Wednesday, July 16, 2008

June DataQuick

The June DataQuick numbers show median prices are down again (-24.5% for Los Angeles County from its last-August peak). Volumes are seasonally up slightly for the month (June is the peak month of the year), but well down from June 2007 (-25.6% for LA County). Orange County was a slight exception, with volume down but prices up for the month. (May DataQuick post)

This puts Los Angeles County prices back to late 2004, Orange County back to spring 2004, Ventura County back to the end of 2003, and San Diego back to spring 2003.

Think that a year ago we were still waiting to see any fall in DataQuick median prices for Los Angeles, and some were arguing they wouldn't. Now it's a certainty, they're down a quarter in less than a year, losing over three years of increase.

The remaining question is just the Westside. It's been a longer wait than we expected, but the bears have otherwise been right. The economic wreckage from the national bubble continues to spread, overwhelming premature calls of "containment".


46 comments:

Anonymous said...

No the bears have been wrong in 90402. 90402 is special and won't fall more than 5% because people with money know that they need to spend excessively to impress their peers.

So that will keep the prices at bubble levels for 90402. That's how people with money got their money--they spent it like drunken sailors.

And this is all an illusion (the median house price decline). It will start back up as soon as the feds bailout all of the failing banks and money houses.

Buy now or be priced out forever!

Anonymous said...

don't feed the trolls.

there is not a single person on this board that honestly thinks the 90402 won't go down. the people saying it are just trying to provoke an angry reaction


don't take the bait

Lionel said...

"don't feed the trolls."

I thought anon 1 was being facetious, but I have to admit, I'm having trouble telling the difference between comedy and reality these days.

Anonymous said...

anon one is just trying to irritate and provoke
don't take the bait

NO ONE on this board thinks the 90402 will avoid going down

NO ONE

the trolls are worthless scum

Anonymous said...

Everyone on this board is absolutely convinced that 90402 is going down.

The question is whether it will be much more than 70%.

I'm calling down 73.5% by October of 2009

Anonymous said...

I agree that the Westside cannot be immune and some day soon the data will reflect price corrections spreading from the condos we've already seen get hammered.

However, the one exception even I make to this is the 90402, I don't think that zip can go down because it is NORTH of Montana, something you are all ignoring. It's still $1.9 million there, drive-by bids, for empty lots. Bidding wars. 90402 is in a perpetual bull market, and if you don't buy now you're just going to get priced out, because the going rate for these empty losts can only go up.

Anonymous said...

4:12 pm is a troll or an idiot.

1:58 pm was sarcasm--I should know since I wrote it.

But I know for a fact that there are quite a few people out there that believe that THEIR favorite piece of RE won't be hit.

We all know who they are and their voices are more strident now than ever.

Anonymous said...

General 90402 question since that seems to be the trend. When people talk about a $2M teardown, what are some examples. I bike through that area sometimes and all I see are nice houses. Is "teardown" just the codeword for an older house that is still very liveable, but not updated in a long time. Do the majority of those sales actually get torn down and replaced with something grander. Why wouldn't they just add-on and refurbish the interior.

Jonathan said...

many of us in this little corner of the on this blogosphere believe that real estate is currently overpriced.

but there is a rather unique set of events unfolding that could make us wrong -- specifically, the substantial inflation that may elicit as the government prints money to bail out banks, f&f, and perhaps later to pay off t-bill holders. while dishonoring one's debts in this fashion is dishonorable, the lack of character and spine shone by so many of our leaders (on both sides of the aisle) suggests that this is a realistic possibility.

so, if you buy your home in the 90402, borrowing most of the purchase price, it's possible that you'll be paying the bank back with dollars worth much less than those you'd borrowing today.

buyers in 2010 would be paying for the home in funny money so you might not experience a nominal loss.

call me paranoid, but i see this as a realistic possibility and while i can't stomach the idea of plomping down the big $ before the fall, but make no mistake that sitting on dollars (as many of us on the boards say we're doing) has real risks as well.

thoughts on how to mediate these risks?

Westside Bubble said...

Anon 7:53, yes, literally existing houses that have been torn down to build new McMansions. I've posted past examples.

Jonathan, not that you're wrong, but a counterpoint is that the destruction of asset values as real estate and stock values fall and loans default is DEflationary, despite what the government may attempt to do. Mish has written extensively on this.

Anonymous said...

my guess is that 90402 prices will be flat for next five years, we'll hit 7% inflation during the same time - so, prices flat with a ~caveat that there will be a ~30% drop in inflation adjusted numbers. just a guess though...

Anonymous said...

I actually think that the current months dramatic consumer cost index increase speaks to the possibility that we could see a paper increase in real estate values while seeing an inflation adjusted loss.

We could have both the bulls and bears claiming that they're right for a VERY long time.

Anonymous said...

I take everything said in these blogs with a grain of salt. You have to understand that homeowners would be crazy not to try to defend their homes' values even in the face of overwhelming evidence and momentum suggesting serious price declines are in order or have taken place. Anything you can do to sway sentiment in your favor is considered doing your part to protect your assets. Renters, on the other hand, have the vested to interest to do the opposite. Fortunately for them, they have the data and the momentum on their side, so they end up looking less foolish in their posts.

Jonathan said...

wb, thanks for your prompt response, and for running such a fine board. mish = who?

my concerns are generally that currency management is political. as we float away from bedrock principles it can be used (like the tax code) to protect and reward constituencies. the financially conservative sentiments that dominate this blog seems at times to represent a small minority of the u.s. these days.

if the inflationary pressure is political, there will be a grab bag for the goodies and it is possible that the there will be "real" deflationary pressures but "nominal" inflation. think builder bailout, which probably won't happen, but you never know.

my approach to mediating these risks is to make small but significant speculative bets, mostly WAY out of the money LEAP calls on equities that may do well in inflationary environments.

i don't do this with that many $, just enough to provide some insurance protection against mega-inflation.

does the community think i need to be fitted for a tinfoil hat?

Anonymous said...

The community probably thinks that you are off-topic and talking about leaps and calls probably belong more on Mish's blog.

Anonymous said...

The community probably thinks that you are off-topic and talking about leaps and calls probably belong more on Mish's blog.

Jonathan said...

apologies, found mish, interesting. tx all.

Anonymous said...

i don't want to take sides in the battle between bulls and bears

any of us that care about the community feeling of the 90403 or 90402 need to come to the hearing on july 21st

at city hall at 7pm monday july 21st there will be a hearing

as you know the greedy real estate developers are trying to build a dense 17 unit development at 17th and montana this will create traffic and hurt our quality of life

the real estate developers give plenty of contributions to our santa monica politicians so the politicians are likely to give the developers what they want

only by showing up and making your voice heard can this development be stopped

please if you care about sm show up and speak up

thanks

Anonymous said...

Thanks for the info about development at 17th and Montana. I don't know anything about it, but a bit more density at or near that intersection sounds good to me. The intersection is busy as it is. If someone wants to improve the housing stock there, I see no problem. Maybe I'll show up and voice my approval.

Anonymous said...

Since there's no available land at 17th and Montana, how many units do you think they are tearing down to obtain these 17 new units? This is a senior housing/assisted living deal and from what I understand it's already approved. This will give local residents a place to house their parents. How much traffic do you think a 17-unit, assisted living facility generates? It's likely less than the buildings that get torn down to build it.

Anonymous said...

developers are scum

we all benefit from a freeze on development in santa monica.

no new construction of anything under any circumstances


i would make an exception for affordable housing for our police and firemen cause they deserve it but come on

ANYTHING they build increases the traffic

the residents of SM want no development it is the scum developers and their tools in city govt that are pushing for development

we already have enough traffic

NO MORE DEVELOPMENT

Anonymous said...

there is literally no one on this board arguing that the 90402 is going up

why don't we have a reasonable discussion of whether it is better to buy or build - since we all know that prices are coming down

which is better


(1) buy a vacant lot north of montana, hire a contractor and build your own house

(2) buy an already existing house north of montana

Anonymous said...

Hello anti-development:
I think that the state should pass a law that bans all residents of Santa Monica was working in ANY job that is related to the building industry.

This would include working for:

1. contractors (of course),
2. banks and financial institutions that do business with contractors or the building industry,
3. companies that supply materials to the building industry,
4. legal and other service companies that do work for contractors or anyone in the building industry,
5. companies that supplies the building industry with energy,
6. companies that supply vehicles or tools to contractors or the building industry,
7. companies that supply internet or any computer based service or supplies to the building industry,
8. any other company or business that makes a single dime out of developing RE.

There. You want NIMBY then you should suffer the consequences of your fascist anti-freedom and capitialist views.

I would expect that after we passed this new law the housing prices in SM would fall dramatically because most of you would be out of a job.

Anonymous said...

actually, plenty of places in the inland empire want development

let the developers go build there and make tons of money

capitalism is good but only where the residents want development

the majority of the people in inland empire want them to build stuff there

the majority in SM want no more building simple as that

give the people what they want

Anonymous said...

No development=bankrupt city, bad streets, higher crime, etc.

Get over it. It's more connected to you daily lives than you think. I don't develop in Santa Monica for the simple fact that the city is so hardcore and stringent that it's hard to make money vis a vis heading out to the IE and working with friendly cities.

But if you think that categorically all developers are scum then I guess that's OK too. You live in one of our homes, shop at our malls, and vacation at our hotels. Check yourself. You are a fool.

Anonymous said...

the majority of sm citizens want no developers

developers bribe the city government in sm to ignore the people and build anyway.

therefore i classify the developers who build in santa monica as the worst type of despicable scumbags.

they ignore the people and the will of the people.


the citizens of the inland empire welcome development - they want development. the developers in the inland empire are doing what the citizens want. therefore the developers in the inland empire are solid citizens as far as i am concerned

big difference. if you build offices or condos or shopping or anything in santa monica - if you are a developer in santa monica you will burn in hell

Anonymous said...

traffic is getting worse in santa monica due to the developers

Anonymous said...

A mole wore a wire for a year while acting as a bagman carrying bribes from developers and contractors to Chicago building inspectors, exposing systemic corruption in the Zoning and Buildings Departments, authorities said Thursday.

Even for a town that has turned payoffs into an art form, the operative uncovered brazen misconduct, investigators alleged.

City inspectors ignored problems, fabricated reports and sped up paperwork in exchange for envelopes of cash, work on their homes and tickets to skyboxes for Bulls games, the federal charges alleged. One inspector took $10,000 to approve two illegal basement units in a building, while another allegedly took $7,000 to "inspect" plumbing that was already covered by concrete, investigators said

Anonymous said...

It's the growing population of LA as a whole, not the developers in Santa Monica, who cause traffic problems. Developers feed a demand, not create it. If you built something in Santa Monica that no one wanted, it would sit vacant and dark. I don't see a lot of that around here. But hey, burn in hell anyway. It's just so funny that people with no sense of how communities and governments function in relation to the economy spout off that their little city is under siege. It's something you'll never be able to defend against. You can't stop people from visiting Santa Monica and spending money in its stores. Developers don't bribe cities. They just submit plans and their arguments for approval. Cities succumb to the overwhelming pressure of the economy.

Anonymous said...

the city counsel succumbs to the overwhelming pressure of the developers


the economy doesn't dictate development. Developers do.

developers make campaign contributions to the city counsel members and bribe them in numerous subtle and unsubtle ways



simply look at the opinion polls in SM. we the people don't want development.

any development is being built cause scum like you ignore the people

you pretend to not understand.


Upton Sinclair described you perfectly when he said

"It is difficult to get a man to understand something if his livelihood depends upon his not understanding it." -- Upton Sinclair

Anonymous said...

to all that care about our city please join the santa monica coalition for a livable city

http://www.smclc.net/mission.html

if you don't join, the santa monica that you know and love will be replaced

Anonymous said...

The word was that property bubbles don't burst, but this does look more like a burst than a fizzle. Peter Viles (LA Times) comments on DQ figures showing coastal properties are now very clearly feeling the squeeze.

Anonymous said...

Wow! I like all of the progessive, liberal and tolerant voices of Santa Monica!

Some of you are one step from those bad folks that toasted people in gas ovens in Germany during the War. It's incredibly easy to get people to turn into ruthless animals.

You can see it right here on this board and everyone here is living a life of luxury and comfort that only a tiny proportion of humanity has experienced.

Yet you call for "developers" to burn in hell.

Man you people need to see a therapist because you are 100% certifiably SICK!

In case you haven't noticed, the City of Santa Monica holds elections regularly. If the citizens of said city would like to get elected officials to change the way government decisions are made, the citizens can do that.

Of course if you crazy mentally ill idiots believe that "they" are out to destroy your beloved city and there is nothing that can be done about it short of stringing people up, murdering them, or breaking the bad guys children's knees, then I suppose there's nothing that anyone can do.

I'm glad I don't live in Santa Monica. I'd rather join the Hitler Youth of So California than live in this town.

Anonymous said...

anon 2:38pm said:

--_the majority of sm citizens want no developers

developers bribe the city government in sm to ignore the people and build anyway.

therefore i classify the developers who build in santa monica as the worst type of despicable scumbags.

they ignore the people and the will of the people."--

Do you have any evidence of this supposed corruption? Or are you just a troll?

If you are serious, what kind of nut are you?

Are there others in Santa Monica like you?

It's very interesting how you stereotype the Inland Empire. Do you also believe that blacks have inferior intelligence?

Or that Cal State graduates are less smart than Stanford grads?

Or that people who shop at Vons are inferior to those at Whole Foods?

What do you think about people who like country western music?

Tell me, how does it feel to look down on so many people? You know, the "common folks" that make less than $70,000/yr?

Let's hear it for the superior race of Santa Monica resident!

Anonymous said...

"It's very interesting how you stereotype the Inland Empire. Do you also believe that blacks have inferior intelligence?"

No, but people from the 909 do!

"Or that Cal State graduates are less smart than Stanford grads?"

Um... yes.

"Or that people who shop at Vons are inferior to those at Whole Foods?"

Inferior? No, but they certainly eat inferior food.

"What do you think about people who like country western music?"

Strictly speaking thats Country & Western music. You left out the ampersand.

"Tell me, how does it feel to look down on so many people? You know, the "common folks" that make less than $70,000/yr?"

I'll never live like common people,
I'll never do what common people do,
I'll never fail like common people,
I'll never watch my life slide out of view,
and dance and drink and screw,
because there's nothing else to do.

Anonymous said...

read some opinion polls

every single opinion poll done in recent years has shown that sm residents want no developers

Developers should stop creating traffic

traffic around the water garden is already hellish due to the developers now they want to bring trafic hell to the rest of SM

Epsilon said...

Does anyone honestly believe that the median Stanford grad is NOT smarter than the median Cal State grad? And how in the world did you convince yourself of that?

Anonymous said...

>>Does anyone honestly believe that the median Stanford grad is NOT smarter than the median Cal State grad? And how in the world did you convince yourself of that?<<

Define for intelligence.

I work around people from the best Ivy League schools to those that attended the lowliest state colleges.

Also there are people that didn't even graduate from high school in a foreign country.

I have yet to see any indication that Ivy League or Berkeley, Stanford or any other top echelon grad was any more intelligent than people who attended less prestigious schools.

Ah, FYI, the place where I work is filled with MDs, PhDs, MDPhds and just about everyone else has a graduate degree (except the housekeeping staff).

Be careful who you express your simple ideas about intelligence to next time you get sick since the doc or nurse or technician may have done their undergrad at Cal State L.A.

Man you are stupid and an snob.

But being a snob and a bigot is a prerequisite for living in Santa Monica.

Anonymous said...

>>>"Or that people who shop at Vons are inferior to those at Whole Foods?"

Inferior? No, but they certainly eat inferior food.<<<

You're exhibiting your stupidity because you are only being taken for a ride by purchasing your food at Whole Foods.

There is absolutely not one piece of epidemiologic or public health data that demonstrates that "organic" or any other "natural" foods like those sold at Whole Foods is any better than the food sold at Ralphs or Vons.

There is no data from any study that has demonstrated that pesticide, herbicide or any other residual chemical or hormone in food is at all responsible for any increased risk of cancer, birth defects or any other health problem.

All you are doing is practicing a fad that is not based on science. It is a fad based on 1960s throwback ignorance.

So, yes, you are proving that you are also not very smart when it comes to spending your money.

And who said that people living in SM were smarter than those living in Paramount.

Anonymous said...

"There is absolutely not one piece of epidemiologic or public health data that demonstrates that "organic" or any other "natural" foods like those sold at Whole Foods is any better than the food sold at Ralphs or Vons."

Your showing YOUR ignorance now. Whole Foods ceased to be an organic grocer in the 1990s. Now it's primarily an international grocer.

The average shopper in Santa Monica is more likely to leave the store with Dragon Fruit, Babimbap, Tempeh, Epoisses, and a bottle of Madiran, then they are to leave the store with a basket of organic apples.

Anonymous said...

"I work around people from the best Ivy League schools to those that attended the lowliest state colleges."

Why the State Colleges gotta be lowly?

"Also there are people that didn't even graduate from high school in a foreign country."

Why the drop outs gotta be foreign?

"I have yet to see any indication that Ivy League or Berkeley, Stanford or any other top echelon grad was any more intelligent than people who attended less prestigious schools."

I'll throw your own remark back at you:

Define for intelligence.

"Ah, FYI, the place where I work is filled with MDs, PhDs, MDPhds and just about everyone else has a graduate degree (except the housekeeping staff)."

Who must be the dropouts from foreign countries? Why the housekeeping staff gotta be foreign dropouts?

"Be careful who you express your simple ideas about intelligence to next time you get sick since the doc or nurse or technician may have done their undergrad at Cal State L.A."

What a self serving narcisistic justification for faux egalitarianism. I need to be careful who I reveal my biases to because they might be helping me when I'm sick...

"Man you are stupid and an snob."

Actually, your not coming off so well here yourself.

Anonymous said...

trouble is, the westside real estate industry is more sophisticated at lying than in other areas. 60% or more homes on the market purchased between 2004-2007 are in default on their prop taxes. why would ANYYONE list a home in this market if they weren't in trouble? because westsiders are so sophisticated, they often make deals with the banks to put the house on the market instead of taking it to trustee sale (where no one will bid)--often, just as the notice of default comes out. no, these places don't go to trustee sale, as agents are fond of saying. they do need to sell fast though. and there is demand on the westside.

Anonymous said...

what is the deal with people on this blog talking about who is smarter,what ivy league school produces smarter graduates, etc.????

Can we pleeeaassseeee stick to real estate chat????

Anonymous said...

I live in Santa Monica because it is close to where my husband got a job (was 3 block before the business moved). Due to the lefty-liberal reputation of the city I was amazed at how varied and tolerant my neighbors were. In fact one went to school with Ted Nugent and shares his views on gun ownership as do I. I am delighted with more development because high density is needed to support public transportation which I use all the time. The Water Garden is a fantastic addition to the neighborhood and we walk our dog over that way frequently. IMO the biggest problem in SM is rent control. There is no free flow of people and the rent control units bring in so little money that they are crumbling. I rent a condo so I can be in a building that is cared for. Sadly like many people on the west side I just found out my landlord is in financial trouble due to buying a house at the peak and wants to sell my unit. He still thinks he can get a lot of money for it LOLOL.

I don't think there is any one type of people who live here, it is mixed culturally and politically. Also judging by my nieghbors prices need to come down, they are not all making lots of money and people who bought at high prices are in trouble. We also have a new big Section 8 housing complex that just went in with another soon to be renting. Section 8 is not part of high end neighborhoods although we get trick or treaters now because people with families can afford to live there.

Anonymous said...

thank you for sharing

most of the poeple who live in section eight housing are good folks, good neighbors.

just be aware that statistically you are much more likely to have your apartment burglarized now that you have secion 8 housing nearby.

please google this and make yourself informed

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