It all started when Dean Borton was suddenly, as he put it, "blessed with early retirement."
In other words, the public relations firm Borton worked for, "gearing down" for some expected losses, decided to give the 64-year-old copywriter a head start on his Golden Years.
Borton and his wife Meredith had a plan. They'd sell their Diamond Bar house at a nifty profit, they thought, and go back home to a lake in Michigan, where the living is cheap and unstressful.
The Bortons had bought the house--a stucco-walled hillside home with a shake roof, a swimming pool shaped like a big footstep and a scintillating view of the San Gabriel Mountains--for $160,000 in 1984. Considering the way property values had risen in the late 1980s in the San Gabriel Valley, they figured they'd sell for $290,000. Easy.
That was in January. Since then, they've dropped the price by $10,000, gone into escrow twice--both sales fell through--and taken over the brokerage duties themselves. And still the house is unsold.
Nowadays, after Meredith goes off to her job at a direct marketing firm, Dean busies himself manicuring an already weed-free yard and thinking about that lake in Michigan. "I'm getting a little edgy," he says. "I'm at the point now where I'm going to have to find something else to keep my nimble mind busy."
The real estate downturn, which has thrown a wet blanket on the housing market all over the United States, has arrived with a vengeance in the San Gabriel Valley. Interviews with agents and brokers show:
* Houses--particularly in the $300,000 to $500,000 range--have been languishing with "For Sale" signs on their front lawns for a year or more.
* The infusion of foreign capital, particularly from Asia, that kept the San Gabriel Valley market hot through most of the 1980s has slowed considerably.
* Houses that do sell are often going for far less than equivalent houses sold for a year ago. Brokers say that there is a widening gap between asking price and selling price.
Except in the low end of the market, in which houses sell for under $200,000, buyers are scarce.
Most real estate agents don't like talking about the down side of their business. "We're talking ourselves into a recession," said broker Alex Turner, a former president of the East San Gabriel Valley Board of Realtors. "Marginal people are being scared out of the market because there's too much negative talk."
But a survey of the real estate boards in the San Gabriel Valley shows that, for the first nine months of 1990, sales are down throughout the region by 30%, compared with the equivalent period last year. At the same time, the inventory of properties for sale has risen dramatically.
"Weekend open houses are really dead," said Diamond Bar City Councilwoman Phyllis Papen, an agent for Remax Diamond Bar. "What you get are not buyers but escrow company representatives and lenders, coming by with cookies and cold drinks" to drum up business for themselves.
Most real estate brokers expect the slowdown to last well into next year, when the San Gabriel Valley's strengths will begin to assert themselves again.
Some agents say they're experiencing a normal cyclic downturn after several years of soaring prices, just as in any financial market.
"People don't worry when the stock market has a tremendous surge, then settles back to a reasonable advance," said Jack Newe, broker-owner of Century 21 E-N Realty in Diamond Bar.
Two years ago, prime properties in the region were being snapped up as soon as they went on the market. Real estate agents talk fondly now of the go-go years, when some houses got seven or eight offers on the day the "For Sale" signs went up.
Now, everybody has horror stories about houses that won't sell.
Richard and Esther Schuster just sold their house in a well-to-do neighborhood in western Pasadena after it was listed for a year and a half. The couple and their two children moved to a bigger house in the same neighborhood in May 1989 and started paying two mortgages, expecting the first house to sell pretty quickly.
"I had a feeling we'd sell it by the end of the year and get about $700,000 for it," said Schuster, a manufacturer of biodegradable paper products.
They finally closed the deal for the house in September, selling it for $560,000.
Some real estate agents say the situation appears to be more than a simple market adjustment.
"It's not just affecting realtors, it's affecting banks," Papen said. "The market is tightening up on home equity loans and bridge loans.
"You used to be able to get a home equity loan, then go out and buy a second piece of property. But those are a lot harder to get now."
There is still a strong market for "starter" houses, agents say. "If there is such a thing as a $150,000 house, it'll sell--yesterday," said Monrovia broker George Baker.
But "move-up" sellers--those seeking to cash in on middle-level properties in order to move up to a larger, more expensive house--are finding buyers scarce.