Unreal estate

The media is finally figuring out what has been all too apparent here Where The Ghetto Meets The Sea in recent months: the red-hot housing market that was goading people into buying more than they could afford and taking out huge "equity" loans, is beginning to slide into the tank.

This cunning little vacant lot with an ocean view was offered for sale at $866,000 more than six motnths ago. No guarantee of buildability is offered, since it would cost the new owner hundreds of thousands of dollars to shore up the crumbling lot and build a very expensive foundation (after getting Coastal Commission approval, which can take years). It has been reduced to $799K and, as far as I know, hasn't had any offers or even enquiries...


From fence to fence, it is barely up to the city's 1500 sq. ft. mininum area. Not all of that is usable land.

When I moved here five years ago, still being seduced by some promises made to me by a client (they didn't pan out), I looked at a few pads for sale in the neighborhood. At the time, houses were selling in days, weeks at most, and generally for more than the asking price; now, they are sitting for months, and prices are falling inexorably.

The number of foreclosures in Southern Californis have risen by more than 45% since April. Interest rates are rising. "Interest-only," minimum-payment and other trick loans are starting to explode in peoples' faces.

It's all a zero-sum game. When someone wins, someone else loses.

Strange, but I don't feel at all sorry for the people who got caught up in the system. Hard to weep for the greedy.

But I must admit that, even if the prices were to drop 50% here -- most unlikely -- I won't be buying a house here. Even with an ocean view, it's just not worth it.