An often missed but critical piece to the puzzle is the change in the Primary Residence Capital Tax Gain Law. After 1997 the change allowed home owners to sell their homes (not income or second homes) and keep any profit made up to $250,000 for individuals and $500,000 for couples. No requirement to buy another house of equal of greater value and you can live in a house for two years and do it again and again. In, fact many many people did just that several times if they were fortunate to be in a location where property values had a upward run for five or more years. Guess where one of the steadiest and longest runs happened: LA, and yes, Los Feliz, which was under-priced compared to the more fashionable West Side of Los Angeles, did really well for a lot of people. Jeff Lewis among them. So combined with their tax free $$$, lower interest rates screaming 24/7 and rising values, homeowners began treating their home sweet home as a personal ATM machine. As long as conditions were right everybody was HAPPY. BUT oops guess what? It had to change sometime. If it is too good to be true...it is too good to be true. Reality, no pun intended, is back and it seems that everyone wants to find someone to blame.
Somehow I don't think it was Jeff Lewis who was responsible for the sub-prime disaster, for the adjusting house prices or for people not being able to afford the home they wanted because they can't qualify for the loan now. But people are STILL buying houses. The people who buy Jeff's and Ryan's homes are generally in the Entertainment Industry, as are a great percentage of those who buy anything in our areas of LA. We are not talking about anywhere else here. These people buy homes that are perceived to be done and professionally DONE. Does not not matter what price point either. In LA is it all about the "SHOW" and Jeff and Ryan are among the best at producing a HIT. Carrie and I have been working with them for years.