I sold my house in 2010 and moved to Lake Arrowhead where I bought a house on a rare level piece of land that I fenced for my dog.
After, living there for two years, I found that I could not tolerate the altitude, even though it is only 5200 feet. I was short of breath and had trouble sleeping. I had to sell the house and move back to sea level. In doing so, I lost a lot of money and have been renting since 2012, first a small condo and now a three bedroom house in Mission Viejo. I have slowly rebuilt my funds and have started to think about buying another house. I would really like to move to Tucson but my children are in California and I would be alone in Tucson. Jill and I are back together since 2014 and so one reason for staying here is less important. I would not be alone.
The other reason why I am reluctant to buy another house in southern California is the insane level of real estate prices. In moving to Lake Arrowhead, a resort, I found the only real estate market that is NOT increasing in value. Mission Viejo, where I have lived since 1972, is in Orange County and has some very high real estate values. I have been nervous about another collapse in prices and don’t want to buy at the peak of the market.
Recently there have been a few signs that the party may be over.
In the 1980s, there was a surge of buying from Japan as Japanese used the towering real estate prices in Japan to borrow and buy expensive houses in southern California. When Japan entered the present 25 year slump, the prices of southern California homes also dropped and many were sold for a fraction of the previous price. An impressive example, is what happened at the Pebble Beach golf resort. In 1989, a Japanese investor bought the resort for an amazing price. Ten years later, he had to sell for a fraction.
The sale will end nearly a decade of Japanese ownership of Pebble Beach, which became a symbol of the exorbitant prices paid and, subsequently, the massive losses suffered by Japanese investors who flooded into U.S. real estate during the late 1980s and early 1990s.
“We think it’s the best golfing place on the globe,” said Ueberroth, who began negotiations to purchase the property in March. “I’ve been lucky enough to have played there over the last 40 years.”
The purchase of Pebble Beach Co. includes the Pebble Beach Golf Links and three other nearby courses; two luxury hotels, the Lodge at Pebble Beach and the Inn at Spanish Bay; and 17-Mile Drive, a popular tourist destination.
Pebble Beach Co. is owned by a partnership between Taiheiyo Club Inc., a Japanese golf resort company, and Sumitomo Credit Services Co., one of Japan’s largest issuers of Visa cards. The partnership purchased Pebble Beach in 1992 from golf tycoon Minoru Isutani, who bought the company only two years earlier from a group headed by oilman Marvin Davis. However, the debt-ridden Isutani was forced to sell the property at an estimated $350-million loss.
That’s a big loss and an example of what happened. Now, China is is seeing a stock market crash similar to the Japan real estate crash in 1990.
China is still going through a difficult transition from socialism to capitalism, meaning its government that once tightly controlled the economy is slowly letting the global market take the wheel. That’s a tough process, particularly for a government that is used to being able to turn the economic knobs as it pleases. It still likes to do so from time to time, as it did on Thursday — a currency move that will get to in a bit.
But to show how precarious things are, a relatively small tweak sent investors into a pretty steep nose dive. And when China dives, so does everybody else, as evidenced by the market declines around the world.
So, how much effect will that have on Los Angles real estate ? This much.
Prices for the top 5 percent of U.S. real estate transactions remained flat in 2015 while all other houses gained 4.9 percent, according to data from Redfin Corp., a real estate brokerage and data provider.
In the Los Angeles suburb of Arcadia, where Zhang is struggling to sell the six-bedroom home, dozens of aging ranch houses were demolished to make way for 38 mansions built with Chinese buyers in mind. They have manicured lawns and wok kitchens and are priced as high as $12 million. Many of them sit empty because the prices are out of the range of most domestic buyers, said Re/Max broker Rudy Kusuma, who blames a crackdown by the Chinese on large sums leaving the country.
And now, the Chinese market is crashing. Hmmm. Can southern California real estate be far behind ? I’m waiting. Meanwhile, I still like Tucson where prices are much lower.
For example. We are still thinking about it.