Digging Out From Under a Real Estate Slide
Ads for property here could rival the most breathless copy for houses in Malibu: “Sea breezes, drop-dead ocean views, rugged hillsides, world-class surf a stroll away, Southern California beach-side living at its finest . . .”
Never mind that nearly half of the tiny community’s homes were assessed at zero value after a devastating landslide in 1995. Overlook for a moment the lawsuits, the conflicting predictions of geologic doom, the houses that still sit smashed at the base of the steep slope looming over the seaside town.
James “Bo” Lundy did.
In a leap of financial faith, he just bought a vacation place in this hamlet 10 miles up the coast from Ventura for $158,000, joining a tiny band of others who have sunk money into a community where values have been not merely depressed, but comatose.
While the market throughout the rest of Southern California is rocketing, La Conchita’s is barely stirring. But here in a town where a gouged hillside draws looky-loos and where some homes still bear county warnings of a “geologic hazard area,” a few properties have ever so gingerly changed hands.
It’s hardly a boom, but amid the bougainvillea and banana trees of La Conchita, the Lundy purchase is a noteworthy ripple.
“I had a feeling that the market might be at its low,” said Lundy, a commercial real estate broker in Bakersfield. “And I liked this little house.”
It has been more than three years since the terms “La Conchita” and “real estate market” have been used in the same sentence without a heavy-handed ironic twist. Last year, all of six properties were transferred--two for less than $10,000 after foreclosures and all but one of the others for well below $100,000, according to county officials.
Most of the properties that have sold in this neighborhood of about 200 homes have been bought by people who already live here or who have relatives here.
A couple of houses were snagged at foreclosure sales after their owners could no longer handle mortgages on homes that suddenly had become worthless.
But Lundy is a rarity: an outsider who saw a “For Sale” sign, negotiated a price, secured homeowners insurance and a conventional mortgage, and signed on the dotted line.
“We were looking for a weekend or vacation place away from the heat,” he said.
In their search, the Lundys prowled coastal high-rent districts from Laguna Beach to Santa Barbara. They found “starter homes” in Summerland, just south of Santa Barbara, that ran as high as $500,000. Eight miles down the coast, a one-bedroom, one-bath cottage on an oversized corner lot in La Conchita had hit the market for about $185,000.
From the sun porch, Lundy, his wife and their two small children can gaze out across the railroad tracks and U.S. 101 to the mighty Pacific. From the spacious garden, they can gaze back 100 yards or so to the huge hill that gobbled up nine houses like so many hors d’oeuvres March 4, 1995.
Lundy is redoing the 40-year-old home’s wood floors, putting in a new kitchen and converting the garage into a second bedroom. He doesn’t figure he’ll be at the epicenter of a mud bomb any time soon.
He has run across geologists who believe that the hill won’t move much for the next eon or so, as well as those who believe that danger may be at hand. But his house on Surfside Street is about as far from the hillside as you can get in La Conchita. Even if the slope “flexes its muscle,” Lundy said, his getaway spot probably will be spared.
Appraisers for Norwest Mortgage evidently agreed. The company granted Lundy a 15-year mortgage--perhaps the first conventional mortgage to be written in La Conchita since the landslide.
Ronald O’Neill, the real estate agent for the couple who sold the house, said the community has been unfairly stigmatized.
“I had a lot of people who said it couldn’t be sold, that it would never get insurance, that nobody would finance it,” he said. “But they were wrong.”
Besides, he asked with the doleful zest of a lifelong Californian, who among us is immune from risk?
“All of California is in an earthquake-danger area,” he said. “The whole coastline is in a tsunami area.”
Whether or when there will be a next slide is a perennial topic here.
According to many homeowners, the answer hinges largely on the outcome of a lawsuit against La Conchita Ranch. Neighbors say the ranch contributed to the slide by over-watering an avocado orchard on a mesa high above the community.
A class-action suit, which demands monetary damages for property owners and protective measures for the hillside, is set for a hearing in October.
An earlier suit filed by a different set of property owners was settled for an undisclosed amount last year.
Andrew Castricone, a Los Angeles attorney who represents the ranch, said there was no excessive irrigation.
The landslide was “a natural geologic process” aggravated by heavy rains and the 1994 Northridge earthquake, he said.
Whatever the judicial twists and turns, a handful of buyers are betting that the hill won’t give way again. Last year, for example, a couple bought a large home for $275,000 in order to be near relatives already living nearby.
Then last February, as mud poured off the mountain in torrential rains, Tony Alvis bought a 2,500-square-foot place across from the slide-shattered remains of a house that had belonged to his brother Dan. The price was $50,000, according to county records.
“It’s like a gamble, but I didn’t have to go to Las Vegas,” said Alvis, a surfer, oil-rig worker and jack-of-all-trades who has lived in La Conchita for more than 30 years. “Even if a slide wipes us out in 10 years, I’ll have enjoyed it.”
Not everyone who has bought here lives in town. Representing an overseas investor, Ventura real estate agent Linda Freeny picked up a foreclosed home tucked up against the hillside. The price: $9,000.
“They basically were giving it away,” Freeny said. “Malibu can slide all over the place and property values there never go down. It’s very sad.”
But most La Conchita residents weren’t fortunate enough to be on the receiving end of great deals. A few were able to negotiate lower payments with their mortgage lenders, but others lost their homes.
Ray Seider, a Santa Barbara insurance agent, had sunk his family’s savings into a La Conchita rental house. But he said “liability issues” kept him from renting it out after the landslide. Meanwhile, his bank would not give him a break on his payments.
“They just wouldn’t listen to us,” he said.
The home was auctioned for $7,000. Seider, who is one of the plaintiffs in the pending lawsuit, said he ended up losing about $100,000.
But just as it was before the slide, La Conchita is still a mix of never-say-die types and beach worshipers just paying their respects and passing through.
A block from Lundy’s freshly painted place in the sun, retired pastor Jonathan Harrel was watering the roses outside the brown-shingled house he built two decades ago.
“I have no intention of leaving or selling or moving away,” he said. “If I were a billionaire, the farthest I’d move would be right over there,” he added, pointing to the gated community of Rincon Point about a mile up the coast.
Last winter, a tide of mud oozed down a nearby street and into Harrel’s yard, but for him, the imposing hillside poses no problems.
“I’d rather live by faith than by fear,” he said.