A house in the hills for $400K? Foreclosure and opportunity in Highland Park

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Last week I published the the stories of three recent home-buyers, and one of them was brave enough (masochistic enough?) to offer a more detailed account of her decision to ignore the comments on this blog and buy a house. Milla Goldenberg, who writes the blog Milla Times, on finding a home in L.A. for $400,000:

‘Originally, I looked at Silver Lake but the fixers there were selling in the fives, so I moved my target east to Highland Park, where prices seemed more manageable.

‘I drove around the neighborhood every weekend for about a month, even at night, to get the lay of the land. I had a friend who bought there a few years back, and I was always impressed that her street housed a Buddhist temple, a Baptist church and a Jewish synagogue, and was one block from the Gold Line. Sure, I noticed the graffiti and homeys with tattoos on their necks, but I saw plenty of that all over the city and wasn’t particularly afraid of mingling with the working class. Tons of cool bars, boutiques, coffee shops and galleries peppered York and Figueroa, and the hillside houses remained shockingly affordable. I also noticed that the area’s first Starbucks was being built and figured that if I got in after the first Starbucks but before the first yoga studio, I would be set.

‘The landscape was filled with foreclosures, many of which were trashed by their previous owners. I passed on all these dumps and held out hope that I could find something more to my liking. I did, in fact, find many houses to my liking and thought I could score them easily at a bargain price. But something odd would always happen: I was outbid.

‘Months of reading L.A. Land convinced me there were no other buyers out there, so I was shocked to discover that I had competition.’

‘Granted, it was nothing like the competition during peak, but I quickly realized I was up against other first-timers like me looking to score a deal. And we were looking at the same houses — the good houses — because the good houses, when priced right, were moving, and still relatively quickly. Many times, I saw a seemingly good house appear on the MLS for just a few days before being snatched up.

‘After about two months of looking, I found my good house: a foreclosed property in the hills on the Highland Park-Eagle Rock border, a 3/1 on a 5,300 sq ft lot, detached garage, partially built basement, 1,000 sq ft inside, a sizable deck and amazing view into the valley below. The house had been on the market for a week before I made my bid. Price tag was $449,000. I checked the comps for the block, which were mostly in the fives. I checked the public records on the house and found out it had been occupied by the same family for 10 years, who refinanced twice during the boom, pulling out about $540K. They were in foreclosure a year later.

‘I negotiated a purchase price of $410K, so I went over budget a bit, but not in a way that wrecked me financially. I understand how the naysayers and doomsdayers can cry from their armchairs that the sky is falling, but as someone who actually went out there, I know things aren’t as dire as people think — unless, of course, you’re a speculator only concerned about your bottom line, which I am not. I also understand how a pack mentality and the bottomless echo chamber of the Internet can cause people to resist the idea that now really is a good time to buy. But it is a good time to buy.

‘I do know that prices have already fallen 20% from their peak and I thank my lucky stars that I didn’t buy at peak. Did I buy at trough? Probably not, but that’s not my primary concern, because when we put market timing aside, owning a home is always a good thing. So I’m not worried about short-term depreciation. I found a great house in the hills that I know will sell when the time comes. I have a roof over my head, a big yard for my dogs to play in, a tax shelter that will keep me smiling at tax time, more space and storage than I’ve ever had in any apartment, no landlord to bother me and a killer view that soothes me after a long day. I couldn’t be happier with my purchase. I have no regrets now and I’ll bet you my house that I won’t have any in the future.’

Thanks, Milla.
Comments? Thoughts? Be respectful, please. E-mail story tips to peter.viles@latimes.com