Today's DataQuick April headline is "Southland home sales highest in eight months". But Los Angeles County median price continued down, now 20.9% below last August's peak, and sales volume is down 30.6% from April 2007. "Highest in eight months" is faint praise, especially as sales always turn up in the second quarter.
In neighboring counties there was a slight price uptick in Ventura and San Diego Counties. (Link to March DataQuick.)
Monday, May 19, 2008
April DataQuick
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12 comments:
Funny. No matter what the news, bears/bulls discount/cite a gospel depending on their view.
Some will always buy and some will always sell, no matter the state of the market.
LA market, and even the Westside, is large enough that the trends will continue until we reach some sanity in pricing.
I suspect, however, the bottom will be sooner than most realize. Housing will never be cheap.
Just great, the bottom is now being called and the westside has been untouched by the price declines. $1.6 million for the tiniest shack north of Wilshire is a nightmare that's here to stay?
Just great, the bottom is now being called and the westside has been untouched by the price declines.
LOL... the bottom will be being called for quite some time yet. Forget the headlines... look at the numbers. They suck. Bottom is roughly when foreclosures decline measurably, inventory declines YOY, and sales are up YOY. None of those things are happening. Maybe next year? Maybe not. :-)
On the near the bottom scenario....
I bought in SM at the near bottom of the last recession and it STILL wasn't cheap. I bought a SFR from the Federal Gov't, who had acquired it from a failed S & L (remember Charles Keating?)
Everyone assumed we got a great deal....but even the Fed knew SM was a fairly strong RE market. They didn't give the property away. It sold for about $100K less than the former purchase price (5 years previously), or about 18% less.
So waiting for the deal of the century might of already happened....its always a good time to but real estate if you can afford it, can live in it, take the tax deductions and raise a family in a good stable setting.
Bottoms happen when nobody is willing to call it a bottom. There are too many bottom callers around to make this a real bottom.
Markets don't go straight up and they don't go straight down. But they do tend to follow longer term cycles. Trees don't grow to the sky.
This is the seasonally strong time of year and there are going to be new waves of buyers as we take steps down. I remember seeing many people talk about some of the false rallies that occurred during the last downturn in the 90s.
The fact that people are so worried about still being priced out shows that we have not hit a true capitulation stage...
All this being said, I agree that property around here will never be "cheap". The westside will likely always carry a good sized premium over many other areas of LA.
Does Westside Bubble have an email address we can send articles to? The Wall Street Journal just ran another bullish piece, but this one about the high end housing in each of the major metro areas, including Los Angeles, and claims the last year has not only seen those areas not decline, but that "Median prices in Brentwood are up 16%. The Hollywood Hills, up 26% to a median price of more than $2.1 million. Rancho Palos Verdes and the Palos Verdes peninsula, up 17%. Parts of Newport Beach, one of Orange County's poshest addresses, are up as much as 67% to $2.75 million. The coastal village of Laguna Beach is up 6%."
http://online.wsj.com/article/SB121122333682304367.html?mod=RealEstateMain_1
This is truly depressing if true.
Arti
Arti,
You may want to read some papers that are more local...Like the LA Times:
http://tinyurl.com/5cam2l
Median sale prices fell by 13% in Beverly Hills in April, compared with the same month last year. Rancho Palos Verdes dropped 18% over the same period, while Newport Beach's 92660 ZIP Code took a 34% hit, according to DataQuick Information Systems.
Experts say these areas and others are catching up with price declines that struck first in outlying suburbs such as the Antelope Valley and the Inland Empire, where many first-time home buyers purchased their properties with sub-prime loans.
"You can't have one market hugely cheaper than another forever," said UC Berkeley professor Thomas Davidoff, who specializes in real estate.
"You can't have one market hugely cheaper than another forever," said UC Berkeley professor Thomas Davidoff, who specializes in real estate.
Of course you can. That is a patently absurd remark. The historic truism is that location is king.
Incidentally, both the Wall Street Journal and the Los Angeles Times are right. Newport Coast (the region that is the 90402 of Newport Beach) is WAY up. The rest of the city is WAY down. Again... location, location, location.
I think that when he said "forever" he might have been talking about spacetime and future light cones. In that case, he's probably dead right.
Regardless, if you had read the article you could have inferred that he was talking about price drops of Antelope Valley/Inland Empire relative to price strength of premium areas. He's probably following the theory of the reverse ripply effect. That's really not "patently absurd" nor does it affect the "historic truism" of location is king.
Boys and girls,
I've read this blog a fairly long time. I really appreciate all the intelligent contributions I read.
And here goes my 3 cents (used to be 2 cents but inflation and all...lol). And keep in mind that you're getting what you paid for. $0.
As has been said by minds greater than mine a million times before, this time I do believe is different. But it really is this time.
We've experienced an UNPRECEDENTED housing boom, part of an unprecedented asset boom in general, in such a short and contracted period of time. Plus, we are now experiencing, and will continue to experience for the foreseeable future, very high inflationary pressures. Partially due to the fault of our central bank's M.O. and
paritally due to BRICs wanting their piece of the pie.
For those of us who are students of the economy, this should be fun to watch unfold.
The only saving grace for real estate is that as this great inflation takes hold, real estate prices at some point in time will have to stop falling and moderate. Possibly then they will go up some, at best some nominal pace, because RE is, afterall, an inflationary hedge.
The way we all have been trained/conditioned to think of RE (RE = big $) here in L.A. will have to change. I think it will possibly be different for a very, very long time. Who knows.
Prepare for worse times, and to be on the safe side, I'd prepare for much worse times.
Unless your personal circumstances dictate otherwise, there is absolutely NO rush to buy real estate at this time.
Thanks anon 2:24. We have been on the sidelines for 5 years now and I feel like I'm going to lose patience soon, even tho I know it's not a good time to buy. Comments like yours are very helpful to remind me of what I, too, believe. Thanks!
Does Westside Bubble have an email address we can send articles to?
Sure! westsidebubble {at} gmail {dot} com (if all that cryptic punctuation helps thwart the spammers, although Gmail's spam filters are quite effective).
Even better if you add your own comments and quotations, as opposed to just a raw article. Guest posters are welcome!
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