Image Above: Our CA Dream Home - "Home Ownership - An Activerain Challenge - June 2019" By Debe Maxwell, CRS
The Home Ownership Dream
I Have Never Been A Tenant...
This discussion is going to revolve around my personal experience in the California real estate market from 1972 thru the great recession of 2008 and the comeback up to 2019. We have been landlords but never have been a tenant.
One of the things I remember best about the early 1970s was how focused my husband and I were in what we wanted to accomplish. To make a long story short, we met in college, started dating and by 1972 we were married. Before our wedding, we had to make up our mind where we were going to live. This was a huge decision. My husband and I had to take into consideration our work location and his new school. Because of traffic, we decided to move halfway between LA (work) and CSU Fullerton (school).
Our First Townhouse
Should We Rent or Buy?
A big decision needed to be made. A new area in West Covina was developing called Woodside Village. There were homes, apartments, and townhouses. A 2 BD apt. was going for $185/mo. You could get a larger brand new 2 BD townhouse with a laundry room for $16,500, but it required $800 down. It also required a credit history and a woman's salary didn't count. After all, I could get pregnant!
Was This Home A Good Investment?
It was a tough decision but we decided to buy a townhouse. We got to pick our own finishes and we had a small side yard. The clincher...$165 house payment! SOLD! My dad had to co-sign and I worked 2 jobs to come up with the down payment and the $800 in upgrades. In fact, with work, and school, my husband and I had one Sunday off together every two weeks.
In 47 years, with all the recessions included, this investment has increased 2,057% which is almost a 44% increase each year. Great investment, huh! I wish we could have kept it.
Our First Single Family Home
Our Formula - Keep Moving Further Out (Away From LA)
Into New Developing Areas
Two and a half years later, we sold that townhouse for $25,000. We could not have saved that much money. Our friends bought a two-story home for $38,500 in 1974 in Chino California. We called it "Cow Country". By 1975, you could only get a 3 BD, 2 BA single story home for $42,500.
We took the money out of the townhouse and put a down payment. We were able to buy some new furniture and a brand new color TV! We were living large. Ha Ha! The next three homes all we did was take money out of the previous homes and move up to a bigger home.
A Side Note...
This Lewis Home neighborhood was increasing $500 a week for a time. If we had waited, we would not have been able to afford the home. Our neighbor's home would have cost us $50 more a month for an additional bedroom and we did not see the value in it at the time. We didn't have children...yet! Within a year, I was pregnant! We missed an opportunity...
In 44 years, this home has gone up 1,107% or 25.1% a year.
Our First (resale) Two Story Home with a POOL!
For those of you who don't know, my husband is part fish. His parents had a pool built for him and his brother. Having had access to a pool from 8 years old, he always wanted his own home with a pool.
This was the first resale home we bought. It was 4 years old. We gave it beautiful curb appeal and added a brick patio and brick walkway. Our neighbors loved us because this was a corner house and an eyesore from lack of upkeep.
Every home we owned in California had some sort of masonry or rock formation, patio or walkway that my husband designed and laid. He learned this skill from his father. His father developed the mix for the brick you see on Nordstroms stores. This was the same mix we used in all our homes. This added value because we got the pallets at company cost (pennies on the dollar) and the labor was sweat equity.
Again, this home was about 20 minutes further away from our Chino home.
This is a 245% increase in 31 years or approximately 8% a year increase. You see the pattern here? In our 4 years in this home, we averaged 9.6% a year increase.
A Home Swap!
The owners were about 2 weeks from foreclosure. We made them a sweet deal. They moved into our Chino home and rented it from us. They got just enough out of escrow to make the move and put down the rental deposit. Again, everything out of this house went into the next house.
A Home With A View In The Foothills of Alta Loma
Moving On Up! (altitude)
This was another brand new home. We picked the finishes and yes, it was a little further away. We were the first to move into this phase. It was Halloween 1988! This was the first home that we had some money to do the hardscape. Brick walkway, brick firepit, and cement walkways, patio, and pergola. It was also the first home we owned with a 3 car garage.
We went through a recession and had ended up being here for 10 years. We made about 3% a year on this home but in the 31 years, the house has increased by 7.8% per year.
Our California Dream Home
Looking For A 4-Car Garage for Two Years Closer To Orange County
Since the late 1970s, I have been holding all the family gatherings in my home. Frankly, most of the homes we owned were pretty tight for family events. Our boys were reaching adulthood and we had five cars and 2 watercraft on a trailer. We needed the room. The fourth car garage was a drive through so we could pull the trailer straight through into the side yard. Again, much further away from LA.
Custom Designed Backyard with Pool, Putting Green with Sandtrap
This home had everything we wanted. It was a 4 BD, 3BA, built on a 15,000 SF lot. Most importantly, my siblings and their growing families had the room to spread out and enjoy all the amenities including a pool table! We were very blessed to be able to do this for my family.
As we know, all things come to an end. We were able to enjoy our Sedona home as a retreat but finally decided that we had to make the break from California to Arizona full time.
This home has increased 2.5% a year in the 21 years since we built it.
A Final Point To Drive The Investment Factor of Home Ownership
Two other California homes that go back 6 and almost 7 decades. My husband and I had a plan. We continued to buy homes further away from Los Angeles to get a better value for our money. These next two homes are roughly 7 miles from the heart of Los Angeles. They are the childhood homes of my husband. I actually spent many years at the Village Drive home watching my kids learn how to swim, enjoying Christmas and other holiday events.
Village Drive Monterey Park
Custom Built Home and Pool in 1961 For $55,000 - Currently $983,000
Back in 1960, homes on the lower end of Beverly Hills were going for about $15 - $20,000 more than this home. Those homes are valued at between $2.5 to 3 million now! So, it is always location, location!
Currently, this home is valued at about $983,000. That is a 1,683% increase or 27% increase per year.
East Graves Monterey Park
Custom Home Built in 1953 for $18,000 - Currently $783,000
I still find this hard to believe. This home is a small 3 BD 1 BA home. However, it is 7 miles from Los Angeles and this property has become extremely valuable.
This home has increased in value by 4250% over 66 years. This is 64.4% a year. So those who tell you that home ownership is not an investment. Maybe, this is true in some areas but I think I have proved my case for homes in California.
I sold three of these homes as FSBO. Years ago, real estate contracts were about the size of new car contracts in today's world. I was very fortunate to have a brother-in-law who was a co-founder of a large commercial real estate brokerage and had corporate lawyers available upon request. I actually had to use them a couple of times. I have been involved with real estate since 1971 and watched the Southern California market grow. I found out that prices would show a steady increase. When times were bad and the market stagnated, the California market would explode and make up for the lack of growth. I think the above stats show that.
Many of these pics are screenshots from Google maps.
If you are interested in Sedona area real estate...
Please give me a call at (928) 274-7355 or visit my website at SellSedona.com. I have been involved in real estate for a large part of my life and have the experience and know how to help you with any real estate matter you may have.