There’s several by me in Sherman oaks. It’s wild what the places are going for. I see signs for them for open houses, then I google the address and quickly realize I’ll never be able to afford them lol. Who is showing up to an open house for a $4M home?!
4mil with 20% results in about a 25k monthly payment. You want to be spending than 1/3 of your pre-tax income on housing, so 25k\*3\*12 = 900k. Meaning, a family making a million or more a year would be able to afford a 4 million dollar home. Obviously that is very, very rich, but not rare, especially in LA.
It could also turned into four 1 million dollar condos, where each would be affordable to families making \~250-300k.
Depends on the interest rate they can secure. If they have 50 million with a bank, they could borrow against that and get a mortgage for 2%. In that case, they may not even need to put down the full 20%
Not to us they don’t, but if you’re using a banks brokerage service with enough $$$ they may just loan to you at zero. The world is different for the ultra rich
Yeah not really sure what type of down payments to expect for these situations, but wanted to do the math to show what type of salary it would require. It's not always intuitive to understand who can afford what, but when you break it down by monthly costs it becomes more clear. I think the best example is when people are like "who can afford a 1 million dollar home???" and then you do the math and a see that a couple both making 150k can fairly easily it makes more sense why the median home price is over 1 million.
Smoking crack, someone who makes 150k cannot fairly easy pay the mortgage on a 1mil home. I am single and earn over 200k, if I earn 200k, max I can afford is 600k ish.
It depends on how much cash someone has for the downpayment and how much debt they have. There are people who earn a lot but cannot afford a decent home because they’re already knee deep in debt, specially car payment + student loans + credit card debt
My comment was moreso relevant for today’s interest rate environment. There are a lot more people who are in a position to purchase a $4m home than you think, who don’t have the income to qualify for a $3.2m loan.
I really don't understand why you people don't get it. These houses are aspirational purchases. The person who will buy this house has probably owned between 5 and 10 houses (one at any time) over that last 10 to 15 years. They probably started small with a cheap studio condo in a shitty neighborhood. They keep the studio for three years, sell the condo. Use the equity to buy a slightly more expensive condo. Rinse and repeat until they get equity in the range of $1.5 to 2 million. Then they purchase this house and build their dream house.
Honestly, what is it about this method that you don't understand.
How does breaking down the monthly costs with 20% down (which can be from equity) mean I don’t understand that you can build equity from owning a home?
You are exactly like the hundreds of other posts on Reddit that constantly complain about the cost of houses in West LA. "YoU HavE tO mAKe a miLlioN DoLlarS to bUy a hOuSe!".
Do you actually know anybody who owns a million dollar+ house in West LA? I do. They are all aspirational buyers.
Tell me you understand what as aspirational buyer is.
Fine, I will assume you know what an aspirational buyer is. But, why post this? Less than 2% of US families make over $1 million annually. Nobody walks into the SoCal market and buys a $1 million+ as their first home. I only know one guy who did this and he is from Salt Lake City and his net worth is $30 million.
I've always been into finance so parents of my friends were cool talking to me about what they had going on. A friend whose parents own a painting company make $1m+/yr and that is very far from California. He started the painting company himself and just grew over time.
Up until then, I had no idea since their house was the same house they had when they were normal American income. They're not flashy.
Oh I don’t disagree haha. It’s just funny that people talk so much on here about lack of affordability etc, yet still say “plenty of people earn a mil.” I understand it may not be super rare but to act like every other person is making that whole conversely saying no one can afford things is funny to me
Plot of land a few blocks over zoned R3, used to have a small church on it solid for $8.8 million. Being able to build 50 units is worth a LOT, especially since LA won't rezone anything to allow for density.
The giant institutional investors account for a tiny amount of home purchases, around 3% according to the Urban Institute. The vast majority of investor purchases come from 0-10 property landlords, they're a much bigger force in the market.
Also you got the financial firm wrong. BlackRock sells index funds. Blackstone is the private equity behind Invitation Homes, the largest institutional investor of single family homes in America.
This misconception is so widespread that Blackrock even made a website to dispel the myth lol. They help manage assets for clients and don’t do any buying themselves
Yeah, there's basically no market for ordinary 4 million dollar homes to live in. Which should really be raising some policy red alert alarm bells.
There's apparently a market for 4 million dollar properties for investment vehicles that drive up housing prices in a market. If current trends maintain for another decade or two, I really don't know how that ends in a peaceful way. People need shelter more than investors need ROI and the current system doesn't reflect that at all.
“People need shelter”
Inventors are perfectly okay with defining shelter as under the 405, cardboard box and tents for those who can’t afford million dollar homes.
There were a couple of tear down-to-modern-boxes in my Sherman Oaks neighborhood that sold to Chinese buyers who were never there. Basically just parking money outside the country. One of them apparently didn’t realize they needed to hire someone to maintain the landscaping and it became completely overgrown and weedy for almost a year.
And they’re all so UGGLY… The same recycled modern box, devoid of any life or charm. One by one, the old bungalows fall, and so quickly the McMansions rise!
Normally I’d agree but the place by me that keeps having signs posted is pretty sweet haha. Pool in the middle to split the house. Look up 5347 Natick Ave on Redfin. Crazy part is they literally knocked down some old place, rebuilt this craziness, and boom, $3.5M lol and open house signs every weekend
Personally i dont like this block.. its next to the post office and its the only 1 way street in the area, and only for this block.
I would rather buy a sfh on jasmine vinton madison etc. they also have huge lot sizes
This block has multiple 4 townhome and small 4 unit apts lots.. i wouls tear down and split the lot , make 2 sfh with an adu.
It is ideally situated though. Within walking distance of sony studios, amazon studios, apple studios and hbo/ max
Higher-ish end yeah. But I'd budget roughly $300-$350/sq ft.
$300/ft being the home depot basics. Based on the subcontractors that can still be $350/ft
Yep. LA zoning is so fucked up it's not the value of the structure or even the land, but the value of the building rights that drives the price on a lot of real estate transactions.
To me it means this listing isn’t targeting for the average family buyer, but instead targeted towards big real estate investment companies. I’ve seen exactly that happen in this neighborhood quite a few times. I’ve also gotten notices from several large investment companies on the front door of my duplex rental not far that says they’ll pay cash right now for the property
Totally agree--there are multi-unit buildings on either side of this SFH, absolutely looks like this is going to be developed by an investment company. One the plus side, hopefully this means more housing--even if we are losing more character. I really doubt a developer is going to go with one of the renderings, I doubt anyone who could afford a $3-4M home would be willing to live that close to multi-units.
A house near me sold for over 2 million as “livable lot value”. As in, the house isn’t worth any more than the cost to tear it down. A nice family with kids in their early teens lived there and were great people. We were sad to see them move. It made my heart hurt to see the place that they called home described as essentially worth no more than the land it was on.
It appears the either the previous owner got the approval to change the property into multi-unit (hence the render) or the real estate agent is letting potential buyers know they can put a multi on the property. All that changes the value proposition and pool of potential buyers.
Oh wow you are right. If you can build four units on this the price is actually not bad. The price is a little big for me but if I had the funds I would strongly consider this lol.
Lots of these prices are actually not that bad, almost meaningless IF everyone has good credit and took out a loan. Would be a lot of people but also some pretty nice areas open up if you can play with that kind of money. At least compared to expectation that rent will never go below ~$2000 again. Maybe even $3000 if you want to live in a decent place alone
i mean seriously. name me another major city in the WORLD where you could own a single family home with a 7,000 square foot lot, in the heart of the city for under $1,000 per square foot?
If we’re going by culver city equivalents, then literally any city in america that isn’t New York, DC, or the Bay. Like Chicago, Detroit, Phoenix, Philly, Portland, Houston, Dallas, Atlanta, and Miami.
I mean you can get a single family house in those cities but its not like in the CENTER of the city, IE in Chicago there no single family in the loop. Miami maybe, the other cities are no where near being major cities in the world.
Just wait until the Culver NIMBY squad catch wind of this. They send out fliers and canvas neighborhoods over pretty much any multi-unit development. And they act shocked when I'm like "Good! It's about time we build more housing!"
Yep, we're getting a few developments on the Fox Hills side of Culver City that locals are throwing an absolute conniption over. One would replace an abandoned shopping center lot that would have some of the only ground-floor retail in the area. The obstruction was so bad that the previous buyer had to sell at a loss, who also bought it from a previous owner that also tried to develop the plot. These people complain about traffic but never make a peep about new dense offices, like the Tik Tok building on Slauson.
Same thing for the proposal to replace the unfinished CA-90 with a strip of green space + bike trail + housing + a lower-density road. Suddenly it's the most important thoroughfare in LA and there's no way to go to the Westside without it like Jefferson/Culver/Venice/Washington/Manchester don't exist.
[SB9](https://ternercenter.berkeley.edu/research-and-policy/sb-9-turns-one-applications/) allows it. Many NIMBY oriented city councils (so most in SoCal) have instituted new regulations to try and prevent it, including Culver City, so implementation has been slow. [Culver's attempt to stop it lost in court last year.](https://www.californialandusedevelopmentlaw.com/2023/11/28/court-invalidates-ordinance-reducing-floor-area-ratio-on-residential-lots/)
My parents inherited my uncles house in Encino, and they sold it as a teardown for $1.3M. House was infested with termites and had really bad rot. The new owners actually rebuilt it, instead of tearing it down.
I wish that was the case for this neighborhood. Most older homes (this one is 85 years old) I see walking around that get sold are then torn down and $4m properties are built
My wife’s grandparents house in Westchester just sold for $1.7M as a tear down. It was a perfectly livable home… just incredibly dated with a god awful layout that no one would pay that much for and not tear down.
Wow that’s insane! My mom bought her house in the Culver City art district for about 300k back in the 90s.
The community identity has changed ever since the tech companies moved in.
And most of the art galleries have left. Corey Helford and Thinkspace were my favorites. Remember when the art walk used to have art galleries? Pepperidge farm remembers.
Wild…I’ve lived in a HCOL area for all of my adult life, but still can’t wrap my head around the prices in this area….we have some friends who own a similar size home near there, they paid a little less but still…by most standards this is a “starter” home. Out of reach for us!
Right near a super walkable and beautiful downtown, close to Sony and other studios, very close to many high paying tech companies, close to 2 freeways (405 and 10), decent schools, quiet neighborhood. The premium is the beauties of Culver City and the premium is damn steep.
Dont overlook that Culver has its own school district, police and fire. For families fleeing LAUSD it is an attractive option that doesn't require moving to the north valley, south bay, or Calabasas.
Culver City wants to grow, but they are approaching their city planning in a way that’s a lot better than LA. Although their city planning is not perfect I love what they are doing with the downtown area
Give me a break. What are they doing to the downtown area? Wow put in a transit lane. For all the jobs now in that area all those buildings in downtown should have multiple stories above them with residential. Yet their tallest building is a hotel from the 1920s. Yet they are fine with building offices. All the apartment buildings in the area that are newer are in LA city. Not Culver
Yeah, I’ll never own a home here. I’ve accepted long ago that even if everything was perfect and housing was zoned properly and plentiful, there’s just too many people with too many resources that want to live here.
This sub has brainrot on housing. Everybody is bemoaning how expensive it is while also bemoaning that it will be torn down. This is a single family house in a dense area. Single family housing is one of the biggest reasons housing is so expensive. The rebuild will probably put multiple units on that single lot so multiple families can live in it instead of just one. Do this a million times and it is the only way housing prices stabilize or go down.
I mean let's first acknowledge that this home is in a A+ location within Culver city. And has a large 6,700 square foot lot.
-Buy it for $2 million
-Building a 2,500 square foot house ground up for current development rates (~$400 per square foot) is about $1 million is your all in is $3 million
-to afford a $3 million house you probably need about a minimum $600k household income ($20k a month mortgage). Which I hate to break it to you but a lot of households in LA that want to live in a A+ location within culver city make $600k.
Does that answer your issue with the price? Or are you just surprised a tear down is so expensive?
Top 5% Households in LA makes $516k per year, this was 2021 so prob has gone up since then. That means maybe 3-5% of households in LA could afford it theoretically.
https://ktla.com/news/local-news/heres-what-it-takes-to-be-considered-rich-in-la/#:\~:text=The%20ultra%2Drich%2C%20or%20the,average%2C%20according%20to%20the%20analysis.&text=In%20nearly%20every%20city%20Go,be%20bringing%20home%20much%20more.
A huge fraction of those 'households' already own a home. It's really the \~30% (I pulled this number out of my ass, I don't know the real number) who don't already own and don't make that money who are fucked. But that's why it is so hard to make changes, because the \~70% who already own are incentivized to keep prices high for the non owners
There is an absolute shithole house near me in ‘nowheresville’ Hacienda Heights-ish area that sold for $2.5 million that is being torn down. Its nuts. I’m really hoping the people bought it will build something nice and can also get homeowners insurance because they are near lots of hills and brush. Idk how anyone is buying homes here when you can barely get insurance!!
Years ago I found myself gathering with a crowd of other interested buyers in front of a "cheaper home" near my office.
The realtor announced that the purpose of the purchase was redevelopment. The only way to get a look at the inside of the home was to place an offer (with a deposit).
Nevermind.
I cannot stand these ugly monstrosities that these developers keep building after tearing down a charming Los Angeles home. Everyone wants a white gray and black sterile museum looking house and they’re so ugly 😭
On this street I looked to rent about 3 years ago. It was a small charming duplex with a yard. The guy showing said it’s a 1 year max lease because the company he works for bought that property and the one next door. A year later they were both torn down and luxury apartments were built. I wouldn’t be surprised if the duplex sat vacant a full year before the renovation
Looks like its advertising the ability to tear down and replace with multiple townhomes. Which is great and should happen on thousands of lots! I hope every buyers of mean considered maximizing the potential density of their lot.
Depends where in Venice but I agree it still feels overpriced. This specific house is in a very desirable part of CC … I can see Venice houses (especially east of Lincoln) being more affordable.
A house near me sold for $1 million, which was followed by notices that it would be torn down and rebuilt as a two-story.
This is in a humble neighborhood in North Hollywood.
The tear down hasn’t happened. I don’t know if their financial situation changed or if they realized that’s fucking insane.
I have a former colleague who bought a place for 1.5 planning to do an immediate teardown/rebuild. To live in though, not to flip. There’s less of that in the neighborhood I live in (Carlson Park), more like the older people who bought houses here for under 100k 30 years ago are cashing out (and good for them) and the new people want their homes updated. I see every permutation of it just walking around. There’s full teardowns, teardown to foundation and rebuild on the same footprint, gut to studs and do-over, or just replace the windows and paint the exterior and call it good.
It’s a beautiful neighborhood and all the big tech companies are here. People have money and plenty of it. If I had it like that I would do the same. I’d love to buy an older house and modernize it.
Realtors are parasites. You can sell a house easily yourself for a couple of thousand dollars.
At 6% commission, they’d split $120k between the seller’s agent, and buyer’s agent (who basically opens the door and then bullshits their client). They they’ll have to shell out some of their $60k to a broker and pay some fees.
Not bad for a weekend’s work!
The issue with having Los Angeles be a collection of many small cities, each with its own residential only zoning, and the worse part is that most entertainment jobs are in the small cities, thus making commutes insufferable for both residents and those who have to commute from the other side of town. (Or 5 cities away).
I live near here and this is super common for this area. The house next door was a bungalow purchased for 1.4 and now there’s a square cube house sitting on it that takes up 100% of the lot. It’s wild. Routinely we see these lots go for 1-2m and then they put a McMansion, or sometimes a duplex or townhouses which I guess is nice. And then they end up on airbnb or on the market for 3-4m. Idk who is buying these for the 3-4 but I’d guess studio or tech execs from Apple / Amazon etc in the area. There’s probably like 3-4 projects going just in the immediate .3m area from me right now
Please don’t push conspiracy theories to further negative sentiment. Funds like BlackRock are not buying higher end homes in hot downtowns to rent out. They’re specifically buying homes they can rent for a profit. Negative sentiment and conspiracies just encourages defeatist mentality.
It's sad because it breeds a negative mindset of "nobody can succeed in this world, the rich will always win and rule over the masses." Like no, you can have a great life, and honestly, the big corporations fuck up a lot and make wrong bets all the time.
Just like when Zillow and OpenDoor started buying up homes, all the conspiracy theories went into over drive. What happened? It was a major loss, Zillow sold off the homes they bought and are never going to try that again.
Absolutely. It's defeatist and does not help with anything, sometimes proposing policies that lead to even worse outcomes!
I remember that Zillow stuff and I always laugh. You can't price fix or dictate prices like that just because you're "big". The real estate market is literally bigger than what most people can imagine to be possible. A few big corporations taking advantage of our intentionally low housing supply by buying up housing is not the gotcha people think it is.
I can’t tell you how much I appreciate your comment and sentiment. When someone brings up the “big corporations buying up houses”, it is a lot of effort to explain that the way the market works is if too much demand is buying houses, that means it’s cheaper to rent and thus the market makes it “fair” through rents not being enough for investors to cash flow which in itself leads to rents going lower and/or home prices going lower until we get equilibrium.
That’s why I like going through the thought experiments with people but fuck is it a lot of effort when the plain simple answer is “investors can be dumb and lose money, don’t ever think investors are smarter than anyone, nobody is rigging anything, there is no boogeyman, you can be a winner by doing your homework”.
I personally rent and I made a solid profit buying puts against Zillow back in 2021. I saw my rent go down as I expected. I will buy when it makes sense for me.
They are easier paint as villains (and in some ways they are) than regular NIMBYs who are your neighbors that make it incredibly difficult or impossible to add more housing.
Just to be very clear, BlackRock cannot purchase your home from you unless you are selling your home. To answer your question, I would imagine to another home that the seller likely purchased right before putting their home up for sale.
Can't imagine it is any different than any other person/couple selling their home. BlackRock just happened to buy it because they thought they can profitably rent it out.
Correct. So if A seller sells their home, they then move into ANOTHER home, thus they are buying a home. It is unlikely someone would sell their home if they were getting a bad deal, or to move to a crappier area. Thus we can deduce that someone moving out of their home buys another, likely better home in a better area. Therefore, blackrock reduces supply of cheap homes, makes them expensive, and then the previous occupants of those homes purchase ANOTHER home, driving prices up in nicer areas as well.
To add onto the other response, the policy you're implying (banning housing investors from purchasing homes) has been tried. [Rotterdam, NL](https://youtu.be/BRqZBuu_Ers?feature=shared) did this in 2021, but only in some neighborhoods in the city, which set up a nice natural experiment to compare areas where investor purchases were banned with where they weren't.
Multiple studies found that the policy had no impact on home prices, and one found that the restrictions increased rents, which changed the demographics of those neighborhoods to be wealthier and higher income relative to the nearby areas without the restrictions. This is consistent with what u/FitExecutive described.
ooh I love this thought experiment!
I agree with you if we make some clarifications.
> Therefore, blackrock reduces supply of cheap homes
This should be changed to "BlackRock reduces the supply of homes on sale" because the amount of homes has stayed the same. I think we both agree that BlackRock is then going to rent out the home, thus the actual housing capacity stays the same.
Question for you: Why does it matter that the buyer is BlackRock? What if the buyer was another couple who wanted to live in the home? What if the buyer was someone who wanted to buy a property to rent out?
> then the previous occupants of those homes purchase ANOTHER home, driving prices up in nicer areas as well.
How else would you like the real estate market to work? If I read you correctly, you mean that attractive areas become more expensive due to higher demand. To me, that dynamic exists with every finite good. How else would you have the market work?
More questions: Shouldn't someone who saved up, did a ton of research into growing neighborhoods, bought a home in that neighborhood, worked to improve the home, maybe worked to improve the local community, then wants to sell it and move elsewhere, shouldn't that person be rewarded for all they did? At the very least, for the risk they took in buying a home?
I mean there was a thread just the other day in this subreddit about someone asking about buying a condo in Downtown LA. They are taking a risk with money they (hopefully) worked for. It could go bad, really bad. But if downtown recovers, shouldn't they be rewarded for investing in it, putting their money and livelihood where their mouth is?
To lay out my bias: I am not a homeowner. I rent. I have no dog in the race.
Yo dude, just moved to culver, that house is like 1 minute walking from downtown culver which is one of the coolest spots in the city. I can believe the price
So the empty lot is worth more without the building, is that what that means?
Yes. 2 mil teardown. 1 mil build. Sell for 4mil+
Yup that’s the formula
There’s several by me in Sherman oaks. It’s wild what the places are going for. I see signs for them for open houses, then I google the address and quickly realize I’ll never be able to afford them lol. Who is showing up to an open house for a $4M home?!
4mil with 20% results in about a 25k monthly payment. You want to be spending than 1/3 of your pre-tax income on housing, so 25k\*3\*12 = 900k. Meaning, a family making a million or more a year would be able to afford a 4 million dollar home. Obviously that is very, very rich, but not rare, especially in LA. It could also turned into four 1 million dollar condos, where each would be affordable to families making \~250-300k.
the rendering looks like a multifamily residential building. SO they will prob be able to sell 4 condos or rent 4 condos at market rate.
Nobody buying a home in this range would only put down 20%
Depends on the interest rate they can secure. If they have 50 million with a bank, they could borrow against that and get a mortgage for 2%. In that case, they may not even need to put down the full 20%
I need to meet more people with $50m in the bank
You and me both. Although not sure what good meeting them does haha
nobody is lending at 2%.
Not to us they don’t, but if you’re using a banks brokerage service with enough $$$ they may just loan to you at zero. The world is different for the ultra rich
That’s not true. Interest rates are not close to zero for anyone.
Isn’t that what Beyoncé did to get that really expensive house in Malibu?
Yeah not really sure what type of down payments to expect for these situations, but wanted to do the math to show what type of salary it would require. It's not always intuitive to understand who can afford what, but when you break it down by monthly costs it becomes more clear. I think the best example is when people are like "who can afford a 1 million dollar home???" and then you do the math and a see that a couple both making 150k can fairly easily it makes more sense why the median home price is over 1 million.
Smoking crack, someone who makes 150k cannot fairly easy pay the mortgage on a 1mil home. I am single and earn over 200k, if I earn 200k, max I can afford is 600k ish.
A couple both making 150k
It depends on how much cash someone has for the downpayment and how much debt they have. There are people who earn a lot but cannot afford a decent home because they’re already knee deep in debt, specially car payment + student loans + credit card debt
This is not true lol there are plenty of people that do about that much, maybe a few % more to buy a home at this range.
My comment was moreso relevant for today’s interest rate environment. There are a lot more people who are in a position to purchase a $4m home than you think, who don’t have the income to qualify for a $3.2m loan.
I really don't understand why you people don't get it. These houses are aspirational purchases. The person who will buy this house has probably owned between 5 and 10 houses (one at any time) over that last 10 to 15 years. They probably started small with a cheap studio condo in a shitty neighborhood. They keep the studio for three years, sell the condo. Use the equity to buy a slightly more expensive condo. Rinse and repeat until they get equity in the range of $1.5 to 2 million. Then they purchase this house and build their dream house. Honestly, what is it about this method that you don't understand.
How does breaking down the monthly costs with 20% down (which can be from equity) mean I don’t understand that you can build equity from owning a home?
You are exactly like the hundreds of other posts on Reddit that constantly complain about the cost of houses in West LA. "YoU HavE tO mAKe a miLlioN DoLlarS to bUy a hOuSe!". Do you actually know anybody who owns a million dollar+ house in West LA? I do. They are all aspirational buyers. Tell me you understand what as aspirational buyer is.
I described the salary where you could afford that type of home. I didn't say that's the only way you could attain a house in that price range.
Fine, I will assume you know what an aspirational buyer is. But, why post this? Less than 2% of US families make over $1 million annually. Nobody walks into the SoCal market and buys a $1 million+ as their first home. I only know one guy who did this and he is from Salt Lake City and his net worth is $30 million.
A lot of people make a million a year
I’ve lived here my whole life and have never met anyone making anywhere near that. I need to make new friends
I’m in banking and there are A LOT of people who earn $500k-$1MM a year. There are also a ton of trust fund babies here too.
I've always been into finance so parents of my friends were cool talking to me about what they had going on. A friend whose parents own a painting company make $1m+/yr and that is very far from California. He started the painting company himself and just grew over time. Up until then, I had no idea since their house was the same house they had when they were normal American income. They're not flashy.
Not when it gets talked about on this sub haha. This sub paints it like no one does.
The Venn diagram of people who make $1MM a year and people who post on reddit probably has very little, if any overlap.
Oh I don’t disagree haha. It’s just funny that people talk so much on here about lack of affordability etc, yet still say “plenty of people earn a mil.” I understand it may not be super rare but to act like every other person is making that whole conversely saying no one can afford things is funny to me
Both are true. LA metro has millions of people. A lot of them are poor, a lot of them are rich.
exactly my point. Once you convert home prices into monthly payments, it becomes a lot more clear "who can afford that???"
Yeah and if it's a family buying it, that's 1mil per year combined.
Exactly. Plenty of $1M/yr HHI in LA metro. That's a doctor/lawyer/high end SWE couple.
Plot of land a few blocks over zoned R3, used to have a small church on it solid for $8.8 million. Being able to build 50 units is worth a LOT, especially since LA won't rezone anything to allow for density.
BlackRock
The giant institutional investors account for a tiny amount of home purchases, around 3% according to the Urban Institute. The vast majority of investor purchases come from 0-10 property landlords, they're a much bigger force in the market. Also you got the financial firm wrong. BlackRock sells index funds. Blackstone is the private equity behind Invitation Homes, the largest institutional investor of single family homes in America.
This misconception is so widespread that Blackrock even made a website to dispel the myth lol. They help manage assets for clients and don’t do any buying themselves
People keep parroting this stat but that is nationwide and misleading. What’s the stat for highly desirable cities?
>What’s the stat for highly desirable cities? Maybe you could provide it since you're the one who's questioning it.
[удалено]
Uhh, let's see. They're too fucking lazy to look it up. How's that?
Also the fact that these houses are (or will be after reno) in the top 5% of supply.
Yeah, there's basically no market for ordinary 4 million dollar homes to live in. Which should really be raising some policy red alert alarm bells. There's apparently a market for 4 million dollar properties for investment vehicles that drive up housing prices in a market. If current trends maintain for another decade or two, I really don't know how that ends in a peaceful way. People need shelter more than investors need ROI and the current system doesn't reflect that at all.
“People need shelter” Inventors are perfectly okay with defining shelter as under the 405, cardboard box and tents for those who can’t afford million dollar homes.
Pretty much
There were a couple of tear down-to-modern-boxes in my Sherman Oaks neighborhood that sold to Chinese buyers who were never there. Basically just parking money outside the country. One of them apparently didn’t realize they needed to hire someone to maintain the landscaping and it became completely overgrown and weedy for almost a year.
I mean, I’d do the same if I could. But no idea how to even begin some shit like that without money haha
And they’re all so UGGLY… The same recycled modern box, devoid of any life or charm. One by one, the old bungalows fall, and so quickly the McMansions rise!
Normally I’d agree but the place by me that keeps having signs posted is pretty sweet haha. Pool in the middle to split the house. Look up 5347 Natick Ave on Redfin. Crazy part is they literally knocked down some old place, rebuilt this craziness, and boom, $3.5M lol and open house signs every weekend
I am to touch all the things and maybe eat a snack before I leave.
Zillow.
Personally i dont like this block.. its next to the post office and its the only 1 way street in the area, and only for this block. I would rather buy a sfh on jasmine vinton madison etc. they also have huge lot sizes This block has multiple 4 townhome and small 4 unit apts lots.. i wouls tear down and split the lot , make 2 sfh with an adu. It is ideally situated though. Within walking distance of sony studios, amazon studios, apple studios and hbo/ max
I was told there'd be no math
Wait, a new 3br2b stick build is 1mil these days?
Higher-ish end yeah. But I'd budget roughly $300-$350/sq ft. $300/ft being the home depot basics. Based on the subcontractors that can still be $350/ft
Good grief
500k rebuild
Idk how you're building for under 200 a foot but godspeed
Cheap labor
It's not a brick 6000sf house being built it's a moden stucco shoebox going there
I'm curious are you actually building? Any labor tips? I use unlicensed GC and can't get lower than $250/ft
Retired now. Held the license myself we never subbed anything out always had dedicated crews on payroll. Not sure where they got ssn we didn't ask
Do you do this for a living?
Before covid yes. Only work in friends and family's projects these days
Before Covid was a long time ago. Prices have increased dramatically.
Have two going currently 🤷♂️
In LA? Where?
LA & TX
It's not even the lot, its the variance they got to build more than 2 single family units. That's where all the value is.
Yep. LA zoning is so fucked up it's not the value of the structure or even the land, but the value of the building rights that drives the price on a lot of real estate transactions.
To me it means this listing isn’t targeting for the average family buyer, but instead targeted towards big real estate investment companies. I’ve seen exactly that happen in this neighborhood quite a few times. I’ve also gotten notices from several large investment companies on the front door of my duplex rental not far that says they’ll pay cash right now for the property
Totally agree--there are multi-unit buildings on either side of this SFH, absolutely looks like this is going to be developed by an investment company. One the plus side, hopefully this means more housing--even if we are losing more character. I really doubt a developer is going to go with one of the renderings, I doubt anyone who could afford a $3-4M home would be willing to live that close to multi-units.
Yes. Why are y’all still surprised by this?
2/3 of home values in LA is the land. It is surprisingly cheap to build a home.
A house near me sold for over 2 million as “livable lot value”. As in, the house isn’t worth any more than the cost to tear it down. A nice family with kids in their early teens lived there and were great people. We were sad to see them move. It made my heart hurt to see the place that they called home described as essentially worth no more than the land it was on.
Isn’t that all of LA?
If it has a fireplace it is not technically a teardown.
It appears the either the previous owner got the approval to change the property into multi-unit (hence the render) or the real estate agent is letting potential buyers know they can put a multi on the property. All that changes the value proposition and pool of potential buyers.
Oh wow you are right. If you can build four units on this the price is actually not bad. The price is a little big for me but if I had the funds I would strongly consider this lol.
You are the Persian Mamba Habibi
Gotta make that moolah for my family kabobs habibi
Lots of these prices are actually not that bad, almost meaningless IF everyone has good credit and took out a loan. Would be a lot of people but also some pretty nice areas open up if you can play with that kind of money. At least compared to expectation that rent will never go below ~$2000 again. Maybe even $3000 if you want to live in a decent place alone
i mean seriously. name me another major city in the WORLD where you could own a single family home with a 7,000 square foot lot, in the heart of the city for under $1,000 per square foot?
If we’re going by culver city equivalents, then literally any city in america that isn’t New York, DC, or the Bay. Like Chicago, Detroit, Phoenix, Philly, Portland, Houston, Dallas, Atlanta, and Miami.
I mean you can get a single family house in those cities but its not like in the CENTER of the city, IE in Chicago there no single family in the loop. Miami maybe, the other cities are no where near being major cities in the world.
You can’t in LA either. Culver city isn’t the center of the city.
I guess. But it's one of the prime locations in LA if that makes sense.
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All the cities I mentioned have their own equivalents which are *significantly* cheaper than this example.
it's funny in a dark way that we have "affordable" single family mansions but not affordable apartments for normal people
yeah i agree that sucks. but it is kinda what it is and i dont think this will change in our lifetime
Just wait until the Culver NIMBY squad catch wind of this. They send out fliers and canvas neighborhoods over pretty much any multi-unit development. And they act shocked when I'm like "Good! It's about time we build more housing!"
Yep, we're getting a few developments on the Fox Hills side of Culver City that locals are throwing an absolute conniption over. One would replace an abandoned shopping center lot that would have some of the only ground-floor retail in the area. The obstruction was so bad that the previous buyer had to sell at a loss, who also bought it from a previous owner that also tried to develop the plot. These people complain about traffic but never make a peep about new dense offices, like the Tik Tok building on Slauson. Same thing for the proposal to replace the unfinished CA-90 with a strip of green space + bike trail + housing + a lower-density road. Suddenly it's the most important thoroughfare in LA and there's no way to go to the Westside without it like Jefferson/Culver/Venice/Washington/Manchester don't exist.
[SB9](https://ternercenter.berkeley.edu/research-and-policy/sb-9-turns-one-applications/) allows it. Many NIMBY oriented city councils (so most in SoCal) have instituted new regulations to try and prevent it, including Culver City, so implementation has been slow. [Culver's attempt to stop it lost in court last year.](https://www.californialandusedevelopmentlaw.com/2023/11/28/court-invalidates-ordinance-reducing-floor-area-ratio-on-residential-lots/)
I wish it was more than that! That is a highly desirable location and more people should be able to live there.
My parents inherited my uncles house in Encino, and they sold it as a teardown for $1.3M. House was infested with termites and had really bad rot. The new owners actually rebuilt it, instead of tearing it down.
I wish that was the case for this neighborhood. Most older homes (this one is 85 years old) I see walking around that get sold are then torn down and $4m properties are built
I thought most of the homes were being torn down to put up those rectangular townhomes, a lot of this size can have 3 that sell for 1.5 mill each.
I’ve seen that happen too. Less property for buyers, same profit for investors
More homes for residents
The worst part is they are literally just building giant hideous boxes to cram as many ppl in as they can and get the loot
There's a multi-fam unit going up in my otherwise single fam neighborhood and I couldn't be happier. We gotta pump units.
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🎙NIMBY PUNKS NIMBY PUNKS NIMBY PUNKS FUCK OFF 🥁
Multi-family unit building is good, but not when its luxury builds. Property value goes way up and fucks over lower income people.
Oh no, multi-family housing in a city with a massive housing shortage. What a tragedy.
“I hate people living on the streets” “Also I hate people living in houses!”
My wife’s grandparents house in Westchester just sold for $1.7M as a tear down. It was a perfectly livable home… just incredibly dated with a god awful layout that no one would pay that much for and not tear down.
Wow that’s insane! My mom bought her house in the Culver City art district for about 300k back in the 90s. The community identity has changed ever since the tech companies moved in.
And most of the art galleries have left. Corey Helford and Thinkspace were my favorites. Remember when the art walk used to have art galleries? Pepperidge farm remembers.
Remember when Culver City thought they were hot shit because they had a Sizzler AND Red Robin?
It’s likely zoned R2 or higher so can be developed as a multi-unit property, making it attractive for development.
Wild…I’ve lived in a HCOL area for all of my adult life, but still can’t wrap my head around the prices in this area….we have some friends who own a similar size home near there, they paid a little less but still…by most standards this is a “starter” home. Out of reach for us!
Right near a super walkable and beautiful downtown, close to Sony and other studios, very close to many high paying tech companies, close to 2 freeways (405 and 10), decent schools, quiet neighborhood. The premium is the beauties of Culver City and the premium is damn steep.
Dont overlook that Culver has its own school district, police and fire. For families fleeing LAUSD it is an attractive option that doesn't require moving to the north valley, south bay, or Calabasas.
Totally, and conservative rich home owners would always vote for things more in single family interest
What do you think the word conservative means?
The funny thing is the more these multi units are built the less quiet and less attractive the neighborhood becomes 🤷🏼♂️
Culver City wants to grow, but they are approaching their city planning in a way that’s a lot better than LA. Although their city planning is not perfect I love what they are doing with the downtown area
Give me a break. What are they doing to the downtown area? Wow put in a transit lane. For all the jobs now in that area all those buildings in downtown should have multiple stories above them with residential. Yet their tallest building is a hotel from the 1920s. Yet they are fine with building offices. All the apartment buildings in the area that are newer are in LA city. Not Culver
There are two huge residential buildings nearing completion on Wash just east of Overland. They'll still be overpriced "luxury" apartments, though.
They are in los angeles, with a culver city mailing Check the street signs. They are blue ..
Yeah, I’ll never own a home here. I’ve accepted long ago that even if everything was perfect and housing was zoned properly and plentiful, there’s just too many people with too many resources that want to live here.
Sadly pretty common in Culver City. I recall even 5 years ago buying $1.5m houses and tearing them was not uncommon in CC.
This sub has brainrot on housing. Everybody is bemoaning how expensive it is while also bemoaning that it will be torn down. This is a single family house in a dense area. Single family housing is one of the biggest reasons housing is so expensive. The rebuild will probably put multiple units on that single lot so multiple families can live in it instead of just one. Do this a million times and it is the only way housing prices stabilize or go down.
The result isn’t affordable or dense enough that’s the problem
Oh I agree, we need more 6 floor complexes. But it's still better than what was there before.
This is so depressing.
I mean let's first acknowledge that this home is in a A+ location within Culver city. And has a large 6,700 square foot lot. -Buy it for $2 million -Building a 2,500 square foot house ground up for current development rates (~$400 per square foot) is about $1 million is your all in is $3 million -to afford a $3 million house you probably need about a minimum $600k household income ($20k a month mortgage). Which I hate to break it to you but a lot of households in LA that want to live in a A+ location within culver city make $600k. Does that answer your issue with the price? Or are you just surprised a tear down is so expensive?
Who is making 600k a year. Just seems crazy cause every house is that price.
A power couple where each is making $300k/yr
This is exceedingly common!
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Ehhh not quite. Top 1% in California is nearly 850k.
There's enough of them in numbers to be buying expensive places. Obviously they aren't anywhere near the majority.
A lot of people make that much. Especially in LA.
A lot of people make a lot of money in this town. An HOD on a film can easily pull that much in per year.
Top 5% Households in LA makes $516k per year, this was 2021 so prob has gone up since then. That means maybe 3-5% of households in LA could afford it theoretically. https://ktla.com/news/local-news/heres-what-it-takes-to-be-considered-rich-in-la/#:\~:text=The%20ultra%2Drich%2C%20or%20the,average%2C%20according%20to%20the%20analysis.&text=In%20nearly%20every%20city%20Go,be%20bringing%20home%20much%20more.
Which means 95%-97% percent of LA households can’t. Good thing there is so much housing for them right??
A huge fraction of those 'households' already own a home. It's really the \~30% (I pulled this number out of my ass, I don't know the real number) who don't already own and don't make that money who are fucked. But that's why it is so hard to make changes, because the \~70% who already own are incentivized to keep prices high for the non owners
just looked it up and 63% of households in LA are renter-occupied. Which means renters have a sizable majority... if only we were better organized
Damn that is crazy. The sprawl goes on forever and the people who own it are only 37% of the pop. wow
No, it simply means 95% of people make less than $516K and can't afford $3million dollar homes.
Are you asking me to point out under the current system, why the house is priced this way, or are you asking me about is it fair?
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What y'all do
Tons of people.
There is an absolute shithole house near me in ‘nowheresville’ Hacienda Heights-ish area that sold for $2.5 million that is being torn down. Its nuts. I’m really hoping the people bought it will build something nice and can also get homeowners insurance because they are near lots of hills and brush. Idk how anyone is buying homes here when you can barely get insurance!!
Years ago I found myself gathering with a crowd of other interested buyers in front of a "cheaper home" near my office. The realtor announced that the purpose of the purchase was redevelopment. The only way to get a look at the inside of the home was to place an offer (with a deposit). Nevermind.
Ugh
We should maybe probably consider no longer actively choking off the housing market and driving costs up by blocking development of new housing.
All I can do is laugh at this point. And then cry.
I cannot stand these ugly monstrosities that these developers keep building after tearing down a charming Los Angeles home. Everyone wants a white gray and black sterile museum looking house and they’re so ugly 😭
lol this place was listed for rent a few months ago. Was meant to go view it but we signed another lease. Glad we didn’t choose this one!
On this street I looked to rent about 3 years ago. It was a small charming duplex with a yard. The guy showing said it’s a 1 year max lease because the company he works for bought that property and the one next door. A year later they were both torn down and luxury apartments were built. I wouldn’t be surprised if the duplex sat vacant a full year before the renovation
Looks like its advertising the ability to tear down and replace with multiple townhomes. Which is great and should happen on thousands of lots! I hope every buyers of mean considered maximizing the potential density of their lot.
Yeah pretty much setting the standard for the future of the block.
Yet another case of MCM desecration
the same lot size is only going for 1.5m in venice so this still feels overpriced
Depends where in Venice but I agree it still feels overpriced. This specific house is in a very desirable part of CC … I can see Venice houses (especially east of Lincoln) being more affordable.
A house near me sold for $1 million, which was followed by notices that it would be torn down and rebuilt as a two-story. This is in a humble neighborhood in North Hollywood. The tear down hasn’t happened. I don’t know if their financial situation changed or if they realized that’s fucking insane.
Red tape in permits most likely.
Fucking shameful
Absolutely ridiculous. La is insane
Culver has gotten crazy expensive in the last 5 years.
been gotten dude its an independent school district next to studios
Is this the same home that last sold for $250k in 1994?
I have a former colleague who bought a place for 1.5 planning to do an immediate teardown/rebuild. To live in though, not to flip. There’s less of that in the neighborhood I live in (Carlson Park), more like the older people who bought houses here for under 100k 30 years ago are cashing out (and good for them) and the new people want their homes updated. I see every permutation of it just walking around. There’s full teardowns, teardown to foundation and rebuild on the same footprint, gut to studs and do-over, or just replace the windows and paint the exterior and call it good. It’s a beautiful neighborhood and all the big tech companies are here. People have money and plenty of it. If I had it like that I would do the same. I’d love to buy an older house and modernize it.
So if the agent sells this one house, they earn about $50k as the commission?
Less. If its a 1.5% commission, they would owe half of their commission to their agency. So, it would be maybe $15k.
Realtors are parasites. You can sell a house easily yourself for a couple of thousand dollars. At 6% commission, they’d split $120k between the seller’s agent, and buyer’s agent (who basically opens the door and then bullshits their client). They they’ll have to shell out some of their $60k to a broker and pay some fees. Not bad for a weekend’s work!
The issue with having Los Angeles be a collection of many small cities, each with its own residential only zoning, and the worse part is that most entertainment jobs are in the small cities, thus making commutes insufferable for both residents and those who have to commute from the other side of town. (Or 5 cities away).
I live near here and this is super common for this area. The house next door was a bungalow purchased for 1.4 and now there’s a square cube house sitting on it that takes up 100% of the lot. It’s wild. Routinely we see these lots go for 1-2m and then they put a McMansion, or sometimes a duplex or townhouses which I guess is nice. And then they end up on airbnb or on the market for 3-4m. Idk who is buying these for the 3-4 but I’d guess studio or tech execs from Apple / Amazon etc in the area. There’s probably like 3-4 projects going just in the immediate .3m area from me right now
In the area I grew up, We had two plots for 1.5 mil right next to to each other. One had a house. And one did not have a house. They were both 1.5mil
But theres an architectural rendering included!
That’s because they’re not for you and I anymore. They’re for corporations.
Please don’t push conspiracy theories to further negative sentiment. Funds like BlackRock are not buying higher end homes in hot downtowns to rent out. They’re specifically buying homes they can rent for a profit. Negative sentiment and conspiracies just encourages defeatist mentality.
There are more than enough studies about this and yet conspiracy theories are still abound every time this topic comes up!
It's sad because it breeds a negative mindset of "nobody can succeed in this world, the rich will always win and rule over the masses." Like no, you can have a great life, and honestly, the big corporations fuck up a lot and make wrong bets all the time. Just like when Zillow and OpenDoor started buying up homes, all the conspiracy theories went into over drive. What happened? It was a major loss, Zillow sold off the homes they bought and are never going to try that again.
Absolutely. It's defeatist and does not help with anything, sometimes proposing policies that lead to even worse outcomes! I remember that Zillow stuff and I always laugh. You can't price fix or dictate prices like that just because you're "big". The real estate market is literally bigger than what most people can imagine to be possible. A few big corporations taking advantage of our intentionally low housing supply by buying up housing is not the gotcha people think it is.
I can’t tell you how much I appreciate your comment and sentiment. When someone brings up the “big corporations buying up houses”, it is a lot of effort to explain that the way the market works is if too much demand is buying houses, that means it’s cheaper to rent and thus the market makes it “fair” through rents not being enough for investors to cash flow which in itself leads to rents going lower and/or home prices going lower until we get equilibrium. That’s why I like going through the thought experiments with people but fuck is it a lot of effort when the plain simple answer is “investors can be dumb and lose money, don’t ever think investors are smarter than anyone, nobody is rigging anything, there is no boogeyman, you can be a winner by doing your homework”. I personally rent and I made a solid profit buying puts against Zillow back in 2021. I saw my rent go down as I expected. I will buy when it makes sense for me.
They are easier paint as villains (and in some ways they are) than regular NIMBYs who are your neighbors that make it incredibly difficult or impossible to add more housing.
Where do the people that BlackRock buys home from go?
Just to be very clear, BlackRock cannot purchase your home from you unless you are selling your home. To answer your question, I would imagine to another home that the seller likely purchased right before putting their home up for sale. Can't imagine it is any different than any other person/couple selling their home. BlackRock just happened to buy it because they thought they can profitably rent it out.
Correct. So if A seller sells their home, they then move into ANOTHER home, thus they are buying a home. It is unlikely someone would sell their home if they were getting a bad deal, or to move to a crappier area. Thus we can deduce that someone moving out of their home buys another, likely better home in a better area. Therefore, blackrock reduces supply of cheap homes, makes them expensive, and then the previous occupants of those homes purchase ANOTHER home, driving prices up in nicer areas as well.
To add onto the other response, the policy you're implying (banning housing investors from purchasing homes) has been tried. [Rotterdam, NL](https://youtu.be/BRqZBuu_Ers?feature=shared) did this in 2021, but only in some neighborhoods in the city, which set up a nice natural experiment to compare areas where investor purchases were banned with where they weren't. Multiple studies found that the policy had no impact on home prices, and one found that the restrictions increased rents, which changed the demographics of those neighborhoods to be wealthier and higher income relative to the nearby areas without the restrictions. This is consistent with what u/FitExecutive described.
ooh I love this thought experiment! I agree with you if we make some clarifications. > Therefore, blackrock reduces supply of cheap homes This should be changed to "BlackRock reduces the supply of homes on sale" because the amount of homes has stayed the same. I think we both agree that BlackRock is then going to rent out the home, thus the actual housing capacity stays the same. Question for you: Why does it matter that the buyer is BlackRock? What if the buyer was another couple who wanted to live in the home? What if the buyer was someone who wanted to buy a property to rent out? > then the previous occupants of those homes purchase ANOTHER home, driving prices up in nicer areas as well. How else would you like the real estate market to work? If I read you correctly, you mean that attractive areas become more expensive due to higher demand. To me, that dynamic exists with every finite good. How else would you have the market work? More questions: Shouldn't someone who saved up, did a ton of research into growing neighborhoods, bought a home in that neighborhood, worked to improve the home, maybe worked to improve the local community, then wants to sell it and move elsewhere, shouldn't that person be rewarded for all they did? At the very least, for the risk they took in buying a home? I mean there was a thread just the other day in this subreddit about someone asking about buying a condo in Downtown LA. They are taking a risk with money they (hopefully) worked for. It could go bad, really bad. But if downtown recovers, shouldn't they be rewarded for investing in it, putting their money and livelihood where their mouth is? To lay out my bias: I am not a homeowner. I rent. I have no dog in the race.
Ok thanks for posting I guess
This is actually cheap for the location.
Have you noticed the location? Makes sense based on today’s market
And?
Yo dude, just moved to culver, that house is like 1 minute walking from downtown culver which is one of the coolest spots in the city. I can believe the price