How about today's LA Times Business section today for extreme bearishness?? - Declines stir talk of bear market
- Lender [Countrywide] stung by fears on finances
- Hollywood payroll company Axium files for liquidation
- KB Home loses $773 million
- Maersk Line to lay off as many as 3,000
- AT & T shares fall on CEO warning
- Gold continues to shine, surging to a record of $878
- Bear Stearns' Cayne joins exodus of chiefs
- Consumer borrowing jumps
- Global slowdown is forecast
If that's not enough, be sure to keep up with Nouriel Roubini's recent posts and Stephen Roach's Financial Times essay (via Housing Panic).
Westside real estate bulls say the reason prices fell in the early 1990s was because we had a bad recession that time, unlike now. Uh, right.
7 comments:
The LA City's PLUM Committee just punted the "Baseline" anti-mansionization ordinance to the City Council for consideration. I live in Brentwood Park and support it. I hope it will keep the Park from looking like a subdivision on steroids. Some realtors and others in the neighborhood oppose the ordinance and believe it will reduce values (as if the economy weren't handling this quite capably already, thank you). Since this blog is read by people in the know in real estate, what do you all think about the ordinance and how it might affect valuations? Thanks!
The Governater is now going after homeowners insurance with a fee to help cover the $14 billion budget deficit.
Sounds like homeowners will have to foot some of the housing meltdown.
With regard to the anti mansion ordinance, both sides are right.
The people in favor of the ordinance say that smaller houses will preserve the character of the neighborhood, and they are right
the people against the ordinance say that it will hurt real estate values on the margin and they are right. I think it will hurt the owners of smaller lots and perhaps help the owners of larger lots. Let's say you have a spec builder that wants to build ten thousand square foot homes. Let's say today he can buy a lot that is a half acre and build that home. Let's say that under the new law he has to buy a three quarters of an acre lot to build that home.
so the ordinance will create more demand for three quarter of an acre lots and less for the smaller lots
If you are the owner of a massive lot you should clearly be in favor of the ordinance - if you own a smaller lot, you could go either way. if you plan to sell you should be against it - if you plan to live in your home for decades then be in favor
Anon, I wrote about this back on September 18. In summary, the Los Angeles proposal is about the same as what Santa Monica passed in 1999 for north of Montana, and that certainly hasn't hurt values.
Thanks for replying to my post on the ordinance, and yes, I read the Sept 18 posts. I'm curious why we "need" 10K sq ft homes. Is it like SUVs where there is more margin for builders? My friends who tore down a lovely small character home in S.M. and built a mcmansion explained they "had" to do that if they ever expected to get a return some day when they sold - the market demands big houses. Sounds like a sort of pyramid scheme - everyone thinks only big homes are good investments?
Well some people like to throw massive parties for 200 people
i mean if you want to host an event to benefit a charity or a political cause you believe in you need a very large house.
not to say that everyone that buys a ten thousand square foot house is in to this, but generally they take advantage of the space for one reason or the other
Anon 10:27, that thinking seems to have pushed the mansionization of north of Montana: the profit on sale of lot + big house vs. lot + smaller house.
But it's a source of my growing disinterest in north-of-Montana, as it becomes more and more just about big, expensive, aloof boxes.
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