Well, as we’ve all been hearing, it’s been another bad month for the nation and for L.A. County. Prices are heading–you guessed it!–DOWN, DOWN, DOWN. In fact, year over year, prices have fallen 35.7% countywide. The median home value is now $340,000.
Of course, the drops are greater in some areas than in others. In general, working class areas are most likely to show the greatest declines and more affluent areas the least. Statisticians are telling us that until now lower-priced areas have lost 44% of value while upper-income areas have lost 22%. That is a reflection of the ability of the rich to cushion the blow. They have more resources to call upon when times get tough. Lower-income folks are more likely to live paycheck to paycheck with no real savings in case of a downturn.
Thus, we note that in our San Gabriel Valley Azusa is down 30.9% to a median of $280,000; Altadena is down 28% to a median $420,000. Baldwin Park dropped 31.9% to $274,000, Covina is down over 30% to $330,000, Duarte has dipped a whopping 42% to a median of $280,000, and La Puente is down over 32% to a median of about $275,000. Pomona is still Heartbreak City for our area, though, with drops of 49% and 40% to a median of $230,000 in 91766 and 91767, and to 44.6% in 91768 to a median of $210,000. This is truly horrible and is producing a sea of human misery.
Still and all, other areas of L. A. County are doing far worse. In one ZIP in Palmdale prices are down 64.9% to a median of an unbelieveable $80,000. Other Palmdale areas clock in a medians of $253,000 and $129,000. With prices like these, you know that remaining home owners are going to bail either letting their homes go to short sale or into foreclosure.
The lower-priced homes are now in many areas priced below replacement value. So, in other words, prices cannot fall too much further. So the previous situation of lower-priced homes taking the greater hit in home values we are told, is about to change. This downturn is so severe and so intense that now the wealthy are also starting to lose their homes in greater numbers.
Some of that is due to true economic hardship. After all, the wealthy are the business and shop owners whose sales are down the drain and the executives who are being downsized. Eventually, with businesses failing, they run out of money as well. And, as homes in more affluent areas begin to lose value, many owners question themselves: why am I sitting here paying on a $600,000 mortgage when my home is now worth $350,000? Sometimes it’s a business decision to let the home go…It is cheaper to rent the same house, perhaps as much as half as cheap, especially in good areas which have many foreclosures, such as Corona or Rancho Cucamonga. Fear not, though, these massive foreclosures are coming to L.A. County as well.
Areas in L.A. County which until now have maintained are starting onto that downward spiral. In our area, affluent Arcadia has declined 22.5 % in 91006 to $420,000 while 91007 is down 26.2 to $830,000. These are significant drops. San Marino with only a few sales is also down 25.5% to a median $1,250,000. Sierra Madre is down 24.6% to a median of $660,000. Glendora 91741 is down 31.8% to a median of $505,000 while 91740, only partly in Glendora school district, is down 18.7% to $386,000 median.
San Dimas is down only by 9.8% to a median of $508,000. LaVerne is down only 13.9% to a $439,000 median. Claremont is down 9.6% to $520,000. These postings show these cities are holding their value well in comparison to the rest of the county. For this, east Valley residents can be grateful despite losing whopping amounts of equity in their homes.
What does the near future hold for our county? I’m afraid it’s more drops in value, especially among the more affluent areas. Until January 9th, Freddie and Fannie have declared a moratorium on foreclosures both to get everyone through Christmas as well as to allow banks to catch up. Once the moratorium period is over, we will see a tsunami of foreclosures right here where we live. Even a new President will be powerless to stop it.