Comments on: Plunging Prices Shock Sherman Oaks

By: Arnie

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By: Sherman Oaks Apartments

Sherman Oaks Apartments — Wed, 20 Aug 2008 18:07:30 +0000

Very interesting, Tim. Thanks for sharing. I can't help but wonder how this will effect prices for Sherman Oaks Apartments

By: Tim Hebb

Tim Hebb — Fri, 04 Jul 2008 15:44:27 +0000

Nice to hear from you, Christopher, all the way from West Virginia.

What great memories you must have of the Stone Canyon house; I wish I lived there now. Its Redfin listing is interesting: shows it was last sold in 1994 for $175K, after being sold in 1989 for $400K – another perfect example of how a bubble bursting can take many years. Of course now its value is roughly $1M, give or take.

Here’s the Redfin link: http://www.redfin.com/CA/Sherman-Oaks/3751-Stone-Canyon-Ave-91403/home/4891769

Is the home in the Google Street View yours?

Thanks for sharing a piece of the history of Sherman Oaks, and your own.

By: Christopher Breeze

Christopher Breeze — Thu, 03 Jul 2008 23:21:34 +0000

Well writing from West Virginia at the cost of housing in Sherman Oaks – 91403…My father moved us to 3751 Stone Canyon Avenue in 1966, He paid $55,000 for the house. In 1968 there was a terrible mud slide to the rear of our home (
corner of Stone Canyon Ave. and Loadstone Dr. ), the two houses behind us were destroyed, we had to move out at the demand of the LAFD., eventually leaving Southern California for South Carolina. My father had no “mud slide” insurance as it was not offered nor an issue then. He lost everything. I was surprised to see the house again during my 30th high school reunion, that it was still occupied with absolutely no back yard, no pool and a barrier holding back the mountain.
My fathers annual salary then was about that of the cost of the home, which would mean by todays standards the people living ther would have to be making $750,000 – $1.2 million dollars a year, which I doubt is the case.
Christopher Breeze
Martinsburg, WV

By: Marcy

Marcy — Wed, 04 Jun 2008 18:33:16 +0000

Revolt? Nah. No reason to. Prices will come down, but not due to any revolt or other conscious, intentional action (or non-action)by Americans. I use myself as example: we waited out the frenzy, even though we could have purchased years ago when it started. We were urged (and made fun of for not listening) by friends and co-workers to “get in on it”. Hindsight is now 20-20 for those people, right? Now we couldn’t be sitting any prettier…with cash in the bank and a whole candy-store of homes at our figurative fingertips, with prices dropping like ripening fruit. Revolt? Why? We’ll get exactly what we want just by waiting and watching and keeping in the mix.

This is nothing new. It has happened before, and will eventually happen again. The pendulum is always in motion.

By: Carlos Carboney

Carlos Carboney — Wed, 04 Jun 2008 08:49:41 +0000

Heres the deal… people in S.O.’s do not make 125K. They made it in the boom times from real estate nina loans, but those days are gone and the e/z credit that fueled the 125K boom/doom are gone forever. Reality bites and hoping to see equity in the future is at best an illusion. The American economy has tanked and people have not adjusted to reality I hate to say it but the working class will soon revolt and the prices will come down even further. The crazy rent increases will finish the job.
I SMELL A CONSUMER WORKER REVOLUTION. What do you think?

By: JJ

JJ — Sat, 31 May 2008 05:44:44 +0000

Agree with Yev. People seem to lose sight of the fact that, despite declines, home prices are still out of reach for local populations. This does not mean the rich just got fantastically richer – it’s an indication of the inevitability of steep price declines. Many “starter” homes in Sherman Oaks (1700 sq ft, 2-3bedrooms) are priced around $800-$1MM. In order to afford at those prices, you need a gross income of around $275-350K/year using standard multiples of income. The people buying (not long-time existing owners of) 1700 sq ft homes in Sherman Oaks are not $300K/year families. Prices will inevitably return to the point that people in local markets can afford homes without compromising their futures. If the “typical” Sherman Oaks family is a 2-income, $125-175K/year household, then prices will ultimately and invariably adjust to reflect those families’ ability to pay for those homes.

By: Yev

Yev — Sat, 31 May 2008 03:25:17 +0000

Dan and Tim,

I am a renter in Studio City, patiently waiting for the market to tank more. I’d like to buy, but believe we will see 2000-2001 prices. Both of you got out in time, and were in the right place at the right time.

Now that lending is cut off, and based on my research people in Sherman Oaks or Studio City or many other areas in LA simply do not make enough to support current prices with a normal 30 year fixed mortgage. Median income in these areas is less then a 100K, with a 20% down, forget about it. With interest only, option ARM, 2/28 mortgages gone, and required downpayment, the market is simply dead.

Tim, the investor you are talking about is in a hell of a lot of trouble, once this years selling season is over, prices will tank more, she’ll be foreclosed I bet.

By: Tim

Tim — Fri, 30 May 2008 19:21:31 +0000

Congratulations on your timely exit, Dan!

I appreciate all your observations and basically agree, and welcome your balancing comments. Hope you’ll keep being a reader, and keep posting sharp commentary.

Since you shared your story, here’s a bit of mine: I sold my home in Sherman Oaks in mid-2006. The stats indicate it was very near the peak of the market, but it truly felt overripe even then. I believe I could have gotten 5-10% more had I sold sooner, in the midst of the real hysteria.

The new owner – an investor – rented out the house for a year, then listed it on the market for sale. It was absurdly overpriced and of course didnt’ sell, so she pulled it off and is now renting it again. Anecdotes like this lead me to believe that there is a large shadow inventory that owners just don’t even try to sell, hoping for a return to 2005 prices, or at least some stabilization. And if housing inventory is that much larger than the numbers indicate, then we have an even longer path to recovery and farther for prices to fall.

Anwyay, that’s just my thinking…