I recently purchased a home in Los Angeles, something I wasn’t sure I’d ever be able to afford. When prices started skyrocketing in the mid-2000s, like many other people I chose not to buy and saved my money instead. I was glad I did, despite some acquaintances insisting that prices would only get higher. In 2005, the median price of a single family home in Los Angeles was about $529,000; by 2008 the median price fell to $340,000. (The median is the point at which half of all homes cost less, and half cost more).
After watching prices and interest rates fall, I began looking in earnest. I got very excited to see I could actually afford to buy in a neighborhood where I would like to live. I began by looking online, and found many places that fit my criteria: in my price range, a reasonable commute to work, nearby places to walk or hike, and safe enough for me to take a walk alone. In fact, there were so many places that I got picky, at first only wanting to see places that had been decorated to my taste. If I didn’t like the flooring or the kitchen countertops, I passed. Most of the listings were short sales, meaning the homeowner owed more on their mortgage than they could expect to sell for. Banks will often agree to accept less money in order to avoid the more expensive and time consuming foreclosure process.