Tuesday, September 18, 2007

Santa Monica prices and income

I've been thinking about this since my Sept. 4th Modeling prices and income: could I refine price and income indices specific to Santa Monica? Here are the results so far.

I've written before about "lot value" prices north of Montana. I'm attempting to formalize that, assembling a series of low-end sale prices of standard 50x150 lots on 9th, 10th, 12th, and Euclid, north of Montana. (I omitted 7th, Lincoln, 11th, and 14th for their noisier traffic.) Some I got by looking for old sales for newer houses in eppraisal.com. Others are from agent fliers and (recent years) the County.

I'll post my list as a comment to save space here. If you have more to offer, please do! There's a big hole in the earlier 1990s, and I couldn't find the 1989 peak I though I recalled of over $900K.

The first conclusion is that this Santa Monica index tracks S&P/Case-Shiller for Los Angeles pretty well (scaled by eye), but rose a little higher around 1990 and hasn't turned down yet.Here I've added Los Angeles County and Santa Monica median houshold income from the Census (a different index, but similar slope to the per-capita income I used before). Santa Monica is a little higher, but still well below the housing curve.

So a second conclusion is there's little reason not to expect a similar fall in Santa Monica to the 40% +/- across Los Angeles I estimated before.


Westside Bubble said...

Here's my list so far:

Year Price ($K) Address

1981 $275 537 10th
1982 $230 427 9th
1984 $265 553 9th
1985 $295 550 10th
1985 $320 339 10th
1985 $316 527 Euclid
1986 $420 611 10th
1986 $475 557 12th
1986 $450 545 12th
1986 $485 233 Euclid
1987 $473 403 10th
1987 $510 348 12th
1987 $470 347 12th
1987 $725 547 Euclid
1988 $605 348 12th
1988 $705 549 9th
1988 $780 557 12th
1988 $725 615 Euclid
1988 $785 330 10th
1988 $777 317 12th
1988 $800 412 10th
1989 $830 555 10th
1989 $700 711 12th
1989 $865 408 Euclid
1989 $712 560 9th
1990 $900 424 9th
1990 $735 326 9th
1991 $810 308 Euclid
1991 $655 554 9th
1996 $541 627 Euclid
1996 $610 1027 Carlyle
1996 $626 714 10th
1996 $650 423 9th
1996 $655 558 10th
1996 $610 333 12th
1996 $650 344 Euclid
1996 $640 404 12th
1997 $610 323 9th
1997 $750 507 10th
1997 $752 538 10th
1997 $751 545 12th
1999 $785 337 12th
2000 $750 518 10th
2001 $995 550 Euclid
2002 $1,000 544 Euclid
2002 $1,100 402 10th
2003 $1,375 229 12th
2003 $1,397 602 10th
2003 $1,401 627 Euclid
2004 $1,610 633 10th
2005 $1,795 717 Euclid
2006 $1,976 502 Euclid
2007 $2,050 307 Euclid
2007 $2,200 342 12th

Anonymous said...

News today :
Buffering the bubble?
Fed slashes interest rates to buffer economy
Tue Sep 18, 2007 7:21pm EDT

WarChestSM said...

Westside, are you sure you aren't Calculated Risk's brother or something?? This data is fantastic, thank you for posting.

Santa Monica/LA had the same jobs, weather, schools, "world city status", beaches, Hollywood influence, etc back in the last downturn and we saw prices decline.

Anonymous said...

Why is there no data for 1992 through 1995?

Mr.Mortgage said...

Unreal work. Are you a full time analyst?

Your real estate hasn't dropped like this property. Credit crunch and luxury slowdown in LA.

Westside Bubble said...

Anon, it just didn't turn up from the sources I had. Wonder if anyone with MLS access can find such info there?

Thanks, WarChestSM and Mr. Mortgage! No, no relation to CR and not a full-time job, but I've always been into showing things with numbers.

Anonymous said...

great work. i agree with your assessment that lot values could fall 30% or more.

according to your data, the peak to peak CAGR from 1990 to 2005 was almost 7% ($750k to $2m). that's not unreasonable given the decline in LT rates, income growth and population growth over this period.

the *trough* to peak growth rate was more like 15% ($500k - $2m from 95-05). i think a lot of the more bullish folk on these websites make the mistake of measuring HPA from trough to peak, as opposed to peak/peak or trough/trough.

if one were to postulate that the next trough will be in 2010 and that the trough to trough growth rate will regress to 7%, it implies that lot sales in SM will bottom at ~ $1.4m 3 years from now.

obviously, this ignores the potential that prices of existing SFR could provide a price floor for the teardowns.

Don said...

I've been tracking the median sales prices from DataQuick since the November 2006 data for Culver City, Santa Monica (south of Wilshire), Century City, and a swath of L.A. from Miracle Mile to Venice Beach. In August, I saw for the first time, almost across the board month-to-month declines in median sales prices. The exceptions are few enough to enumerate: 90034 SFR, 90036 SFR/Condo, SM 90404 Condo, 90405 SFR. The 90036 condo number spiked enough to offset all the other condo numbers, but that was on just two sales (I've set the inclusion in the spreadsheet threshold at more than one sale). It will be interesting to see how things look in December when I can start doing YoY comparisons. Even with increases in interest rates, we're seeing our savings goal for a down payment (20%+enough to keep the mortgage&taxes under 28% of gross monthly income+points on a jumbo mortgage at the lowest rate at the credit union*) going down.

* Interestingly, I've found that the savings goal is lower if you pay points in cash on top of the down payment than to go with the higher rate and no points.

Mr.Mortgage said...

What's the cost of the interest rate cut to you?

Come on Westside Bubble Maniacs make some comments. Freedom of Speech is still in force on my blog.

SM Local said...

There has been a considerable amount of discussion regarding an "inevitable" decline in home/condo prices in Santa Monica. That being said, where do people see SM prices in 3-5 years. Also, I see little discussion re: 90404 and the Pico Neighborhood. Anyone care to comment on those locales?

Westside Bubble said...

SM Local, see 2937 Delaware Ave with links to previous posts about 90404. It appears to have sold already.

Pico west of Stewart is multi-family, and my focus has been mostly single-family.

Anything you'd like to suggest?

SM Local said...

Thanks WB (the site is great by the way). I'd only like to see some projections (guesstimations) for SM prices beyond the projected downturn (3-5 yrs).

Gaurang said...

Love your graphs, love your blog.

Westside Bubble said...

Longer term, SM Local, my best guesstimate is prices will follow incomes in Santa Monica. I'll keep working on trying to refine that.

You're welcome, Gaurang!

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