Buying property in California
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Due to the unexpectedly high number of Californians defaulting on their mortgages, one of the biggest banks in the USA recently had to raise around £4 billion in emergency funding to keep the wolf from the door. The cost of buying property for sale in California is falling and falling, and with lenders still reeling from all that crunching credit, they are less than eager to hand out further loans to domestic speculators buying property in California.
Now many who assumed gold-rush fever would last at least a lifetime are wondering just how low things can go.
With six districts of southern California averaging a property price fall of 17.9 per cent since this time last year, and nine districts around the ever-popular San Francisco Bay area falling by 11.6 per cent, things are looking very rocky for the domestic property market.
To spin a phrase, though, a California homeowner’s poison could be a UK buyer’s meat, and overseas property investors are poised to make a killing in California – as long as they can time their gold strike just right.
Almost without exception in California, property prices are way down on their highs of last summer, and for those potentially buying property in California in sterling, current prices look rather appetising, with a southern Californian average of just over $400,000 (£200,000), and a northern average of around $550,000 (£275,000).
The two major population centres in California that are known to us all are Los Angeles and San Francisco. In the latter, the most popular districts for people buying property in California are bucking the trend somewhat, with property prices tending to remain static rather than fall.
San Francisco’s super-refined northern districts, such as Nob Hill and Pacific Heights, are both desirable and costly, with centrally-located apartments selling from around $700,000 (£350,000) and up to at least $2 million (£1 million).
To the south-east, neighbourhoods still offer impressive cultural diversions, as well as breathtaking views of the city, but can also offer the most affordable property in the city, with apartment prices starting at around $200,000 (£100,000), rising to a little short of $1 million (£500,000) for family homes. There is a vibrant air to these districts, with working-class families and young professionals forming the majority of residents.
At the heart of this steep (topographically, that is) city, Twin Peaks rises above the apartment blocks, offering panoramic views of both city and bay. Here one can find historic properties on manicured streets as well as exciting contemporary condo developments. Condo prices start from around $600,000 (£300,000), while family homes will set you back at least $1 million (£500,000).
Around a two-hour drive to the south of San Francisco, on California State Route 1 (otherwise known as the Pacific Highway – and you’ll be hard pressed to find more dramatic coastal scenery), is the Monterey Peninsula, which includes the famed neighbourhoods of Pacific Grove, Carmel and Pebble Beach (calm yourselves golf fans).
These are stunning coastal communities with history, culture and amenities aplenty (17 world-class golf courses, for example), yet with property prices at least starting at a reasonable level. Condos, townhouses and small family homes, for example, can be found here from around $250,000 (£125,000), although the cost of buying property in California here rises rapidly as the neighbourhoods become more fashionable. Recent reports, though, say that at least half the property for sale in super-cool Carmel is still available at under $1 million (£500,000).
Drive south again on the Pacific Coast Highway (or, PCH, as the locals call it) for a couple of hundred miles, and you’ll arrive in Santa Barbara, a charming city some two hours’ drive from LA, with more than a hint of its Spanish heritage still in evidence, especially in its many whitewashed, tile-roofed properties. The city’s excellent beaches are also reminiscent of Spain.
Prices for condos and townhouses in Santa Barbara start from around $400,000 (£200,000), while family homes fetch from around $500,000 (£250,000).
That said, there are properties here that would make some of the residents of nearby Beverly Hills weep with envy – they’re nearer to the $30 million mark.
And speaking of Beverly Hills, properties even in that most famous of LA neighbourhoods may now be within reach for British buyers with a respectable amount of cash to splash.
Bearing in mind that some of the most sought-after property in the world has historically been found in this area, it’s interesting to note that cottage-style homes are now to be found from around $1.5 million (£750,000).
More affordable property is of course available in the City of Angels, such as in the side-by-side districts of North Hills and Mission Hills (some ten miles north-west of downtown LA), where prices for condos and townhouses start from a mere $150,000 (£75,000) – and these are genuinely pleasant places to live.
A stone’s throw from the crazy heart of downtown Los Angeles, Malibu offers a very different experience, with miles of stunning beaches, and almost as many miles of stunning homes, either on the beachfront or in the canyons and mountains behind. Residents here seem to have the best of both world’s with their close-knit laid-back community having easy access to the likes of Hollywood, Beverly Hills, Sherman Oaks and Santa Monica.
It’s perhaps surprising to note then, that small detached family homes can be found here from just $800,000 (£400,000), and condo and townhouse prices start from less than $600,000 (£300,000). Is this really as low as the cost of buying property in California can go?
No one’s saying the credit crunch is a good thing, of course, but if you can afford the cost of buying property in California, you’ll thank crunchy for small prices.
First published in Homes Overseas Magazine June 2008.
Some information contained within this article may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advise from a qualified professional.
