2/6/09 - Pacific Palisades inventory jumped for the week, while Santa Monica and Mar Vista was pretty flat. More price reductions and churn of expired/ withdrawn listings back on the market as others leave. And a couple into escrow.
Not unlike the LA Times, the Santa Monica Daily Press on Friday had its front page "Housing price slide comes to Westside" article (pdf). Gary Limjap, the main real estate agent interviewed - who was pretty realistic, especially saying "Sunset Park being among the hardest hit, seeing its home values drop 25-30 percent in the third quarter 2008 from the same time in 2007" - just happened to have a bottom front page ad. Hmmmm.
LA County Santa Monica Pacific Palisades Mar Vista
<$3M New Tot DOM<$2M New Tot DOM Tot New DOM
-------- ------ -------------- -------------- ----------
1/30/06 27,732
2/28/06 29,420
3/31/06 31,819
5/ 1/06 34,032 38 33
6/ 2/06 37,847 56 36 38
6/30/06 42,317 66 40 49
8/ 4/06 45,315 70 34 50
9/ 1/06 46,781 71 27 59
10/ 6/06 47,369 83 25 98 71
11/ 3/06 45,780 80 20 91 77
12/ 1/06 43,103 65 18 72 96 39 20
1/ 5/07 35,646 54 4 60 117 33 6 71 66
-------- ------ -------------- -------------- ----------
2/ 2/07 36,715 38 15 45 124 29 16 61 71 70
3/ 2/07 41,251 42 14 51 114 26 10 68 79 55 25 76
4/ 6/07 42,857 41 23 49 107 18 8 73 103 54 52 50
5/ 4/07 45,918 46 28 54 92 19 6 82 79 71 37 52
6/ 1/07 52,198 50 25 61 78 17 15 87 78 77 39 53
6/30/07 52,769 42 18 56 81 17 11 92 77 74 33 61
8/ 3/07 54,166 53 28 68 86 23 12 78 76 84 39 68
8/31/07 57,432 57 21 72 98 18 7 69 75 90 40 79
9/28/07 58,973 59 17 74 103 26 9 90 81 87 20 87
11/ 2/07 58,731 62 19 81 120 29 7 106 77 98 35 88
11/30/07 59,108 52 14 67 136 23 11 88 94 96 23 96
12/31/07 53,475 42 5 53 148 19 2 73 119 79 13 116
-------- ------ -------------- -------------- ----------
2/ 1/08 53,722 54 16 67 157 26 16 101 118 89 36 96
2/29/08 53,520 50 10 68 178 29 8 108 108 88 21 103
3/28/08 53,566 57 17 81 171 32 14 122 92 82 22 105
5/ 2/08 54,098 59 14 83 159 35 7 136 93 90 33 96
5/30/08 53,216 56 23 79 147 34 9 142 106 91 29 89
6/27/08 53,058 74 28 98 131 30 6 129 107 96 26 95
8/ 2/08 51,906 66 14 89 125 34 8 120 136 99 35 101
8/29/08 50,124 62 9 79 122 29 5 108 156 91 25 104
10/ 3/08 48,113 58 14 82 145 41 15 128 132 84 24 109
10/31/08 47,017 64 22 90 131 55 18 159 126 83 21 103
11/28/08 45,216 64 12 91 141 54 7 151 124 73 9 130
12/31/08 40,810 52 3 80 171 47 5 130 134 63 10 144
-------- ------ -------------- -------------- ----------
1/30/09 38,486 67 16 94 181 59 15 157 145 66 15 157
2/ 6/09 66 5 93 159 64 7 164 132 67 4 155
2/13/09
11 comments:
Happy said...
RE: 4X income.
I earned $468K last year. My wife (physician working part-time) earned $65K. We will annualize that in 2009 +/-.
Also, I have $1MM in the markets. Used to be more.
SO...
Do I feel comfortable purchasing a house for $2.2MM.
HELL NO.
I'm looking in the $1.5-$1.6MM with $500K down. Remember, you only get a tax benefit on the first $1MM.
Moreover, the financial markets were slammed. Will they go to 6000? Probably not - arguable. Will they hit 12,000 again in the next 3-4 years. Maybe.
So, even putting the $500K into the housing market seems like an opportunity cost against the financial markets.
The point.
I am an agent's wet dream.
And, I'm not buying in this free fall.
If you want to participate in the $2MM housing arena, you'd better have $600K+ to put down and yearly cashflows north of $650K.
1) 3X max.
2) Cash is king and there are better (still unstable but better) instruments to save.
3) Earners are getting nailed now. My bonus will be impacted.
It's going to be a long 2-3 years.
BY THE WAY...
Regarding the longevity of a housing bubble. I believe we are NOT in for a 7 year decline like 1989-1996. Why? Information flow is better. The market is far more perfect than it used to be. For instance, I can communicate with you knuckleheads on here. :-)
Look out below.
On the flipside, there are those who overestimate the bubble. The 40%+ bubble deflating crowd is a bit too bearish. I'd say if you are seeing a 30-35% decline from crest to trough, you will be right. It'll take 3+/- years (from Q4 2007). Hold on to your d*ck as the next 24 months is going to suck.
$2.1MM lot on Montana Q4 2007 will be...
$1.9MM Q4 2008
$1.7MM Q4 2009
$1.6MM Q4 2010
Get ready for a 25% decline.
If it gets to $1.6MM before 2010, you are welcome to visit me North of Montana. I'll be the guy grinning. Alternatively, we'll move to the Palisades... I'll be grinning there too.
Cash is king.
Get a deal today or don't participate. 4X earnings is doo-doo talk.
ALL MY BEST,
_______
let me respond to happy this way - happy you say that you want to pay 1.6 for land north of montana - you will probably be slammed by the bulls who come here saying it will never get that cheap and slammed by the bears here who fantasize about 90402 being affordable to those making 50k
no one will support you
I agree with you 100% except for the decline % assumptions... it will go down in sustainable amounts proportional to what it what it went up in unsustainable amounts. That number is far higher than 30-35%. And being in a similar situation as you and fully agreeing that cash is king, I would also argue that when the 30% correction comes even faster than you predict, you will be less likely to want to jump in and catch the knife. The increased information flow (even to knuckle-heads) that makes the correction FASTER also works to make those who are educated more nimble to adjust their tactics.
Reading the first comment was really interesting...
Westside: It might be interesting to do another open post to get an understanding of who is doing and thinking what. What are the sellers doing? What about potential buyers? What do they have saved up? When are they planning on jumping in? What will they be looking for? etc.
People hate to hear about those making a safe steady bulletproof 400k a year waiting for the right time to buy
bulls hate it and bears hate it
OK so there are two sets of buyers in the streets between Montana and San Vicente right now
(1) the people with 400k safe and steady income like Happy.
(2) The middle income types who get help from parents (google Seppi Esfandi - he just bought a house for 2.2 million on 21st with an income of 90k)
Seems like both groups are able to buy today but some are holding back
"no one will support you"
And no one will believe you.
Happy -
you are right
Who said "safe and steady". Making less this year and said so.
The Santa Monica murder trial is about to get going . . . about time too
___— The attorneys representing two alleged gang members charged with brutally murdering two Santa Monica men at a birthday part at the Moose Lodge in Ocean Park argued here Thursday that eyewitness testimony placing their clients at the scene is unreliable.
The arguments came during opening statements made by the defense for Eric Nuñez, a.k.a. Ector Hugo Sanchez, and Jose Mojarro, who face two counts of murder with a special gang enhancement (using firearms during a gang crime) and a third count of assault with a deadly weapon.
A third man, William "Willie" Vasquez, who is also an alleged gang member, has been charged as well, but will not be tried at this time. All three have pleaded not guilty.
If convicted, the defendants face life sentences without parole or the death penalty.
The three, who are believed to be members of the 18th Street gang Alsace clique, are charged with the murders of Santa Monicans
Epsilon said...
I think putting larger multiples of income into housing will probably always be part of the sacrifice for living in Southern California...
But I do envy my parents, who bought their first house for $101,000 and never moved. Definitely not overweight on housing among his asset classes.
On the other hand, his retirement fund was still cut almost in half by the recent downturn. Much worse than housing, in other words, even for people that bought in 2006 or 2007.
It's hard to diversify yourself out of market downturns, and housing is still more stable than most other asset classes...
__
I agree w epsilon's post above
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