More reasons to be bearish, even on Santa Monica real estate (not to mention the bizarre zig-zags of the stock market over the last week):
"U.S. Recession May Have Begun in Last Quarter of 2007", Bloomberg reported today (via Mish and CR).
Neil's analysis of the latest Case-Shiller data at Real Estate Comments notes (but read the full version!):
Despite how weak this spring/summer selling season was, price declines slowed. However, do not forget, we are exiting the best time of the year for SELLERS! The traditional time of the year for price corrections is October through February. With the integral of price declines to date, I think the market is close to breaking.Closer to home, price decreases this week - 6 in Santa Monica and 1 in Pacific Palisades - seemed especially prominent in cumulative effects.
I see this fall as the transition to the real-estate emotion of Panic. I see the spring being a switch to Capitulation. Capitulation is the time of the greatest price drops. ... My final conclusion is to note that a 4% per YEAR drop is the equivalent of free rent.
They didn't exaggerate when they wrote, "UNBELIEVABLE NEW PRICE!!" for the 3 bed/2 bath house up a hill at 16463 Akron in PP. It's now been reduced 50% from its initial $3,200K to $1,595K in a little over a year (and thanks, Anon(s))!
The 6/8 at 411 Lincoln in SM came to market at the incredible $5,795K, but in 3 steps in 2 months has cut 22% to $4,495K.
Marble and Gatedness at 212 24th cut another $100K, to $2,895K.
An interesting indicator of lower-end north of Montana, the 3/2.75 at 517 14th cut another $99K to $2,250K.
And the 4/3 at 1135 Berkeley is now down 20% in over a year, from $2,388K to $1,899K.