Left: Sitting on a 2,500 square foot lot, this original home in La Verne has an asking price of $335,000. Center: Selling for $2,850,000, this La Verne hills home is one of the many custom homes built on a private street. If the asking price is too low, the seller may get more, but if the bar is set too high, prices still may be negotiated. Right: La Verne real estate mogul Don Kendrick remembers when this empty lot was listed for $250,000 years ago. The site recently sold for $750,000.
Before La Verne was La Verne, it was known as Lordsburg, and land was dirt-cheap; no one would have imagined that 115 years later, people would be paying astronomical prices for a house in La Verne. An 84-year-old, 640 square foot La Verne house (roughly half the size of a basketball court) on C Street sold last year for $275,000. This was just one of 18 homes built before 1930 and sold last year for prices ranging from $275,000 to $620,000.
The real estate market in the last two years has rapidly increased. If you did not buy a few years ago then you missed out according to many homeowners. “I couldn’t afford to buy my house today,” says Randy Miller, a La Verne homeowner and University of La Verne adjunct professor, who lives north of Baseline. Randy originally paid $290,000 in 1989, and now a fixer upper next door sold for $500,000.
Long-time real estate agent Lonnie R. Suchanek says the market “will slow down compared to now but still rise 2 to 3 percent a year.” That seems like a steep incline, taking into consideration that the market has risen 15 to 30 percent in some Southern California areas such as La Verne, Glendora and other neighboring cities.
The most “in demand” homes in La Verne are the oldest ones that have small town charm. These homes are commonly known as “money pits”; they need much renovation, which takes a lot of money. “They are the highest dollar per square foot,” says Don Kendrick, a La Verne real estate agent and new La Verne City Council member. Kendrick owns his own real estate office in downtown La Verne on Bonita Avenue, near D Street.
The median California household income in 2004 was $56,070, with a median price home of $470,920. The current median priced home in La Verne is $500,000 more than double what it was in 2000. That does not seem mathematically feasible. In order to qualify for the median priced home, one needs to have a minimum income of $109,320, among other things like good credit. That is double the average household income. In one year, the median-priced home increased 41.6 percent, according to the 2005 Los Angeles Business Journal.
Few optimistic people believe that the market will soon be a buyer’s market again. It comes down to a basic supply and demand issue. “Values are going to climb as long as there’s a lack of inventory,” says Kendrick. Bruce Johnson a real estate broker at Avantra in Glendora says, “The market will adjust but not go down.”
There are numerous people wanting to live in California and just not enough housing. For example, in La Verne, there are only three to four areas that have room for development, and at the most, a potential 60-70 homes can be built, Kendrick explains. Something will need to change. In some places like Long Beach, they have already started building up like San Francisco in tall buildings with lofts and apartments, allowing more people to live in the area without using as much land.
The people who have the resources and the desire to move out of the state or own much property are sitting comfortably financially with the market, as expensive as it is. For example, retirees who have homes in large cities and are looking to move somewhere with a slower-paced life are in good shape. They are able to sell their house, make a few hundred thousand dollars, and buy a newer house for a portion of that. People looking to move out of the state are in similar situations.
“Prices are so high right now, it’s stupid to sell unless you’re moving to Des Moines, Iowa or Bend, Ore.,” Bruce Johnson, a real-state broker, says half-heartedly. Some homeowners think they are rich, which is true in some cases, because the price of their house has doubled from what they paid for it. But unless they sell it and move to a less expensive house, they will not make a profit. Unfortunately, moving is not practical if you are working in and around the Los Angeles area.
Locally, the prices are extremely high from La Verne to Montclair. The price ranges depend upon the location says Suchanek. “Above the 210 freeway, the prices range from $500,000 to one million. From Baseline to the 210 Freeway, they’re $400,000 to $600,000; below Baseline to Foothill is $350,000 to $500,000, and below the 10 freeway, the houses are $275,000 to $290,000,” explains Suchanek.
A majority of people want to live in nice clean areas like La Verne. “La Verne is a quaint city with a small-town atmosphere,” says Kendrick. “Part of La Verne’s appeal is its safe community.” Out of the 13 neighboring cities, La Verne has the lowest crime rate; the police and fire departments are not outsourced, giving residents a faster response rate. “It’s a great place to raise our kids,” explains Miller. “It’s quiet and nice with friendly neighbors on both sides. We don’t plan on moving.”
Georgina Zierbes and her family have lived in La Verne for four years. They bought their house for $200,000, and now it is worth $450,000. “I love La Verne because it’s clean, quiet, and I feel really safe. There’s really great schools, and the police are really on top of things,” Zierbes says.
Darci Banks, a 25 year-old La Verne resident and Cal Poly, Pomona student, plans “to marry rich” in order to live in La Verne. “La Verne is really cute; I love it,” Banks says. “Unfortunately, I can’t afford to buy, and I don’t know if I ever will.”
Rich Tafoya, a ULV alumnus, and his wife Leanne recently bought a house in Covina. “We initially wanted La Verne or Claremont, but that is unrealistic,” he explains. It is tough for young people to find hope in owning their own home due to today’s real estate market. The couple started out looking to buy in La Verne. “We went into Don Kendrick’s office and gave him all of our information and asked what we could get in La Verne, and he said, ‘Maybe we should check in Pomona; there are some really nice places that are close to La Verne.’” They picked up their stuff and told him, “No thanks.”
“First time buyers are so screwed right now; it’s impossible,” says Johnson. “Lots of young kids are qualifying for interest only loans, and there are lots of foreclosures because they don’t have the equity built. They are doomed.”
Bruce’s partner Ingrid Moreo, a realtor at Avantra, says that is the down side of real estate right now, but she stresses to buy under any circumstance if you know that your income will be going up. “Get into whatever you can as soon as you can,” says Moreo.
Don Kendrick’s advice is for young people to stretch their income now and buy; and eventually their income level will meet what it needs to be. “One hundred percent financing is not hard to qualify for,” Kendrick says. Financial institutions do not want to be in a position where an entire demographic is cut out of the home buying process.
Suchanek says they are creating “new types of loans that will fit into programs that will enable young people to buy.” Most of these programs include high interest rates and longer loan periods, which mean houses will take longer to be paid off.
La Verne has come a long way from its Lordsburg days when land was dirt cheap. Today, there are not many people leaving La Verne, and when they do their house is sold in an astounding three weeks. For them, it is like winning the lottery.