The price we pay to not live in Texas
It’s Moving Season! Come on, there’ll be beer and pizza, and we can use your truck.
A lot of the big news regarding people moving in and out of the states is centered to a large degree on the fact that, according to the 2022 Allied U.S. Migration Report, people are fleeing California for the warm embrace of Texas, which seems analogous to a goldfish jumping out of its bowl for the warm embrace of the carpet. Sure, Texas will save you money on taxes, the cost of living and real estate, but I’ve been to Texas and it has a big problem with scenery, politics and electricity. Worst of all, it’s a state that’s lousy with Texans.
Yes, it’s true real estate is cheaper in Texas than it is in California, much in the same way that it’s costs less to stay in the Economy Inn in Muleshoe, Texas than it does to spend a night or two at the Surf & Sand in Laguna Beach.
For those who, for whatever reasons, decide to remain in Long Beach rather than give up their dreams and move to Austin, “The California of Texas,” things are starting to somewhat loosen up in the Long Beach real estate market. People aren’t giving away their homes quite yet, but the median average price of a home here was $728,000 in February, which is down almost 9% over February 2022, and the median sale price is about the same—$725,000, down 9.38%. And while sale prices were largely over asking prices during the boom years, above-asking prices are down 30.5% over 2022 and price reductions are also up by 15.5% over last year.
The big hurdle, though, for homebuyers is rising interest rates which can quickly erase any bargains you might get from snapping up a home costing slightly less than what it would’ve gone for a year or two ago.
Consider the difference in even a 1 percentage point raise in rates, for instance, between a rate of 6.03% and 7.03% for a median-price home in the U.S. (which was $419,950 in February—and there are, of course, no $419,000 single-family homes in Long Beach) equals a raise of $219 in your monthly payments, or $79,000 over the life of a 30-year loan.
In Long Beach, where interest rates were around 4.1% in February 2022 and now are around 6.8%, your monthly payments would’ve been about $2,803 a month in 2022 and $3,781 a month in 2023. Or about $1,009,000 over 30 years versus $1,361,000 with the higher rate.
Worse, Jerome Powell, chief of the Federal Reserve, has been making noises about another fairly steep increase in short-term interest rates and, while those rates are separate from mortgage rates, lenders tend to tag along with raises and decreases in the Fed’s rate.
Let’s see how you can stay out of Texas by buying a home priced near the median in Long Beach, and I’ll admit in advance that Texas, despite Texans and the other faults of the state, can be tempting when compared to Long Beach home prices.
From the outside, this home in the Bixby North neighborhood, a bit of a panhandle poking up to the north end of Del Amo from Bixby Knolls proper, looks like most homes in the East End looked back in the 1950s when they were still new and minimally landscaped. The neighborhood is a generally quiet enclave just west of Cherry. At 1,816 square feet and sporting four bedrooms and three bathrooms, it’s a lot of house, but it needs some work to cheer it up. Flooring and paint at least, and definitely some new lighter cabinets for the smallish, dark kitchen. On the plus side, there’s an inside laundry room, a covered patio out back in the large yard that includes an above-ground pool, which may or may not be a selling point. The 1942 home is listed at $749,900 by Realtor Hal Schlegel.
This completely remodeled 1944 home is in Wrigley Heights, a neighborhood that’s cut off from being in south Los Cerritos by the 405 Freeway. Despite its perhaps too-close proximity to that freeway, it’s still one of the nicest homes you’ll find in this price range. Listed by Nicole Rouzan of Coldwell Banker, the house has fine curb appeal on a nice block in an emerging and promising neighborhood. It’s bright inside with a big living room. It has three bedrooms and a bathroom featuring subway tilework in 1,012 square feet of living space. Its large bay window in the living room lets in plenty of light, and it has a large and inviting backyard with new sod and a seating area surrounding a built-in fire pit. It’s listed at $735,000.
Your $725,000 buys one of the nicer homes in the Washington neighborhood at 131 E. 15th St. It’s a three-bedroom, two-bath cottage weighing in at 976 square feet, but the finished attic conversion makes it close to 1,300. The 1921 house has sort of a rode-hard exterior, but it’s fairly immaculate inside thanks to a $50,000 renovation that gives it handsome teak hardwood floors throughout the house, including the modern galley-style kitchen and large dining and living rooms. Other upgrades include all new plumbing that includes a tankless water heater. The home is listed by Davy Ouch of Century 21.
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