I won’t get into why, but this little article (SoCal Office Building Sold For 60% Of Cost) caught my eye when I saw it through CurbedLA, written by Seekingalpha.com.
It crystallized a concept I’ve been trying to wrap my head around for the past few months. It originally occurred to me while visiting a recently completed housing development at Channel Islands Harbor. Anyone familiar with the area understands there is very little local industry. It’s mostly agriculture, with a Navy base and some moderate local infrastructure. The developers must have sold the construction project as exurban housing for workers commuting to Los Angeles.
The original buyers, it appears, were people working in the construction business – carpenters, plumbers, electricians – moving into seafront homes in a gated community with price tags starting in the low-700s. So when business was booming, and your overtime was pushing your wages into the six-figures range, you might have been able to find option ARM or Alt-A paper to squeeze into that McMansion.
QuantumTom 