Tuesday, May 20, 2008

Not selling north of Montana

The LA Times front page today includes, "CA mansion for sale, cheap. OK, cheaper." It begins,

The rich may indeed be like the rest of us. Prices of their homes are now falling too.

Gated mansions and hillside estates have held their own through most of the real estate slump, but data released Monday showed big drops in the region's most exclusive neighborhoods.
Perfect timing to update our everything over 30 days on the market north of Montana.

At 21 it matches last month and is double the past months' average, net of some sales and other new additions. Over 90 days on the market (red below) is down two, from 9 to 7. Here's the detail:

420 7th, 2 bed/2 bath, CLP=$1,777K (+27%**), OLD=8/16/07 (**redone to sell after first listing)
1140 San Vicente, 0/0, $1,895K (-14%), 1/30/08
517 Euclid, 5/2, $2,195K, 4/19/08
754 23rd, 4/3.5, $2,279K (-15%), 6/8/06
710 19th, 3/2, $2,295K (-8%), 3/10/08
460 Lincoln, 3/3, $2,395K, 4/14/08
238 17th, 4/3.5, $2,635K (-2%), 3/11/08
541 Euclid, 4/4.5, $3,200K (-7%), 4/7/08
1820 San Vicente, 4/3.5, $3,295K, 3/6/08
723 22nd, 4/4.5, $3,350K (-6%), 4/1/08
369 22nd, 5/4.5, $3,599K (-5%), 1/18/08
714 14th, 5/5.5, $3,695K (-1%), 2/26/08
636 22nd, 5/4.5, $3,995K, 3/14/08
316 25th, 5/5.5, $3,995K(-15%), 2/6/08
333 14th (photo), 5/6, $4,195K (-14%), 6/29/07
424 14th, 6/6.5, $4,195K, 3/6/08
734 22nd, 5/4.5, $4,288K, 3/21/08
205 19th, 4/5.5, $4,350K (-3%), 4/2/08
425 4th, 5/5.5, $4,890K (-6%), 2/4/08
508 Marguerita, 5/3.5, $5,495K (-4%), 4/18/08
808 Adelaide Pl, 7/10, $16,975K, 3/31/08


Anonymous said...

I'm sure all of the pent-up demand out there will take care of this inventory by mid-June because, as we all know, the 90402 is different.

Anonymous said...

I, personally, have so much pent-up demand that I think I will buy 5 of them!

Son_Of_SM said...

To paraphrase WB from April 20, 2008:
>>>>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 April 2008, the main zip codes I track in detail rose significantly from March 2007:

LA/Mar Vista 90066, 26 sales, $821K median house price, +5.9%
Santa Monica 90402 (north of Montana), 7, $3,040K, +16.9%
Santa Monica 90405 (Ocean & Sunset Parks), 9, $1,450K, +31.8%<<<<

Small samples are not much use in statistics. For a slightly better picture, here is a summary of the years sales numbers from March 07 to April 08 and the respective increases over the 2006 averages for the two SM zips I look at:

90405; 128 houses sold at an average of $1277k, +14.76% over the 2006 average of $1113k

90066; 375 houses at $842, +1.43% over the 2006 average of $830

The 90066 increase is ho hum, but the 90405 increase is significant. It's too early (in my opinion) to compare 2008 to 2007.

Anonymous said...

Hey son of SM, instead of using 2006-2007, why don't you use 1846-1847, it's about as useful...

How about 1st quarter (or first 1/3 of 2007) vs 2008?

Anonymous said...

also for son_of_sm (love your name):
Isn't it a little skewed to compare YOY figures from March 07 to April 08? What would the numbers look like if you compared April 07 to April 08?

Anonymous said...

There's no doubt that the bottom has been reached. Even if it hasn't, zipcodes like 90402 and Manhattan Beach will hold their value compared to the vast mediocre tracts of the rest of California.

There are more wealthy people today than there were 10 years ago and these people aren't going to settle for Van Nuys.

Face it, we're moving closer to the "Two Americas" everyday. One America will be renters in crappy houses/apartments and the other America will live in places like Santa Monica.

Anonymous said...

I can slice and dice all the data and tell you anything you want to here and I only have minimal exposure to statistical analysis and using the analysis toolpack on Excel. Just look at some of the contradictory articles in the LA Times, NYT, and WSJ that came out this week. It's all different conclusions from the same dataset. I think son_of_sm's analysis is weak, but the two following comments are just foolish. That person can't read a post for content and presented two replies that underscore their lack of reading comprehension.

Anonymous said...

5:28 is also an agitator spouting empty claims to annoy the bears.

Anonymous said...

90405 is on fire...wow! I love Sunset Park/OP. Its the best value in SM for the money, close to the beach and without all the NOMO snobs....

Anonymous said...

The only thing that looks more idiotic and embarrassing than a homeowner in denial about their home's worth are renters who think we are returning to 2000-2001 prices in LA. Honestly, thats just golden. I wish I could take a picture of you guys.

Anonymous said...

No, Anon 5:34, old data is useless data, unless you want to know how far an area has fallen from it's peak. This is the kind of stuff the NAR uses to justify their lies. Things like month-to-month sales increases, old comps and short term sales trends. In fact, son of sm's data doesn't even include # of sales comparisons. I'd bet sales #'s are down 50% 2006 vs 2008 but all this data says is the total number in one year and that the median is up. Skewed, useless, biased in presentation, crap.

Anonymous said...

Well I heard we were in a new paradigm where you could never lose money in real estate and prices never come down... since prices are going down EVERYWHERE (because if nothing's selling, it's going down in value! Even in NOMO!) I have a feeling the angry renters are going to be way more correct.

Anonymous said...

--"The only thing that looks more idiotic and embarrassing than a homeowner in denial about their home's worth are renters who think we are returning to 2000-2001 prices in LA."--

Ah, at the rate prices are falling, by this time next year the prices will be at or lower than 2000-2001 levels in L.A.

Do you read the newspaper? Prices have caved in over all of California except for a few small areas like the Westside.

It IS possible that prices won't crash here, but given that the financial meltdown is affecting the entire world, I have a hard time believing that 90402 or anywhere else on the planet will be immune.

NeedleBrain said...

10 houses on the 90402 market listed between about $3.3 and $4.3 million is remarkable.

How many total sales occurred in 90402 in the last quarter (at any price)?

There are about 8 other new constructions ($4m or so)ready for sale by later summer ( i guess).

What are the holding costs on construction loans?

There is probably a formula you could devise to indicate the price reductions that will occur each month as they linger.

Son_Of_SM said...

The numbers I used are free from DQNews. I didn't make an argument for rising or falling prices. The time frame is based on when I found the DQNews site, i.e. March 2007, and started cutting and pasting their data onto an Excel page. My former professors would hunt me down and shoot me if I tried to pass this off as a "statistical analysis".

My opening paragraph was just poking fun at WB for his April 20th post.

I'm glad at least one of you got it.

Anonymous said...

Adjust 2000-2001 prices for inflation. We'll get there. Real inflation, not that BS CPI number.

Anonymous said...

"Adjust 2000-2001 prices for inflation. We'll get there. Real inflation, not that BS CPI number. "

10:13pm - What do you think the "Real" inflation rate has averaged since 2001 ?

pop said...

"What do you think the "Real" inflation rate has averaged since 2001 ?"


Anonymous said...

Thanks Pop -

To revert to 2001 prices (230,000) plus the annual 5.5% "True" average inflation per Shadow stats, here's what I come up with for median price estimates for this year and beyond.

2008: 334 K
2009: 353 K
2010: 372 K

So, if this thing goes on for a couple more years, we are looking at about a 17% decline from todays prices to revert to 2001 prices + 5.5% inflation.

Seems reasonable to me.

Anonymous said...

I'll be we shoot past it on the way down. Too bad I own my home.

pop said...

"I'll be we shoot past it on the way down."

That's what usually happens... Here's some interesting analysis... We're somewhere between "bull trap" and "return to normal"

Psychology of the Bubble

Anonymous said...

if i understand correctly the owner of

517 euclid

also owns the house next door

if a buyer wants a double lot there are very few opportunities in 90402 right now

can someone that knows the 517 euclid situation let me know what the owner would sell both houses for - the one he lives /in and 517 euclid at the same time

Anonymous said...

Anon at 8:01, maybe you should just call the listing agent.

Anonymous said...

"Anon at 8:01, maybe you should just call the listing agent."

But he doesn't have a quarter for the pay phone outside the public library where he's posting from.

Anonymous said...

I know it's the most bearish site on earth, but there are some good articles today at patrick.net. The one by Charles Hugh Smith does a good analysis of the downswing of a bubble.