Where it’s happening

Not too long ago, Seoungsook Lee was supporting herself by waitressing. But today, after some calculated investments in real estate, the 32-year-old widow is living off sales profits and rental income.

Lee and her husband, Sehyun Kang, bought a handful of residential properties in Koreatown before his death in 2001. Through a careful mix of buying and selling during a period of rapid home appreciation, these transactions have become Lee’s financial security.

Median home prices in Koreatown’s 90006 ZIP Code -- like a handful of others in Southern California -- have more than doubled in the last two years. The median price for a home in Koreatown during the three-month period ending in August 2002 was $235,000. For the three months ending in August 2004, it was $485,000.

Many Southern Californians who bought homes in the last several years are sitting on substantial equity. Of the 450 ZIP Codes in Los Angeles, Riverside, San Bernardino, Orange and Ventura counties, 66% have seen median home values at least double since 2000. And homes in 97 ZIP Codes have doubled since 2001.

Median prices in five areas recording sales of 50 or more homes annually have doubled in just two years: Koreatown 90006 and Jefferson Park 90018 in Los Angeles, Santa Clarita 91390, Oxnard 93033 and San Jacinto 92583, according to DataQuick Information Systems, even though appreciation throughout the Southland has begun to slow in recent months.

The trait these areas have in common is affordability.

“These are relatively low-cost areas with low-cost housing,” said John Karevoll, an analyst with DataQuick. “We are seeing a slower sales pace further up the socioeconomic totem pole and conversely a higher sales pace the further down the pole you go. For the less-expensive part of the market, there still is a little more gas in the tank.”

Some homeowners in these areas who hit the market at just the right time have sold to improve their lives or make other investments.

“Real estate made my client a Cinderella,” said Sue Choi, owner of Re/Max 100 and Lee’s Realtor. Other clients of Choi’s, Hanna Lee and husband Jong Kwon Paik, both 48, bought a 3,200-square-foot home for $340,000 in Koreatown a year and a half ago. After about $150,000 in renovations, the couple sold the property in June for $845,000. They’ve put some of their profits into a new liquor store business in South Los Angeles. But as for more residential real estate, they are biding their time.

The Lees and their 19-year-old daughter, Catherine, have downsized to a nearby apartment and hope the market will cool. Then they plan to buy again.

Others reaping the benefits of rapid appreciation are taking the cash and running.

“Sellers are heading to Arizona, Nevada and Oregon,” said Bob Dougherty, with Coldwell Banker in Camarillo. “I call it the California gold rush.”

One such taker is Lance Wilson, 33, who has seen tremendous appreciation in Santa Clarita. The 91390 ZIP Code jumped from a median of $286,000 in August 2002 to today’s $577,000.

Wilson bought a 3,600-square-foot, five-bedroom, three-bath home in Santa Clarita in May 2003 for $565,000. He recently listed the house for $850,000. If the house sells for its list price, that will be a $285,000 gain in less than a year and a half.

“We’ve profited on every home we’ve sold in Santa Clarita,” Wilson said.

This latest home will be the fourth the Wilsons have bought and sold in the last four years -- each a move up from one bigger house to the next. Wilson figures he’s made about $400,000 from the sale of the last three homes.

The couple, who have a 3-month-old daughter, Aubrey, plan to move to either Arizona or Texas -- states where they feel they can stretch their dollar more.

“We’ve made plenty of money in California,” said Wilson, who will also leave behind a successful commercial-door business. “We just want to concentrate on family now and a different, slower lifestyle.”

Realtors report that the entire Santa Clarita Valley, which also includes Saugus, Newhall, Castaic and Valencia, has also done extremely well. Some who passed up opportunities to buy are kicking themselves for not getting in when they could.

Carrie and Robert Gibson, a two-income couple who live in Redondo Beach, passed up a chance to buy a home in Valencia in summer 2001. The Gibsons made an offer of $238,000 on a 1,500-square-foot tract home. But they got cold feet and pulled out of the deal. They said they didn’t like the floor plan or the potential three-hour round-trip daily commute from Valencia to Robert Gibson’s job at a promotional products distribution company in the South Bay. Today, similar homes in the same development that the Gibsons walked away from are selling for $480,000.

“People are out there throwing $500,000 around on starter homes like it’s nothing,” said Carrie Gibson, who works in the medical field. “Had I had a crystal ball, we would have snatched that property up.”

Instead, the Gibsons remain on the sidelines in their 800-square-foot Redondo Beach rental, waiting for something, anything, to turn the market in their favor.

“We are stuck,” Carrie Gibson said. “The only way we can buy a home is after the next earthquake hits.”

Bill Leggett, 45, recently sold his 3,500-square-foot home in Valencia for $700,000 and made about $470,000 on the sale.

“We have a joke in Valencia,” he said with a laugh. “The town name is Spanish for increasing equity.”

Leggett and his wife, Sue, 44, cashed out and put their furniture in storage.

They are now living with their two sons, Hunter, 10, and Colin, 9, in a Valencia rental about half the size of their former home. They hope to relocate to Bend, Ore.

“It’s a gamble, what we did,” said Leggett, a property insurance appraiser. “But we always wanted to go to Oregon anyway.”

In Los Angeles’ Jefferson Park, the median price for a home two years ago was $176,000. Today, it has more than doubled to $353,000.

“The area has become a popular entry-level market,” said David Repoza, a broker with City Living Realty.

The community, bordered by Adams and Jefferson boulevards and Arlington and Western avenues, has offered buyers priced out of the Westside an affordable option. Its 2,500 homes are mostly one-story bungalows built between 1905 and 1920 with front porches, neat lawns and interiors with decorative moldings, beamed ceilings and leaded glass.

Some of the Jefferson Park sellers now taking advantage of their $100,000 to $300,000 in gains are working-class families planning to move up to newer, larger homes in San Bernardino, Las Vegas and Bakersfield, Repoza said. “It’s an American dream for some of these people.”

Haydee Franco, an agent with Global Realty in Bakersfield, recently helped sell her parents’ home on 30th Street. Eleno Franco, 65, and wife Elodia, 58, paid $137,000 for the house seven years ago. It sold for $465,000.

“Of course my parents saw they were going to get a lot of money for that house,” Haydee Franco said. “They decided this was the right time to sell.” The Francos, both retired, plan to buy in Bakersfield and start a family business.

Rapid appreciation is boosting home values in the desert too. The communities of Hemet and San Jacinto, located within 50 miles of Palm Springs, San Bernardino and Riverside and about 80 miles from San Diego, also have experienced steep price increases.

Just a year and a half ago, the median price for a single-family resale home in San Jacinto was $127,000. Today it is $249,000.

Some who have grown up in the area feel they are being priced out of their hometown market. Buyers willing to commute -- career military personnel or others who can’t afford to live in San Diego and Temecula -- are picking up the slack.

“We are right in the crosshairs between Los Angeles and San Diego,” said Michael Dailey, 38, an administrator for an industrial heater manufacturer. “Everyone is suddenly interested ... $260,000 for a house in this area is just nuts.”

But apparently not crazy enough to dissuade Dailey and his wife, Kerri Fly, 46, a medical records decoder for Loma Linda Hospital, from moving up.

Last month, the couple sold their 1,250-square-foot home for $258,000. They had bought the house in 1996 for $87,900. Now, they are buying a six-bedroom home for $299,000 in one of San Jacinto’s new developments.

“We did a lot of shopping around,” Dailey said of home searches in Arizona, Riverside, Loma Linda and Yucaipa. “But right here, this is the best bang for your buck. You won’t find anything cheaper anywhere.”

Matthew Rafferty, 28, a native of the area who commutes to San Diego to work for Amtrak, thought he might be priced out of the market. Even though he recently pocketed about $70,000 in equity selling a condo in Hemet, he worried it would not be enough for a down payment.

But after looking at 25 homes, he and wife Maria, 36, finally found a three-bedroom, two-bathroom house in Hemet in the mid-$200,000s. Rafferty said he’s not concerned he might have bought when prices are especially high.

“We found something that we like and we were willing to pay a little bit more for it,” he said.

His favorite thing about the house? The big backyard.

“I think we made a good investment, a very good investment,” Rafferty said. “But I need a lawn mower now and I am taking donations.”

Allison B. Cohen is a Los Angeles freelance writer. She can be reached at a.cohen@ix.netcom.com.