Saturday, October 29, 2005

Watts Up With The New York Times?

A New York Sunday Times Real Estate Section article on the housing boom in Watts suggests a 1300 foot house sells for between 300,000 and 400,000. It also states that homes top out at around 400,000 in Watts. The article then states, quoting a real estate agent:

High crime rates, declining school systems and, until recently, lower property values have motivated people to move out. Ms. Arnold said places like Marina County, Bakersfield, Ontario and Riverside, all an hour or two from the city, are luring people away with houses twice the size for half the money.

So... that means that a 2600 foot home in Bakersfield, Ontario or Riverside would sell for between 150,000 and 200,000.

Uh - really?

Well, according to Coldwell Banker, in 2005 the average 2200 foot home (and not... 2600') in Bakersfield sold for... $407,000 and in the Riverside/Ontario area for $459,000.

See below link for my statistics.

And even if CB's criteria in this survey is a somewhat different than the mean or the average price of those communities (it appears to be weighted towards more upscale neighborhoods) - it is still clear those cities are not a lot cheaper than Watts, much less twice the house for half-the-price cheaper.

For example, even counting all sales at all square footages, the cheapest of the three areas is Bakersfield - and even there the average sales price in all areas is just under $300,000, far above the $150,000 to $200,000 range. And average-sized house in Bakersfield is a hell of a lot smaller than 2600 feet.

But what really puzzles me is - what low cost city called - Marina County - is located within a two hour drive of Los Angeles?

Since I assume the writer or the editor double checked any figures they were given before printing them, the NYT appears to be looking at summer 2005 figures for Watts and then the 1990's figures found in the 2000 census for the other areas. But even then, those figures would not back-up the premise.

The other possible reason for the disconnect is that some web sites show an city's average assessed value. And since any home which has not sold for many years will be still assessed at its long ago value in California, and since it takes time for properties to be reasessed even after selling, those numbers have no relation to what current values are.

But as for the comparative sales prices in.... Marina Valley - well, I'm still looking for it...


Just realized writer likely meant Moreno Valley!

And, yes, that rather remote area (east of March Air Force base) does have many people coming from the inner city areas of LA looking for affordable newer housing. But the average sales price is still in the $350,000 range; cheaper per square foot when it comes to the smallest Watts houses - due to the high land values in LA - but more comparable in the per square foot prices when it comes to larger houses in Watts.

Still, nothing remotely near the twice-the-house-at-half-the-price scenario.

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