The "Biggest Loser" on the Westside
Well, the numbers are in for August 2008. And "The Biggest Loser" according to Melissa Data in Total Sales Volume (TSV) is:
Beverly Hills 90210
-68.9% (TSV) -37.8% (ASP)
Next to the Total Sales Volume (TSV) is the Average Selling Price (ASP) which includes both Single Family Residences (SFRs) and Condos. Here are the rest of the "Biggest Losers" in order on the Westside:
Marina del Rey 90292
-64.6% (TSV) -24.8% (ASP)
Westwood 90024
-64.5% (TSV) -29.1% (ASP)
Venice 90291
-59.4% (TSV) -19.0% (ASP)
West Hollywood/LA 90048
-55.9% (TSV) -5.4% (ASP)
West Hollywood 90069
-46.5% (TSV) -22.2% (ASP)
West Los Angeles 90025
-46.1% (TSV) +5.3% (ASP)
Culver City 90230
-42.4% (TSV) -14.8% (ASP)
Pacific Palisades 90272
-37.8% (TSV) +12.7% (ASP)
West Los Angeles/Rancho Park 90064
-36.2% (TSV) -24.1% (ASP)
Santa Monica 90405
-31.4% (TSV) -25.1% (ASP)
Areas that exhibit large double digit declines in both (TSV) and (ASP) show no signs of a market bottom. It appears like the price declines still have a ways to go. Also, now that the traditional busy "Summer Selling Season" is over, it will be interesting to see what the results are for September, October, November and December.
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39 comments:
Where are you getting this data?
I see now that it's Melissa Data. I'm not sure where they actually get their data or what controls they put on it, but it seems odd in many ways including #sales and what month they get reported in.
Keep in mind that they include SFRs and Condos in their data. But, it still is measured YOY (Year over Year) and is a good indication of what the market is doing.
lumping in single family homes and condos is completely misleading and is no way a good source of data. The information you are giving is not accurately telling any story but just throwing some numbers out.
As for Melissa Data, I believe it acurately shows how much real estate is being funded by loans each month in certain areas. Having worked as an appraiser and real estate agent in the past, the real story in this market is LOANS. Or the lack thereof. It is obvious that prices are under pressure and declining in most areas on the Westside now. I happen to think that now it is intensifying.
If you have reason to believe otherwise, present your numbers. Many people are threatened by these numbers and should be. However, this is all public information and I am just doing the math.
Hey, I can see from your Data that Westside prices have come down. However, after looking through dozens of listings in the Westside things still look untouched. For instance, I found a listing in brentwood its a 2000sqft home listed at 1.685million. Now really, who has that kind of money to spend on something small like that, the street isn't pretty at all and the home isn't really nice. Are we not seeing huge declines in the Westside, because the ALTa/ARM adjustable crisis hasn't happened yet? Really when you see nice areas in other cities, say Houston people such as doctors lawyers and what not live there. According to LATIMES, people who make 250k "Doctors/lawyers etc" a year can't afford to buy a nice house. Now really what kind of place to live is it, if white collar people can't even afford a nice home for themselves or their family, without moving into the Inland Empire. Let me know your thoughts.
Listing prices are not sales. BIG difference. People are still asking rediculous prices, but not getting sales. You will see prices drop as foreclosures hit the market on the Westside. We are barely beginning to see them in the fringe areas. Once loans begin to reset at higher rates from Alt-As (next leg down) you will see SALES PRICE DECLINES.
After that, I/Os, ARMS and Prime really get the party started.
Be patient....
Your right about listing prices haha, its like me asking 400 dollars for an apple am I going to get it no. Oh and how much of a price correction do you think we'll see in the Westside? I've looked at some sales records in Santa Monica and West Hollywood, two homes about the same price doubled in two years unrealistic.
Crappy data, if you ask me.
SFR and condos lumped together? Wrong analysis for sure.
Plus the volume #'s point to condo sales skewing the numbers....and we all know condos are bad investments....no brain surgeon needed to figure this out....
Give us cleaner data and I will believe the sky is falling!
All you folks with Alt A or variable mortgages set to reset....call your damn bank now and work out a loan modification....
I did, and locked in my teaser rate as a perm. loan.....Yep, you heard me, the banks are getting pressure from the feds to avoid have anymore foreclosures, so they will do it....you'll be surprised....it wasn't that hard....I'll keep my Santa Monica house thank you very much...
Most people who bought these properties couldn't afford them in the first place, its very unhealthy for a real estate market to double in two years. Housing values don't even increase that fast in 10 years. What caused this bubble stupidity and toxic loans. The market was never meant to be this expensive. Good for you keep your house. Your too bearish though, high end areas need buyers. Like LATIMES says people who make 250k a year can't afford a home. Thats sickening, the top 3% of incomes can't even buy a decent 3000sqft home in a nice area thats not like 60 miles inland. How do you explain all the Inland Empire foreclosures? Those people didn't refinance, and guess what we thought that foreclosure nightmare was over. Well my friend its not, foreclosures have spiked once more in the Inland Empire. Sum it up prices are too high they need to come down regardless of area. Enough proof Mr Cocky>.<
The last post is right. Those people didn't refinance why, because they couldn't afford the home in the first place. Maybe you could, anyways there aren't enough people who can afford their payments like you to keep the Westside prices at these sickening levels. This blog may not be as accurate as you would like it to be, but it doesn't take a rocket scientist to say all real estate markets in the area are or will be affected to some extent. My reasons if the Inland EMpire/SFV is much cheaper, where do you think people will move there of course. Supply and demand people will move to the cheaper areas, the higher priced areas will fall in price do to this because of lack of demand. Other reasons incomes DON'T match, like the other guy said the top 3% of income can't afford a nice place. Thats really bad, my last reason is renting. If you can rent a home for sale at 1.5 million for 5k a month you probably would. if you bought it you would have a much higher mortage, and you would pay all sorts of high taxes. Ever notice 50% of the population in LA rents?
Very important point Anon 8:08, Why buy, pay property taxes, maintenance and risk your down payment (15% now) being eaten away, when you can rent for much less? IT DOESN'T MAKE SENSE!
Also, why are banks suddenly being so nice and working out mortgages? Because they have a load of shadow inventory, they know prices are dropping, and they can't take anymore loans back. Look at WaMu (Largest Savings and Loan) Dead Man Walking....
As for the data, the question you have to ask is WHY has Total Sales Volume dropped so precipitously? Credit Crunch, plain and simple. Mean and Average Selling Price can be skewed but it does show trends, which is very important.
Not a pretty picture... Westside drops are just starting.
How low do you the Westside prices need to come down? Like a previous person said, they saw some listings that were half the price 2years ago. Oh and whats the deal with all these articles about "oh housing is about to bottom". Are people tired of talking about this "doom and gloom". Its doom and gloom for the house prices to not correct themselves, these people have a backwards mentality . Maybe a market like Phoenix is near a bottom but CA isn't.
Check this home out: http://www.trulia.com/property/42396770-8701-Clifton-Way-Beverly-Hills-CA-90211
As you can see its not really a nice house haha. If I had the money I wouldn't move my family into that piece of crap, scroll down and look how much someone payed for it in 05.
My prediction is 50% off peak pricing (2007) on the Westside. When, is anyones guess. The fundamental of price/income is still way out of whack. Resets from Alt-A loans, I/O and Prime ARMs, hence foreclosures will take a serious bite out of SALES PRICES. Plus, buyers are now educated about FORECLOSURE PRICING. It really depends on how long the FED wants to string it out.
Personally, I believe we need to flush out all the garbage loans, and take the pain as quick as possible. It will be hard, but it's better than 5-10 years of slow torture.
How low has the Westside fallen from peak prices? Or are you saying they need to fall 20% more since LA country fell 30% from last year? 20% really wouldn't seem to be enough like I said how could a home two tears ago double in value ex 5 800 tofay 1.7million. How much did that home actually go up, and how much of it is just a stupid nonsense asking price?
Sorry for the typos, by 5 I meant 2005 and 800 800k.
Westside prices have fallen about 10% on average so far. LA County prices encompass a much larger area.
And, people can ask what ever they want. It is the actual selling price that matters.
Do you know of any good websites that show what homes in these areas are actually selling for? and yes I strongly agree with you a 50% correction or more is needed for the Westside. Heres another thought say you bought in the Westside 15 years ago. Now you have a family with kids, where are the kids going to move when they're grown up? Probably out of state because its still too expensive. The current generation of owners in these cities won't be around forever, no ones immortal haha. What happens when they die, who'll take their place and buy these outrageous homes haha. Good logic eh? All these people who say now is a great time to buy don't understand reality, they think reality is being a debt slave to a house that your loaning from the bank for 30 years. Oh how are cities like San Diego and the whole OC area doing? I know San Diego is a bit cheaper than the LA area. Now is Norcal at all in a bubble, or no due to the high tech jobs in that area "cities like San Jose San Mateo etc..".
Check out Zillow. It is listed to the right in this blog along with some other website links.
Thank you, do you happen to know anything about those other markets I mentioned? Oh and what happens to newer homes that were built where a former home was? As in say I bought an old home demolished it and built something nice. Will those go down at least another 40% like the others? Or no because they're new, and I guess that would make them more desirable. I know everything is affected, I was just curious.
All of Calif has experienced a bubble. Start by checking out Dataquick first. Then I would go to some of the foreclosure sites (Realty Trac and Foreclosure Radar). For SD and OC, Piggington is another excellent site to get a beat on local markets.
All of these sites are listed to the right in my Favorite RE Tools/Data and Favorite Re/Economics Blog sites. Just click on the links.
Thanks
Latesummer.....why did you change your name from Latesummer2008 to Latesummer2009? I see you previously posted as Latesummer2008 in other blog posts in 2007.
Latesummer2008 was when I was looking at San Diego Property via Piggington. And I believe now is the time to begin nibbling at some properties that have dropped 50% or more in San Diego County.
However, LA is at least a year behind SD, and I think it will be Latesummer2009 before some buyers re-enter the market here.
When do you think these markets will bottom, do you agree with Dr Housing bubbles prediction of 2011? Along with Dr. Housing Bubble's prediction, people in the futures market are betting 2011. I myself don't have a year or date, I think it'll bottom out when these properties are affordable once more.
I forgot to add.. San Diego is cheaper than L.A. yes it has more buyers but it is still not near a bottom.
It is hard to predict exactly when the bottom will occur in LA. Alot depends on how long the Govt strings it out. 2011 is a good bet at this point. Regardless, I believe we drag along the bottom for at least 2 years, so 2011, and 2012 look good right now. Who knows what effect the recent financial markets disaster could have. It might be quicker, if banks are allowed to fail, instead of being bailed out.
And yes, parts of San Diego have not bottomed yet. Outlying areas may have though.
Your right, and the outlying areas in San Diego are really cheap. The actual city, hasn't hit bottom yet you still see properties for sale that were double of what they were a few years ago.
Forgot to add... I just saw a post that SOCAL prices are back to 2003 levels. Well on the sales history of numerous homes i've looked at the home sold for half of what some idiot is trying to sell it for now Yes like you said anyone can ask what they want, has the reality just not set in? Is that how it works the market may have bottomed in some places, but it takes a while for reality to set in for the seller or what. Like if San Diego Bottomed, why are basically every single 3-4 bedroom houses for sale over a million dollars, if they were around 400k-700k just a few years ago?
Sorry by sales history, I mean 2003 sales history heres an example: http://www.trulia.com/property/1064026809-2665-Narcissus-Dr-San-Diego-CA-92106
The only question with stats involves the fact that most Westside areas have too small of a volume to really be entirely meaningful. Not saying that the downward trend isn't there just saying that these stats alone don't tell an a completely accurate picture...
You make a very good point. However, Total Sales Volume (YOY) is very important. It tells you how many transactions are getting funded, which is the big problem now. Laso, Average Selling Price does give you insight towards trends. Looking at them both together, gives you a good idea of a local markets health. Especially, if they are double digit negative.
Would you happen to have an answer to my September 17th post?
Different areas have experienced different % declines. Anywhere from 10-50% in SO CAL. Outlying areas have been hit hard and it creeps in from there. Affluent areas have yet to get hit as hard, but they will. Loan resets from the different toxic products will cause foreclosures for those that bought from the early 2000s to 2007.
Be patient, and save cash.
WIll this bailout have any affect on these loan resets, if the democraps manage to get their "part" of the bill included.
Those fools who bought in the affluent area deserve it Like I've said numerous times before those areas weren't meant to be that pricey in the first place.
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