The Seduction of the Home Auction
This post on the L.A. Times’ L.A. Land blog about 17 brand-new model homes being auctioned off in Palmdale reminded me of my own auction story. It happened during the last downturn, in the mid-1990s.
The Palmdale homes, from around 1,800 to 4,100 square feet, originally were priced from $289K to $605K, but they’ll be auctioned with minimum selling prices of between $125,000 and $250,000. Pretty tempting stuff.
In 1993, I was about to get remarried. The first husband got the Riverside house (he still has it) that we’d purchased together in 1988 for $157,000. It had been my first new house, and I had put a lot of work into fixing it up. So when the fiance and I heard about an auction of brand-new homes in Moreno Valley (I know, I know), I may have seen an opportunity to replicate my former life (the house part) for relatively little money.
We picked out a 2,100-square-foot house on the cul-de-sac portion of the development, on the view side of the street. Starting prices were around $120,000. The same homes had sold before the crash for close to $200K. We agreed we would not go higher than $145,000. We got the house for $142,000 and thought we had gotten a great deal.
But this is why price should not be the only consideration in buying a house. Although we told ourselves this was “the nice part” of Moreno Valley (anything north of the freeway, where the mountains were, was preferable), the quality of life there sucked. There were no parks, no nice restaurants. Worse, we were surrounded by a high percentage of aggressive-dog-owning, loud-music-playing, lawn-maintenance-averse neighbors.
Even though we’d paid a low price for the house, we weren’t able to unload it without losing money until 1999 (net proceeds: $6,000). I hated every minute of living there. And the house’s newness was its only special quality.
I wonder who will be buying the Palmdale auction homes. I hope it’s people who love Palmdale, if that’s possible. Because even though it’s tempting to snap up a huge house for what seems like a song, you have to think about what it will be like to live there (unless you’re an investor, of course, but are these homes good investments?).
There’s a reason why areas like Palmdale, Lancaster, and Lake Elsinore are tanking harder than everywhere else. The main lure of those places was big houses for less money. The people who “bought” them couldn’t afford them. Now, entire neighborhoods are being abandoned. With all the foreclosures, there are new bargains to be had. But where does quality of life fit in?
I’d rather rent in a neighborhood I really want to live in than buy in an area just because I could.
Recent Redfin posts:
Plunging Prices Shock Sherman Oaks
Silver Lake Foreclosures Continue to Languish
