p.s. just so I don't come across as a big know-it-all ;) ...we had to make the decision to rent out that house or sell in 2003 when we had to move out of state for a few years...I said we definitely had to sell because there was no way that prices would go above 2003 levels...I was wrong about that one :)

In this case, the foreclosure kinda fell into my lap. The seller first tried to sell it to me as a short sale (he owed 50K more than what it was worth). The bank wouldn't approve the short sale because they could see that the seller did have assets to pay this difference; however, the seller said he would rather just hand the keys back to the bank than take the 50K hit. So, I already knew the house and the seller well enough to have faith that the house would not be trashed. I watched the house every day as it went through the foreclosure process and put in the only offer the first day it was made available. I would consider foreclosures again, but I would definitely be more cautious about buying a home where I didn't know the history as well as this one.

Thanks for the comment, Lisa. How was your experience with the foreclosure process? Would you do it again or buy a home that's not being repossessed by the bank?

I am impressed with the high number of sales in Westchester last month! And, yes, Playa Vista is lookin' pretty bad if there was only 1 sale last month.

Nope, I don't consider Westchester and Playa affordable. Nationwide, the once-relied on rule-of-thumb was to buy a home within 2.5 x your annual income. Now, there has always been a premium on CA real estate so the multiplier tends to be higher here, but if you get up to 4 x annual income you are at the point where people really start stretching to make their payment.

I sometimes look at listings in other areas just to get perspective. For instance, in Rancho Cucamonga, where some of my friends live, there are houses that sold for over $800K 1-2 years ago now going (in foreclosure) in the mid 400s. This is for a 3,000+ sf home on a big lot in an area with an "award-winning" school district. Now I would consider that as an increase in affordability. And I know it "is different here" in west LA, but one area can't go down like that without the other falling some as well.

I bought my last home in foreclosure in 1997 for $165K. The previous owner had paid $250 in 1991. This was in a trendy/hip area of LA (the nice part of Silverlake). So, that was about 40% off. I think this time it will be worse.

As for whether I'll wait it out 'till bottom. No. I would prefer to wait until 2010, but my husband is getting tired of living in a small apartment, so I think I'll only be able to keep him waiting until fall 09.