Monday, October 5, 2015

Preservation Vs. Mansionization II: Arcadia Real Estate Prices Are Tanking

Repetitive Council Comment Syndrome Sufferer
One of the big dumb myths being peddled by those opposed to a voter measure designed to curtail mansionization in Arcadia is that real estate prices there continue to rise, and that this is something enriching many of the residents there. And should big bumpin' starter castles somehow be prevented from being built, nice retired people and their patient though perhaps less provident progeny would somehow be denied the right to the enjoyment of handsome profits on the family home when they decide to sell the joint to some predatory McMansion developer and move someplace else. Hopefully as far away as humanly possible.

While this might have been true at one point, it now appears that is no longer the case. With the reason quite possibly being that buyers no longer see much value in paying premium prices to live in a community choked with mausoleum looking monuments to nouveau riche gaucherie known as McMansions. Even in a place oxymoronically known as the "Beverly Hills of the San Gabriel Valley." Kardashian-style bloated excess and all.

While there could be other contributory factors (the collapsing economy of the Peoples Republic of China comes to mind), the "Preservation Versus Mansionization" dichotomy that we discussed yesterday is certainly playing an important role.

But don't tell the Arcadia "size matters" crowd that.

The following interesting though poorly informed document comes from a handout that was passed around at a Councilmember Sho "Way" Tay sponsored McMansion outreach event that went down recently.


Nicely written and all I suppose, but is it actually true? The available data would tell us that no, it isn't. At least not when you are talking about the resale value of homes both behind the Peacock Veil and in Sierra Madre. And isn't that what people really care about?

There are currently 250 homes for sale in Arcadia, including condos and townhouses. This is around double the normal inventory of homes for sale considered normal in a market of this size, and at any given time. It almost seems like everyone wants to get out of Arcadia at the same time, causing the real estate market there to dissipate rapidly.

Things are now approaching the panic level. People seem to want to get out of there while the getting is good, and prices are now falling fast.

Price reductions have become the new norm for getting a home sold in Arcadia. All while folks in the surrounding communities often experience price bumping multiple offers on their homes from competing hopeful buyers. It is interesting to note why so many existing home owners now want out of Arcadia, which has pushed up the inventory of homes on the market to historic double the normal inventory levels.

Could Johnny GemCoin’s bizarre and embarrassing antics, along with those other two City Council members (Jolly Roger and Way Tay, gents who have obviously sold their teensy souls to development interests), be the straws that broke the camel's back for long time Arcadia home owners? Residents who have now had enough of this city and its corruption and want to get out? Now? Before the next McMansion goes up next door to their single level ranch house?

Is Arcadia really that desirable a place to live anymore? Is it still worth the money?

There are currently 44 brand new homes for sale in the city of Arcadia, each with an average of 123 days on the market. After over 4 months of market time the average brand new (McMansion) home still sits empty and unsold.

The average asking price for these unsold homes, which average 5 bedrooms, 6 baths (paging Dr. Freud) and over 5,000 SQFt., is $3,033,331. Some are much more. 123 on average days on the market (and still unsold) seems to be a long time to sell a home that is supposedly what all of those purported new Arcadia homebuyers are clambering to buy.

As of today, the average time for Arcadia homes of any year (new and older homes) to find a buyer and open escrow is a full 3 months. And the current pending sales of all Arcadia homes now takes 3 months just to find the buyer, not 3 months to close the deal. That takes even longer. Add 30 to 45 days more to finally close and transfer such properties to a new owner.

Compare this to the Sierra Madre average of under 2 months on the market to find a buyer and open escrow. This really is quite a contrast.

This first graphic is the current Zillow data showing the median home sale price in Arcadia over the last several years. In Mid Year 2014 the median Arcadia home sale price was around $1,200,000. Today, and again according to Zillow, the median home sale price there has tumbled to $938,000. A stunning 22% decrease in value for all Arcadia homes.

Here is that Arcadia chart. This is a median chart, and was available on October 3rd.


For an easy contrast, here is the Zillow home value chart for Sierra Madre that we posted yesterday. This is a regular chart, and not a median one. As you can see it is conceivable that, should current trends hold, Sierra Madre home prices could overtake those of Arcadia in the not that distant future. Something that many would have believed inconceivable just a short year or two ago.


Preservation Vs. Mansionization. Think about it. It is a term that should be on the minds of everyone these days.

We'll wrap this up with one more mighty burst of data. What you will see next is homes sold that were built in the years 1900 to 2010. No brand new homes are included in this data. Just existing homes that current homeowners have sold. Not contractor/builder or developer homes built recently with only a profit motive in mind.

The current year 2015 data sheet shows that existing homeowners got an average of $1,554,448 for their homes. We're talking about homes sold between 1/01/15 and 10/04/2015. This represents a stunning $161,309 reduction in Arcadia's existing home values.

Here is the 2014 data.


And here is the 2015 data.


Any questions?

sierramadretattler.blogspot.com

69 comments:

  1. Arcadia Real Estate AgentOctober 5, 2015 at 6:28 AM

    Ouch! That's gonna leave a mark.

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  2. How many Sierra Madre residents are glad they moved out of Arcadia?
    Former 30 year residents of Arcadia,John and Diane Shear sure are!

    ReplyDelete
    Replies
    1. Arcadia's loss was our gain. Thank you John and Diane for all that you do!

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  3. If I lived in a 1-story ranch-style home in developer free-for-all Arcadia, I wouldn't be able to sleep at night. Everything I've enjoyed for the last say 30 years - the views, the light coming through the windows, the privacy in my backyard, even the value of my home - could be gone in an instant if the house next door gets torn down and replaced by a home the size of an aircraft carrier. Who wants that kind of insecurity any more. You paid a high price for your home because it had certain appealing attributes and all that could be gone when the Groh's of Mur-Sol build one of their McMansions next door. There's no protections at all in Arcadia from this. That's why people are leaving Arcadia in droves. Add to that the corruption, the focus on revenues, people like Steve Chen wearing sunglasses and threatening to kill people, the former 3-term Mayor John Wuo involved as well as others - or course people want to leave. Its not exactly turning into a family friendly community any more.

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  4. Arcadia is no longer a community. Its just a place to park some "dirty" money that someone managed to get out of China and its a hot bed for developers who want to tear everything down to appeal to those new buyers. No sense of community any more and it will only get worse. You have a majority of corrupt politicians running the City Council, City employees who don't live in the city but love all the money coming into the coffers and people coming in who want to tear everything down. The merger of all three cannot be sustained. Unless Arcadia rapidly changes direction, property values will completely collapse - maybe as fast as GemCoins' sudden collapse.

    ReplyDelete
    Replies
    1. I realized that Arcadia wasn't a community a few years ago.

      An Asian-born friend of mine, who moved to Arcadia for the schools, told me that as soon as the kids graduated she was selling and moving back to West Covina. Wow.

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  5. Send the word back to China. Don't invest in Arcadia. Its become a risk you don't want to take.

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  6. Great statistics Tattler. Arcadia real estate is collapsing and it will only get worse as the FBI continues their investigation in to GemCoins. It appears that there will be many more shoes to drop with that story.

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  7. i think all of this is a bunch of crap

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    Replies
    1. Denial. It is not just a river in Egypt.

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  8. Has the phony real estate bubble burst in Arcadia, Ca. yet? Must have been propped up by all those GemCoins along with their swindling investment team back in Communist China.

    ReplyDelete
    Replies
    1. GemCoins backed by amber mine.

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    2. No. A guano mine.

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    3. Speaking of guano, here is what the Arcadia Best blog's chief big dome Scott Hettrick has to say about John Wuo and GemCoins:

      "Some investors who feel they have been victimized by this business have voiced their concerns at recent City Council meetings. Some of those investors have said current City Council Member and 2014-15 Arcadia Mayor John Wuo should be held accountable as well because he has been photographed at USFIA/Gemcoins promotional events which have been used in marketing materials. But investigations by city and federal officials have not resulted in any citing of Wuo for any wrongdoing."

      Earth to Scott: Nobody has been cited yet. Even those "visited" by the FBI and SEC. A list that includes John Wuo.

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    4. Hettrick is just singing for his supper.

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    5. Here's a gem of a pitch from a currency site:

      http://community.xe.com/forum/business/new-investment-gemcoin-extraordinary

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    6. This pitch DOES contain a small grain of truth, which I was astonished to see. AB 129 is allowing "alternate currencies" to exist in California. "California’s action stands in sharp contrast to the rest of the nation." So this is the start of a lot of craziness?

      https://www.cryptocoinsnews.com/ab-129-california-legally-approves-use-bitcoin/

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    7. The Feds are going to track all of the GemCoin moneys. Any McMansions built with funds raised through Chen's ponzi scheme will be seized and the money allocated to the victims.

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    8. I'm wondering if this is going to turn into a state's rights issue vs. the Feds because of the AB 129 and now other legislation allowing this and setting up a structure for alternate currencies to exist? The GemCoin scam could be used as leverage to take down what California is doing outside of Federal purview?

      https://www.cryptocoinsnews.com/california-moves-ahead-burdensome-virtual-currency-license/

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  9. Real estate in Arcadia is like a ponzi scheme. Only the early players got paid.

    ReplyDelete
    Replies
    1. Here's how the brokers/agents are still peddling Arcadia with "infomercials" containing endless hype. This one, BeSmartee, is owned by Tim Nguyen - CEO & President, Veronica Nguyen - Vice President, and Arvin Sahakian - Vice President.

      "The City of Arcadia is a microcosm of what's happening all over California because of the flood of Chinese money into the real estate market. Owners are putting their homes on the market and asking $2 million to $3 million for 17,000 square foot lots. They're having no trouble finding buyers. The economic boom helped the city build a $20 million high school for performing arts. The local Mercedes-Benz dealership has expanded. One Arcadian's home was valued at $1.2 million, and a real estate developer offered him $1.5 million."

      https://www.besmartee.com/blog/chinese-real-estate-buyers-in-california

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    2. I can't imagine any organization with less credibility with homeowners than the Arcadia Assoc of Realtors. Everyone knows they only see Arcadia as a money source. They could care less what happens to it. Plus they backed John Wuo's last run for office. No word if that campaign was funded with GemCoins. Backed by a guano mine.

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  10. I hate to change the subject, especially one as hot as this, but, Sierra Madre has a very important meeting tonight at City Hall. The local rag has this event on the front page so I thought it may not be seen by many of us. At 6 pm in the City Council Chambers is the time to voice your opinion on weather we as a city want to keep our local police or change to the Sheriff's Department. When our local police have sued the city and continue to cost us more money it is time for the community to be heard. We all know residents do not want to be seen speaking out against the local authorities in a small town like ours, but, if you are not happy with the costs, actions and the way we are treated, now is the time to speak up for what you want. This is also a great opportunity for our officers to work on a bigger department with a lot less chance of going bankrupt and more chances for promoting. A town as small as SM just cant afford our own department with the backing and respect that the SD brings to the table. When our PD has a difficult situation they always call on other departments for help, most of the time it is the Sheriffs who they call, are we paying for those special services anyway or is it free. There are a lot of questions to be answered, do you have the will to ask them or be seen listening to the answers? Sierra Madre does have some good officers, officers that deserve a chance to work on a department with more opportunities. Do we want new officers that we are always training or do we want experienced officers who would love to work in our town. This is a great opportunity for our city if City Hall handles it right, we shall see.

    ReplyDelete
    Replies
    1. I am not comfortable with publicly stating my support for utilizing the Sheriff's Department at this meeting.

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  11. Does anyone know where the hidden spy camera is in Sierra Madre? I heard we have one in our city.

    ReplyDelete
    Replies
    1. Bailey canyon paring lot

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    2. I think there are 2 police cams, one in Baliley Canyon and one on One Carter, but that doesn't count because you can see them both.

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    3. Do we pay someone to sit in front of a monitor and watch Bailey Canyon?

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  12. The committee is advising CC to keep the PD. Some of them were backed by the PD financially. Go to the meeting and listen to the garbage these people spew. Check out how much of the city budget goes to the PD.

    ReplyDelete
    Replies
    1. The municipal employee unions run City Hall. They also have control over Harabedian, Goose and Capoccia the Tax Man. It is what corruption looks like. The only way to beat these people is to take away tgeir UUT money. Period.

      Delete
  13. This comment has been removed by a blog administrator.

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  14. Sierra Madre property values could soon surpass those of Arcadia? Omigod! Are we living in the end times? Better hide all the sharp objects in Peacock Town!

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  15. the deck is stacked against the Sheriff's Dept. shows that we are not as smart as La Canada!

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    Replies
    1. The dirty secret is Sierra Madre's cop union vehemently opposes bringing in the Sheriffs because half of our PD is either too physically unfit or intellectually deficient to make the cut with the far more rigorous LASD. They'd have to be let go.

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    2. Yes, I've noticed that LCF seems to be smarter than all the other cities around here. We're the dummies getting ripped by the public unions. They incorporated later to create a school district, and opted out of a PD and also let the County keep the library. (The residents set up their own Friends of the Library to provide additional support from the community)

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    3. My two cents on this:
      The POA, Harabedian, Goss & Capoccia are afraid to do a full study and confirm that it'll save money. To avoid that, one just keeps saying how bad LASD will be and continue to scare the crap out of people.

      Also, when will the contracting out study be done for the paramedics? Every Sierra Madre property owner pays LA County a tax to provide paramedics. SM's current paramedics are NOT volunteers or residents. They're all paid. Let's get to it!

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    4. Yeah, paramedics are paid a whopping minimum wage so let's get rid of them and bring back the EMTs

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    5. Everything should be on the table. Instead all we are getting is a phony process.

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    6. 11:16 that minimum wage "fact" is a bunch of crap. Look at the City Wage scales AND the CalPERS retirement that's included for full timers.

      If you can't handle the truth, go get some ice cream. Somewhere else.

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    7. Mother Moo can take care of your pain, 11:16. That is why they call her Mother. She is a Goddess of caring.

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    8. 1:48 Oh please insults don't belong in a discussion, it only shows your ignorance.

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    9. There is a lot of truth to what 1:48 has to say. Personally I think we should get rid of the UUT altogether and then have all city employees reapply for their jobs at much lower wages and benefits. There isn't a single one of them that deserve to make more than the average Sierra Madre taxpayer.

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    10. you are a communist.

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    11. Let's see, we bring n LASD and reduce HR, Work Comp and pension costs? Why would we do that? Duh.

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  16. It is sad that McMansions are dragging down home values in Arcadia. Why do the people there stand for it?

    ReplyDelete
    Replies
    1. well, someone must be wanting to sell their fake ranch house for a reason..

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  17. Your blog is interesting because you cover a lot of local news, but you would have a lot more credibility if you reported facts accurately without trying to push your own personal agendas.

    ReplyDelete
    Replies
    1. Would you prefer me to push your agendas?

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    2. This is a blog not a news service I for one must say it represents the views of the "blogger" amongst others of his choice.He does a good job of presenting opposing views tho...........

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    3. Isn't that why somebody does a blog? To express a viewpoint?

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    4. 12:37, go away.
      Find a blog you like.

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    5. Maybe the Mod can sell days. You tell him what viewpoint you want represented and on what day, and he'll write a post for you. $2,500 a post would be about right.

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    6. I am 12:37p. I don't have any agendas because I live in San Marino and our real estate market is doing just fine. I just came to this site to read about the gossip about Gemcoins and Mayor Wuo. But when you say retarded stuff like Arcadia is tanking and that Sierra Madre is surging, you are just making you and your blog look bad. The average resident in the cities you talk about is rich and educated, and they will not fall for your sensationalist baloney.

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    7. So you disagree with the data taken from Zillow and actual 2014-2-15 home sales in these two markets? Have you actually analyzed the numbers and found some fault with them? Can you share your findings with us?

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    8. 3:08's agenda is to sneer at Sierra Madre.

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    9. I live in Beverly Hills and have a ceement pond.Hunting is not good as Sierra Madre but the women folk are friendly.

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    10. I've seen the Housewives of Beverly Hills on TV. Those women are weird.

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  18. Correlation is not causation. Statistics do not happen in a bubble. You can make any case you want when you cherry pick into. I could say that because Sierra madre's water and sewer fees are so high, our property values remain high. But then I would have to kick my own ass for saying something so stupid.

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  19. 11:16 is right about the paramedics, they get minimum wage and they are part time. There is a full time paramedic that teaches and schedules for the 24 hr. shift, he gets full benefits the rest are part time earning $11 and change. 1:48, you really need to understand how city hall will put a little twist on things to show costs the way they want, think about it, paramedics performing life saving services at minimum wage salaries, that's what the city thinks of our safety.

    ReplyDelete
    Replies
    1. Well you sure do sound like a union hack, don't you?

      Work as a Paramedic for SM, then get hired to a big time FD and you get the CalPERS Platinum Pension. Give it a freaking rest.

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    2. No union Rep here. The paramedics who work here all have full time jobs and work here BECAUSE it is Sierra Madre and they love their work. As I said before if you think we should not have paramedics, then come to the meetings and tell them you want our emt's back.

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  20. If Arcadia is so prosperous with property taxes from McMansions, then why was it necessary to vote and issue a new bond for school construction projects and why is it necessary to continue the UUT and even increase it? Why is Arcadia planning to raise water rates? It just doesn't add up. You see, the real increase in revenue is from home sales that were previously limited by Prop 13. Now with re-assessment, the tax bill can be 5 to 10 times higher. On top of that, a new McMansion may add add another 2-fold increase. But the majority benefit comes from selling, at any current price, and reaping the benefit of reassessment after 20 yrs.

    Here's the take home message in case you missed it:
    Preservation and a normal and healthy selling market leads to a huge increase in property tax to the city, with or without mansionization. Preserving the (assessable) value of neighborhoods is entirely consistent with increasing property taxes to the city that will last for generations. And it comes without the blight and bubbles of speculative mansion building.

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    Replies
    1. flimsy argument 5:17, sorry

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  21. Arcadia. Community of Homes ?

    Sho Tay's letter makes me see green. We should be selling condos and time shares, cutting lots in half and quarters, bulldozing every oak tree and building to the absolute limits of the code and all the variance we can grab on top, Absolutely everything we can do to make money. Forget about quality of life, peace, views, neighbors, kids playing in the yard. Life is all about money and none of us should waste a single second thinking about anything besides money.

    Don't kiss your spouse, don't throw a ball with your kids, don't pet your dog because it's all a waste of time and it's costing you thousands and thousands. Your house is an investment and if you think otherwise you're an idiot. Work to live? You're an idiot. Work to increase your pile of loot and don't do one damn thing else. Or you're an idiot.

    And if you won't sell to an all cash offer, we'll cite manifest destiny so others can make money off you. You idiot.

    Arcadia. City of Lost Souls !

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  22. The two graphs in this article are comparing two different things. It is comparing Arcadia's Median Sales Prices to Sierra Madre's Zillow Home Value Index, which is based on the Zillow Zestimate Price. The Zestimate Price is calculated from public and user-submitted data, taking into account special features, location, and market conditions.

    For a more accurate comparison, one must compare Arcadias Median Sales Price with Sierra Madres Median Sales Price, OR Arcadias Zillow Zestimate Price with Sierra Madres Zillow Zestimate Price.

    If anyone is interested in the actual comparison here is the Zillow Home Value Index Price and Median Sales Price for Arcadia and Sierra Madre:

    Zillow Home Value Index Price checked on Zillow.com on 10/06/2015:

    Arcadia = $1,090,000 Current
    Sierra Madre = $869,000 Current

    Zillow Median Sales Price check on Zillow.com on 10/06/2015:

    Arcadia = $938,000 Current
    Sierra Madre = $821,000 Current

    Here is the link to Zillow Home Prices and Values for everyone to use for themselves: http://www.zillow.com/home-values/



    ReplyDelete
    Replies
    1. Thanks. Still shows Arcadia heading south while Sierra Madre prices are on the rise.

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    2. You're welcom, but check again. As of August 31, 2015 Zillow.com Median Sales Price of homes for Sierra Madre's and Arcadias prices show they are both in decline. It's your blog though, you can make it look however you want to the reader. Cheers.

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  23. http://www.bloomberg.com/news/articles/2015-10-06/in-north-america-s-costliest-city-rich-chinese-face-backlash

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  24. Just stumbled upon this. 56 year resident of Arcadia in various areas currently in the village. This article and the comments read like something from the John Birch Society. Lol. Yes the area has changed, yes the developers have overrun it largely, but the times have just also changed like anywhere in Southern California. Sad but true. And the ARB's in the 5 or 6 neighborhoods of Arcadia are our last line of defense and do a very good job in the Village area of preserving the overall feel of the community. Those in the non-ARB areas are regrettably toast.......so take off your white hoods everyone and support your local ARB.

    ReplyDelete