A drive-by, an AK-47 and SWAT: Welcome to your starter neighborhood

In a report earlier this week, the California Association of Realtors discussed affordability of "entry level" homes in Los Angeles. The Realtors calculated it would take household income of $86,700 a year to buy a home priced at $433,200, which the Realtors figure is an entry-level home in this county. Only 27 percent of the households in the county can afford that, the group said.

What kind of home might you get for that kind of money? And in what kind of neighborhood? For $399,800, you could buy a very small house on Estara Avenue just north of downtown. Two bedrooms, one bath, only 572 square feet.

The listing describes this little house as a "First time Buyer's Alternative ...  a great property with good size fenced Yard lots of room for your children to Play."

While playing, your children could look out in the street and see the terrifying scene above. The house is a stone's throw from the spot where police today shot and killed one man and wounded another after a wild incident that began with a drive-by shooting.

I don't mean to pick on this neighborhood -- there are no doubt hard-working people there struggling to make a better life, and home ownership plays a role in that quest. My point is this: There is something not right about paying $400,000 for a tiny house in a neighborhood the police described today as "a base of operations for Avenues gang members."

Four hundred thousand dollars for a tiny house in a neighborhood where violence is common, according to a man named Juan Soto. "This kind of incident happens about once a month," Soto told the L.A. Times. "This is not the first time."

I understand that Los Angeles has become a very expensive city in recent years. I'm afraid I don't fully understand why.

Thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo credit: L.A. Times

Comments

[Kate]

Of course, that's hardly the only neighborhood with prices in that range, and it's far from the quietest. I agree that the prices for that location are ridiculous, but there are other options.

[formerlahomeowner]

What's not to like?
572 sq foot house: $399,800
AK-47 assault rifle: $1000
Bullets: $50
Homeownership: Priceless

[toby]

I laughed when I saw 300,000 dollar Condos in Watts.

The simple truth is that LA prices are still wildly overpriced, even for LA standards.

[chanko]

hmm...$433,200 is a little steep for a household income of $86,000. All the mortgage calculators generate a price well below $433,200 even with 20% down. For that household income you're looking at mid 300's and that's with little debt and a substantial down payment. Sounds like CAR is trying to drum up business with their creative estimates.

[Laker]

Another nice DUMP. This one is actually "nicer" and "safer" than the one in lawndale...
Seriously, i think there is an extra zero as this place is maybe worth $40,000...
After thinking about it, i would not go there if you pay me $40,000!
Dump an dumper....
What a joke!

[T Hebb]

Peter earns my respect for daring to voice his honest wonder at the price of homes here in the City of Angels. There will be many seasoned, cynical and sophisticated observers with ready explanations for why prices are what they are. But none of those explanations will truly satisfy. In the end, it may be market forces inexorably grinding prices down to earth that offer the only satisfactory resolution to the question.

[Kathryn]

Wow! 400K for a 572 sq foot home. Is this one of those fantastic buys in metro LA that Lefty keeps posting about?

Prices seem to be coming down much faster further away from LA, in the safer but albeit more boring suburbs. In Simi Valley, there are quite a few decent starter homes in the 299K-335K range. Good schools, no drive-bys.

I was actually thinking that the prices might be coming down to rather affordable levels. Looks like rational thinking hasn't come to LA yet. It'll be interesting to see what that house on Estara Avenue actually sells for,

[Cal]

The home next door to where that SWAT officer was killed was for sale. It's a foreclosure that started at 479k over 200 days ago, now it is 345k. The low end is what saw the most appreciation in LA (look at the Case/Shiller broken out by quartiles) because that was the places where the new found access to credit was most widely felt and were least likely to be financially literate enough to understand it.

Now that the support has been taken away and the poorer people dont have the luxury of denial of reality, it will be what falls first and faster. The higher end up the ladder still doesnt realize they need those first and second move up buyers to get out of their homes but have enough money where they (nervously) stick to their asking price and pray for an offer.

[Keith]

You lay awake at night wondering if your aim will get better before your ARM resets

[Andrew W.]

I live in a house that is brand new, is 6 times bigger (sits on a half acre), costs half as much, and is so safe you don't even need to lock your doors at night.....

My advice to those who live in California: ............ Move to a new state....

[peter m]

That area is a classic gang pocket and there are 1000's of them all over LA/IE, Vent County,ect. One near the westside is Baldwin Village. Another is Harbor Gateway near 205th st, home of the 205th gang. Behind burbank airport is another gang nest. They are everywhere even in the westside and are endemic to LA. The cities of Cudahy & Maywood may be considered as the private fiefdoms of the 18th st gang. Wilmington is one gigantic gang turf pocket. It is almost a natural feature of the LA landscape, similar to predatory pack animals staking out turf in the african savanna.
To get back to that area of the shooting it is somewhat isolated by railroad/fwy barriers and tucked away in a forgotten dark corner of LA which is why the gangs sprout & flourish there. Only when there is a large gang eruption involving massive LAPD presense does the spotlight get thrown in these forgotten ghetto pockets, like throwing a light in a dank & darkened home corner and watching the cockroachs scurry away .
A 15 X 10 mile swath of South LA(150 sq miles,comprising 1/3 of LA's total area) ,the part which largely comprises Scentral, is basically one gigantic third- world ghetto pocket. I have been perusing home sales and prices in these areas as a hobby last two years and have seen 80-100 year old 2/1 800 sq ft crackshacks in these parts going as high as $500-600,000 as late as June 2007 when appraisal fraud/ quick fix and flips/ cashbacks were running thru the ghetto like a virus .
Fraudulent sales & pricing in the LA ghettos was the norm 2005-2007.

[Rachel]

My husband works on the street where the violence
took place today.
When I dropped him off at work I noted a townhome of
brand new construction that had been sitting on the market for about 6 months. Price: $650,000 now dropped
to $599,000. This brand new construction is set amongst
slum apartments.
Every morning you see the hard working residents of
these slum apartments walking to the bus stop.
This is your starter neighborhood.

[Stump Barnes]

Perhaps CAR should file a friend-of-the-court brief in the "District of Columbia vs. Heller" supporting the individual rights view of the 2nd Amendment. Afterall, these starter home borrowers are going to require some serious firepower to survive until they can breakeven on their home purchase he middle of the next decade.

Even better maybe OTS or Sen. Chris Dodd with include some sort of assault rifle giveaway with their government bailout of loser home borrowers.

[brettdl]

I just took a look at Realtor.com's calculator. A family with an income of $86,700 and $300 monthly debt payments can afford a home no more expensive than $254,777, presuming they put down $20,000.

A more likely scenario:
Income: $87,600
Monthly Debt Payments (car loan, credit cards, furniture): $600 a month
Total down: $10,000

Maximum home affordability: $127,389

[John T Watts]

So get on Realtor.com and find out what you can get for $400,000.00 in other parts of the country and get out of town.

[Willie]

The bubble still much alive in the price of this shack. Of course you need a big yard to accomodate yourself and the children in tents since there is barely any space inside, but for a kitchen, a bath and the semblance of some living space. My master room is bigger than this dump! Oh, at least you have a big driveway so you can accomodate the Escalade and the ghetto Bentley!

[JK]

This area and others surrounding it have been taken over by illegal immigrants and their gangbanging children. This is part of the reason housing in "safer" neighborhoods (read: the Westside, Santa Monica...) have become so darn expensive. People aren't just looking for a trendy area, they are looking for a safe place to raise their families, good schools for their children (where at least most of the other students speak English) and they can go out to the mailbox without a bulletproof vest. It's amazing what the citizens of this country have allowed to happen to Los Angeles.

[chris]

There is way too much vitriol in this post and comments -
"struggling" "slum" "illegal immigrants".
Maybe prices are high within central Los Angeles because hard working people actually want to live in central Los Angeles, not way out in a white-washed suburb. Agreed, this 572 sq ft home is way overpriced. $399 is also only the asking price. Someone will buy it because someone wants to live there, someone who doesn't fear their "hard-working" neighbor.

[kwk]

According to "Zillow" that exact property sold for $250,000 on 5/15/2007. Of course, the "Z-estimate" for the property today is $410,000, so that give the current owner the gall to list his at $399,000. What a pipe dream.

I'm one of the lucky ones that moved out of California back in June 06, and I am certainly glad I did.

[ray]

Gangbanging and drug dealing, how else are you going to afford a home in LA? Time to move to Detroit, at housing is cheaper.

[Fourth Generation]

It is amazing that xenophobic bigots like JK still live in this country..........

[Todd]

I know this pocket well. As a Silverlake/Echo Park investor I found myself in this pocket looking for deals. It is rough indeed. 9 unit non rent control on Andrita listed for more than a year. 8 unit on Drew listed for more than a year. Many people bought in this area 2004 to 2006 just jumping in blind not really knowing the area. They see the 90039 zip code and just bought. This is an armpit of an area due to gangs indeed. It is know that anything between the cemetary and 2 fwy is no where to invest.

[jaded]

what's xenophobic or bigoted about correctly stating that plenty of poor areas are full of illegal immigrants and their gangbanging children?

what, you think the Avenues gang are 10th generation white Irish kids?

[migel]

Hey ray, you don't think they are gangbanging in Detroit you must not go outside.

These problems are everywhere. LA has a culture your not going to find anywhere else, and immigrants legal or otherwise help create that culture.

[left of lefty]

i just looked through redfin using <400k as a search criteria, and ran down the coast west of the 405. there are listings in malibu, pacific palisades, santa monica, marina del rey, el segundo, manhattan beach, redondo beach, torrance, rancho palos verdes, "good" areas of san pedro and long beach, huntington beach, and newport beach. then again, i suppose there are gang pockets everywhere in l.a. and orange county.

while i believe most of those are condos, they are good entry homes for young professionals who want to 'live a good life' rather than working the yard on weekends. i bought my first sfr when i was single a long time ago. and i hated the yard work. eventually i ended up paying someone else to do it. though now that i'm older, i've taken back doing my own yard work since my weekends are not as lively as before, and the exercise is good for me. i imagine as i get even older i'll downsize to condos again.

as for raising kids, each is entitled to his own methods. however, i believe children will learn and benefit more in a ... 'challenged' and 'culturally diverse' environment than the perfect suburbia that tvs and movies portray. they may feel uncomfortable among other children who don't speak english, but they'll either learn another language (a good thing) or learn to work and function among people who are different than they are (also a good thing). and as you upgrade your home through the years, your children will see their parents making various sacrifices and overcome many challenges. they'll understand the relationship between work and reward. these are lessons that can only be learned after they're old enough to reflect back on their own history, but it's well worth the effort.