Housing upheaval: a tale of two homes
At the moment, most lenders are raising the bar for new loans as they continue reeling from the meltdown of the sub-prime mortgage market.
On the other side of the housing divide is Effie Micheals, 45, who placed her three-bedroom, three-bath South Pasadena condo on the market last August for $750,000. Great neighborhood, great school district. She figured she'd get top dollar.
And why not? The Southern California property market had been minting money for years. Buy a home, sit back and let the dollars pour in. It was as close as you could get to a sure thing.
Kind of like buying tech stocks in the late 1990s. But the thing about bubbles is, they have a habit of popping.
A few months after Micheals' condo was listed, it was reduced in price to $725,000. When that didn't work, it was knocked down again several weeks ago to $679,000.
Micheals bought the nearly 1,700-square-foot condo for $675,000 in 2005. She saw it as a steppingstone to another home in the vicinity, and planned to use the cash from its appreciated value to buy something even nicer.
"There was no way I thought I'd ever let my home go for less than $800,000," Micheals said. "Everyone wants to live in South Pasadena."
Now she figures she'll take a loss once all the fees are taken into account when the condo's sold at its current bargain-basement price -- if it's sold, that is.
"It's very disheartening," Micheals said. "I'm very upset."
On Monday, the California Assn. of Realtors reported that home sales statewide fell about 30% in January from a year earlier and that the median price of an existing home was down 22%.
If things get any worse, I may have to introduce Porcupile to Micheals. They have a lot in common.
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