Housing upheaval: a tale of two homes

Porcupile is thinking that the price of his house could be as much as 50% below what it was worth when he moved in. Even so, he'd still have to cut a doable deal with a lender.

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.

But Porcupile knows that his steady government paycheck should count for something if he decides to take the plunge.

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.

Consumer Confidential runs Wednesdays and Sundays. Send your tips or feedback to david.lazarus@latimes.com.

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