Read it and weep-
7/31/09 LA Times Business Section
http://www.latimes.com/business/la-fi-default31-2009jul31,0,173542.story
I live in Montrose/ La Crescenta neighborhood of Southern California, which is a bedroom community about 18 miles north of downtown Los Angeles, very picturesque tucked in the foothills of the San Gabriel Mountains, with good schools, relatively low crime, stable community.
Lately my neighbors, many of whom have lived in this community 30+ years, have been commenting at the number of houses and apartments for rent. Normally, the occupancy rate hovers near 100% due to the great schools, proximity to work etc. Now, nearly every street has a "for rent" sign.
On the other hand, I've noticed malls and restaurants are busier now than they were last Fall and winter.
Case in point, friends in their mid-fifties. They just got married after living together for quite a while, so that he could retire from his job and she would have full benefits. Bought their house here 3 years ago with 20% down, now upside down in equity. Original loan was fixed for 5 years at 3.5%, will re-set in 2011. They leased their house for $300/month over mortgage plus taxes, and hit the road to travel around the country for the next 18-24 months. They say, if the market doesn't recover by the time the loan re-sets, they'll have to walk away. They're hoping for the best, but who knows.
All I know is that last Christmas they wouldn't even spend $15 to get together for drinks, and now they're relaxed enough to spend $1000 to get their truck re-painted.
And, so while the stock market may have rebounded, and the mood may be better, I think there is still a tremendously large (8-15%) shadow inventory here in California, which includes current defaults, foreclosures that haven't hit the market, and defaults just waiting to happen (like my friends).
With all this in mind, I'd like to ask all of you- what do you see happening to California real estate over the next 6-18 months?
Comments(0)