Will You Pay $1.7 Million for a Condo?

I went to the following open house during the weekend and I am not too impressed with this home because it's in front of a busy and noisy street called South Catalina Avenue in Redondo Beach and its kind of busy cross street Avenue C.  The price tag is $1,6999,000.  It's not a house, it's only a condo.

After paying 20% down ($339,800), the monthly cash out-flow for this condo is $8,075 for a 30 year mortgage ( mortgage payment + property tax + HOA fees).  That is only assuming the new buyer isn't going to re-paint the interior or re-decorate.  Some of the interior painting is pretty gloomy looking to me.   I personally don't like the layout of the home because it has 2 bedrooms on the ground floor.  I don't like homes that have bedrooms downstairs and living room and the rest of the home upstairs.    The traffic was pretty noisy when I was there and it was a Sunday.  I can't imagine the noise when it 's a weekday.  There is the side way ocean view from one of the balconies on the side on the cross street of Avenue C.  The ocean view isn't front and center.  Even though the home is supposed to be 2,300 square feet, it feels a lot smaller inside because of the three-level layout.   If I have $339,800 cash on hand, I will definitely not want to buy a condo in front of the intersection like this one, what about you?  Will you pay this kind of down payment and monthly cash to buy a condo like this?

2202 Huntington Ln, Redondo Beach, CA 90278 at $680K

  

When I went to the open house, it was priced at $729K.  The real space inside felt a lot smaller than the square footage reported.  The lens of the camera made the house look a lot newer, sharper and a lot more spacious.  I was a little disappointed when I stepped out to the backyard, it was pretty small and cramped.  The master bedroom is of a good size but with wall colors and decors that reminded me of the show "The Golden Girls".  The master bathroom has tiles that are so very 80s and that need to be redone too.  One thing about having that kind of tiles is, dirt and mildew tends to accumulate on the grids easily and fast, making the bathroom look dated and dirty too frequently.  This kind of tiles require a lot more cleaning time and therefore they are not for me.   The rest of the bedrooms are all very small with wall paint that needs to be redone. Typical of most of the townhouses in North Redondo Beach, a lot of bedrooms have windows facing closely with neighbors' windows.  

At the time of the open house, I felt that $729K was too pricey for the work that I will need to do to re-decorate the interior to suit my taste. Besides, I felt cramped and I smelt stuffiness when I was inside.  It was overall not better than my upper level apartment rental that has city view.  With the property tax and my tax bracket, even after the portion that was tax deductible, I will actually need to pay the non-deductible portion of over $1500 a month for interest expense and property taxes, before homeowners insurance,  and other upkeep and maintenance expense or the redecorating expenses and the repayment of the actual principal.  That is only if I put 20% down payment.  Despite the money side, I didn't think I would want to  rent this house, let alone settling down on it with a 30 year mortgage. My rule of thumb is, I'm not going to buy a house if I don't even see myself renting it.

This is why I am still at my rental apartment.  Buying that house will cost me more cash outflows each month and tie up over $145K of money in a 30 year mortgage. For the next 10 years, what really goes into the equity of the house may be a few hundred dollars after the non tax deductible portion of the property tax and interest.  Even interest rate will be low, the size of the loan and my personal income tax bracket will still generate quite a big amount of non tax deductible interest.  Also, the property tax is very high and will continue to increase. Redondo Beach has a huge burden of future obligation for pension and health benefits for the city employees, I just don't know what's going to happen when the city finally runs out of money to fund them... This creeps me out whenever I consider whether or not I should buy a mere townhouse at over $700K...This house eventually was sold at $680K, not to a first-time home buyer, but to a wealthy investor.

514 N Juanita Ave Unit A $750K

This house has a very nice and modern exterior. It's on a good street, but far away from the beach. The interior, however is a lot smaller than the pictures show. The inside has some stuffy smell when I was touring inside. The smell reminded me of the apartments of college students. I'm not sure whether it's the ventilation or the layout of the townhouse that traps odors. It was hot when I was there. May be they hadn't opened all the windows, except the balcony in the master bedroom that faces the street. I don't think they wanted to open all the windows during open house because the rest of the windows in other rooms are in close proximity with neighbor's windows. This is the front unit, and it at least has the front side of the house that has a decent distance from the neighbors across the street. The sides of the houses and the back of the house are all too close to neighbor's windows. So they are closed during open house or may be for a long time so this explained the stuffy and stale food smell...

The tiny kitchen opens right into the tiny living room. Again, it reminds of an apartment setup... The inside of this house is too cramped and not opened. It just feels smaller than the reported square footage on the listing. I absolutely do not want to pay $750K to live in a cramped space like an apartment.... This house is not a bargain at this real estate market and it is absolutely not worth paying the property tax and HOA and also the closing cost to live in a house this quality. With that price, one can get a much better house in Torrance... I will pass this one again...

710 North LUCIA Ave Unit A Redondo Beach, CA 90277

I went to look at this home today. It looks much bigger and newer on the pictures than it really is. Priced at $739,500, I think it's too much because the layout of this townhouse feels tiny and cramped. Every window is surrounded by neighbor's windows at very close distance. There is very little privacy. The master bedroom has a normal size. But the other bedrooms are very very small. All the bedrooms are on the ground floor and the living room and kitchen on the top floor. I personally hate this kind of layout. The so-called ocean view advertised on the listing is a joke and totally embarrassing. I see more obstructive windows and tree tops from the very close neighbors than anything.... The listing sounds good but the quality at this price level is really disappointing. The property tax is sky high at $9,306 for 2010. Even if my tax rate were at the highest bracket of 35%, I would still be paying $6,048 a year just for property tax. This number will be much bigger for me because my income is far less than the 35% tax bracket. The lower one's tax bracket, the lower one can benefit from the tax deduction effect on property tax. Besides, there is the earthquake insurance, the HOA, the loan fees and interest for a 30-year mortgage and closing cost. I will have to make quite a lot of money to afford this tiny townhouse. This townhouse also needs some updating because the interior is kind of dated. At this price level, it's beyond my annual income. I do have the 20% down payment, but it doesn't make sense for me to spend a lot more every month so I can move from my current beautiful rental home in a nicer street to this cramped tiny townhouse, just to be a homeowner (actually a renter of the government of the city, the state, the fed and the bank?) I will pass this one and I will remain a happy renter for the time being.

510 Susana Ave

Feeling determined to leave our miserable apartments that we are keeping separately in both Redondo Beach and Sherman Oaks, we have been diligently searching the rental market. During my search, I have seen too many beat up apartment buildings just like the ones we are currently occupying, only to have no elevator and to be in worse neighbourhoods...

Finally I found this house for rent on 510 Susana Ave in Redondo Beach. The house is in a very nice middle class neighbourhood inhabited mostly with white collar professionals like ourselves. There is great curb appeal. The neighbours seem to take very good care of their houses. Soon as I stepped out of the car, I feel in love with the good old American vibe of the street and the exterior of the house (looks a lot nicer in person than in picture).

When we stepped in, I was even more impressed. How much nicer this is than all the apartments we visited. There is all nice hardwood floor in the sizable living room, dining room and open kitchen area. The kitchen is spacious and is equipped with newer appliances and granite counter tops. The dining room opens to a nice covered patio and a very nice and well maintained backyard with fruit trees! There is 1 bedroom downstairs and 1 very nice 3/4 bathroom next to this bedroom. Upstairs there is one big bedroom that has a huge deck with nice roof top and city view. Standing there, I was already visioning myself lounging there on weekend mornings with my breakfast and favorite magazines, enjoying the refreshing ocean breeze and smell of the morning. Then there are 3 other nice size bedrooms and another nice bathroom with granite counter top, double sinks, a bath tub, and a separate shower. The only flaw this place has is that there is no master bedroom with its own bathroom. But I can live with that because the house looks like it was remodeled not long ago, with new bathrooms, new carpet in all the bedrooms... The house just looks so new to me even though it was built in 1965. May be I have been living in old junky apartment for too long. Just the possibility of us living in a house in this new condition makes me so excited and so happy. So all together, there are 5 bedrooms and 2 bathrooms in this house, that provides an office for each one of us for our work, and also may be some extra storage room or guest bedroom for my mother-in-law if she comes to visit with us. There is a huge attached 2-car garage, in-house washer, and dryer, front lawn and driveway. I can't wait to finally not share washers and dryers with filthy neighbours. I would like to live in this house. I can see myself being so happy living in this house. After all these months' apartment hunting, I told my husband, "no more, this is it, this is our new home. I'm going to sign the lease." The rent for this house is $3,000 a month, which is still a little cheaper than the combined rents of our two separate lousy apartments. Can you believe it???? We are living separately like bums and yet with a little less money, we can actually live like middle class Americans!! Unbelievable!!

I went home so excited and I couldn't wait to sign the lease on Monday. Then the leasing agent called in 2 hours just to tell me the house was already rented out. Someone else just signed the lease in the broker's office when I was stepping out of the house! I feel so crushed cause that put us back to this "indefinite stay" in our separate miserable clumpy apartments!! I'm in such lousy mood now I can't even explain it. Meanwhile, some tenant underneath us is grilling in his balcony. I'm coughing and choking with the smoke as I blog... I am crying now. I'm sad because I just don't know how much longer I need to live with this bullshit before I can find a place to move to!!

I Hate My Hubby's Luxurious Apartment in Redondo Beach

I would like to write a post to vent out all my anger and frustration with my husband's "Luxurious Apartment" in Redondo Beach.... I've been spending countless miserable weekends here visiting with my husband that there is no blog post long enough to list all the things I hate about this place. To have a glimpse of what I am going through, just click here to read the reviews of other tenants.....

If one day my husband and I are filing for divorce, this apartment will be the reason.