Here we go…. another blog about the tide of the housing market.
Played out phrases get tossed about by people who are hit the hardest in the community and give those who are in it for the long run a bad name; All it took was a period between 02′ to 05′ for the under qualified and opportunistic to contribute in breaking an already fragile market — many are mortgage brokers who are trying to move on to greener pastures and looking recession proof industry while the people who were lent money they couldn’t pay are left with debt and foreclosures. Here we are with rate cuts and soft periods allowing us to examine what really will constitute the next changing of the tide.
One unique perspective to look at is the order in which Los Angeles reacted to the housing slump. During this recession I have happened across areas in Los Angeles that have found that in certain areas, values have fallen while in others they have come to a balancing point. Historically, the first market to be hit has been condos; Real Estate in Los Angeles suffered a steep decline in 1994 when the L.A earthquake happened. Many investors and home buyers were tentative about purchasing years later for fear that another quake would rattle their investment. A supplementary effect to this time period was that interest rates were at an astronomical level, ranging from 9% all the way up to 19% — those factors alone can send a market reeling.
There is a converse relationship and a some what paradoxical state going on in L.A because while the entire country is experiencing a severe downmarket while, Condos in L.A are doing surprisingly well. While Single family homes in the L.A average about 700 to 860k, many condos and town homes of equal size and occupant range are coming in significantly less than their SFR counterpart — in the 200k range on average. Its a great option for many reasons, the main point being that many condo units are still seeing a very large ROI a few years down the road — considering that you use the right mortgage program.
So if you are considering home ownership, don’t over look the opportunity to snag a condo. They come in many shapes in sizes in very desirable neighborhoods and will continue to be a healthy growth as more people continue to invest and move around. New Condos are popping up and the market is staying strong in many areas in L.A and Long Beach, now is your time to see what you’re missing.