amount of equity, get out now, pocket the money, move to a lower cost city and sit back and watch the next bust cycle hit California real estate!
I love that little bungalow in Pasadena. It looks exactly like the first home I ever owned, in the hill section of Burbank. I bought it in 1979 for $79,000. When I sold it five years later, the new owner bulldozed it and built a mansion that doesn’t fit the neighborhood. I often wish I had never sold it.
In spite of large size and low price I wouldn’t think twice about the larger condo. Its adjacent to a commercial alley, its only 4 total units, which means there’s a hefty assessment when the roof needs replacement, not to mention other infrastructure repairs. The HOA will skyrocket when the bills come poring in. The complex is 16 years old, just the time things start to need repairs. The unit itself is in horrendous condition, basically a gut job. Most fixtures are gone, painting and other wall treatments are psychedelic. Its a foreclosure and looks like it’s been occupied by drug addicts. The space is a plus, the price marginal for the condition, a sweat equity purchase would be an understatement . The neighborhood and location do not support a huge investment to turn it around. And the taxes are 4,000 plus now and with improvements will go higher. You may get less space but there are better condo buys in Pasadena. Location condition and taxes and even space, considered.
HPPSINC wrote: “…which means there’s a hefty assessment when the roof needs replacement, not to mention other infrastructure repairs….”
You made a nonsensical argument. Who do you think pays for roof replacement and infrastructure repairs on a house? The city? The county? The state? The Federal Government?
Ernst, that post assumes that the OWNER will be hit with a special assessment when the roof needs replacing, or some other major structural issue comes up. The poster is stating that you, the buyer, will have to bear this cost.
I know about special assessments and figured my share of a new roof and tuckpointing into my offer when I bought my vintage Chicago condo. We have a 9-unit building with a flat gravel-and-bitumen roof, and my share of the special we had to asses for the roof and the tuckpointing is $6900. A four- unit place on two stories has a smaller footprint than my place and, while the cost per unit will be rather higher than in my 9-unit association, it should not be much more. I figured what my costs would be on a 1200 sq ft cottage with its own roof, and needing tuckpointing, and they would be closer to $20,000.
The bad part of the place mentioned here is the $4000/yearly tax load. That is a monster tax bite for a shabby, small condo in a dodgy neighborhood that needs a gut rehab. Once it is rehabbed, of course, the taxes will skyrocket.
I would suggest to economically marginal denizens of coastal CA- that is, anyone making less than $125K a year- that they look to relocate to a cheaper locale, even if they have to take a pay cut. You are better off on $65K a year in a location where you can buy a nice place in a decent nabe and school district for $225K, than you are in a place where you make $200K, but a tiny, shabby cottage costs $800K and even a ratty, small condo in a slum costs $300K. You can work on saving money and get back to CA later… if you still want to. If you are under age 40, you have most of your life ahead of you, so think of where you want to be in 20 years.
Housing To Tank Hard in 2014!!
Keep the dream alive Jim!
More water problems in CA, as if drought and radiation was not enough
http://www.zerohedge.com/news/2014-11-17/3-billion-gallons-fracking-wastewater-pumped-clean-california-aquifiers-errors-were-
Any impact on the demand for housing?
Reminds me of Texas. “the California’s Department of Conservation’s Chief Deputy Director, Jason Marshall, told NBC Bay Area, California state officials allowed oil and gas companies to pump up to 3 billion gallons (call it 70 million barrels) of oil fracking-contaminated waste water into formerly clean aquifiers, aquifiers which at least on paper are supposed to be off-limits to that kind of activity, and are protected by the government’s EPA – an agency which, it appears, was richly compensated by the same oil and gas companies to look elsewhere.” Jerry was running for re election and needed the campaign contributions. Jerry-Perry, what’s the difference? They both like the green. We have the best governments that money can buy. True, they differ on social issues, but when it comes to green, they are brothers.
I wish people would stop complaining. You are going to pay a premium to live in the entertainment and weather capital of the world. Get over it.
In my opinion it is similar to complaining about the price of cars. Are we in shock over the price of a Porsche or Ferrari? We shouldnt be… we should be in awe about how much money people have not what the car is really worth based on armchair economics. Like you said, in the center of great weather, beaches, healthy foods and living, house prices correlate to that.
Maybe you two should visit the Dr. It’s A Great Time To Buy blog instead.
If you stop complaining about people complaining, your wish will be just that much closer to coming true! You’d have more time to enjoy the weather…or could it possibly be that this so-called capital of entertainment has you entirely fucking bored so here you are complaining?
Charles Hugh Smith weighs in on Calamity Jane’s (Janet Yellin) recent Fed comments.
http://www.oftwominds.com/blognov14/injustice-bubble11-14.html
excerpts below:
Inflating housing out of reach of young households as a matter of Fed policy isn’t simply unjust–it’s cruel. Fed policies designed to goose asset valuations as a theater-of-the-absurd measure of “prosperity” overlooked that it is only the older generations who bought all these assets at pre-bubble prices who have gained.
In the good old days, a 20% down payment was standard. How long will it take a young family to save $130,000 for a $650,000 house? How much of their income will be squandered in interest and property taxes for the privilege of owning a bubblicious-priced house?
If we scrape away the toxic sludge of sanctimony and misrepresentation from Yellen’s absurd lecture, we divine her true message: if you want a house, make sure you’re born to rich parents who bought at pre-bubble prices.
We LOVE So Pas, but we didn’t want a mortgage (eyeball and hearing issue) so bought this adorable 2,000sq ft “cottage” in Simi Valley, in lieu of living in a more sophisticated town. So Pas is great, it’s a urban vibe (Goldline mobility-lite rail) and the charm of a suburban village. I wish we got the money bug in our youth. Being middle class is so limiting.
2014 isn’t over yet. By the end of the year, YOY selling prices could be down.
That El Molino house in not in the best location. That’s pretty far north on El Molino. That being said, it is a cute house and plenty big for one or two people.
I’d call it a marginal area. Not terrible but not great either. You can see it on the crime map right here: http://www.crimemapping.com/map.aspx?loc=1508+N+El+Molino+Ave%2c+Pasadena%2c+CA+91104
The Dr. mentioned that Pasadena has some tough areas. Anyone recall hearing it referred to as “Blood City”? Blood refers to the gang, not the bodily fluid. I don’t think of Pasadena as particularly dangerous–relatively speaking–but it does have high crime areas that have persisted for decades.
Oh, I do know about crime here. I was born at Huntington Hospital and have lived here all 50 yrs of my life. Boy, have I seen changes here, both good and bad.
91105 is the best zip in Pasadena. If had the money, that is where I’d be.
@Rhiannon We should do lunch.
Actually, all the SGV peeps here should meet for lunch. So we don’t kill each other, we’ll have bears at one table paying cash and bulls at the other paying with credit.
@ Teresa I never said it was a great time to buy. But if prices go down 20% in the desirable area (SM, Venice, WLA, CUlver City, Pasadena, West Holly, etc). MY comment still applies – prices for homes will still be skewed higher and only the wealthier will be able to afford, just like the Porsche or Ferrari. If they drop their prices by 20% it doesnt change affordability for the average shmoe.
@QE Abyss The areas you mention don’t all have the same profile. They’re not equally desirable. Maybe I’m the only one but I don’t think all of SoCal should be priced to the hilt because we have good weather. For instance, you could not pay me to live in a house in Culver City next to the 405, even if other areas are quite liveable.
Again, this is just my preference, but I’m not in awe of people with a lot of money. I don’t come to this blog or watch the real estate market to be impressed by how much money people can throw around. As the Dr. has said, there’s a lot of all-hat-and-no-cattle around these parts.
It’s helpful to understand that there is a contingent of commenters here who have a hard time swallowing sugggestions that whilst they have made SoCal the center of their universe, it’s not the center of every other person’s universe. The fact that one would complain about complaining is most telling in all of this. As witnessed above, the usual backpedal when cornered is to deflect our attention to so-called “prime” areas. You’ve accurately pointed out that there’s an entire region of SoCal beyond prime that is also factored into the equation for many, yet we continue to get complaints from those whose bets have been placed and would like nothing less than to see prices drop below what they paid in which we often see manifested as “quit yer bitchin.”
Are there any blogs about real estate in Texas or North Carolina or one of those other places? If so, are there any people from California spending time on them?
These prices are nuthin compared to the bay area.
It’s Altadena.
Leave a Reply