Downtown--I'm Baack!

So what's downtown Los Angeles going to be five years from now, ten years from now? Will it be a 24-hour center? Will it seem Manhattanized in places? I don't know.

I don't know if downtown Los Angeles can become the next great downtown success story, the next mega mecca. Maybe the Gehry Grand Ave project will happen, maybe it won't. Maybe the downtown living trend will peter out, exhausted by a phalanx of re-use projects and unendearing start-ups, high wire financial acts, and indifferent market response. Maybe it won't.

The thing I'm convinced of: it will be different. Different than the grand--not Grand--plans? Probably. Different from what it is now? Unequivocally. There will be more people living downtown for starters. There will be more services as well.

If you build it they will come? Yeah pretty much. "At what price will they cease coming?" Now that's the question. Selling housing in California ain't exactly like selling 3-D glasses to the blind. For the right price you could sell igloos on an expressway.

Adam's Ten Cents

The big money downtown real estate people are close, they've got a good feel for the hustle, for the zeitgeist, canny strategies abound. Here's my ten cents (it used to be "two" cents, but then you know...): put in a charter school and bank roll the heck out of it. Make that your centerpiece, photograph the computer labs, the indoor rec facilities, the cultural-rich field trips. Then you're selling to everybody, not just athlete playboys and furniture designers. Everybody.

The Story of West Adams Heights

Let's start in the 1860s. As you may dimly remember from your high school U.S. history class, the U.S. Congress exploited the absence of their Southern colleagues during the Civil War (aka the War Between the States or even the War of Northern Aggression, depending on your orientation and/or ideology) to push through a whole slate of land legislation designed to hasten western settlement. Chief among these laws was the 1863 Homestead Act which offered a free "1/4 section" (160 acres) to "pioneers" willing to farm and otherwise "improve" the land over a period of 5 years.

Summarily, the West Adams Heights tract (or "Adams Street Homestead Tract No. 2", as it was first known) was homesteaded in 1868 by one Mary Hall. Mary's brother, Charles Victor Hall, was a student who had worked on survey efforts in the area. Charles was a claim-layer as well, opportunistically snapping up a 1/4 section (160 acres) to the south. (I'll detail the C.V. Hall tract in another post.)

Located smack in the middle of the public lands nestled between the pueblo lands surrounding the Plaza and owned by the City of L.A. (which sold off its holdings after statehood in 1850) and the Avila family's Rancho Las Cienegas, Mary Hall's land had most recently been used for cattle grazing. The city though was slowly developing an appetite for residential land (population doubled after 1890, reaching 100,000 in 1900); and, by 1893, school-teacher Hall (now married to military veteran and surveyor William Moore), subdivided her land for "exclusive home sites."

An economic depression rivalling The Big One of the 1930s seized the nation in 1893 perhaps hampering development in West Adams Heights for its first few years as a residential enclave. But recovery arrived in Southern California Country (to borrow a Carey McWilliams phrase) and gigantic houses for rich and socially prominent folks started springing up in West Adams Heights by the turn of the century.

Geographically speaking, West Adams Heights commands a particularly nice spot, on the northern end of a flat mesa that dips south offering views across an undulating plain to the hills now named for Lucky Baldwin. Land baron and Malibu developer Fredrick Rindge built his own "town" house in the tract, just below the crest of the ridge, in 1905. (Sadly, he didn't live to spend much time there, shuffling off this mortal coil in 1906. The house itself, however, still stands and is listed on the National Register of Historic Places.) Hall and Moore built their own house in the southwest corner of the tract (it was plowed under to provide surface parking for the 1948 Golden State Mutual Life Insurance building--an architectural treasure in its own right albeit it of a different stripe--at the corner of Western and Adams).

Between its attractive topography and its architectural riches, it's not hard to see how the area acquired the nickname 'Sugar Hill' in the late 1940s and 1950s when the neighborhood housed numbers of prominent African Americans. (The aforementioned Golden State Mutual Life building is something of a symbol of the economic stature and prominence of Sugar Hill's mid-century denizens; it remains the country's largest African American insurance company.) But before Sugar Hill could be born, those same pioneering African Americans had a battle to win. Like many Los Angeles tracts, land deeds in the West Adams Heights tract came equipped with a slate of restrictions designed to ensure and perpetuate the "desireability" of the area. The most noxious of these restrictions were racial in nature. By the 1940s, the deed restrictions approached expiration. While some absentee landowners welcomed the opportunity to profiteer from an expanded market, others feared the prospect of living in a racially integrated neighborhood and lobbied for the convenants' extension. Eventually, several would-be property owners challenged the constitutionality of the racially-based deed restrictions. These cases were ultimately consolidated and heard at the U.S. Supreme Court. Its 1948 Shelley v. Kraemer decision parses the issue somewhat: declaring not so much that the restrictions themselves violate constitutional provisions but, rather, prohibiting courts from enforcing them. Regardless, in the absence of enforceability, the racially restrictive covenants were rendered impotent.

This triumph of equity, however, was short lived. In 1955, the U.S. government saw fit to target the neighborhood in its bid to connect downtown and the Westside with a freeway. Constructed between 1961-66, Interstate 10 (known locally as the Santa Monica freeway) now plows right through the heart of the West Adams Heights tract.
The freeway succeeded in fragmenting the neighborhood: the 2 halves are not even connected by an overpass. In the aftermath, the trend of absentee landholding continued with some owners concerned more with profits than neighborhood cohesion. Moreover, the area was "up-zoned," effectively incentivizing the demolition of historic single family residences.

Undeterred by the consequences of these setbacks, residents have remained committed to preserving their quality of life and preserving an unique collection of early 20th century housing styles. The northern part of the neighborhood boasts a particularly effective neighborhood association which meets regularly, actively engaging residents and cementing neighborly links among its ethnically diverse denizens. One of its most commendable beautification projects has been the restoration of the street markers that punctuate the corners of Washington & Oxford, Hobart, and Harvard. (Highway sound walls are apparently in the pipeline as well.)

Like all great cities, L.A. is an ever evolving story and West Adams Heights amply illustrates that. I strongly recommend a visit to this unique, beautiful and historically significant corner of Los Angeles. Heck, you've whizzed past it, and the Armenian Gethsemane Church with it's dome-topped tower, at least 1,000 times on the Santa Monica freeway. Why not get off and check it out? You might just discover your new home.

(West Adams Heights tract boundaries: Western to Normandie, Washington to Adams. West Adams Heights neighborhood boundaries: Western to Normandie, Washington to the 10 freeway.)

Jane Jacobs

Jane Jacobs, celebrated urban theorist, died Tuesday at age 89. Jacobs' most influential work, "The Death and Life of Great American Cities", was published in 1961. Espousing theories about urban life and city form that were largely unfashionable at the time (and even some that continue to be today), Jacobs was an opponent of large, sweeping renewal projects and development forces that often sought to clear and rebuild. A powerful activist presence in New York in the 1960's, Jacobs ultimately relocated to Toronto, where she continued to campaign for, and write about, cities. Always endowed with a strong anti-bureaucratic, anti-establishment bent, many of Jacobs' proposals for maintaining rich, variegated, urban life, have found acceptance and even implementation.

Emard bath #1

A continuing series of images devoted to a home in West Adams Heights coming to market in late May.

The downstairs bath is nearly complete, impressively rendered in white subway and hexagonal ("hex") tile. A 3/4 bath, with period toilet, and a slender pedestal sink, it recalls the post-Victorian era, wherein bathrooms seeking an association with things "sanitary", moved away from conspicuous ornamentation and color.

Either that, or it was a ruse to make tile setters rich.

(For information on the Emard house neighborhood, please see the West Adams Heights post

Door flyers

I am annoyed by door flyers. Can't we pass a city resolution to ban them?! I understand that advertising is expensive and that the ol' USPS doesn't give many breaks, but I am being flyer-ed to death. Pizza delivery, month-to-month auto insurance, gardening services, home remodeling, you name it--I get it, slipped beneath my wiper blade, my welcome mat, rubber banded to my door handle, or just left to lie in the walk.

Funny how the flyer 'handers-outers' never come back by, to pick up the discards, those blown by the wind, soaked by the rain, tossed in the gutter.

I want redemption values attached to flyers, just like used-up drink bottles. I wouldn't mind at all if a guy came by on Saturday mornings pushing a cart full of crumpled pizza chain door knockers, hittin' me up for my rug cleaning notices. "Hey man, I'm on the way to the recycling center, you got any of those green slips I can take off you--you know the ones that say 'Alfombras'?"

Waiting for the Crash

Yep, those are my clients--the ones waiting for the crash. They've read the Los Angeles Times, the on-line pundits, ignored the demographics, and noted the ominous financial trends. They've been waiting since 2004 and it's a matter of principle now, of moral superiority. They will be rewarded by waiting, and virtue will be theirs, or so promises their financial faith. In the meantime, the market sprints off, like Greyhounds chasing a mechanical bunny.

It's the biggest question really. Is Los Angeles in a real estate bubble, and will it burst? I've got more to say regarding this than I can fit in a single submission, or write in a single sitting, but let's just keeping pecking away.

To those that are concerned with a loss in value, what're they doing now? About shelter I mean, sleeping along the embankment? In a pup-tent by the river? In a comfy tree house? Presumably they're paying rent. Hopefully it's cheap rent, but even $800 a month is nearly ten grand a year. Isn't that a loss?

Buy a house because you want to. Because it's a step forward. Because it's a way to optimize your environment--whatever. Since when did home buying become mere speculation?

Do I like the housing market? I like being a homeowner. I like working on my bungalow, and I know that I'm going to be in it long enough to ride out any market rough spots.

100% Financing

There's much concern about the possible housing market destabilization of ARMS (adjustible rate mortgages), interest rate hikes, and the equity re-fi cycle heading south. While I don't want to sound pollyanna-ish, it isn't just the belt-tighteners resorting to non-fixed rate and interest-only financing, and isn't the case that the market'll be capsized solely by a few non-traditional loan products.

Mac-daddy flippers and make good home restorers, amongst others, also seek short-term, low re-pay periods. Either to minimize carrying costs, or to keep cash free for incoming repairs and improvements. These aren't always the loan products of last resort, for the financially flaccid. The popularity of these products were in part borne by housing's bear market: the best investments are often defined by the highest return with the least expenditure.

As rates creep up, and borrower's rates re-set, I'm sure they'll be overextended home owners (or 'note payers') bailing out. Foreclosures, a favored gauge, are "up"; and yet, they had nowhere to go but up, having hit historic lows. Their current levels account for scarcely more than a blip on the inventory radar.

Is the worst ahead? It likely is. After all, we've passed through a period in the housing market when there was "no worst", no downside, and no risk. Homeowners, to a man, made a lot of money on paper in very little time. Those gains may now become less: less frequent and less lucrative, and interrupted by periods of loss.

Should our money go instead into baseball cards or Cabbage Patch dolls? Not necessarily, but buyers may need to think about longer carrying periods, not just six-month springboards; and, investors may have to earn their heavy lettuce by doing more than just paint touch-ups and Pergo.

Emard House

I've a listing, in the West Adams Heights neighborhood. The house, a three-story Foursquare, built in 1904, has undergone an extraordinary amount of work (what would you call down to the studs and back?!). All original elements have been dutifully retained and if needed, refurbished. (See pictures above of fretwork awaiting reinstallation, and egg-and-dart detail on fireplace.) I've been consulting with the homeowner for over six months now, amidst systems work large and small. I'll continue to document the progress of the house as it nears market. Also, I'll write more about the wonderful enclave that is the West Adams Heights neighborhood.

(Update: please see post The Story of West Adams Heights.)

The Third House

Some buyers want their first house to be their third house. Or they want their first house to be their parents' house. Naturally they don't remember their parents first house, a cracker box along the shipping canal, with the stoned-up well, and the flypaper strips in the kitchen. It's the parents third or fourth residence, the one buyers spent their teen-years in, that they remember.

It's hard to get where you want in one step. People don't usually secure their dream job fresh out of college. Their first little league contest isn't their most masterful performance. They don't marry their first date.

This isn't about "settling". There's always a range of choices, some of which will be better than others. The challenge is to marry personal needs with value. A buyer's first purchase needn't be a blood bond, but a start.

The Anxiety Dream

In the dream, the whale's mouth, ringed with dagger-sharp teeth, is closing; and, I must pass my clients through before it seals shut. In one version of the nightmare, I look along the roof of the creatures' mouth, and just above the palatoglossal arch, appear faintly enscribed dollar figures: $800,000....$900,000, and fading to black near the uvula $1,000,000.00.

Maybe the market will go through a downward pricing readjustment, I'll write more about that soon. Regardless, I think a number of eras have come to a close: cheap petrol and cheap money (i.e., low interest rates, ergo, cheap housing). Cheap housing is gone in Los Angeles. The early '90's Southern California real estate crash reached nadir in 1996. That's ten years ago.

Am I happy about making these big commissions? What big commissions? You think I'm cruise controlling through a series of dual-agency deals in Rolling Hills Estates? Hah, most of the time I'm bear-wrestling some free-for-all in City Terrace, cutting up 2% with my broker. And that's alright, provided I can get another buyer past the teeth.

If I blink my eyes, the sign reads NO BUYERS, strangled by an unrelenting evergreen.

Beautiful Paper

Am I an iconoclast?

I don't automatically subscribe to all the old axioms, like "buy more house that you can afford--you'll grow into it"; or, "you can change the house, but you can't change the neighborhood." Still if there's one adage that probably won't draw my dissent, it's: "buy the cheapest house in the best neighborhood". (Now I might quarrel with how one defines the "best" neighborhood, but....)

Anyhow, I recently had a smart client that did just that. Quarreled with me? No, I meant bought the cheapest house thing. Naturally the house needed a lot of fixin', and amongst the first "demo" casualties were the carpets (covering oak floors), and a pair of enormous, storage closets built for the purposes of converting public areas to bedrooms. In the living room, one of these wall-length monsters blocked windows of slag glass and a fireplace! In the dining room, the closet extraction revealed glimpses of a beautiful early twentieth-century wallpaper (ergo, article A above). Can the paper be preserved? We're unsure. Regrettably, it's already missing in places. However, enough exists that a stencil might be made to match. Stay tuned. (Incidentally, the house was built in 1907. The dining room walls appeared to have first been painted red, then papered.)

Condoland

During the San Fernando Valley's secession bid (from the city of Los Angeles) there were regular re-naming contests. The names "Valley City", "Rancho San Fernando", "Mission San Fernando", and "Camelot" were all ballot choices, while "Twenty-nine Malls" was a memorable, comic submission. Here's my own comic entry: "Condoland", after the miles and miles of low rise condominium buildings which line key arterials like Sherman Way, Nordhoff, and Cahuenga. But why I am writing about or even interested in condominium buildings in Valley Glen or Lake Balboa? Because I think it's where many entry buyers are going next (if not already)--not just to the Valley--but to condos. With the median home price in Los Angeles approaching fifty-six gazillion dollars, buyers are increasingly forced to explore (hopefully facilitated by their, ahem, agents) more "affordable" options (among them, condos with a median cost closer to--fifty-four gazillion dollars).

According to information from the California Builder's Industry Association (CBIA), based on current building permit counts, single family starts are down in the Los Angeles area while multi-family starts are up. The most active area actually isn't in the S.F. Valley--it's in downtown Los Angeles where new condo starts and conversions are sprouting like....they once sprouted in the San Fernando Valley! Will all this activity be enough to quench California's home-ownership thirst? California's ownership rate is the nation's second-lowest at 57%, 13% below the national average. Will all this activity be enough to facilitate homeownership for my embattled clients? Will downtown get a Trader Joes? Will the Clippers win a play-off series? Will the San Fernando Valley cease being the butt of jokes? We'll have to stay tuned.

It's Raining Again--Quick Let's Inspect!

I love to see properties and conduct inspections in the rain. It isn't about romance or peeling out on slick driveways, it's about the opportunity to hunt for water--the destroyer of homes. That's right, when better to look for signs of water infiltration, to check around windows, in basements, attics, and crawl spaces. Grading and drainage can even be noted. Is the decomposed granite walk holding up? Is that a blotch on the dining room ceiling? Is the water pooling next to the South side? I want to know!

The climate here, in many respects, is so forgiving that people overlook the weather hardiness of their homes. Who cares about a void in the siding, or if double-hung sashes rattle a bit in the wind, it ain't exactly artic air spilling in. True enough, but if it's water penetrating a poorly knit-together roof line, or gaining entry through an attic fan, or flowing beneath a masonry foundation--there could be expensive consequences.

I know there's a lot of agents who don't like to get their Prada slip-ons dirty, who spend look-see time chatting about flat-screen placement and dried flower arrangements, who prefer the interior of their dark, new model Mercedes with the light-up visor vanity, to an attic covered in fiberglass batts or a damp cellar with a leaky water heater. That ain't me. I'm out there to look at houses and look at 'em I do.

Don't get me a wrong, I'm not down on "fixers". I bought a heavy fixer; and, I've sold a lot of fixers from "heavy" to "light". If you're a buyer looking to get into the bottom middle of this market, you'll likely acquire a property with condition issues. My motto is: the buyer deserves to know. If there's something wrong with a system, if there's structural compromise, the buyer deserves to know. Hey, nobody's got X-ray vision, nobody can see into walls, and you can't necessarily uncover all that's wrong with a property--but you try to, and the agent's eyes should be part of that effort.

More About Animals and Real Estate

One thing the downtown real estate developers have really got right is--the animal option. As in, most buildings allow them. Even our friends' bull mastiff would be permitted, we were told during the recent (and disappointing) Downtown loft tour. Of course some breeds, like Presa canarios, are excepted. (I don't mean to impune Presa canarios. After all, the character of almost any animal is driven in significant part by the breeder and owner.)

A year ago, I listed a studio condo in Koreatown. I had a truckload of agents and buyers, clamoring to see it. Multiple offers were written. Hey that's generally 'all good' if you're a listing agent--only thing is, the offer count would've been even higher if the building allowed pets. One couple was incensed, "If we're the owners, how can they tell us we can't keep our ten-year old house cat." Another asked mockingly, "What're they gonna do--stage a kitty eviction?!"

Many are marrying later--if at all, and having kids later--if at all. Perhaps for these reasons (and others), the companion animal is becomingly increasingly present in contemporary, urban, American life.

Point is, whether you like animals or not, if you're living in a community bound by C.C. & R.'s (covenants, conditions, and restrictions) and animals aren't on the welcome mat, you're courting a smaller buyer's pool. Smaller buyer's pool, less demand, hey you don't need an Econ degree to figure where I'm going.

Dogs deserve better

When you're on the real estate "junket", going to a different micro neighborhood each day, looking from yard to yard, block to block, you sometimes spy the uncaring treatment of dogs.

Look, I'm probably the first guy to admit I don't walk my dog often enough. But at least mine isn't chained by day, left to sleep in the cold and wet by night, in constant proximity to fecal matter, and without fresh water.

Yeah it's a big city and there are crooks, lugs, and loons; but a dog has to function as more than just theft deterence. If a dog helps you feel more secure--great; but, dog ownership shouldn't only be about utility.

Real Estate Snipers

Frequently I'm asked by clients whether they can bring a friend or family members to see a house they're considering for purchase; often, during the escrow period. To which I always respond in the affirmative. The support and approval of friends and family is an important thing, sometimes a necessary thing--particularly when la suegra's footing the closing costs. Everybody's going to spend time in the new house right?

Still, there are those friends that act as snipers. Mostly they fit into three categories.

A) The DINC's: double income, no clue. They've got ample means of support, a swank hillside pad, and a frayed connection with the real estate realities of common folk. They think themselves well-meaning: they want good for their friends. Only their idea of good comes in a zip code or a price range that just isn't accessible without a bank heist.

B) Retired hound: a recent home buyer, only not too recent, who's idea of the market is frozen in time. They're sure your client can do better, if only they look longer. After all, their Venice casita was only $415K--in year 2001!

C)The BB's: better than their britches. Frequently renters, who cling to some ill-deserved self-worth based on their entrenched presence in a neighborhood in which they could not afford to buy, generally made possible by mama rent control. They resent the intrepidity of their homie, trolling the buyer's beat, and the sorts of latte-less neighborhoods in which they'd never consort. Maybe they're afraid of losing their friends to the home-buying cabal. Maybe they resent their own meager stakeholding being laid so bare. Either way, if you're a block too far south, if a car three blocks away is parked on a lawn, or if a newsstand with European dailies isn't within walking distance, the ruling is thumbs down.