The market value depends on what neighborhood you live in. We can't generalize. When someone asks what's the market like in Los Angeles, there are certain areas that have gone up and others that have gone down. We can't lump them all together. So if you've read that home prices are at 2004 levels, you'll want to check what neighborhood that statistic actually relates to. You may find that the Hollywood Hills and Hancock Park areas are less affected than other areas. If I can help you in a more specific way, feel free to contact me.
RE/MAX Execs 310-213-9437
By the way, Hancock Park is in high demand and the prices are pretty strong. Make sure that you speak with a Realtor to price it right and market it the best way possible.
Thanks. Solomon Team (310) 979-3798 , SoldbySolomon@gmail.com
I have been looking in the same markets as you have and I agree... the sellers refuse to accept reality. The reality is that the market won't bear the prices they are asking for. Real estate agents will continue to say that some smaller markets are protected from price drops. Not true. Each area is affected to a different degree but many people are listing their homes for prices higher than they bought them a few years ago.
I suspect that for the wealthier owners of homes, they would rather hold on to their homes instead of selling them for a lower price. They don't understand how their home is worth hundreds of thousands less than their neighbor, who sold for a high price a few years ago. Also, wealthier owners may be able to sit out the market and keep their high priced home listed without any need to sell anyway.
Wait it out. Prices are dropping. In case you haven't heard, all sectors of the economy are taking a hit.
We have more buyers in my area (Culver City) then homes for sale to satisfy them.
I completely agree with you. I have been looking exclusively in the Hancock Park area for almost 6 months, and have been familiar with the area for 20 years. I have made the same calculations that you have. Houses are still listed at prices much inflated from the peak of the real estate boom. Sellers are listing their houses as if the bubble never burst. My opinion is that when sellers see that their neighbors sold their house at a very high price last year, they assume they should get more. It makes no sense, but the law of supply and demand dictate that a house is worth whatever someone is willing to pay for it. I still think that the prices are overly inflated, even in this great neighborhood. I have no idea what kind of people can afford these houses, but I wish that they would stay on the Westside. All I can hope for is that buyers, like you and me, hold our ground, and do not buy at these overly high prices. When demand goes down, prices will go down.
No offense, but I don't take much stock in what real estate agents have to say. They have a vested interest in keeping prices high. Additionally, I don't believe in "comps." In this time of economic uncertainty, what a house sold for last year, or even last month, has no predictive value in what the house will sell for today or next year.
Finally, I remember in the 90's when houses in HP were just sitting on the market. That was less than 10 years ago. I'm waiting it out for prices to come down to Earth.
I think you are right. I need to contact a qualified real estate agent that knows the listings and go from there.
I know that both are very desirable areas, but just as the supply is very low in those areas, I believe that the supply of clientele that can afford $10,000 to $20,000 per month on a mortgage is equally low relative to the population of LA. I'm one of those people, but just hard-nosed when it comes to business and the bottom line on any deal.
The bottom line for me is that it does not make sense that these homes have appreciated with the LA market, but now that there is a decline in LA, they are now immune to the LA market. That makes no sense whatsoever.
Yes, I do understand that each area is in it's own market. For me though, these areas have risen in and been affected accordance with the overall Los Angeles market, and I find it interesting that they are now not affected and therefore dropping with it.
Looking at public records on this site, I see many homes bought in late 2005, which was near the price peak if I'm not mistaken, and yet sellers are turning around and relisting at 35-60% higher than they bought the properties for.
It just doesn't make sense to me considering all that I've been following and reading over the years.
Ray--Thanks for your insight. On these types of properties, a 10% difference can be an additional $250,000+, so it's definitely a concern to me whether they go up or down over the next year or two. I wouldn't buy a Honda Civic for $65,000 just because it suits my needs and I happen to be able to afford it (not that I'm comparing these homes to one!).
Thanks again for your responses! I appreciate your time and find your comments very interesting points to think about.
I would not be concerned with how the prices compare to those of 4 years ago, but rather be more concerned with your needs and affordability. In the long run, the price going up or down in a year or two doesn't make much difference.
You should contact a Realtor to help you determine what is the best home for you given your needs and affordablility and remember that just because homeowners in one area may be over their heads, homeowners in other areas may not be.