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Sky-High Housing Hits Home in Ventura

Official thinks house will benefit him and city, which provided a large down payment.

March 28, 2004|Daryl Kelley | Times Staff Writer

The money was good, the job was a natural fit and you can't beat the balmy seaside weather of coastal Ventura. But before new City Manager Rick Cole accepted his job last month, the City Council needed to provide a $325,000 down payment on a modest 75-year-old house.

Cole, 50, is an expert on things that make communities tick. But the extent of the Southern California housing crisis didn't hit home until he began searching for a new house for his family.

"We paid $675,000 for 1,481 square feet," said Cole, who fell into a bidding war for a 1929 Spanish-style house in a resurgent neighborhood with classic architecture, an abandoned elementary school and streets full of potholes.

"The price started at $639,000 and just kept going up. It was an absolutely unbelievable experience," said Cole's wife, Katherine Aguilar Perez.

"Ordinarily, you'd walk away," Cole said. "Except the next house is going to be the same, and a month later it's going to be worse."

The couple sealed the deal within a day, embracing a neighborhood with character and proximity to the ocean and Ventura's historic downtown. "It's just three blocks from our children's school and 10 blocks from City Hall," Perez said. "Rick can ride his bike to work."

But the price was steep at $456 a square foot, rivaling more exclusive coastal communities in Southern California.

Cole's purchase reflects a runaway real estate boom that economic experts say is leading to a brain drain of young, talented workers from Ventura County and other coastal areas in Southern California. It demonstrates that even the region's more affordable seaside towns are now out of reach for most potential buyers. Workers must commute from cheaper inland areas.

Cole, an urban reformer who helped reshape Pasadena as mayor and Azusa as city manager, said his home-buying experience reemphasized the need for Ventura to fill its vacant lots and aging commercial strips with clusters of new housing that the average worker could afford.

"Eighty percent of the residents of Ventura couldn't afford to buy back the houses they are living in," Cole said. "It's a run-up that's swallowing up first-time home buyers. If you don't have equity to cash in, then you're out of this market."

In Ventura County, the sales price of a typical condo or house has soared $92,000 -- to $440,000 -- over the last year, the greatest percentage increase in Southern California. For single-family homes alone, the price was nearly $529,000 in February, one-third more than the year before, according to the California Assn. of Realtors.

And the story is even bleaker in communities such as Cole's, that lie near the ocean.

His three-bedroom, one-bath house in midtown Ventura -- an uneven collection of small dwellings and tattered apartments, some with distinctive architectural styles -- has increased $480,000 in value since 1997, when it sold for $195,000.

A Santa Barbara couple, Thomas and Cara Hill, purchased the same house in 2000 for $320,000, reflecting what was then an emerging trend in western Ventura County. Now, thousands of Santa Barbara workers, unable to afford a home in the state's priciest market, have moved 30 miles down the coast to Ventura, Oxnard, Ojai and beyond.

"It's fairly obscene," said Hill, 35, who owns a Santa Barbara surf T-shirt business and whose wife teaches elementary school in Santa Barbara. "It was our first home. And we moved here out of pure necessity. We're UC Santa Barbara graduates, and we wanted to live there. But housing for us in that market was nonexistent."

Today, the Hills are counting their good fortune. They are taking more than $350,000 in equity up a Ventura hillside to buy a Spanish-style house of 2,700 square feet and slight ocean view for $900,000.

"We're still trying to catch our breath," Hill said. "And we're feeling we're kind of rolling the dice a little bit. But when you compare coastal Ventura with the rest of Southern California, I think there's still some room to appreciate some more."

Real estate agent Dave Smolen, who listed the Hills' midtown house, said that experience demonstrated the market's volatility.

"It's the same everywhere. Everybody wants to be in coastal California," Smolen said. "I've been in real estate 23 years, and I've never seen anything like it. It went up like a rocket in 1988, but that was all speculative buying, and it collapsed" when the economy nose-dived.

With interest rates near record lows and the supply of homes very low, Smolen said he saw no peak in the market.

"Two years ago, we'd have more than 100 houses for sale [in Ventura.] Now we're seeing fewer than 80. And at one point last week there were only 28," Smolen said.

There is no telling, Smolen said, what a house like the one Cole is buying might bring in another year.

"We had four written offers on that house in 24 hours, and three were above the asking price," he said.

By the time Cole had made his offer a few hours into the process, he knew nothing less than $660,000 would have a chance.

In the end, Cole and another buyer submitted final offers, and Cole got the house for $36,000 more than the list price.

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