Anyone Know Huntington Beach?

[waiting hawk]

Ok I made a bet with a good friend. We argued on real estate since 2004. Now he is divorced and renting in HB. I made him a bet, an expensive dinner that by the end of 2008 a small 2 bedroom house (“shack” she called it) below Adams (near downtown) would be 499k.

They are in the high 6’s and 7’s now. Since jumbo loans are crashing I’m betting that I will win even though I have my reservations about places so close to the beach and only followed inland empire (which I have bets of 50% on). Anyone know the area I am referring?

[patientrenter]

waiting hawk, I live next door to HB, and close to the HB area you describe. It’s been a while since I looked there, so I don’t have a clear crystal ball. But I think there are few of the wealthy cash buyers for the shacks in this area, so I would give a drop from high 6’s and low 7’s to just under 5 a 50/50 chance. It won’t happen based on what we know now, but a new downward impetus, like a California recession triggered by housing, could do it by end of ’08.

Patient renter in OC

[patientrenter]

waiting hawk, I live next door to HB, and close to the HB area you describe. It’s been a while since I looked there, so I don’t have a clear crystal ball. But I think there are few of the wealthy cash buyers for the shacks in this area, so I would give a drop from high 6’s and low 7’s to just under 5 a 50/50 chance. It won’t happen based on what we know now, but a new downward impetus, like a California recession triggered by housing, could do it by end of ’08.

Patient renter in OC

[patientrenter]

waiting hawk, I live next door to HB, and close to the HB area you describe. It’s been a while since I looked there, so I don’t have a clear crystal ball. But I think there are few of the wealthy cash buyers for the shacks in this area, so I would give a drop from high 6’s and low 7’s to just under 5 a 50/50 chance. It won’t happen based on what we know now, but a new downward impetus, like a California recession triggered by housing, could do it by end of ’08.

Patient renter in OC

[Ex-SD]

When you factor in that you won’t be able to get a jumbo loan (over 417k) at a reasonable interest rate and that qualified buyers will be in very short supply, my guess is that the price by the end of 2008 will be closer to $440-$450k. I also think that if you wait until the end of 2009-2010, these types of properties will sell for around $375-$400k.
Why? (1) Investors won’t buy them to rent out unless they can receive a better return on their money than they can get from a CD or the stock market. (2) Foreclosures are going to get a lot worse than they already are which means lower prices and a glut of homes to sell. This means that anyone who is NOT in trouble with a re-setting, adjustable ARM and who will not be upside down on their loan…… but who has to sell their property due to job loss, health problems, job transfer, etc……….will have to match or beat the prices that the foreclosures will be selling for. Right now, the inventory of listed, unsold homes in L.A., Orange and SD counties combined is almost double of what it was a little over a year and a half ago. You can’t have rising foreclosures, rising inventories, lack of qualified buyers due to new loan restrictions, etc. without having drastically falling prices. They may fall in chunks or start free-falling within the next month……who knows? But………they WILL fall. When they fall, they won’t recover for years and incomes are not going to rise enough/fast enough to enable enough new buyers to qualify for a mortgage. I can’t imagine any more foreign banks or brokerages buying any more horse-crap, sub-standard home loans from the USA or anywhere else after what happened the last couple of weeks in France, Japan and the USA. Be patient, save your money and you will know when the time is right to buy.
BTW: I sold my house in SD in April of 2005……..cashed out and moved out of state. When the time is right, I will move back and buy again. My wife and I saw this coming like an elephant running in our back yard back in 2004.

[Ex-SD]

When you factor in that you won’t be able to get a jumbo loan (over 417k) at a reasonable interest rate and that qualified buyers will be in very short supply, my guess is that the price by the end of 2008 will be closer to $440-$450k. I also think that if you wait until the end of 2009-2010, these types of properties will sell for around $375-$400k.
Why? (1) Investors won’t buy them to rent out unless they can receive a better return on their money than they can get from a CD or the stock market. (2) Foreclosures are going to get a lot worse than they already are which means lower prices and a glut of homes to sell. This means that anyone who is NOT in trouble with a re-setting, adjustable ARM and who will not be upside down on their loan…… but who has to sell their property due to job loss, health problems, job transfer, etc……….will have to match or beat the prices that the foreclosures will be selling for. Right now, the inventory of listed, unsold homes in L.A., Orange and SD counties combined is almost double of what it was a little over a year and a half ago. You can’t have rising foreclosures, rising inventories, lack of qualified buyers due to new loan restrictions, etc. without having drastically falling prices. They may fall in chunks or start free-falling within the next month……who knows? But………they WILL fall. When they fall, they won’t recover for years and incomes are not going to rise enough/fast enough to enable enough new buyers to qualify for a mortgage. I can’t imagine any more foreign banks or brokerages buying any more horse-crap, sub-standard home loans from the USA or anywhere else after what happened the last couple of weeks in France, Japan and the USA. Be patient, save your money and you will know when the time is right to buy.
BTW: I sold my house in SD in April of 2005……..cashed out and moved out of state. When the time is right, I will move back and buy again. My wife and I saw this coming like an elephant running in our back yard back in 2004.

[Ex-SD]

When you factor in that you won’t be able to get a jumbo loan (over 417k) at a reasonable interest rate and that qualified buyers will be in very short supply, my guess is that the price by the end of 2008 will be closer to $440-$450k. I also think that if you wait until the end of 2009-2010, these types of properties will sell for around $375-$400k.
Why? (1) Investors won’t buy them to rent out unless they can receive a better return on their money than they can get from a CD or the stock market. (2) Foreclosures are going to get a lot worse than they already are which means lower prices and a glut of homes to sell. This means that anyone who is NOT in trouble with a re-setting, adjustable ARM and who will not be upside down on their loan…… but who has to sell their property due to job loss, health problems, job transfer, etc……….will have to match or beat the prices that the foreclosures will be selling for. Right now, the inventory of listed, unsold homes in L.A., Orange and SD counties combined is almost double of what it was a little over a year and a half ago. You can’t have rising foreclosures, rising inventories, lack of qualified buyers due to new loan restrictions, etc. without having drastically falling prices. They may fall in chunks or start free-falling within the next month……who knows? But………they WILL fall. When they fall, they won’t recover for years and incomes are not going to rise enough/fast enough to enable enough new buyers to qualify for a mortgage. I can’t imagine any more foreign banks or brokerages buying any more horse-crap, sub-standard home loans from the USA or anywhere else after what happened the last couple of weeks in France, Japan and the USA. Be patient, save your money and you will know when the time is right to buy.
BTW: I sold my house in SD in April of 2005……..cashed out and moved out of state. When the time is right, I will move back and buy again. My wife and I saw this coming like an elephant running in our back yard back in 2004.

[CostaMesa]

While I think that it’s unlikely that we’ll see big price declines in that area to historical levels, it’s possible that some other areas will have bigger swings.

One of the big drivers at HB is the gentrification that’s occurred over the last handful of years. Twenty years ago, HB had plenty of ding-dongs that gave the area a war zone feeling. (Henry Rollins did a great job of documenting this in one of his books, I can’t remember which) For whatever reason, you just don’t see those kooks very much anymore and the place feels much safer. Lots of families and a smaller group of retirees live nearest the beach nowadays. So, I think that the fundamental price support is at a higher level than it had been in historically.

All that is assuming that ‘below Adams’ is referenced to along or near Beach Blvd. The FV corner wasn’t very expensive ten years ago, that might return or might not. Hard to say.

[CostaMesa]

While I think that it’s unlikely that we’ll see big price declines in that area to historical levels, it’s possible that some other areas will have bigger swings.

One of the big drivers at HB is the gentrification that’s occurred over the last handful of years. Twenty years ago, HB had plenty of ding-dongs that gave the area a war zone feeling. (Henry Rollins did a great job of documenting this in one of his books, I can’t remember which) For whatever reason, you just don’t see those kooks very much anymore and the place feels much safer. Lots of families and a smaller group of retirees live nearest the beach nowadays. So, I think that the fundamental price support is at a higher level than it had been in historically.

All that is assuming that ‘below Adams’ is referenced to along or near Beach Blvd. The FV corner wasn’t very expensive ten years ago, that might return or might not. Hard to say.

[CostaMesa]

While I think that it’s unlikely that we’ll see big price declines in that area to historical levels, it’s possible that some other areas will have bigger swings.

One of the big drivers at HB is the gentrification that’s occurred over the last handful of years. Twenty years ago, HB had plenty of ding-dongs that gave the area a war zone feeling. (Henry Rollins did a great job of documenting this in one of his books, I can’t remember which) For whatever reason, you just don’t see those kooks very much anymore and the place feels much safer. Lots of families and a smaller group of retirees live nearest the beach nowadays. So, I think that the fundamental price support is at a higher level than it had been in historically.

All that is assuming that ‘below Adams’ is referenced to along or near Beach Blvd. The FV corner wasn’t very expensive ten years ago, that might return or might not. Hard to say.

[no_such_reality]

I know the area well and live near there. There are a couple wild cards:

1. The city plan for closing main street for a Venice/Santa Monica Promenade effect.

2. The mega-development at 1st & PCH for mixed commercial, retail and condos.

3. The condo & development glut north of main on PCH. It’s seems to be abating however, it may just be units off market. If prices in the beach facing condos tank because of excess competition, shack prices will follow.

That said, the value of the shack isn’t the shack, but the lot and what drove prices was taking the lot, splitting it and build two three story 3000 sf ‘sliver’ homes to sell at $1M each.

All said, I’d say 50/50.

Nice comment on the war zone, very apropro. If the housing market sours enough, I give downtown a 50/50 shot of getting that vibe back.

[no_such_reality]

I know the area well and live near there. There are a couple wild cards:

1. The city plan for closing main street for a Venice/Santa Monica Promenade effect.

2. The mega-development at 1st & PCH for mixed commercial, retail and condos.

3. The condo & development glut north of main on PCH. It’s seems to be abating however, it may just be units off market. If prices in the beach facing condos tank because of excess competition, shack prices will follow.

That said, the value of the shack isn’t the shack, but the lot and what drove prices was taking the lot, splitting it and build two three story 3000 sf ‘sliver’ homes to sell at $1M each.

All said, I’d say 50/50.

Nice comment on the war zone, very apropro. If the housing market sours enough, I give downtown a 50/50 shot of getting that vibe back.

[no_such_reality]

I know the area well and live near there. There are a couple wild cards:

1. The city plan for closing main street for a Venice/Santa Monica Promenade effect.

2. The mega-development at 1st & PCH for mixed commercial, retail and condos.

3. The condo & development glut north of main on PCH. It’s seems to be abating however, it may just be units off market. If prices in the beach facing condos tank because of excess competition, shack prices will follow.

That said, the value of the shack isn’t the shack, but the lot and what drove prices was taking the lot, splitting it and build two three story 3000 sf ‘sliver’ homes to sell at $1M each.

All said, I’d say 50/50.

Nice comment on the war zone, very apropro. If the housing market sours enough, I give downtown a 50/50 shot of getting that vibe back.

[Author]

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