tag:blogger.com,1999:blog-2983944778720243687.post3644508850885421480..comments2023-11-05T04:24:01.807-08:00Comments on Westside Bubble: New low-end north-of-MontanaWestside Bubblehttp://www.blogger.com/profile/03383559105050069002noreply@blogger.comBlogger44125tag:blogger.com,1999:blog-2983944778720243687.post-30555272781599929252007-09-24T11:31:00.000-07:002007-09-24T11:31:00.000-07:00Hi--I am a former westsider who sold in 8/2006 and...Hi--I am a former westsider who sold in 8/2006 and now is looking to buy in South Pasadena. It doesn't seem as if the bubble has hit South Pasadena yet. Any thoughts onhistorically how South Pasadena/SGV has followed sales trends of the westside? Thanks, KarenAnonymoushttps://www.blogger.com/profile/03406349405961358277noreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-15234420239621930692007-09-23T20:29:00.000-07:002007-09-23T20:29:00.000-07:00Everyone here is struggling to figure out if price...Everyone here is struggling to figure out if prices in SM will fall the way they did in the 90's. Rational thinking (mean-reversion, analysis of past trends, etc.) as well as breathless emotion (if prices don't fall, SM can only be enclave of superwealth!) would comfort us that prices MUST fall.<BR/><BR/>However, what will make prices fall? At the margin, a seller needs to sell desperately, and all potential buyers need to not be able to afford the inflated market prices (or, perhaps more importantly, do not want to pay the inflated prices relative to the percieved value of the property).<BR/><BR/>As someone has pointed out, there are so few available properties in SM. What will cause greater volume, and as a result, greater chance for price decreases?<BR/><BR/>-- ARM Adjustment (if buyers of 2-4 Million dollar homes were stupid enough to use 2/28s or some other form of toxic loan)<BR/><BR/>-- Baby Boomers downsizing, cashing out equity<BR/><BR/>-- Major general economic recession that affects even the "working rich" who have bought in SM during the bubble.<BR/><BR/>So the question becomes, going forward, who are the sellers of SM homes, and who are the buyers?<BR/><BR/>If the sellers are ARM-resetting over-levered bubble buyers with less than 20% equity, and/or spec builders carrying some serious recourse loans, then we may see some significant volume.<BR/><BR/>However, if there are a lot of truly wealthy buyers who will do anything to get a SM tear-down, then prices won't go down much. But if the market is "working affluent" people who make $300 to $500 K a year, then prices may come down due to real underwriting and higher long interest rates.<BR/><BR/>One point has been made that is, unfortunately irrefutable for us who have grown up in SM: it has become an enclave of (relative) affluence over the last 20 years after being a nice middle class community for most of its history.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-80598186556559156262007-09-19T15:14:00.000-07:002007-09-19T15:14:00.000-07:00"line never gets old."ignorance is a bliss."line never gets old."<BR/><BR/>ignorance is a bliss.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-80334570770212248012007-09-19T14:43:00.000-07:002007-09-19T14:43:00.000-07:00"The rich foreigners will save us" line never gets..."The rich foreigners will save us" line never gets old.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-71341709325475844542007-09-19T14:33:00.000-07:002007-09-19T14:33:00.000-07:00"I respect very much all of the above comments.Let..."I respect very much all of the above comments.<BR/><BR/>Let me add my 2 cents"<BR/><BR/>Perfect. Their are many movie stars that own properties in SM north of Wilshire.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-91096653260341928802007-09-19T08:56:00.000-07:002007-09-19T08:56:00.000-07:00I respect very much all of the above comments.Let ...I respect very much all of the above comments.<BR/><BR/>Let me add my 2 cents<BR/><BR/>I think we can all agree that there is a global group - a group of people with a net worth over $100 million US dollars.<BR/><BR/>Members of this group can easily pay $5 million for a third home. <BR/><BR/>If somehow 90402 became popular with this group, there would be eager demand for hundreds and hundreds of houses at the $5 million level in 90402. <BR/><BR/>You could look at the meat packing district in NYC - a few years ago this was the domain of transvestite hookers and wholesale butchers. The sidewalks were literally soaking in blood and animal by-products. family-sized apartments could be purchased for a few hundred thousand dollars. <BR/><BR/>The neighborhood suddenly became popular with the global elite and now family-sized apartments cost $5 million in the meat-packing distict. Visit Manhattan. This is a true story. And it happend pretty quickly.<BR/><BR/>Who could have predicted this change? Not me. It just sort of happened. <BR/><BR/>What could cause this to happen in 90402? Let me just throw out some ideas. Let's say one of the Russian Oligarchs builds a property in 90402 and invites all the other oligarchs to a party - the Russian media picks up on 90402 as the next hot area for Russian Oligarchs. Right there you could see demand for hundreds of houses in 90402 from the oligarchs and their hangers on.<BR/><BR/>Sounds far fetched? Well if i had told you in 1978 that Beverly hills was about to be flooded with wealthy Persians, that would have also sounded far fetched.<BR/><BR/>My point is that it is *possible* for 90402 prices to explode upward. <BR/><BR/>It is of course much much more likely for them to collapse.<BR/><BR/>It all depends on how fashionable the neighborhood is perceived to be by those who think nothing of spending $5 million on a house. In most neighborhoods in most cities house prices are related to household incomes. But for the neighborhoods that are fashionable among the population with a net worth over $100 million, all the rules go out the window. Prices go through the roof. Often the owners of the houses only use them a few weeks a year. Owning the house is a fashion statement, a status symbol. I do not mean to disparage any ethnic group, and i do not mean to denigrate or to praise people who have this much money. I am trying to be neutral and honest.<BR/><BR/>I am *not* making a bet either way, I am simply saying that the future is hard to predict. <BR/><BR/>90402 could become a place where the super-rich own houses and keep those houses empty for the same silly reason they own apartments in London that they keep empty. Or not. Who can honestly say they know for sure?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-32184532805111599632007-09-18T16:40:00.000-07:002007-09-18T16:40:00.000-07:00Hey guys, keep it civil, ok?Hey guys, keep it civil, ok?Westside Bubblehttps://www.blogger.com/profile/03383559105050069002noreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-80743288001882808232007-09-18T16:31:00.000-07:002007-09-18T16:31:00.000-07:00same with bashing.same with bashing.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-55907554028120476152007-09-18T15:24:00.000-07:002007-09-18T15:24:00.000-07:00Leave the stalking offline.Leave the stalking offline.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-28678498153683891502007-09-18T15:03:00.000-07:002007-09-18T15:03:00.000-07:00"moniker for 3+ years, over those years I have giv..."moniker for 3+ years, over those years I have given out too much personal information already, and prefer to remain anonymous, thankyouverymuch."<BR/><BR/>I understand. In your shoes, I would want to hide too. But how does ones profession reveal ones identity? I am not asking what is your name, or where do you live or which floor of the building do you work.<BR/><BR/>Excuses are like assholes, everyone has one and they all stink -- do what you preach. So, what is your profession?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-60727747198197096342007-09-18T14:46:00.000-07:002007-09-18T14:46:00.000-07:00It's true that premium locations will command prem...It's true that premium locations will command premium pricing with no relation to fundamentals. Where the problem starts is the mass delusion that much of the Westside is one of those locations. It's really not and the number of true premium spots in LA is much smaller than a lot of us like to think. Of course, we always think "our" little slice is one of them. Delusion is easy when money is involved.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-555956404842282542007-09-18T14:30:00.000-07:002007-09-18T14:30:00.000-07:00You are right - Mews houses: carriage house on the...You are right - Mews houses: carriage house on the ground floor (garage), and stable servants' living accommodation above for over 2.9 mln$. <BR/>subtract garage and you will get 3000+per square foot. <BR/><BR/>I don't think this would sell for 1 mln even in SM North of Montana or prime Beverly Hills. So if you think it is insane here - how much more insane is that in comparison? 3X? <BR/><BR/>You have explained logically in your post above why RE prices in top high-end prime areas in top cities do not need to be related at all to income of average or much better than average folks.<BR/><BR/>Is prime London better than prime LA ? Grass is always greener on the other side. Many people would love to move out of London, just like they want to move out from LA. <BR/><BR/><BR/>CheersAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-41155414697851532582007-09-18T13:48:00.000-07:002007-09-18T13:48:00.000-07:00W1 has always been insanely expensive - plus, its ...W1 has always been insanely expensive - plus, its rare to find places that have a freehold. Its been the bastion of the Upper Classes <I>pied-a-terre's</I> for well over a century. <BR/><BR/>The vast majority of W1 is owned lock-stock-and-barrell by the Duchy of Westminster, Morden College and the Peabody Trust. They never sell, so the best you'll get is a lifetime (99 year) lease. Yes, there is some ex-Council housing, but you won't find any of that in Fitzrovia. <BR/><BR/>The vast majoirty of real estate in W1 is commercial - judging from the listings you posted, they're still pretty good value - less that $100K in Soho is doable - even then, as most of Soho is own and operated by Peachy Property (hawk, spit), they'll still get you to take a 99-year leasehold rather than a freehold.<BR/><BR/>Comparing the north of Montana teardown to a Mews house in Fitzrovia is disingenous at best - try comparing it to Manhattan or the most affluent parts of Washington D.C for a proper comparison. Plus, you can bet that that Mews House will be in much better conditon than that sad little place in SM.<BR/>Horses for courses, mate, horses for courses.... ;-)<BR/><BR/>And, yes the beach is nice, but you're still going to have to get in the car to get to a decent beach. And completely renovate the property, as its still a teardown for $2 million.speedingpullethttps://www.blogger.com/profile/03115650690979498735noreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-89373928930548901522007-09-18T13:26:00.000-07:002007-09-18T13:26:00.000-07:00Just one example of current London pricing to pond...Just one example of current London pricing to ponder over. Now I am really going :-) <BR/><BR/>http://www.findaproperty.com/displayprop.aspx?edid=00&salerent=0&pid=120381&agentid=01803<BR/><BR/>Approx (1.45 mln pounds) approx 2.91 mln $ A house 1524 square feet house (including garage)-actually by US standards-townhouse no lot -prime area. Pretty nice ? Just look at the pictures. How does this compare to low-end Santa Monica north of Montana. Where would you rather live, assuming you could have similar or better paid job here (still better despite sagging $) as an upscale professional ?? Sell that shack and move over here, no -does not sound too bad here after all -? and then there is the beachAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-82109068773752304182007-09-18T11:31:00.000-07:002007-09-18T11:31:00.000-07:00"Still, if I were you, I wouldn't wory about any r..."Still, if I were you, I wouldn't wory about any realtors."<BR/><BR/>Not sure I ever used the word "worry", more like schadenfreude.dwrhttps://www.blogger.com/profile/13255977474398379025noreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-91141062936175812542007-09-18T11:28:00.000-07:002007-09-18T11:28:00.000-07:00"Somehow, I have a huge doubt about you flipping b..."Somehow, I have a huge doubt about you flipping burgers and am curious, what can one possibly do for a living to be so ashamed and hide it so intensly?"<BR/><BR/>Boy are you ever a smart one- sure you're a realtor?<BR/><BR/>I have posted on various bubble blogs with this moniker for 3+ years, over those years I have given out too much personal information already, and prefer to remain anonymous, thankyouverymuch.dwrhttps://www.blogger.com/profile/13255977474398379025noreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-64928712598158708812007-09-18T10:46:00.000-07:002007-09-18T10:46:00.000-07:00"Not everyone is a flipper"...but prices are set i..."Not everyone is a flipper"<BR/><BR/>...but prices are set in the margins and the last comp marks the neighborhood. Falling prices will hit the Westside last but it will hit all the same. Just like the '90s. You kids need to open a history book and stop embarrassing yourselves.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-83615486075398708012007-09-18T10:43:00.000-07:002007-09-18T10:43:00.000-07:00I always laugh at the bulls on these threads. Pric...I always laugh at the bulls on these threads. Prices are so divorced from fundamentals that any effort to reference historical norms as an excuse for the runaway costs of the past few years (for example the previous post) has me rolling on the floor with laughter.<BR/><BR/>Keep feeding those alligators!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-72490723529943230272007-09-18T10:39:00.000-07:002007-09-18T10:39:00.000-07:00Seems like it has generated quite a bit of discus...Seems like it has generated quite a bit of discussion - the world angle. Thanks for the interesting opinions. <BR/><BR/>The UK prices in posh areas W1 for example are<BR/>here:<BR/><BR/>http://www.findaproperty.com/areadetails.aspx?edid=00&salerent=0&areaid=0207<BR/><BR/>Check for yourself <BR/>2$=1pound (for now maybe it will be 3 soon)<BR/> <BR/>Each city has pluses and minuses its Comptons London too. Average middle class or better will never buy in these areas (plenty of these areas in LA) and hence the squeeze in very few high-end area of LA and SM north of Montana is undoubtely one of them in LA. <BR/><BR/>BTW Moscow and Bombay are even less of world class cities I would say in my opinion and yet the RE squeeze is very strong there.<BR/><BR/>Maybe there will be a world wide depression and things will change for a while- but this doom and gloom has been predicted for decades by now. Some price adjustments/stagnation may happen for a while given the scary mood in the media especially in bad areas but I doubt it will be that big. Not everyone buyng is a flipper-people have families and have to live somewhere. Apartments are not a long term option for families in US typically so people are not going to wait 15 years for prices to adjust. <BR/><BR/>Anyway gotta go - make some $$$ or better pounds euros or rupees So keep up the discussion. Thanks for your comments.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-2064721726588940282007-09-18T10:25:00.000-07:002007-09-18T10:25:00.000-07:00"Sure you can, just like in the 90s when"I agree w..."Sure you can, just like in the 90s when"<BR/><BR/>I agree with you 100% about the part of how much one keeps, can't argue there. Still, if I were you, I wouldn't wory about any realtors. Their demise or survival will not have any impact on you. You can proudly continue flipping burgers. <BR/><BR/>Somehow, I have a huge doubt about you flipping burgers and am curious, what can one possibly do for a living to be so ashamed and hide it so intensly? I have a feeling that you are one of those "loser" realtors that didn't make any money in a good market and now is facing the demise.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-7294272056666560452007-09-18T09:56:00.000-07:002007-09-18T09:56:00.000-07:00Ad to be placed in foreign magazines:Welcome wealt...Ad to be placed in foreign magazines:<BR/><BR/>Welcome wealthy foreigners! Come buy up lots of little houses in South LA. What a steal! Great weather. Diverse culture! Close to the beach. Easy freeway access. Close to the amazing jobs you don't need. <BR/><BR/>Los Angeles is so wonderful, you just have to buy here. Soon prices will be over $2M in Compton. Buy now or be priced out forever! We know you are super-rich, but the super-super rich have already bought all of Santa Monica, Bel Air, Pacific Palisades, Malibu, San Marino, Palos Verde, Hollywood Hills and Hancock Park. You'll have to get into Compton fast before it too is snapped up.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-67798441140558107152007-09-18T09:55:00.000-07:002007-09-18T09:55:00.000-07:00As a Londoner, who moved to L.A, I feel slightly q...As a Londoner, who moved to L.A, I feel slightly qualified to comment.<BR/><BR/>During the 89-90 housing crash, London prices dropped by about 50% - it happened then, it will happen now. With the likes of Northen Rock imploding, the chances are that London has reached the height of its prices, and can only go down from here.<BR/><BR/>As for London prices being 'much higher than [L.A] that'...they're not. There are still many many places well under $1 million (about 550 GBP), and even Londoners would balk at paying a million quid for a 'tear down'. <BR/><BR/>2 million would buy you a complete Edwardian villa overlooking Blackheath or Hampstead...hardly a pokey little, pre-war bungalow with questionable structural integrity...<BR/><BR/>And, as for rich Londoners bailing out the housing industry in Los Angeles, the large majoirity of them have oher fish to fry, trying to keep thier heads above water in the Florida condo market.<BR/><BR/>So, sorry, trying to justify the price by laying the responsibility to buy it on 'rich foreigners' is just silly - that place is wildly overpriced by pretty much all definitions, worldwide.speedingpullethttps://www.blogger.com/profile/03115650690979498735noreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-31635166605798557232007-09-18T09:41:00.000-07:002007-09-18T09:41:00.000-07:00I have been a real estate agent for 24 years. Pric...I have been a real estate agent for 24 years. Prices will fall. Any REA who claims otherwise is either deluded or still wet behind the ears and has only experienced a boom period. We really don't have to go that far back to see significant price declines in the Westside. The naysayers are revealing their youth and inexperience.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-49702914895271978652007-09-18T09:28:00.000-07:002007-09-18T09:28:00.000-07:00Sure you can, just like in the 90s when half of yo...Sure you can, just like in the 90s when half of you went BK. It's not how much you made, it's how much you kept, and we all know your collective track record in that regard.dwrhttps://www.blogger.com/profile/13255977474398379025noreply@blogger.comtag:blogger.com,1999:blog-2983944778720243687.post-43339489175149163862007-09-18T09:04:00.000-07:002007-09-18T09:04:00.000-07:00dwr - you shouldn't be comenting on this or any bl...dwr - you shouldn't be comenting on this or any blog and stick to your day job - flipping burgers. Don't be concerned about us, realtors, we made so much money, that we can go without working for at least next decade.Anonymousnoreply@blogger.com