Even the tiniest, most innocuous first steps toward buying a house in L.A. will very quickly make you feel like Lloyd and Harry saving up for the worm store. It’s degrading to anyone with a basic awareness of value.
My fiancée and I went to an open house Sunday in Redondo Beach, Calif., although “house” might be a misleading term to use. This was more like one of those childhood forts you built in the living room while engaging in homoerotic behavior with cousins and siblings (or maybe that was just me).
We’re talking 720 square feet without a garage. Kevin Durant could touch all the walls standing in one spot. I can give you the comprehensive tour right now:
– Little nook to the right dishonestly counted as a bedroom
– Living space to the left perfect for furniture if claustrophobia is the desired aesthetic
– One of those small bathrooms I hate, designed for the segment of the population that enjoys showering, brushing teeth, and taking a dump simultaneously
– Food truck kitchen
– Master bedroom similar in size to your college dorm room if you drew a bad lottery number
– Cute backyard ideal for a three-legged dog to roam
Basically it’s our current one-bedroom apartment, except not as close to the beach. An entire second floor would need to be added to raise children there, unless my wife plans on giving birth to gerbils.
No problem, we buy the shack and use leftover liquidity to remodel right? Negative. The asking price is $745,000. That would be $1,035 per square foot. Only San Francisco and heaven charge more. I understand the concept of limited housing inventory, supply and demand, but this is borderline offensive.
I don’t know how I could ever explain this to my mom in Texas. Coming from those houses, she would think I’m on welfare and scold me some more for not going to Brown. Actually Mom, this house you see, which isn’t big enough for you to spend the night, was three quarters of a million dollars.
We tried to go in well under asking price, but were informed this morning of another offer already. We had a few hours to commit to $750,000 as a starting point in a possible bidding war or forget about it.
If the place weren’t so miniscule, there would have been a dozen offers over asking price including some all-cash. We know this firsthand after bidding $750K on a three-bedroom dump up the same street. By the way, I understand talking specific financials can be impolite. But if you’re reading this, I consider you a friend. And even if you don’t feel the same way, it’s educational. Everyone should at least think about buying a house at some point, and sharing information is powerful. Plus you can look up the purchase price of any house online.
Anyway, they wouldn’t even let us counter at $750K. Think about that. Someone wants to pay you more money, and you won’t even hear him out because there is so much demand for a place that won’t be making the cut for MTV Cribs anytime soon. The stairwell and balcony looked like they were shelled by heavy artillery, and the kitchen hadn’t been updated in 60 years.
Folks are desperate to live here, and not just in the beach towns. Anywhere on the West Side. My fiancée grew up in Culver City, which used to be dubbed Culver S**tty. Nowadays a basic three bedroom-two bathroom house there easily exceeds a million dollars. Even if you go east — to neighborhoods that appear to be one mild recession away from Detroit — the ante is in the $600Ks.
That is not a trivial mortgage, and again I should emphasize these houses are neither luxurious nor large. A lot of them are outdated and ugly. You are simply paying for the scarce land.
The quality of life here is high enough to merit a substantial premium, as evidenced by the market. But at a certain price point, that premium should be spent somewhere else on something else. Around that point hits the realization that perhaps people with strong but not extraordinary talent and ambition will never have the means to raise a family in L.A.
So naturally with all this whining out of the way, we went ahead and put in a $750K bid for the shack. We want to be house poor without the effing house, haha. Why do this? I like the lime-green front door and the idea of making payments toward equity rather than a landlord who owns five million-dollar-plus properties.
We’ll see what happens. I’m not sure if I would be happier to win it or more relieved to lose it. Surely there has to be some market correction on the horizon if not a full bubble popping. Yet I am the schmuck willing to jump into it after researching for less time than I do on plane tickets. It’s a long line of schmucks fighting each other and logic for a small piece, and who knows how much this one will cost. You just never know in a housing market that begs the question, who’s dumb and who’s dumber.
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