Real Estate in Los Angeles: Are You Outta Your Mind?

Husband and I took a walk around our neighborhood Sunday afternoon and inevitably stumbled upon a couple homes for sale and a few more open houses we walked through {just for the hell of it}. While I am aware we live in a prime Valley location, I'm wondering if this location is aware of the recession we are in that the NY Times is dubbing "...the longest yet in America since World War II"?

We both grew up in the Valley {as did both of my parents} and now we reside in a condo in Sherman Oaks {a block west of Studio City actually} and while it happens to be one of the only palm-tree lined neighborhoods in the Valley, it's no Beverly Hills . . . although, I'm not sure the real estate agents and home-owning sellers are aware of that fact.

The first home we grabbed a flier for {actually a main block west of us} looked like an average 50's Valley house that had been upgraded over time. It's a 2,375 sq.ft. 3 bedroom 2.5 bathroom home on 8,049 sq.ft lot, boasting walk-in closets, pool and spa {which takes up almost the entire backyard, mind you}, Corian counters, copper plumbing, hardwood floors, etc. etc. etc. Listing price: $895,000

The second was a tear down and newly constructed 2 story home with 5 bedrooms and 4.5 bathrooms, approximately 3,400 sq.ft with a lot size of only 6,500 sq.ft., tiny backyard, no pool ...but I must admit that other than looking a bit hotel-ly on the inside and tract-homey on the outside, this house was amazing. Listing price: $1,295,000

Um, are you outta your mind Sherman Oaks? Who is/are buying these homes right now? Who?

While many neighborhoods on the edges of Sherman Oaks and even further out have dropped in value, it seems that Sherman Oaks is in total denial of our economic situation. In fact, I'd venture to say that all of Los Angeles is in denial!

What I do know is that the ban on foreclosure sales and evictions from houses owned by mortgage giants Fannie Mae and Freddie Mac is over I still wonder what it's going to take for these prices to come back down to normal standards ...and just how long as well?


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So, what was meant to be an invigorating little afternoon walk turned into an eye-opening and rather devastating acceptance of our own reality. But my question still stands: Who is buying these homes right now?

If someone were to pose that question to me I would say nobody ...but the listings are not dropping so somebody must be able to afford these kind of prices and it boggles our minds.

Since paying off the rest of our debt by mid 2007 and saving our money like squirrels hoarding nuts, we have accumulated a nice little "nest egg" but it's nowhere near 20% of $895K! And even if it were, I'm not so sure I'd drop it on a little Valley house that I know sold for almost half of what is on the market today just ten years ago! Even the homes on the edges of this neighborhood are not low enough yet to be what I would consider reasonable for what we'd be getting.

In the midst of all of this it seems that now, people who made the less than optimal choice of buying beyond their means in a severely inflated market with insanely unstable loans are being rewarded by Obama's Stimulus/Foreclosure Bill and getting "bailed out" of a situation that we thought we were being smart enough to avoid.

While I am not in any way saying that I want people to lose their homes to foreclosure, I am wondering what prize we get for being smart and saving our pennies until we had enough to buy?

...in other words where's our stimulus check Obama? Where's our pat on the back for doing the right thing? ...and how about investing in progress, prospect, probability and intelligence instead of greed and failure?

...I'm just sayin'