Tuesday, November 17, 2015

Latest Core Logic Numbers Show That Arcadia Real Estate Prices Are Still Plummeting, Sierra Madre Up

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McMansion lovers in Arcadia are often likely to loudly congratulate themselves for what they claim are the continuing significant increases in property values on the eastern side of the Peacock Curtain.

However, and contrary to the opinion above (which some still do happen to hold, and often in highly vociferous ways), it would appear that the greater the square footage of your house, the lower your real estate intelligence quotient. Or at least that is what appears to be going on down there.

So what is Core Logic telling us? Arcadia single family homes in its 91006 locations, and as of September 2015, are down a shocking -25.6% from September 2014 prices. Conversely, Sierra Madre 91024 "Single Family Homes" prices, as of September 2015, are up a stunning 27.8% from September 2014 prices.

Does anybody still believe that restricting McMansions in Sierra Madre will cause property values there to plummet? Or that building vanity castles in Arcadia will cause peacock prices to skyrocket? Only the misinformed and gullible, greedy developers, along with Arcadia Councilmen Roger Chandler and Sho Tay, appear to share in that opinion now.

The reality seems to be that community preservation, and not wholesale mansionization, is what is driving the real estate boom we can see today in Sierra Madre. And having quite the opposite effect in Arcadia.

Here are the screen shots:


Don't take my word for it, link here to get your data straight from the Core Logic horse's mouth.

Bonus coverage from Nov 5: McMansion Mad Arcadia Home Sales/Prices In A Tailspin (link)

Barry Gold writes to the Library Services Proposal Committee

Tonight is the latest incarnation in City Hall's many attempts to get utility taxes increased in Sierra Madre. They have already held the Police Department, Paramedics, Fire Department and Water Enterprise hostage, so tonight the city have little choice left but to nail the Library to the mast as well.

Barry Gold recently wrote the following letter to the members of the Library Services Proposal Committee, so I figured it would be best to post it here as well. This is what he had to say:


They won't be televising this one, either. If anybody happens to be there, please share what went down.

sierramadretattler.blogspot.com

49 comments:

  1. Showing how those numbers do not show what you want them to show is the fact on the same graph shows Sierra Madre condos prices dropped 37 % during the same time while Arcadia condos rose 29% which is also not the case .

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    1. The condo sales figure is based on the sales on 2 in each town. Not exactly a representative figure. The Arcadia drop of 25% is based on September sales of 24 single family homes. A far more representative figure. Since neither town is known for its large stock of condominiums, wouldn't this be the more important figure? This downward trend has been reported here before. Do you have any figures that contradict this?

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    2. Denial is a river in Egypt, 5:59.

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    3. Maybe Arcadia's prices are plummeting because potential investors are now fearful that if they can't build modern homes they'll be stuck with one of those crappy post-war McRanch turds.

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    4. Not an attractive description Shakespeare, but why are such houses going for more than ever before in Sierra Madre?

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    5. I wonder why the anti-Ranch poster keeps turning up....maybe being paid to?

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    6. Pretty unpleasant fellow if you ask me.

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    7. I suggest ice cream.

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    8. Sure, I'll take a hug. Just rinse your asbestos off first.

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    9. The Arcadia price drop is in direct correlation with Saving Arcadia / saving highlands campaign. Buyers are staying out not knowing what they will get into, if the saving Arcadia prop passes. No new permit has been approved for new homes in FY 2015 in the highlands. Some who bought before that are unable to build as their plans are blocked by this group.

      This is a short term problem but on the long run this will preserve the character of the city or whatever is left of it.

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    10. How do you explain the 25% price jump in Sierra Madre? Much of the Saving Arcadia initiative is very similar to what is already going on in Sierra Madre. Preservation boosts home prices. Mansionization kills value.

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    11. 2:52 doesn't know what they are talking about. The Saving Highlands organization hasn't succeeded yet in passing any of their measures. Let Arcadia pass some rules like Sierra Madre and then watch housing prices stabilize as homeowners can be secure in the knowledge that the dream home they bought with the nice views, natural light coming through the windows and backyard privacy can't be eviscerated by a demolition next door that replaces a 1-story 2500 square foot ranch with a 2-story 6,000 sq. ft McMansion.

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    12. >>>>>>The Arcadia price drop is in direct correlation with Saving Arcadia / saving highlands campaign. Buyers are staying out not knowing what they will get into, if the saving Arcadia prop passes. No new permit has been approved for new homes in FY 2015 in the highlands. Some who bought before that are unable to build as their plans are blocked by this group.<<<<<<

      Actually, the opposite. You would think that already built McMansions would command an even higher price for being more rare if the ballot passes - and therefore increase the percentage of the value of house in Arcadia - but guess what, even the McMansions aren't selling for the asking price. I've seen "reduce prices" on newly built McMansions quite a bit recently. McMansions just aren't selling as well anymore. Supply and demand, need to lower prices to sell these McMansions.

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  2. Its no surprise that eventually real estate values go down in development free-for-alls like Arcadia. Two things happen. One is simply supply and demand. As supply goes up, prices come down. So when you have the ability to tear down virtually every home in the city and build a McMansion, then there will be an increase in the number of McMansions which brings down the price. The second reason prices come down is that eventually the word gets out to Buyers that you may buy a great house in Arcadia with wonderful views, lots of natural light coming in and and complete privacy in your backyard. In fact, you will probably pay a premium for those kinds of features. The only problem is that it may not last. In other words, when there are no reasonable rules in place, you are always vulnerable to your neighbor next door perhaps selling their property to a developer or the neighbor themselves simply wanting to expand their home. The end result is that the 1-story ranch style house next door may get turned into a 2-story over-sized home the size of an aircraft carrier that is shoehorned into the lot next door to you. In the blink of an eye or I should say after a year of hammering and trucks and noise, you have lost your views, light and privacy. That kind of vulnerability and insecurity causes buyers not to want to pay a premium for features that may not last and possibly not want to live in such a community as Arcadia to begin with. Finally, as more existing owners seek to "cash out" or escape the carnage before it affects their home as well, they put their homes up for sale so that there is now a glut of homes on the market. It doesn't mean just more McMansions for sale which also lowers prices outlined in the first reason, but just the sheer inventory of homes for sale, brings down prices. All of these reasons eventually lead to decreases in value now seen in Arcadia. If you take each one of these points and flip them on their head, you will see why prices are rising in Sierra Madre and why preservation and maintaining the character of a neighborhood leads to higher prices.

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    1. Its all about the quality of life for the residents. Cities that manage to maintain that in the face of urban sprawl, will always maintain or increase the value of their real estate.

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    2. Arcadia is not a nice place to live in any more and the values are starting to reflect that. When the City is greedy and only focused on getting us much revenues into the city's coffers, the quality of life will erode and that's what is happening in Arcadia. There only hope is that the Save the Highlands group succeeds in their efforts. If they fail, Arcadia is lost and values will continue to go down.

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    3. 6:19 makes complete sense to me unless of course you're a developer and then alot of stupid things come out of your mouth to justify the continued quest for profits at the expense of the community. Developers usually don't live in the community they are exploiting, so they are gone once their project is over and the existing residents are stuck with the traffic, congestion and other pernicious consequences from their project.

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    4. Arcadia may be in the midst of a death spiral. Price going down, more people trying to get out before the prices hit bottom which further drives down the price, a corrupt City Council, greedy City Employees who are only focused in increasing revenues to fatten their salaries and pensions. Is it any wonder that Arcadia is losing its luster?

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    5. People are rushing to dump their homes before the Saving Arcadia ballot initiative gets passed, because if it gets passed, land prices will drop 15% overnight.

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    6. On the other hand, a successful repeal of the Arcadia UUT next April might makes prices go up since taxes will be lower.

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    7. 12:00 - similar restrictions were put in place in Sierra Madre and home values have gone through the roof. How would you explain that?

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    8. 12:00 pm has it exactly wrong. If they are rushing to dump their homes its because the neighbor's house next store may soon be demolished and replaced by a McMansion that is completely out of character for the neighborhood or it could be because the quality of life has gone down or it could be because of the corruption on the City Council and at City Hall. Its seems to be me that Save the Highlands is the least of anyone's worries here in Arcadia.

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  3. That just about explains it 6:19. Whether its the Bungalow Heaven district in Pasadena that has stringent development guidelines or the City of Sierra Madre itself that is very protective of existing owners and the character of neighborhoods, real estate values will increase in such areas and that's what the evidence shows. There are alot of cities where developers like Mur-Sol, the Groh family and the Bowdens have free reign. Buyers have lots of options in those kinds of cities and so prices are cheaper.

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    1. That makes no sense. You mean the housing stock increases in a mansionization situation? How is there more single family housing stock when you are building houses twice the size?

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    2. Let me educate you 6:35. When 100 McMansion are for sale rather than 10, the prices will be lower in cities that allow the 100 to be built because there is more competition. Its called supply and demand. Secondly, the size of the homes has nothing to do with the inventory. We are talking here about the number of homes that come up for sale. You seem to be saying the larger homes take up more than one lot and reduce the supply of existing houses in a community. No, bigger houses are shoe-horned into the smaller lots which has no effect on the existing housing stock. But again, I'm talking about more houses overall on the market for sale, because people want to get ouf of Dodge before their house gets adversely impacted by the developer's McMansion.

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    3. Why are so many McMansions sitting on the market unsold? 100 you say? Wow! It's hard to build things that don't sell in this part of the world.

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    4. Developers have been ruling Arcadia and neighboring communities for YEARS! And who is complicit in that? The local realtors, of couy. And in the case of Arcadia, you can add the corrupt city and their council. I wonder how many people really understand what has been happening in Arcadia. That is certainly not to suggest in any way that Arcadia residents aren't bright et to "get it". I am saying that the average person/family has many things going on in their lives, and cannot always make time to get involved. They leave the decision making to the individuals whom they trust and voted for. Born and raised there, my family has seen many changes over the years, some not to the benefit of the residents and homeowners. In many cases it is far too late to go back and repair that which cannot be repaired. As homeowners we must be vigilant and we must question the motives behind ALL decisions affecting our future. Get involved. Ask questions. Above all, question motives.

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    5. The core logic data shows these sales are for 24 'single family homes' in 91006. There is no detailed breakdown in the size of the home that was sold. It could be a new mansion or an older home. Regardless, the values have dropped from Sept 2014 to Sept 2015. I'm all against these large homes, but can someone put a graph on here that plots 'time on market' versus "median sale price" ? This would show if the price drop is really related to apparent increase in time on market value. Maybe someone could pull this from MLS quickly?

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    6. I'm ot sure what 6:35 is talking about. I don't see the connection between building oversized McMansions and the quantity of housing stock. It doesn't make any difference to the housing stock. Whether its one big home crammed on a lot or a smaller home on that same lot, there is no difference in the availability of housing stock. Now, the ability so split a lot that had one home on it and then has two homes on it is a different story.

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    7. Don't forget about Sunny Construction, Dexter Corporation, Tipping Development, BuildingWorx, El Dorado Homes

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  4. Wow! The Tattler's 11/14/2015 librarian article was picked up by CA Political Review.
    Here's another link to the article - please feel free to comment:
    https://www.facebook.com/NoOnUUT/

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    1. The Tattler's so hot right now.

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  5. That picture looks like the project proposed for the Monastery. What a disaster for the community if that were allowed to happen.

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  6. The traffic that the Monastery project would bring to the city in general and to the northwestern part of Sierra Madre would be a disaster. Somebody needs to drive a stake into that project.

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    1. A $20,000,000 silver stake will do the deed.

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  7. Great letter Mr. Gold. Thanks.

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  8. There are only so many people which can afford to but a 7 million dollar house and a fewer amount of people who could purchase the White House. I guest when Obama is force to move, the Obamas will have to rent, maybe with the help of section 8 if it is still around?

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    1. 8:20, your writing skills are an appropriate match for your thinking.

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    2. Lame. Totally lame.

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  9. Could someone please provide a 10 yr spreadsheet on these cities. A 1 snapshot may not give the full picture, for any of these cities. I would imagine a 10 yr trend would be good for everyone to see in all the cities. Too many potential variables with this report. "I can bend statistics to prove whatever I want".............Another side of this discussion......http://assessor.lacounty.gov/wp-content/uploads/2015/09/2015_annual_report.pdf.....http://www.dailynews.com/government-and-politics/20150921/palmdale-among-cities-that-grew-fastest-la-county-assessor-reports...........

    Just food for thought

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  10. We are joining several of our friends who have left Arcadia for surrounding cities with no regrets at all. Arcadia is no longer the premier city it once was. The "City of Homes" is now the "City of Empty Homes". "Tree City USA" is now "Sacrifice Centuries-old Oak Trees For Ever-Increasing Square Footage USA". There's no sense of neighborhood when several homes on each street have absentee owners, or when owners persist in building massive homes despite the objections of neighbors. When your ARB votes against the wishes of residents in favor of developers, and when you're accused--as the Saving Arcadia group was at the city meeting held 11/10 at FMS--of being racist if you oppose the magnitude and bulk of the new homes, then it's time to go somewhere like Sierra Madre where the things you value are preserved. We've lived in Arcadia since 1963, but can't wait to leave. . Arcadia is circling the drain.

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  11. Assessor's report is based on "assessed values" not "sales prices" and includes commercial properties which has also had a big explosion in Arcadia. No one is bending the statistics except the realtors and the developers. Look at the amount of development fees the city collected last year. The realtors and developers will tell you that development has caused an increase of 75% in development fees collected last year. That's approximately $3.5 million. But look at the numbers closer and $1 million alone is attributable to the Goldline. The developers and realtors will tell you that it's residential development that is funding the schools in Arcadia. Sure, there are huge development fees that go to AUSD, but what they neglect to tell you is that school districts have a per student cap and AUSD has to give the money collected over the cap to the State which then spreads the money to lower income school districts. And that if we don't reach our per student cap, the State would fund the difference. Residential development doesn't make Arcadia great. Residents make Arcadia great.

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  12. Was there a meeting tonight at city hall about the Library ?

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  13. The Library Committee will recommend to the city council not to outsource but instead to implement Level II cost savings.

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  14. Very compelling and inspirational. Thank you, Tattler.

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  15. What nobody is talking about is that home prices in Arcadia were grossly over-inflated in 2014. From talking to a local builder, mainland Chinese investors were buying up anything they could in the US, not caring if they overpaid, just to get money out of China quickly. Now that the Chinese government has tightened restrictions on the outward flow of money, spec builders no longer have a sure profit. Chinese families have been coming to Arcadia for years to enjoy the quality schools, but now even many of them are priced out by developers and investors playing ping pong with properties. I know most have no issue with families coming to live and participate in the community, but in recent years, the mansions aren't even used as "single family residences" anymore. Estimates are that 10-20% of homes in Arcadia sit vacant, primarily mansions, while others are used as boarding homes, and some used as businesses. High vacancy rates combined with high inventory is bad for home prices and the community in general. Such grossly oversized homes makes them difficult to even be used as single family residences. For example, the 17,000 square foot house on Longden, advertised as having an indoor pool and 32 internet/TV jacks; that's a hotel not a home. Prices will likely continue to stabilize as we shift from reckless investors paying top dollar for a house they likely will never live in, to actual families who want to fix up and live here. In the long run, the ballot measure will lead to much more practical development and higher home prices. For those that think Arcadia is the only city affected by this, think again. Recently, development has picked up rapidly in neighboring cities, and investors are even buying up properties in Upland/Rancho Cucamonga. Let's keep up the fight and hopefully Arcadia will be a poster child for something good again.

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