Um, $482k for an Eagle Rock condo is pretty friggin' spendy.

I can't believe people are still overpaying for this garbage.

We've got a long way to go before we hit bottom in this town.

Sorry #1 - I think this is a fair price for such nice places. It's much less than some old house in that area and way more modern. If I were in the market I'd snap it up. I agree the market might - or will - go about 10-15% lower or so, but that wouldn't make that much of a difference on a home in this price range and should recoup that over the next several years. however, with a limited # of places available, it's doubtful any of these would be available. That's a risk I wouldn't want to take if I truly liked these. A house is a home as well as an investment. If you like this, and can afford it, why not?

I like how the name for this place sounds like "rut roh." but seriously, nice finishings. It's too bad that if this were on the westside, it would cost $800k+ for a 2br/2ba

Clearly #2 must be connected with the ownership in some manner.

“over 50% sold in 2 weeks.” is not according to Redfin but according to the agent / developer who posted on Redfin. We all know how truthful sales people and developers are so no need for further comment.

10%-15% drop in price is huge on a $482K home. Why would you buy now if you believe your equity is going to be wiped?

Lastly, the finishes are nice but not out of the ordinary and you're spending $368 PSF in Echo Park. To anyone stupid enough to spend this kind of money for this product, I wish you the best and let's check in a year from now and see if it was such a wise decision.

"I think this is a fair price for such nice places. It's much less than some old house in that area and way more modern.:

Sorry #2, not so much.

http://www.redfin.com/search#lat=34.135369950951294&long=-118.207205501406&market=socal&max_price=475000&region_id=786&region_type=1&status=1&v=4&zoomLevel=14

When you can buy nice SFRs in Eagle Rock for substantially less money thanks to short sales, why would you shell out that kind of coin for a condo?

There will be plenty of nice real estate on sale in 2010-2011 once the Alt-A/Option ARM resets hit, and Eagle Rock is a once and future middle class community, so overpaying for condos there is a sucker's bet.

^ a fraction of this mortgage of this glorified condo. in eagle rock, no less.

Starchy,

Yes we have been through this argument before. What is the mortgage payment on a 80% loan given current interest rates. Let's just say $2,300. Let's say tax deductions take care of the HOA and property taxes. Given rent reductions and free rent concessions, I think you can rent something comparable to this place for $2K-$2.3K /month.

And initially the great majority of your mortgage payment cover the interest on the principal balance, so you're not materially reducing the loan.

So, yeah your equity is nearly wiped out plus there is no economic benefit vs. renting.

sorry starchy, i type fast. guess you are too stupid to deduce this.

"a fraction of this mortgage of this glorified condo. in eagle rock, no less."

simply replace my first instance of "this" with "the", and my second instance of "of" with "on" and voila! a sentence even you can read!

to simplify (for you): "a fraction of THE mortgage ON this glorified condo. in eagle rock, no less."

Um, $482,000 with 20% down equals about $385,000 loan. A current 30-year fixed at 4.75% is $1600 per month, some of which WILL go towards principal. Of course, you still need to add in another $400 for taxes. But that's still $2000 per month. Plus you get around a $20k-per-year tax writeoff and PRIDE AND FREEDOM OF OWNERSHIP, and a damn nice looking townhome.

This is a much better deal than renting...if you have the down payment.

Why such negativity on home ownership around here?

"Why such negativity on home ownership around here?"

Probably because owning a "damn nice looking townhome" doesn't really provide that much pride of ownership, especially in Eagle Rock, especially compared with the "convenience of not having to do any maintenance or upkeep" that comes with renting.

2-3 years from now when you can buy a perfectly nice 3bd/2ba SFR in Eagle Rock for $200-250k, then it might be time to reconsider.

(Disagree? You probably thought those Americana condos weren't going to drop in price either.)

@STARCHY: I see Starchy has that hair up his ass again.

oh horse shit starchy, you did not "ask politely". sarcasm is easily identifiable. your a little prick.

and you clearly understood the point of my post. your just an asshole.

sorry it reads like shit to you, and who the fuck cares if it does? its your opinion. and not a very valid one around here. guess i won't pursue a journalism degree!

^ you don't find it odd that your the only almighty "registered user" that continually gets blasted by the "trolls" for being a prick?

@guest (#14): Not sure how you get to 20k. Yes, you're paying above 20k (assuming there's points in there) in interest in the first year, but it's a below the line deduction. Assuming this buyer is in the highest rate, which he or she almost certainly isn't, the after-tax savings is about 9k versus a standard deduction for a single person of 5.7k reducing tax liability by 2.5k. So you're saving 6.5k under the most favorable assumptions, which is nothing to sneeze at, but for the actual buyer (earning 80k? 100k?) the savings are probably much less. And they fall off from there with the amortization schedule.

http://www.redfin.com/CA/Los-Angeles/5052-Hermosa-Ave-90041/home/7178837

http://www.redfin.com/CA/Los-Angeles/4800-Baltimore-St-90042/home/7081950

http://www.redfin.com/CA/Los-Angeles/4877-Ruth-Ave-90041/home/7180351

http://www.redfin.com/CA/Los-Angeles/1525-El-Paso-Dr-90065/home/7078735

all homes, all cheaper.

"I'm the only one who bothers to smack you back."

what does that even mean, it has absolutely nothing to do with the post i made, however, it seems like that is some sort of reply???

once again, you miss the point and move on...

^^ Actually three of those are nearly the same price per foot. One is actually more per foot, and they are quite possibly the ugliest houses Ive ever seen. There is no comparison.
Im not interested in buying in Eagle Rock, but if your going to have a worthwhile discussion about comps and least show something in the same realm.

@STARCHY: Not the above commenter, but just to give an example, I've been renting a 2/2 for the last few years. Every month in that the time frame the value of the property, based off comps, has dropped more than my rental payment, meaning I would have lost more in equity each month than I'm paying in rent and that's before everything the owner is paying.

Situations are unique, but this isn't terribly uncommon given the fairly precipitous decline from the bubble peak, and the difference between price and rent at the top. At the current rate of decline, it probably wouldn't be that different if I renewed today either since there's no way I'd renew without a substantial lowering of my rent. Plenty of places I could move for less, and the landlord, who's a reasonable, nice guy, knows it, and wouldn't want to lose me as a tenant.

20% down, 6.5% interest, roughly $3000 a month? no? not including utilities, taxes, maintenance, etc...

first decent looking rental i stumbled upon craigslist:

$1600 all utilities paid
http://losangeles.craigslist.org/lac/apa/1127238558.html

is half a fraction???

@guest (#20): In starchy's defense, I didn't understand what you meant either, even after you clarified. Maybe try using complete sentences.

@guest (#28): well i guess it has to do with what your looking for. yes, the condo is a new construction, i don't see any other new condo listings in the area. so where are the comps? my guess would be to look at actual homes, which are in some cases 70+ years old. but isn't a home a better investment than one of these?

"you asked me specifically why trolls call me a prick and I provided you with an accurate and relevant answer."

WRONG!!!!!!!!!!!!!!!!!

read again....

Since these are FEE SIMPLE homes, what are the HOAs per month? Does anyone know? Usually in PUD, they're MUCH lower than in condo buildings like the ones downtown since there isn't that much to maintain. I'd be curious if anyone even knows how much they are.

and even if you were correct, your "accurate and relevant" answer would read as follows"

Q: "why do trolls call you a prick"

A: "I'm the only one who bothers to smack you back."

glass houses on the grammar starchy.

^ the point is the westside is a more desirable and therefore more expensive market. the fact that these rival those in terms of price answers itself.

@guest (#28): I think those condos are pretty ugly at any price.

@STARCHY: are you kidding me? these look like they were transplanted from the westside if anything. what are you trying to say? westsiders don't like modern design????

@STARCHY: well I would argue that the perceived "decline in value" only matters if the landlord wants to sell- but if he keeps it occupied and is covering his nut what is he losing?"

Very true for my landlord who bought a while back, but for me, I could have bought a comparable place and decided not to because the price didn't make sense to me yet with the market looking overheated. Turned out that was the right decision though there was risk involved either way.

@STARCHY: ummm, you didn't really address the post, you just went off again in some alternate tangent. FYI

"I cant imagine anyone (broker, appraiser, etc..) that would use a westside deal as a comp for Eagle Rock."

Me neither, because the Westside is usually much more desirable and expensive, which is why it's interesting to see that you can rent an equivalent place for much less on the Westside.

There's nothing wrong with Eagle Rock, it's a perfectly adequate middle class community.

But in a non-bubble world, perfectly adequate middle class townhomes / minimal lot properties don't go for half a million.

We can rant and argue all we want, but it will be pretty obvious to everyone in 2011-2012 whether this was a good price, or whether the buyers were some of the last victims of the bubble.

I'm guessing it's not a good price.

In response to #16 (Starchy):

I rent a 2 BR home 0.5 miles from the beach in Hermosa Beach and pay $2,500/month. Granted that the Echo Park is a completely different market, I believe that most people would say that my place (with an ocean view) is superior product.
Rented the place in October 2006 when rents were near peak. Just as there is increasing supply for sale, there is now increasing supply for rent. 1-2 month free rent concessions are not out of the norm on 12 month leases (if you negotiate hard enough), so an effective reduction of up to 17% on face rents. I am considering renegotiating the rent on my place. So, while I haven't checked rents in Echo Park, I think you could find something in the $2K-$2.5K effective rent range for comparable product (of course you are not going to find something identical).

My understanding has been that 15 year mortgages are not common and 30 year mortages are the norm. I do not work in residential real estate or I only see Resi RE at a higher level from the financing (lender) side on projects so I am not an expert on the matter. Maybe you work in this area and are more familiar with the matter.

I don't plan to own a place for the next 15 years. I plan to trade up when possible. I think this is generally true for the majority of the LA population. Average length of ownership (in the U.S.) is around 7-8 years.

Somoeone else posted an economic evaluation using a 4.75% rate. Is this really an obtainable rate? I ran my analysis using a 5.5% rate, which is already a generous (low) rate. I don't track mortgage rates on a daily basis because I am not looking to buy now and I don't work in the field.

Lastly, do I view a possible purchase from the view point of a cash on cash return? Yes. I don't see why I shouldn't.