Troubled Areas Are Hottest Home Market : Real estate: Forget ‘location, location, location.’ What attracts buyers in this slump, agents say, is ‘price, price, price.’
Willie London wanted to sell his well-kept, three-bedroom Lynwood home and move to a better neighborhood. But who would want to buy a house near areas plagued with gangs and crime, particularly in a depressed real estate market? He set the price at $172,000 and prayed.
About the same time, a professor at a Long Beach college put his beachfront condominium penthouse up for sale. The asking price: $430,000. A steal, brokers said, for such a gem.
The professor, who asked that his name not be used, received not one offer in four months.
Willie London sold his house in a week.
One word explains both scenarios: affordability.
Among the hottest areas for selling property right now are those with the reputation--rightly or wrongly--of being the worst places to live.
Families are buying where they can afford to: Compton, Lynwood, South-Central Los Angeles, Willowbrook, Watts and parts of Long Beach, East Los Angeles, Carson, Inglewood and South Gate. In many cases, buyers choose to cope with potential neighborhood problems rather than sacrifice dreams of home ownership.
More prosperous areas of Long Beach and Southeast Los Angeles County, on the other hand, are suffering from the same malaise affecting real estate nationwide.
“We handle Compton and Lynwood,” said LeFrancis Arnold, president of Century 21 Arrow Realty in Lynwood. “It’s a good market. The things I’m seeing at a national level and in the Southern California area have not affected our market as negatively as it has others.”
Of about 100 Los Angeles County branch offices in his district, Arnold’s is running third in total transactions and eighth in commission dollars earned, despite the smaller commissions that come with less expensive properties. Other Century 21 offices that serve part of the same area also are faring well.
“My average sales price is the lowest of all the Century 21 offices in the region,” Arnold said. “The average sales price for this office last year was $115,000.”
Some of this activity in less prosperous areas involves purchases in gated communities or townhouses with security systems. But the rest of it happens in old, established neighborhoods prejudged to be in decline.
Market conditions could reverse that.
“You’re going to see a change in some of those neighborhoods,” said Earl Bonawitz, director of marketing and training for one of Century 21’s regional offices. “You’re going to see them cleaned up. You’re going to see pride of ownership coming into some of those neighborhoods that you haven’t seen in the past.
“For a while it was all non-owner-occupied properties being bought and sold. Now you’re seeing people buy those properties who want to live in them.”
Said real estate agent Arnold: “You can get a beautiful home in Lynwood for under $200,000, three or four bedrooms, 5,000-square-foot lot, sometimes a pool. It’s the same with Compton.”
For better or worse, the active low-end market has pushed prices up in that category. “Our average sales price is about $13,000 higher this year than last year,” Arnold said.
In contrast, properties in Beverly Hills are selling, on average, for more than a million dollars below their listed prices and staying on the market an average of 131 days, according to a recent study by Jon Douglas Co., a realty firm.
