Short Story of a Large Price Spiral
Most family histories include a first home in a little nest for two, usually an affordable, if not cozy and romantic apartment.
Through the years, that dwelling and others that follow represent the changing needs of the typical family--increases or decreases in family size, job transfers, separation or divorce.
Considering the mobility and movement tendencies of modern families, it’s not unusual that a typical California family has moved several times over two generations. Moving from one house to another every six or seven years has not been uncommon.
Over the last decade, inflation and recession cycles have had their impact on family movement, but, nevertheless, we are a very mobile people.
After moving from a house, most families tend to cut all ties to the former dwelling, but may continue to remain in touch with their favorite neighbors.
One house I lived in for a short time typifies the historic price increases in Los Angeles homes. The teasing anatomy of its sales history can be repeated in countless other homes.
It is located off Franklin Avenue in the Silver Lake area, on a hilltop with a great panorama of its surroundings to the east. Its purchase price was $45,000, quite typical for such homes in that neighborhood in the early ‘70s, when the real estate market was fallow.
It was a solidly built, two-level, 1,862-square-foot house, aided in its design by an engineer.
In 1975, a realtor bought it for $55,000.
In 1976, she called, and not intentionally meaning to be gleeful, reported that as a real estate editor, “you should know” that she had just sold the house for a grand price of $120,000, more than double what she had purchased it for. That was when prices were skyrocketing in that wild inflationary period.
At a recent realty seminar, Stephanie Fitzpatrick of the Silver Lake realty firm of Fitzpatrick & Associates, headed by her mother, Lou, wanted to update me on “my” house.
In 1982, the couple who owned it had come to the realty firm and asked the Fitzpatricks to sell it “as is.”
“Their idea was to sell the house and everything in it. They wanted to walk out the door with just a suitcase and take off for parts unknown.
“They wanted to sell it quickly and travel the open roads in a motor home,” Stephanie Fitzpatrick said.
It was quite a challenge for the Fitzpatricks. “Not only was it a large house with lots of furniture, but rates were very high. Most transactions of the time involved some sort of owner financing. The seller was willing to carry, but where would the buyer send the check each month?”
After several months, a buyer was found and details were worked out. The sales price was “just over $200,000.” And today, it could sell for more than $260,000--representing a five-year increase just about equivalent to the 1975 price of $55,000.
“I was there the day the motor home made its way up that narrow street,” Fitzpatrick said. “I know several ‘glitter boys’ (star sales personnel) made multimillion dollar sales that day, but none was happier than the crowd around that factory-fresh motor home.
“It was just another good day for my mother. She is still working every day, solving problems, helping people and that . . . is what real estate is all about it. I hope you tell somebody.”
