We know the monthly LA Times / DataQuick median prices by zip code, especially if the number of sales is small, are skewed by what size of houses happened to sell that month. It's still interesting to note that for March 2008, the main zip codes I track in detail fell significantly from March 2007:
LA/Mar Vista 90066, 18 sales, $772K median house price, -13.9%
Pacific Palisades 90272, 21, $1,735K, -17.1%
Santa Monica 90402 (north of Montana), 4, $2,350K, -6.0%
Santa Monica 90405 (Ocean & Sunset Parks), 4, $1,028K, -23.4%
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11 comments:
Does anyone know how they come up with the closed sales number? It seems like the info from Dataquick and melissa data and other sources all have HUGE differences in the results for a given month and totals for a given time frame (like quarter or full year)
The actual number of houses sold figures are too low for either zip code in SM to be of any use for comps....4 houses sold? ridiculous....that means sellers and buyers are at an impass...
Skew you. I should have bought in 90403, houses there went UP 68.8%.
"4 houses sold? ridiculous....that means sellers and buyers are at an impass..."
Agree. And it also is generally a sign that we are near the beginning of a downturn as declines in transactions have historically preceded declines in price.
Yawn...this thing is going to take years...
Agree completely, this thing is going to take years. As I keep repeating, the five stages of grief are the best way to understand the market psychology. The westside is only now moving from denial and into bargaining (it's lagging the other areas), and it will take a long time before anger and capitulation set in.
Arti
A minority voice: Now that it has started, I think that it will fall fast over the next 18 months!
Basically, when there are no buyers at listed prices (or 4 buyers per month), one or two needy "motivated" sellers start listening to the available offers. When they keep hearing 30% off offers, they finally have to bite in order to sell and they knock the market price down for anyone else.
Thereafter, the comps are against higher prices (that no one was willing to pay anyway), so the market keeps dropping. Sensibly.
2 is a crowd when there are only 4 sales. So buyers make lowball offers! Save us all money! Do not be ashamed to not acquiesce to greed and hubris.
It's going to happen anyway, so why not try to save yourself?
Money isn't everything, but it makes some difference in conceptualizing how much money you are comfortable giving away to a "greedy" seller (and take away from paying for your kids graduate school education) to buy sooner rather than later...
Arti,
I think we may already be in the anger stage.
it's like this all over the city. sample sizes for any given zip code are so small that the median figures are nearly meaningless. w/ only four sales in a zip either the 2nd or 3rd highest sale is going to be the median. just depending on which type of house sold the median can swing drastically. the nicer zips in south bay are showing the same thing.
here's a talking point that i have yet to see adequately discussed on this otherwise fantastic blog. i'm looking at a new listing at 115 17th street that is asking $3.2M for a nice-looking house in gillette square.
past sales price indicate $710k in '94 and $1.2M in '98. with some simple help from excel it looks like the seller is asking for an annual appreciation of roughly 10% which seems absurd considering that real estate historically tracks inflation.
so here's my question. what is an appropriate annual rate of appreciation that we could apply to historical prices pre-bubble that would allow us to better price individual homes?
Anon 4:43, one version is the per-capita income line I used on the third graph here.
See this link for foreclosures on the westside
http://terrafirmala.com/2008/04/scheduled-foreclosures-where-are.html
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