Predictions on LA Real Estate

I have friends that are holding until next year in anticipation of a big drop. Problem is, I think there is a lot of people doing the same thing.

One third of Americans did not pay their mortgage last month. I think overall as a country real estate will drop but it feels like LA is immune to it. Many people who own will be unaffected and be able to pay their monthlys even during a deep recession or the house has been passed down for generations.

So what would it take? a 9,0 earthquake? YEARS of fallout from Covid? An invasion by land from China?

SpeedKing9 - I have friends that are holding until next year in anticipation of a big drop. Problem is, I think there is a lot of people doing the same thing.

One third of Americans did not pay their mortgage last month. I think overall as a country real estate will drop but it feels like LA is immune to it. Many people who own will be unaffected and be able to pay their monthlys even during a deep recession or the house has been passed down for generations.

So what would it take? a 9,0 earthquake? YEARS of fallout from Covid? An invasion by land from China?

One third did not make full payments.  One fifth made no payment at all.  A lot of this can be found in areas that have moratoriums on evictions.  I don't think it's as dire (yet) as it is being made out to be IMO.

As Major Cities in States across the USA experience Gentrification increase in Diversity and Recreational Amneties resulting in Americans and Foreign Investors discovering that a good life can be enjoyed for a cheaper price in other localities it should help to DEFLATE the California Dream Monopoly on "the good life"

 

same goes for "The Big Apple"

 

 

 

My business is real estate in OC/LA. I'm not expecting any significant drop. There are plenty of buyers out there waiting. Overall real estate may drop but not in the highly desired pockets.

MJames12 - 

My business is real estate in OC/LA. I'm not expecting any significant drop. There are plenty of buyers out there waiting. Overall real estate may drop but not in the highly desired pockets.


I agree with this. I think supply will remain low and demand high even if homeless skyrocket and shitting on the street increases by 1000%. The weather and ocean and lifestyle are just too desirable. Even if the above poster said people start fleeing cities, I think LA is one of the unique places it won't affect even in a mild apocalypse.

the problem is that waiting to time the market can be a VERY CO$TLY endeavor

 

nearly 10 years back after renting out my primary PAID-in-FULL home to relcate I rented an apartment short-term as a social experient to compare to OWNING while also HouseHunting in the new location.  

 

I  came to know a neighbor which had been renting for 5yrs or so.  He had sold his home for a profit during the bubble BUT had been renting for 5 years which at MINIMUM would have been $60,000 so now his profit is MINUS $60K......

 

so I told him I was going to purchase a home.  this was 2011 at MARKET BOTTOM.  He seemed rather confident that housing had further to drop and said he was going to wait to purchase.  He's STILL RENTING and RENTS have INCREASED.  That was 10 years ago.  So now he has spent $200K or MORE on RENT in these 15 years he has been WAITING.  He could have already had a home PAID-IN-FULL and no more $1,500 PLUS going out in RENT each month.  

When the government spigot stops and the anti eviction are lifted shit will get real.  We are going back to 08 pricing or lower

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Tim Duncan - 

When the government spigot stops and the anti eviction are lifted shit will get real.  We are going back to 08 pricing or lower


This is what my friends who are waiting to pounce say but I don't see it that way. It will HEAVILY affect people who rent but those who own in LA are immune because they aren't the ones who depend on UI or affected by eviction moratoriums. I think indirectly affected in that there will be increase of desperation, criminality, etc. In normal southern\midwestern cities, total different story however.

Tim Duncan - 

When the government spigot stops and the anti eviction are lifted shit will get real.  We are going back to 08 pricing or lower


good point which should be considered as a potential possibility

California is going to slowly turn into a thirdworld hell hole. 

Eventually, prices will follow. Its inevitable.

natural social evolution changes could also impact housing as more regulation increases with the increase in population and change in social demographics as the Government Thinkers determine how to manage the growing/changing population

It's crazy driving around Venice...multi-million dollar homes with entire homeless villages with drugs, rapes, shooting, stabbings, etc right across the street. It's fucking insane.

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So Cal real estate isn’t dropping anytime soon.  Most areas are experiencing such inventory shortages, coupled with high demand and insanely low rates.  Makes for a pretty good seller’s market in most areas.  Multiple offer situations, escalation clauses, etc.  real estate can - and likely will be - one of the ways we pull out of difficult economic times, though I don’t even feel that we’re in particularly rough times.  Dow still holding okay.  If our Governor would stop shutting shit down so people could work, we’d have a lot less people worried about finances and paying their mortgages. 
 

fact is, of all active forebearances that are past due, 77% have more than 20% equity.  This isn’t 2008, nor is it doom and gloom. 

Looked at a house last weekend close to Santa Monica that was listed for $990,000...already had one offer over $1,000,000 and also had a few other offers coming in. Doesn't seem to be dropping really.

The entire city is going to complete shit with the homeless encampments and trash, but real estate doesn't seem to be tanking at the present time.

jman - 

Looked at a house last weekend close to Santa Monica that was listed for $990,000...already had one offer over $1,000,000 and also had a few other offers coming in. Doesn't seem to be dropping really.

The entire city is going to complete shit with the homeless encampments and trash, but real estate doesn't seem to be tanking at the present time.


Exactly, this is what I am saying. I lived in Venice for a long time. People who own there are not happy about homeless people shitting on their property and stealing bicycle out of their garages -but they are desensitised to the nonsense and willing to put up with it. The lifestyle "comes at a cost".

My friend is catching a serial shitter in their yard on their drop cams. Their dog ate some of the poop which was filled with narcotics. Had to take the pup to ER. They just brush it off as "Venice is crazy". Meanwhile I am horrified by this and realising people don't really care about crime increasing, as long as they can maintain the lifestyle.

MJames12 - 

My business is real estate in OC/LA. I'm not expecting any significant drop. There are plenty of buyers out there waiting. Overall real estate may drop but not in the highly desired pockets.


Agree. Santa Monica, Bel Air whatever will be more or less unaffected.


The 1.3 million dollar shithole in inglewood is going to have problems.

effertime - 

California is going to slowly turn into a thirdworld hell hole. 


Eventually, prices will follow. Its inevitable.


It will more be like some heavy handed liberal movie about poverty.


Wealthy people in nice neighborhoods with guards and poor people in favela type shitholes.

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jman - 

It's crazy driving around Venice...multi-million dollar homes with entire homeless villages with drugs, rapes, shooting, stabbings, etc right across the street. It's fucking insane.


This. It's actual insanity. I remember seeing a Ferrari parked on Rose, in front of a tent city. That's unsustainable.