Economy
Related: About this forumDr. Housing Bubble 08/16/14
Flippers cutting it close in Paramount and high prices in Bell: A slowdown in sales and aggressive pricing as the summer enters the final stretch.The summer selling season is drawing to a close and flippers are out in droves trying to squeeze out maximum profits before the fall hits. I know some of you are obsessed with Santa Monica or Beverly Hills but your budget might only give you room for a tiny bright blue 400 square foot place in Pasadena. Expectations people! This is SoCal, land where the notion of property ladder was invented. What would you say to buying in Paramount or Bell for example? You certainly would get more house than you would in Pasadena or Culver City and you are close to city centers. Bell is closer to downtown L.A. than Culver City. After all, everything is gentrifying so better buy now before Compton becomes the next Paris. Even though prices fell in SoCal from June to July and sales have been weak for most of 2014, eager sellers are still trying to get the most out of the current market. Today well take a look at a flip in Paramount and some gentrified prices in Bell.
Flipping in Paramount
One of the key aspects of a frothy market is asking for manic like prices for simple upgrades. This was common in housing bubble 1.0 and is common once again. Sure, flippers with renovations will add value but people drink too much of the cable housing Kool-Aid when it comes to how much they should profit from their work which amounts to ordering around contractors and acting like a reality star on your cell phone. You will get what the last sucker is willing to pay. Nothing more.
It should tell you something when you point to a city and people suddenly come up with excuses as to why not to buy there. Yet their budget certainly doesnt point to a crap shack in a target city. Take a look at this flip in Paramount:
15344 San Jose Ave, Paramount, CA 90723
3 beds, 1 bath, 1,202 square feet
http://www.doctorhousingbubble.com/paramount-flippers-bell-real-estate-socal-housing/
Tikki
(14,557 posts)instead of $349,900...so what!.. someone made a profit.
Tikki
dixiegrrrrl
(60,010 posts)Zillow allows street view, so I "walked" around the neighborhood.
The house next door has 3 cars inside the fenced front yard,
Must have been kinda cute bungalows back in 1929, tho.
Crewleader
(17,005 posts)danriker
(52 posts)That house is depressing. The story is depressing. Are we really about to go through the same damn thing all over again? I noticed today that housing prices here in Portland, Oregon, where there definitely is a shortage of housing, are creeping up - but not to levels like those in L.A., fortunately.
Crewleader
(17,005 posts)Ben Jones posted this under comments on his housing bubble blog today and to give you an idea to your question
http://thehousingbubbleblog.com/?p=8550
Here it is:
The Second Housing Bubble You Didn't Even Know You Were Afraid of
by: Jann Swanson
The fear of a bubble, according to TransUnion in a study it released on Thursday basically boils down to fear of the unknown. There may exist a risk that has not even been identified; the potentially affected parties don't understand the ways in which the risk might manifest itself, nor can they determine its timing or who poses the risk because they cannot measure it and so cannot deploy strategies to combat/mitigate/avoid the risk.
In short, there's this big spooky thing that you don't know about and even if you did know about it, you don't understand it, and even if you did understand, you don't know how to use that understanding to protect yourself. Fortunately, Transunion will take care of all that confusing stuff for you.
The less melodramatic thesis is that Transunion sees risks of a second housing bubble arising out of the many Home Equity Lines of Credit or HELOCS that will be nearing the end of their draw period over the next few years. This means that the loans, most of which required only interest payments during the draw period, will begin to amortize, resulting in a larger monthly payment.
http://www.mortgagenewsdaily.com/08072014_helocs_housing_bubble.asp