3 Families Who Won in the Housing Derby
‘It goes to show that by living conservatively, and not buying every new video gadget that comes out, you can save up and buy a house.’ --Chuck Currie, real estate agent
As prices for South Bay single-family homes rise, first-time buyers are being squeezed out of the market and repeat buyers are becoming the norm, according to area real estate agents and lenders.
Only about 16% of Los Angeles County households could afford to buy the median-priced, single-family home in the county, which sold for $210,029 in March, according to the California Assn. of Realtors.
Greater Pressure in South Bay
And in the South Bay, where prices are generally higher, the pressure on buyers is even greater, local agents said. To buy a house here, it usually takes two incomes, and often parents help first-time buyers with the down payment, agents said.
Here is a look at several of the buyers participating in the South Bay housing derby:
* Young marrieds Scott and Tammy Walter have scored a pretty impressive achievement in the last couple of years: They have saved enough money--$40,000--to make the down payment on their first house.
In an era of easy credit and conspicuous consumption, this is quite an accomplishment, said Clark Realty agents Woody McCain and Chuck Currie, who helped the Walters find a starter home in Hawthorne.
“It goes to show that by living conservatively, and not buying every new video gadget that comes out, you can save up and buy a house,” Currie said. Although many buyers have the income to qualify for a home loan, fewer have saved enough to make a down payment, he said.
With a combined income of about $75,000 (Scott, 29, is an engineer at Hughes Aircraft and Tammy, 28, a software engineer at Northrop), the Walters since their marriage 1 1/2 years ago have lived on his income and saved about three-fourths of hers.
They lived in a modest apartment in Lawndale, rarely used credit cards and bought a used truck for $5,000 instead of a new one, Scott said. “It wasn’t that hard, really,” he said. “We just don’t have a lot of expenses.”
Having saved $40,000 for a down payment, the couple decided that they wanted to live in the Hawthorne-Lawndale area, near their jobs. “I refuse to commute,” he said flatly.
Sought-After Area
The first house they looked at, in the Holly Glen area of Hawthorne, was $325,000, more than they could afford, they said.
Finally, after weeks of looking, for $205,000 they bought a 900-square-foot, two-bedroom home on a good-size lot that would provide room to add on. The neighborhood is strictly single-family homes, and the Bodger Park area is sought-after for its schools by buyers in Hawthorne, the real estate agents said.
The Walters said the house is not what they originally expected to get for more than $200,000. But after seeing prices go up and up, they said they are glad simply to have gotten into the market.
The house is probably smaller than the two-bedroom apartment they are moving out of, acknowledged Scott, “But it’s ours.”
* It didn’t take 33-year-old Debi Gerny long to figure out that if she wanted to buy a home in the South Bay, a townhouse or condominium was her best bet.
Gerny was determined to stay in the El Segundo area, to be near her 8-year-old son’s school and her $24,000-a-year job as an air cargo services worker at Los Angeles International Airport.
But single-family homes in El Segundo start at about $300,000, more than she could afford even with her parents’ help on the down payment, she said. “They were asking $300,000 to $350,000, way beyond my limit,” she said.
Near-misses on a couple of deals added to her sense of frustration as she scoured the market with the help of El Segundo Re/Max agent Bill Ruane.
During the two-day period when she was deciding whether to make an offer on one condominium, she said, somebody else bought it. Another time, she offered slightly less than the asking price on a $220,000 unit and the owners refused to come down a penny. They held out and got their full price within a few weeks, she said.
Finally, Gerny said, she took a look at a 1,150-square-foot condominium in a complex close to LAX. When she saw this two-bedroom, two-bath home with a fireplace, on the ground floor of a three-unit building with plenty of windows and light, Gerny bought it for a little over $200,000.
Gerny said she is relieved to have found a home near her work and the school her son, Geoffrey, attends.
“For about the same amount of money I paid, a friend of mine bought a large, two-story home in Placentia, but she is not there very much because of her commute,” Gerny said. “At least we’ll get to spend more time at home.”
* Steve and Anneliese Maddox are well on their way to being real estate tycoons, having parlayed the proceeds of two successive South Bay homes into enough to afford a third that, with some creative financing, could cost up into the $600,000s or $700,000s, they said.
The Maddoxes started out in 1983 with a $145,000, 900-square-foot “doll house” in Redondo Beach, which with they bought with a $10,000 loan from her father. They renovated it and sold it in 1985 for enough money to give them $20,000 down on a $235,000 home in sore need of refurbishing. It had been languishing on the market in Palos Verdes Estates. The seller carried part of the debt on the house, and the Maddoxes repaid him a few years later by refinancing when the home had increased substantially in value, she said.
For a visitor sitting in the light and airy living room of this home, looking out through a picture window at the pansies and petunias Anneliese planted in the front yard, it was hard to picture it being dark and gloomy, but it was when they moved in, she said.
The three-bedroom, 1 3/4-bath house came with bilious green shag carpeting, heavy draperies and “layers and layers of the ugliest wallpaper you’ve ever seen,” Anneliese recalled. Her husband, Steve, is a salesman and actor, and she works part time in real estate. Both 34, they have daughters 4 and 6.
The Maddoxes did most of the remodeling themselves, removing the carpet and steaming off the wallpaper. They had the hardwood floors refinished, and painted the walls in light, pastel colors. Anneliese made draperies that let the sunshine in.
“If you’ve got flowers in the garden and the colors are right inside, it makes all the difference in the world,” she said.
They have just sold the house, and although they did not wish to disclose the price, the average sale in that area in 1988 was for $540,246, according to Very Important Properties, a real estate firm on the peninsula.
The Maddoxes are renting a house on the peninsula and, if all goes well, they said they hope to be able to buy it, fix it up and sell it.
