Antelope Valley [North Los Angeles County] home sales surge 238%

While national home sales plummeted to their worst levels in 12 years, the Antelope Valley bucked the trend and saw its numbers soar well into triple-digit gains. High desert home sales began the new year with a sizzling start, rising 238% in January over January 2008, while the nation as a whole saw its home sales drop 8.6%. For the nation, it was the weakest sales showing since July 1997.

"It's location, location, location - to put it in the simplest terms," Sam Hare, a past president of the Greater Antelope Valley Association of Realtors, said of the difference between national and Antelope Valley sales.

There were 652 homes sold in January in the Antelope Valley. The total value of the sales was $96 million compared to $49.1 million for January 2008, according to statistics provided by the Greater Antelope Valley Association of Realtors.

"We're within driving distance of the San Fernando Valley and Los Angeles, where workers make enough money and can buy a home - just not there," Hare said. "We're selling houses at $90,000, with monthly payments of $750 to $800 with insurance and taxes. You can't even rent a one-bedroom apartment in the San Fernando Valley for that."

While sales are soaring, home prices have continued their decline. The average sale price in the Antelope Valley in January was $147,288, down 42% from January 2008. On the plus side, the high desert is leading the state in home affordability.

"They are down far enough where first-time buyers and investors are not waiting," Hare said. "We're really starting to see investors come out of the woodwork. I had six people call in the last week saying, 'I think I need to buy a rental.' "

Well said! There are a lot of areas that need to see a lot of price decline before they will be "affordable" by the average family living and working there.

Let's also note that the decline in gasoline prices has made these places affordable to drive to and from one's job in the big city. If we get back to $4 a gallon gasoline, either by Zero's screwing up the energy picture, or imposing taxes on fuel, then all bets on Antelope Valley's recovery are off.

And drive down the 14 and the 405. There is always an accident there. Some are hilarious. Like when a truck full of chickens overturned and they ran around 12 lanes. And an armored truck had a problem and there were quarters all over the place. When the beer truck overturned, the contents were absorbed quickly. And another one carrying pigs a month later.

Jimmy Buffett can write a song about this. His I-95 song is close.

And I’ll bet that the mortgage companies who are selling the mortgages are small real banks in the community, who will also be servicing the loan.

And they would be making a sound investment.

If you lend out 80% of $100,000 to a buyer that has put down 20% and you accept as collateral a house that can be sold for $100,000 to average buyers that can actually afford them, you have come out ahead if the original buyer defaults on the mortgage.

If you lend out $200,000 to an average buyer that has put zero down payment and who can only afford a $100,000 house without resorting to "Interest Only for the First Four Years" gimmicks and then you sell that ticking time bomb of an I.O.U. to a foolish investor after pocketing a fat commission, the foolish investor has accepted as collateral a house that can be sold for only $100,000 to average buyers that can actually afford them, the foolish investor will be begging the U.S. Government for a bailout with our tax dollars and the idiot buyer will be begging the U.S. Government to pay for their mortgage with our tax dollars.

I predicted the current fiasco on Free Republic back in 2005.

House prices are ultimately determined by how much the buyer can afford to pay per month. The drastic lowering of that payment with "$0 down/interest only" gimmicks, has allowed sellers to charge highly inflated prices that the buyer will not be able to afford once the grace period expires. If you like their house, save up your cash for the day the "interest only" grace period ends and they are forced into foreclosure. .............. 39 posted on Sunday, November 20, 2005 3:02:55 PM by Polybius

I don't consider myself an economic genius and I do not play one on TV.

I do give myself credit for having plain, old common sense when it comes to economics. What I cannot figure out is how we got to the economic mess we are in right now when plain, old common sense, not an Economics Ph.D. from Harvard, was all that it took to figure this out way back in 2005.

I had a friend who got married and was so excited to buy their very first tiny, sweet little home wayyy out in the new Palmdale, 15-20 years ago. They started having kids, and so did their neighbors, and life was good, with kids running between the homes and everyone happy.

Then the neighborhood was categorized as a Section Whatever, where people would literally GIVE these little houses to poor people from over an hour away in South Central L.A. Suddenly, the little houses were worth far less than what the original buyers were still paying on them. Suddenly, there was crack everywhere and crime.

My friends were locked into such a H*ll with their three little children that they defaulted and walked away from a home that they could never sell.

Remember that it was the GOVERNMENT that caused that problem out there.

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