Friday, August 28, 2009

June S&P/Case-Shiller

Catching up with Tuesday's June 2009 S&P/Case-Shiller update, Los Angeles peculiarly showed a drop of 1.5% for the Low Tier at the same time as the Middle Tier and High Tier rose slightly. Not that any of these say our own Westside prices are doing anything but continuing to fall.

Overall Los Angeles (including Orange County) is down 41.3% from its September 2006 peak, back to August 2003 levels.

By month that's up 1% from May; down 0.1% from April, 0.9% from March, 1.4% from February, 2.0% from January, 2.8% from December, 2.5% from November, 2.2% from October, 2.6% from September, 2.5% from August, 1.8% from July, 1.6% from June, 1.4% from May, 1.9% from April, 2.2% from March, 3.6% from February, 4.3% from January, 3.7% from December 2007, 3.6% from November, 3.6% from October, 2.1% from September and 1.3% from August. The national (orange line, their original 10-city Composite) index is down 32.3% from its peak in June 2006.

Besides the original city index they have each city broken into Low, Middle, and High tiers (Under $278,293, $278,293 - $441,972, and Over $441,972; updated for June). Los Angeles' Low Tier rose the most and has fallen back the most so far from its November 2006 peak, now 56.5%.

The High Tier rose the least and plateaued for awhile before falling more steeply, now 29.6% from its June 2006 peak. As noted above, it was up 1.6% from May, a return to its January 2009 level (and February 2004).


Anonymous said...

I think this is a dead cat bounce. I think it would be abnormal to see an undisturbed curve going either straight down, or up, and expect to see variations in it due to market influences. Seasonal variations, foreclosure law changes, mortagage rates, etc, all will induce ups and downs in the graph. However, averaged out over 6months, these variations should even out. I plan to look at prices, and if it hasn't risen significantly in 6 months, then I'll continue to follow the prices down.

Anonymous said...

Okay, I agree this could be a bounce, but at this point if you love a house and you can afford it (and can get a mortage!), and it is a long term house (10+ years), then don't you buy it? At what point do we who sit and watch move on something? Am interested if anyone else ponders this question. Certainly there are some really overpriced places that are obvious no-nos, but there are some places that are priced reasonably for today's market...If you love one of them, is that a good enough buy or is even that going to be totaly overpriced a year from now? What does all this data tell us?

Anonymous said...

"At what point do we who sit and watch move on something? Am interested if anyone else ponders this question."

I am a home owner (much more equity than debt), circa 2003, and not a realtor or a bull. If a house is the right neighborhood, footprint, school district, side of the street, lot size, etc. AND the price is at a reasonable 'rollback' AND you plan to live in it and remodel over the next 10-15 years then go for it.

I am happy with my decision 6 years ago and am paying down the mortgage 2x to own free and clear in a few years. I am considering a move-up buy on a select few 90402 blocks, and will pull the trigger if the stars align for the right place at the right price. The exact timing or a further drop does not matter; I have set criteria that in my mind signals it is time to buy. I know where I want to be in 10 years, and know I will pay the mortgage off quickly and live in it through retirement. I watch the MLS like a hawk, and I expect within a year or two I will pull the trigger, or maybe modify my criteria if the market radically changes. Whatever is said on this board or by 'experts' does not affect my decision.

Not sure if this helps, my point is do your homework, set your criteria very carefully, and buy when your criteria is met. No one on this board, realtors, NAR, economists, fed administration, etc. will help pay your mortgage and find your happiness - it is all you.

Westside Bubble said...

if you love a house and you can afford it (and can get a mortage!), and it is a long term house (10+ years), then don't you buy it?

Suppose if you waited a year you could buy a similar house for 10% less? That would be a real savings for you.

Or maybe it won't fall another 10%, or 10% is relatively minor to you, or interest rates might rise and counteract the lower price.

I'll be writing my thoughts on the market ahead soon. Next year (2010) may finally be a good time.

Anonymous said...

Thanks for the thoughtful comments. Westside Bubble - I look forward to reading your analysis of the year ahead.