In the meantime these two items yesterday from The Big Picture and Calculated Risk (daily must-reads for me) reinforce my expectation that we're going to see another step down in the larger economy and local real estate prices during the second half of this year.
Existing Home Sales Slide 2.2%
We see more evidence that next leg down in Housing has begun, ...How high will Existing Home Months-of-Supply increase this summer?
We haven’t looked at the usual idiotic blatherings from the National Association of Realtors in quite some time. For shits and giggles, let’s have a gander at their latest, to see if they are still maintaining their traditional high standards of alcohol consumption.
Ahhh, the Realtor crowd rarely disappoints. The Headline — “May Shows a Continued Strong Pace for Existing-Home Sales” — reveals their inability to separate facts from wishful thinking. ...
Let’s ignore their usual foolishness, and go straight for the data: ...
Earlier I posted a graph showing the relationship of existing home months-of-supply to house prices. When months-of-supply is below 6 months, house prices are typically rising - and above 6 months-of-supply, house prices are usually falling (this isn't perfect, but it is a general guide). ...
The peak for months-of-supply was 11.2 months in 2008. And house prices? The Case-Shiller composite 20 index fell 17.2% in 2008.
We are much closer to the price bottom now than in 2008, and I don't expect that severe of a price decline. But I do expect house prices to fall in the 2nd half of 2010 and into 2011 - probably another 5% to 10% for the major house price indexes (Case-Shiller and CoreLogic). ...
10 comments:
Ahhh, so you only post when there is bad news (declines) for housing. I get it now.
Glad you're back! Your posts are always full of facts, unlike some.
Welcome back Westside Bubble! Just in time for the second drop!
Glad you're back! Was getting worried.....
"Ahhh, so you only post when there is bad news (declines) for housing. I get it now."
Has there been any good news? Please elaborate.
Let's define our terms a little better please.
I have lived here for my entire life, and to everyone I know, the "West Side" includes the entire city North of Wilshire WEST OF LA CIENEGA
That is a huge quadrant of the city, including tens of thousands of homes.
Yes, there are some nice places South of Wilshire. But south of Wilshire is spotty. Around Barrington and LaGrange you have the giant smelly garbage truck depot. Then a little west you have the huge trailer park home / mobile park home. Lots of low income housing South of Wilshire.
So define the West Side as West of La Cienega and North of Wilshire.
Defining the west side this way you are talking about a small part of the city of LA.
Thirty years ago, Young families wanted to live in Beverly Hills, Holmby Hills, and Bel Air. As has been discussed here frequently, the attention has shifted to the more westerly parts of the west side
Anyway the title of this blog is "westside bubble" so let's nail down exactly what we all mean by west side
I think the Inland Empire might see a 10-20% drop in the coming months. But the Westside (as in west of the 405! for the one who can't figure what this blog is about) will probably see a more pronounced drop. A 30-40% in my opinion given the fact that banks are not lending and some people are still not grasping the fact that prices were inflated by easy credit and not real money.
Good to see you return. As for setting westside parameters, it's OK to go south of Wilshire. If you didn't, we would never discuss, for example, SM's Ocean Park, Sunset Park, or all that recent activity straddling the 10 in micro-neighborhood Stewart (Trailer) Park.
The Westside is north of Wilshire, west of La Cienega? That's an odd claim.
This is not a second leg down or a second anything, just a continuation of the downward trend that started a few years ago.
"But I do expect house prices to fall in the 2nd half of 2010 and into 2011 - probably another 5% to 10% for the major house price indexes "
You mean from todays values or the ones we saw in early 2009? I ask because if you mean 5-10% off early 2009 prices, you mean we havent seen bottom yet. However, if you mean 5-10% off todays prices, all you are saying is we get a second crack at bottom prices we all passed on in early 2009.
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