As a scientific society our view on art has been somewhat marginalized in place of more scholarly and practical pursuits. The Internet and medical advances come to mind readily. Hence during the Renaissance, a high value and prestige was bestowed on realism and art depicting life as it truly is. With modern art, the average person does not see the beauty because it is not practical. After all, how can a splatter of paint make sense? But
Let us first take a look at the sales history of this home.
Sale History
10/06/2000: $145,000
04/26/1995: $129,000
10/27/1994: $118,340
As you can see, in 6 years this house appreciated a whopping $26,000 from 1994 to 2000. However, with the new housing renaissance this house appreciated (supposedly) $250,000 in seven years! It is the new housing field of aesthetic sunny housingnomics. A field basing the price of your home completely on the amount of sun you receive in a year and the temperature averaged out over a ratio. This is very complicated to understand but suffice it to say this place has a high sunny/temperature ratio. Or to break it down even further, $35,700 per year in an area where the median income is $45,000. We once again see that working a 9 to 5 is for unintelligent folks because why work when you can sit at home and let appreciation pay for your TiVo and DirectTV.
What would this home rent for in this elite area of Los Angeles? Well let us take a look below:
So the median rent in this area is $1,085 and your carrying cost on this place will be about $2,700 a month. Another cash-flow property in the heart of Los Angeles! And this is accurate because like an art curator, Zillow tells us this property is safely valued at $409,000 so we are actually getting a deal here.
Today we Salute you East Los Angeles with our Real Homes of Genius Award.
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17 Comments:
They ask $600 per square foot in Irvine. Looks like a deal.
Dr. Housing Bubble,
When is this madness going to end???
oc bear,
This place is a fantastic deal! Almost $400,000 for an area with great schools and safe neighborhoods. We need to get on the phone and call our brokers over at New Century.
mrslovelly,
Sadly, this madness is just beginning. I've talked many times before about this summer wonderland season where people "think" their home is still worth peak 2005/06 prices. However, once the summer is passed and fall and winter hit, that is when the fireworks will start because an open house with no buyers is an empty house.
I make it a rule never to buy a house that has a chain-link fence....or one that is in the middle of gang-war territory.
BTW: Glad you redid your site, I will be visiting daily now.
I've been in Cali too long, and exposed so these stupid prices for so long, when I see the picture and the price and almost think, hey, an actual house for under $400k (mind you I lived in the Bay Area 11 years, where the insanity may be even higher). For a moment I think $395k is reasonable, but then I slap myself in the face, because I know really that it isn't.
I have a question for all of you. Will you ever buy a house in California? If so, what will it take for you to get into a home?
Would I be a lunatic if I said that I am waiting for the prices to reach a level where the mortgage payment to income ratio is in line with the longterm average?
It seems to me that 50% is a tad high. :-) I mean in downtown Oxnard, using half my income for housing while sitting on the porch looking at graffiti is the life.
What do you think Dr.?
Where do you think Ventura County is headed Dr.?
Dr., regarding your question. If house prices drop to 1997 or 1998 prices plus inflation, I'm in the market for a house. I don't think anyone knows if or when that is going to happen, but that's my bottom line.
Secondly, I think you are being a little unfair with that house in East LA. I'm sure it must have a lot of feng shui.
Every time we want to jump in to the housing fray, we find ourselves rationalizing, questioning. We ask ourselves, "Is a 5, 6, 7 thousand a month mortgage worth it for a 1.3 million townhome with "ocean peak views?"
We answer ourselves, "No, not worth it."
Are we the fools? I suppose time will tell.
Where's that time machine when you need it?
I don't know if we will ever buy another house in So. Cal. We have a good size down payment, but with my husband wanting to retire in 8-10 years, we don't want to be saddled with a $400K or $500K mortgage. If we wanted to live closer to my husband's job we would have to take on a $800K mortgage. NO THANKS!
I'd like to buy a place and have it paid off in 15 or so years so I won't have to pay rent in my retirement (I'm currently 40). I can make a good downpayment, but I refuse to have a mortgage over $300k. So what's the solution, if it's not to be a Real Homes of Genius abode? Either don't buy in LA and buy an investment property elsewhere and move there in later years, or just say the heck with it and enjoy life!
To anon 12;11
I own two houses side by side, free and clear. One is my home, the other we use as a guest house and for parties. The debt is still higher than rent. Taxes, insurance maintenance, come to 3.5% per year.
The money I COULD have in the bank if I didn't own the houses comes to $2100 per month added to that 3.5% overhead adds another $1200 per month. Total to own my two homes free and clear; almost $3300 to own them free and clear. Even for me, renting is a better deal. If cd rates hit 10%, I'm even more screwed.
Keep the money in the bank and travel until you find somewhere you just can't leave. The key is to not spend the savings. Even when you have the million in the bank, drive a used car, be modest, enjoy the travel and comfort that a 2% debt ratio can bring you.
$500,000CD at 5%apr is a savings account that makes $2500 per month, forever. You can own a $500k home free and clear for the LOSS of this $2500 per month, and add another $1000 per month in taxes and upkeep, or you can rent the same house for $1500 and have beautifull liquidity. Even free and clear, renting puts you $2500 ahead per month. I'm living the prior, take my word for it, the American Dream is quite costly right now. I don't care enough about exact numbers to make it fit, but I can tell you everytime I look at the guest house I twitch. It costs me $1600 per month to own it free and clear. But, I love it and won't get rid of it. I could be on heroin cheaper!
Turdly,
This is anon 12:11 (I can see I'm going to be a regualr poster, so should create an account, but for now...).
Your advise makes sense. I did in fact buy a condo in the Bay Area in 02...and then promptly got laid off right as the dt.com collapse was happening. 6 months later, after not being able to find a job in the Bay Area, I got one in So Cal, and had to move on. I ended up selling as folks were still eager to buy and I'd noticed the rental market had gone to hell (no more dot-commers to fill vacancies). Since them I've remained liquid, investing as much as I can, and doing just fine. I've finally shaken the image that I'm less of a person just because I don't own property. I live in LA and have a 10 minute commute. That's worth a lot!!
I will buy a house when I find one that (A) I'd be willing to live in and (B) I can reasonably afford. The market will determine if this ever happens.
Dr. HB,
You asked your readers what it would take to get them into a home in Ca. My question is what is it gonna take for sellers to get real about asking prices?
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