I wanted to find out if the house by the 101, the one that was listed for a million dollars (someone wins the lottery!) had actually had a chance to sell. My original blog on this is here: http://chrysta.org/word/?p=21 but here is the meat of it:

“Now priced to sell” at a mere $1,050,000. Let’s do the math here, if the suggested price of a house should be 2.5 times what you earn, that would mean that the family that would fill this 3b 2.5 bath , directly next to the freeway would need to be earning $420,000 a year salary. I don’t know about you, but if I were making that kind of money, I seriously doubt that I would chose to live right next to the freeway. Hmmm. In 1993 this same house sold for $115,525. That would mean that a person or family earning $46,210 a year could live there. That seems more appropriate, don’t you think? And, if, let’s say, this house had appreciated at, lets say a generous 3% a year (average?) after 14 years, this house would be valued at $171,741.93. Heck, that is the range of a house I would actually consider myself!

The house, according to Redfin.com http://www.redfin.com/CA/STUDIO-CITY/12529-KLING-ST-91604/home/5222483 was taken off the market.

These are the statistics that I found –fascinating-:
Sold for: $911,000 in December of 2005. Originally build in 1959 (this is a 50 year old house as of next year!)

The sales history is outstanding:
Date Price Appreciation
Apr 30, 1993 $115,525 —
Oct 29, 1993 $219,000 260.9%/yr
Dec 23, 2005 $911,000 12.4%/yr

This house Appreciated 260.9% a year after being sold in 1993 for a mere $219,000 and a mere 12% a year for a $911,000 sale price in 2005. Overall, this house is pretty growth-oriented.

But now? Now houses are dropping, and according to this blog: http://lansner.freedomblogging.com/2008/05/28/socal-home-pricing-seen-at-worst-in-43-years/?ref=chrysta.org a mere 15.1%. Let’s take their asking price (previous asking price) and do some math! Their house should now (if they should choose) be put on the market for $891,450. It doesn’t have a pool, either, so it might be lower. According to Zillow the low value is $885,660. I don’t know how Zillow and cyberhomes get their estimates, but they certainly aren’t based on what people’s incomes are for the area.

Moving on. A $891,450 house would take an income of $297,150 (CEO’s income, somewhere?) and would only require a 20% down payment of $178,290. Considering reports of the lack of savings people have in the US, I doubt even the CEO could afford a reasonably close down-payment on this home. *note, the average income in the area across the freeway in 2004 was somewhere around $78k.

Why do I find this so fascinating? For one, I wonder if the owners are in denial and think they’ll be able to wait this out to sell at their close to a million price tag? Did they get in an argument with a realtor about lowering the price? Are they going to lose everything if they do? Or do they realize that they are already underwater and lost every bit of equity they sunk into the home in 2005? Are they considering “jingle mail”? I might if I were them…
I’m so curious about this home that I’m going to drive by it…

It was a nice “front” of a house. The noise from the freeway was a dull hum, something you could probably adjust to, like anything else. Worth a million? Not in my opinion, but I seem to be at odds with a lot of million dollar thinking that goes on in this town.


In an article from the OC, rents are going down there about 3.1% http://lansner.freedomblogging.com/2008/06/10/big-oc-apartment-complexes-see-rents-dropping

So what gives in the LA area. I’m driving around and just about every other apartment complex has a “for rent” sign. Mind boggling. I know that the complex we’re in is currently jacking up the prices. I know that a 1-bedroom unit now cost more than what we are currently paying for our 2. Is this panic? Greed? Realistic? Not to mention they refuse to turn the heat on in the pool this year. Bastards.

Most reasonable rents are now appearing in Pomona and other areas where the 1.5 hours of commute would suck up the money in gas costs than it would just to live close and pay a hefty sum for an over-priced rental.

I’m out-

Leave a Reply

You must be logged in to post a comment.