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Los Angeles Housing Prices

|Includes: AOBC, Caterpillar Inc. (CAT), RGR

Los Angeles housing prices are overinflated.

As a potential first-time home buyer, I have been looking at single-family houses in the Los Angeles area for the past year. To be specific, I am talking about the area south of the Sepulveda pass, i.e. not the Valley. I am not looking for a horrendous commute. I also don't want to live in the ghetto, so the area I am specifically looking at is west of the 405 from Santa Monica to Torrance.

Unless I want to fork over $600,000 to $700,000+ (and I don't), I'm mostly out of luck. Sure there are some deals to be had...for instance, this house in San Pedro:

For a tidy $304,900 you can pick up this beauty. I like what they've done with the concrete patio -- this is a handball player's dream house. Only a block from the nearest kidnapper/rapist and within 1 mile of 46 other sex offenders (thankyou Megan's Law) -- nothing a bulldozer (NYSE:CAT) and a posse of vigilantes (RGR, SWHC) couldn't fix.

The gamble I am taking is that interest rates will stay low while the sellers realize they are asking too much. Here's to my landlord not increasing the rent while I build up my downpayment.

Disclosure: No positions