Friday, February 22, 2008

Still think Los Angeles is worth a premium in property values? Still think everybody wants to live here?

Wow, when I read the news, even I am amazed at all that negative stuff out there.

A prominent realtor here in the affluent beach cities recently said that he finds an abandoned pet dog at least once a month - a problem stemming from rising foreclosures and blight.

According to a February 22 story by Michael Rothfeld, Jessica's Law, originally passed to crack down on sex offenders, may now increase crime risks, as sex offenders are increasingly ending up homeless - gee, I wonder if the lack of affordable housing in California might have any bearing on this problem at all. There has been a 44% increase in sex offenders as transients in 15 months.

Now renters have a reason to grumble, because rents are spiking even as housing prices are falling. A February 22 story by Andrea Chang notes that Southern California rents have climbed an average of 4.5% in Q4 1007, when compared with Q4 2006. The unfortunate renter featured in the article grumbles that he feels like he's being forced out of Los Angeles.

While it won't help displaced renters now, I do think this rent spike will reverse itself. Some commenters on the L.A. Times blog explain. In places where the crash is "in full force", such as Riverside, rents are coming down. A lot of new property coming on line is going to end up as rental property. One commenter estimates 12-18 months before rents start following property prices down.

This next story is a doozy. According to this February 22 story by Richard Winton, Susannah Rosenblatt, and Andrew Blankstein about gang mayhem, the Avenues gang fought a gun battle with LAPD in the Glassell Park area for hours. That's probably not terribly surprising, but this piece on the L.A. Times titled "A drive-by, an AK-47 and SWAT: Welcome to your starter neighborhood" jolts us back into reality. Somebody wants $400,000 for a "starter" home in the neighborhood where this incident occurred.

$400,000 for a 572 sqft 2 bed 1 bath home in a neighborhood that police describe as a "base of operations for Avenues gang members". Residents ought to be getting combat pay and body armor, in my opinion.

We've read recently about the state's budget problems (link toward the bottom). Let's not forget that shit rolls downhill. The city of Los Angeles now wants residents to fix the sidewalks in front of their own houses when homes are sold. It's still just a proposal, but Los Angeles is revenue-starved. How many equally cash-strapped homeowners are going giddy with that idea?

And this is even before any recession *officially* starts. What's it going to be like a few years from now?


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