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California and the West

Digging Out From Under a Real Estate Slide

Coast: Some risk takers have been buying homes in La Conchita, where landslide ravaged property values. 'It's like a gamble, but I didn't have to go to Las Vegas,' one says.


LA CONCHITA — Ads for property here could rival the most breathless copy for houses in Malibu: "Sea breezes, drop-dead ocean views, rugged hillsides, world-class surf a stroll away, Southern California beach-side living at its finest . . ."

Never mind that nearly half of the tiny community's homes were assessed at zero value after a devastating landslide in 1995. Overlook for a moment the lawsuits, the conflicting predictions of geologic doom, the houses that still sit smashed at the base of the steep slope looming over the seaside town.

James "Bo" Lundy did.

In a leap of financial faith, he just bought a vacation place in this hamlet 10 miles up the coast from Ventura for $158,000, joining a tiny band of others who have sunk money into a community where values have been not merely depressed, but comatose.

While the market throughout the rest of Southern California is rocketing, La Conchita's is barely stirring. But here in a town where a gouged hillside draws looky-loos and where some homes still bear county warnings of a "geologic hazard area," a few properties have ever so gingerly changed hands.

It's hardly a boom, but amid the bougainvillea and banana trees of La Conchita, the Lundy purchase is a noteworthy ripple.

"I had a feeling that the market might be at its low," said Lundy, a commercial real estate broker in Bakersfield. "And I liked this little house."

It has been more than three years since the terms "La Conchita" and "real estate market" have been used in the same sentence without a heavy-handed ironic twist. Last year, all of six properties were transferred--two for less than $10,000 after foreclosures and all but one of the others for well below $100,000, according to county officials.

Most of the properties that have sold in this neighborhood of about 200 homes have been bought by people who already live here or who have relatives here.

A couple of houses were snagged at foreclosure sales after their owners could no longer handle mortgages on homes that suddenly had become worthless.

But Lundy is a rarity: an outsider who saw a "For Sale" sign, negotiated a price, secured homeowners insurance and a conventional mortgage, and signed on the dotted line.

"We were looking for a weekend or vacation place away from the heat," he said.

In their search, the Lundys prowled coastal high-rent districts from Laguna Beach to Santa Barbara. They found "starter homes" in Summerland, just south of Santa Barbara, that ran as high as $500,000. Eight miles down the coast, a one-bedroom, one-bath cottage on an oversized corner lot in La Conchita had hit the market for about $185,000.

From the sun porch, Lundy, his wife and their two small children can gaze out across the railroad tracks and U.S. 101 to the mighty Pacific. From the spacious garden, they can gaze back 100 yards or so to the huge hill that gobbled up nine houses like so many hors d'oeuvres March 4, 1995.

Lundy is redoing the 40-year-old home's wood floors, putting in a new kitchen and converting the garage into a second bedroom. He doesn't figure he'll be at the epicenter of a mud bomb any time soon.

He has run across geologists who believe that the hill won't move much for the next eon or so, as well as those who believe that danger may be at hand. But his house on Surfside Street is about as far from the hillside as you can get in La Conchita. Even if the slope "flexes its muscle," Lundy said, his getaway spot probably will be spared.

Appraisers for Norwest Mortgage evidently agreed. The company granted Lundy a 15-year mortgage--perhaps the first conventional mortgage to be written in La Conchita since the landslide.

Ronald O'Neill, the real estate agent for the couple who sold the house, said the community has been unfairly stigmatized.

"I had a lot of people who said it couldn't be sold, that it would never get insurance, that nobody would finance it," he said. "But they were wrong."

Besides, he asked with the doleful zest of a lifelong Californian, who among us is immune from risk?

"All of California is in an earthquake-danger area," he said. "The whole coastline is in a tsunami area."

Whether or when there will be a next slide is a perennial topic here.

According to many homeowners, the answer hinges largely on the outcome of a lawsuit against La Conchita Ranch. Neighbors say the ranch contributed to the slide by over-watering an avocado orchard on a mesa high above the community.

A class-action suit, which demands monetary damages for property owners and protective measures for the hillside, is set for a hearing in October.

An earlier suit filed by a different set of property owners was settled for an undisclosed amount last year.

Andrew Castricone, a Los Angeles attorney who represents the ranch, said there was no excessive irrigation.

The landslide was "a natural geologic process" aggravated by heavy rains and the 1994 Northridge earthquake, he said.

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