HOUSINGNEWS REPORT
BY DAREN BLOMQUIST EXECUTIVE EDITOR THE DENSIFICATION OF LA LA LAND
LOS ANGELES SPOTLIGHT
For John Gomez the best predictor of an emerging housing bubble isn’t buried in esoteric economic numbers or arcane housing statistics; it’s what other real estate investors are willing to pay for bottom- of-the-barrel homes in his local market of Norwalk, California. “Yesterday I went on Auction.com. A trashed house in Norwalk, the bid started at $200,000; 390 was the top bid. That property probably needs about $40,000 to put it back in use,” said Gomez, owner of Acton Real Estate who has been investing in the Norwalk and Compton areas in south Los Angeles county for 25 years. “When you’re selling a three- bedroom trashed home at $400,000, we’re in another bubble I guess. We’re heading that way.”
Median home prices in Los Angeles County have increased on a year-over- year basis for 57 consecutive months through February 2017 and hit a new post-recession high of $565,000 in June 2016, according to sales deed data collected by ATTOM Data solutions. Prices are still 7 percent below the pre-recession peak of $605,000 in August 2007. Median home prices in Norwalk hit a new post-recession high of $440,000 in August 2016, and home prices have also increased on a year-over-year basis for 57 consecutive months through
February. Prices in Norwalk are still 12 percent below the pre-recession peak of $498,500 in April 2007. Pull Back on Home Flipping While Gomez is always on the lookout for the next good deal to fix and flip, he plans to pull back on purchasing in 2017. “We’re staying fast. We’re not buying anymore. I don’t know what’s going to happen with the market by the end of the year,” he said, noting that his business
When you’re selling a three-bedroom trashed home at $400,000, we’re in another bubble I guess. We’re heading that way.”
John Gomez | Owner, Acton Real Estate in Norwalk
ATTOM Data Solutions • P13
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