I updated for July my graph of DataQuick # Sales and Median Price for Los Angeles County, with the second quarter highlighted in yellow. Notice how weak 2Q07 sales (red line) were, much less of a bump than the previous years, and July was nearly as low as the February low point.
For comparison, I used Melissa Data numbers for Santa Monica zip codes 90402 and 90405, and Mar Vista 90066, to create a Westside composite of # Sales and Weighted Average Price. Months with more sales in 90402 spiked the average price, as seen for April-May 2007. But it dropped in June-July, and I think will drop more. I'll continue this series.
Tuesday, August 14, 2007
July numbers
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6 comments:
Very nice work. A bit more info about how you weight the averages would be useful (is it just to keep a constant weight between the Zips?)
If the mortgage standard tightening over the past few weeks knocks out a few deals at the margin while seasonal effects lower the sales as well, I imagine that we'll see a pretty big drop over the next two quarters.
Whether prices actually start to decline--who knows?
Maybe we find some million dollar homes and compare it to this LOL
http://www.latimes.com/news/local/crime/homicidemap/
We'll be able to see how many murders next to the ridiclously priced houses.
Anon, the formula I used on the Melissa monthly data was:
((# 90402 sales)*(90402 average price)+(# 90405 sales)*(90405 average price)+(# 90066 sales)*(90066 average price))/((# 90402 sales)+(# 90405 sales)+(# 90066 sales))
Rather fewer sales occur in 90402, but of course the prices are higher.
Hey Westside,
Thanks for filling us in on the formula and for keeping us up-to-date.
That said, I'm not sure your formula is measuring what you want: If you multiply the # of sales by the average (mean) price, you get the total price. So, if both the prices in 90402 and 90066 decrease in price but the number of sales in 90066 declines relative to 90402, your price will go up.
What I'd do is take av avage number of sales in each zip over some long period of time, and use that to weight things.
(Basically, trying to get closer to same-home data--the end-game there is something like Case-Shiller.)
See my latest post, Anon.
http://thegreatloanblog.blogspot.com/
Jumbo Mortgage Market Meltdown Freezes Luxury Housing.
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