Free-falling in Palmdale: Prices nearing $100K

The free-fall in prices in distressed areas of Southern California is a major, and ongoing, story -- even if it bears little resemblance to what you're seeing in your neighborhood. Collapsing prices are causing more foreclosures, and prices continue to collapse, raising the likelihood of more foreclosures. This is what most of us call a "vicious cycle," although the Fed chairman, who evidently doesn't like name-calling, prefers the less judgmental "economic feedback loop."

In one Palmdale neighborhood, median sales prices are closing in on $100,000.

Here's an update of August median sales prices in some of the most distressed neighborhoods in Los Angeles County.

Area / ZIP              median price, July    median price, August / median price per sq. ft.
Palmdale/93591        $105,000                 $101,000/$72
Lancaster/93534       $124,000                 $125,000/$89
Lancaster/93535       $148,000                 $140,000/$91
Palmdale/93550        $150,000                 $145,000/$100
Littlerock/93543       $180,000                 $158,000/$116
Palmdale/93552         $190,000                $179,000/$101
Lake Hughes/93532   $195,000                 n/a / n/a
L.A.-Watts/90002      $200,000                 $172,000/$154

-- Peter Viles

Your thoughts? Comments? E-mail story tips to Peter Viles or follow L.A. Land on Twitter.

Photo: Los Angeles Times

Comments

[TakeFive]

"vicious cycle"

We'll see people walk away from perfectly servicable fixed mortgages because of what will happen to these towns.

But congress will bring in a new batch of suckers to buy these homes since they just killed a fundamental reform:

"The committee, chaired by Massachusetts Rep. Barney Frank, took steps to gut a modest reform of the bad lending policies that helped get us into this mess. By voice vote, members moved to overturn a ban on something called “seller-financed down payments” for some government-guaranteed mortgages. Congress largely banned government support for such mortgages just two months ago at the request of the Federal Housing Administration. "

http://www.city-journal.org/2008/eon0918ng.html

[perks]

93591 = Lake Los Angeles, which is essentially Palmdale's Palmdale. Up until the early '00s you could still get a place out there for $80k. It should be no surprise that prices are creeping back to below $100k out there...

[USC Okie]

Pete,

Remembering back through the monthly home sale updates, one of the zip codes out there bottomed out at $63 per square foot and stayed under $100/sf until the late 90s. Was that 93591, or another one?

A price per square foot comparison to the bottom of the 90s market out there would be interesting, and it's all in the archives of the Real Estate section.

Would I trade $100/sf in Oklahoma City for $100/sf in Palmdale? Nope. There's not much traffic here, the people are nice and there are plenty of good jobs around. And I can live on a lake in Northwest Oklahoma City for $220,000 @ $100/sf.

[Mike]

I always thought that Palmdale was quite a nice desert town.

If I ruled the world, I would use some of that federal bailout money to buy up some of the cheap Palmdale homes and then sell them, via HUD, to seniors. Since Palmdale has a Metrolink station, the seniors could get into town to visit the grandkids without driving.

Vote for me for President.

[Brian]

Palmdale and Lancaster have topped the list of zip codes for trustee sales in Los Angeles for the last few years. Here is a table of LA zip codes for Foreclosures in August (You can see Palmdale is #1): http://www.propertyshark.com/mason/BlogCenter/maps_charts_of_the_month.html?type=chart&loc=los_angeles

And here is a pushpin map of upcoming Trustee Sales in Palmdale http://tinyurl.com/3h536f

Hopefully some of these relief efforts start to have an impact.

[the problemwithcaring]

The Washington Post on the growing anti-bailout sentiment:

http://tinyurl.com/AntiBailout

[E]

Hey Pete...

Are you able to put up the peak median prices for those zip codes?

It would be interesting to see how far these places have fallen in total.

[TC]

I live in 93551 and I think the top Median in 06/07 was about $360k. I'd say that number is below 200 now and I have lost alot of $$ on my fixer upper I bought in 04 at well below median.

93550 was over 300 at peak for sure, but it's a mixed area with some nice and not so nice neighborhoods.

Much of this is fallout from unemployment and gas prices as this is a commuter town and also a Sub-Prime hotspot. Prices increased after they did in LA proper. It's beneficial that they drop ASAP to get them moving again, but I am not sure there is the population to buy anyway, they all moved to where the jobs are. They overbuilt the area too and there are acres of graded lots just sitting.

My saving grace is that I live 2 miles from work and my home is still more affordable than rent for a similar home. But watching the neighbors bail out is difficult.

[MyLessThanPrimeBeef]

This is a nice quote from Christopher Ishwood (by way of Houses of Los Angeles, 1920-1935 - a cool book, got a picture of Josef von Sternberg's ship-like house designed by Neutra, in North Hollywood, before it was torn down by a developer for low-income housing.):

California is a tragic country - like Palestine, like every Promised Land, its short history is a fever chart of migrations - the land rush, the movie rush, the Okie fruit-picking rush, the wartime rush to the aircraft factories, followed, in each instance, by counter-migrations of the disappointed and unsuccessful, moving sorrowfully homeward.

[Chup, Bryan, TX]

Mike -- your ideas intrigue me.

Do you have a newsletter?

Seriously, that's a damn fine idea.

[Arti]

But who cares about Palmdale/Lancaster etc., there's almost no one from there reading this blog anyway. So it's $100k for a home there--whatever, the houses there were practically free even during the bubble. $100,000 in cash isn't even enough for a downpayment on a crappy two bedroom condo in West LA. Can we PLEASE cover West LA some day?

[dudeman1961]

Ah, back then it was Palmdale, Lancaster. Now ,it is Palmdale/Lancaster. The greed driven scum pols and developers and land barons have turned these quaint desert towns into a sprawl/hellhole driven by doofus' willing to drive 2 hours to L.A. to work. They're going down? All of them. GOOD!!

[No Hope]

Okay, I've had it. I did everything the mortgage company asked me to do. I faxed and refaxed and refaxed documents in order to get a loan modification. Nothing. I can't sell. I can't refi. i am upside down. Not only am I now paying an adjusting mortgage eating my paycheck that I had no intention of keeping, I now have to pay to bail out the very people who refuse to help me. I am walking. There is no hope.

[jks]

I lived in Lancaster right through the disastrous real estate wipeout of the 90s, and now the poor high-desert area is suffering through another wipeout so soon. This time gasoline is so expensive that commuting to LA will be a real losing proposition, so this bust will be even worse than the last.

[MJ]

I remember just a few years back when people were driving out to Palmdale on the weekend.....to stand in long lines lines...waiting for a number to enter a lottery just to have the opportunity to buy a 450-500k+ house in pre-construction in the newer communities out there. Sad.

[Nirad]

at those prices, the County of Los Angeles should consider buying them to move the homeless there. Having reliable housing would help people get back on their feet and it would save money in the long run.

[MojaveGurl]

Hi, I'm one of the two or three of us out here in the Antelope Valley who can read. I've lived here all my life. And I still have all my teeth. :)
The AV is always the last to rise and the first to fall. Entire blocks of houses in Lancaster were going for $5000 right after World War II. This is nothing new out here.
Please -- all you poor commuters who bought overpriced houses here in the Antelope Valley -- go back to the Shangri-La of LA. Make sure you take your wannabe-gangsta children that run loose all afternoon until you get home from work at 7 p.m.
Maybe the drop in home prices down below will encourage the real gangstas and all the crime they brought with them back to LA. At least the meth lab folks who will move into the empty houses try to maintain a low profile.
The upside of all this is that those of us who work at NASA Dryden, Edwards AFB, and even in Palmdale and Lancaster might be able to afford a nice house now. Ya know, an engineer's gotta live somewhere.
It doesn't matter where you live -- if you have a one-way two-hour commute you're nuts.