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Can you afford it now?

Southern California real estate prices have fallen off a cliff, and buyers are finding that homes and communities that had been out of reach are now in their price range

December 21, 2008|Peter Y. Hong

We've pretty much blown through the first couple of stages of grief with regard to the Southern California housing bust.

There's no room left for denial now that home prices in the Southland are down 44% from their peak in 2007, and there's not much use for anger.

Now we're bargaining.

Previously stubborn sellers are dropping listing prices and banks are increasingly agreeing to "short sales," in which a home is sold for less than the amount of its mortgage.

A real estate recovery may be at least a year off, but in this falling market homes are being listed -- and some sold -- at prices not seen in years.

The median sales price in Southern California just fell below $300,000 for the first time since 2003. On both sides of that midpoint, expectations of what a dollar -- or a million -- is worth in the housing market are being challenged as buyers try to avoid paying too much, and sellers decide what they'll give up to make a deal.

Here's a look at what's available at five price ranges.

$100,000

Palm Springs, one-bedroom, one-bathroom condominium listed for $95,000

For five figures in Los Angeles, the offerings are pretty humble. Pretty typical is a one-bedroom, one-bathroom house on East 98th Street in South Los Angeles, near the intersection of the Harbor Freeway and Century Boulevard. Its listing calls the 738-square-foot house "great for a growing family." The seller wants $85,000 for the house, which sold in 2006 for . . . $365,000.

But in Palm Springs, instead of security bars on the windows, you can get a place in a gated community. This condo complex has six swimming pools and three tennis courts. The unit is listed as a short sale, which means the lender will have to agree to let the property go for less than its mortgage amount. Craig Conley, the listing agent, said he was confident the bank would approve a sale at the asking price of $95,000. The property last sold in 2005 for $150,000. There are more than 30 other condos in the Palm Springs area for sale below $100,000, and in the last three months, more than 20 condo units there have sold for less than $100,000.

$250,000

Corona, four-bedroom, 2 1/2 -bath house listed for $253,900

Riverside County's November median price of $220,000 was down 38% from the previous year, but this Corona house shows just how much more prices could drop. The foreclosed, 10-year-old, 1,850-square-foot Corona house is now listed for sale at 47% of what it sold for in 2006, when it was purchased for $535,000.

Foreclosures accounted for 70% of sales in Riverside last month, the highest percentage in Southern California. This house has plenty of competition: More than 170 houses are listed for sale in Corona in the $225,000 to $275,000 range. But Dennis Findly, the broker listing the house, said he had received five offers since its Dec. 10 listing and expected the house to be sold by the time this article appeared.

"Banks are now pricing them correctly, whereas a year ago they had them priced too high and they sat on the market a long time," Findly said.

Throughout Southern California, real estate agents say and sales records confirm that attractively priced foreclosed houses sell quickly. Which doesn't mean prices will go back up any time soon.

"I am absolutely positive it's still going down," said the 18-year veteran of Inland Empire real estate. "If you're looking at a house like this for $250,000, it looks like a good deal, but a year from now it could be $220,000 or $230,000," he said.

There are just too many foreclosed houses to sell, Findly said, and too many problems in the overall economy to be solved before real estate rises again.

$500,000

Downtown Los Angeles, Eastern Columbia lofts, listed from $465,000 to $599,000

Moving up the price ladder, the choices in the half-million-dollar range are pretty vast. You could buy two big houses in Corona or five of those Palm Springs condos. Or take your pick from small but attractive houses in closer-in suburbs like Burbank, Glendale or Pasadena.

For that amount in downtown Los Angeles, you can now cozy up to the super-rich. Four units in the Eastern Columbia building are listed for sale from $465,000 to $599,000. This is the same building in which a unit sold for $2.275 million in October.

The turquoise Art Deco tower had been a department store from 1930 to 1957 and was later used as an office building. It has a rooftop swimming pool and fitness center.

Ted Trent, who represents the seller of the loft priced at $599,000, said an earlier buyer backed out of purchasing the 1,476-square-foot unit for $775,000 from the building's developer. The unit has been vacant since the building opened in 2007. It had been listed in July for $799,999.

The developer has cut the price to sell it before the new year, Trent said, and may have more to give. The lowest-priced unit for sale in the building, at $465,000, is on the fourth floor and is 890 square feet. It has been on the market at that price since September.

$750,000

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