Thursday, December 31, 2009

Out With the Zeroes, In With the Teens, Happy New Year!

As 2009 comes to a close, we can only wonder what 2010 will bring. In 2009 we saw affordability improve some, due to foreclosures and government intervention. Not exactly the preferred method of a real estate recovery. Notice of Defaults (NODs) have soared in all neighborhoods, and sooner or later these properties will come to market. If you own property, ask yourself if it increased during 2009 or not. That should give you an answer about your particular market, despite what anyone in the media says. Overall, I would venture to say there have been losses of varying degrees based on which neighborhood you live in.

So what does 2010 have in store for home values on the Westside? With the gov't throwing in everything but the kitchen sink and home values still dropping, the future has more downside than upside. The reality is, housing is still on life support. Now that rents are running about half of the price to "own" a home and it doesn't risk losing money or damaging credit, I can't see many rushing to purchase in 2010. With the Westside peaking in 2007, a good year later than most areas, it makes sense that declines would come later also. Only time will tell.

Lets hear some of your predictions for 2010.


Anonymous said...

Right now the 90402 has 35 foreclosures in the pipeline. I predict that this will rise to 60 foreclosures by mid 2010. Banks will be very slow to boot people out and sell these homes - they will trickle on to the market over the next 3 years.

People buying in the 90402 in Dec 09 will come to regret it as the foreclosure homes hitting the market push down prices in 2010 and 2011

Robert said...

there's always bad news when while the market is turning. those foreclosures, if they exist, do not mean a thing. notice all the closings in the past month.
that's just another excuse for not buying just at the time you should be making the buy of your lifetime.
prices are up 10% in the past 2 weeks if you gauge the real price to rates. don't look for the obvious, for that will always make you a loser. as they say , a half a step too slow.

Keep reminding "latesummer" that his user name should be "earlyspring."

Anonymous said...

Robert -
are you saying that the foreclosures won't push down prices, since there are so many people ready to buy in the 90402 and that as soon as they hit they will be bought

Anonymous said...

2010 predictions:

1.The continuing collapse of tax revenues across California will force layoffs of thousands of government workers and early retirement packages.

2. Dismal Christmas sales will cause more commercial properties to go vacant.

3. Permit costs, taxes, and court fines will continue to increase as local governments become desperate for revenue.

4. Apartment rents continue to go down as more unemployed families move in with relatives/friends/or out of state.

5. Hotel room rates continue to fall.

6. Gun and ammo sales continue to increase.

7. Property upkeep deteriorates.

8. HOA's try to increase dues as non-payments mount.

9. The trickle down theory of the stock market rally does not materialize.

10. House prices in Westside go down another 15%.

Anonymous said...

I am worried about #6....

Anonymous said...

Stay away from the Pico neighborhood. Gang wars are heating up. Gangs just did a drive by and fled on the 10. Then soon after shot someone dead in Virginia Avenue Park.

So owning some guns is a must if you live there

Anonymous said...

'So owning some guns is a must if you live there'

Why??? So you can play cowboy and try to go mano a mano with someone who is a better shot than you?

Right....calm down white man....

Anonymous said...

Perhaps the right answer is to live in a neighborhood without a gang problem.

Just look up the LA crime map and stay away from the neighborhoods with gang crimes

Alvin said...

"prices are up 10% in the past 2 weeks if you gauge the real price to rates"

no Robert. the real price to purchase hasn't gone up. the COST has. which effectively lowers demand. coupled with increasing supply (foreclosure pipeline), that suggests LOWER prices ahead, not higher. while it may not seem obvious, it's actually simple economics.

Anonymous said...

it's over...the bottom was last March 09. All of you will be priced out.

Anonymous said...

Where does one find the LA crime map?

Anonymous said...

Google LAPD crime map - it is very easy to find using google

This crime map will show the dangerous vs safe neighborhoods

Anonymous said...

From The New York Times:

Slight Rise in Home Prices Masks Signs of Weakness

The Standard & Poor’s/Case-Shiller index increased 0.4 percent in October, but there were disquieting signs of deterioration beneath the apparent good news.

Anonymous said...

"LS2009 said...

With the Westside peaking in 2007, a good year later than most areas, it makes sense that declines would come later also."

I seem to recall back in 2007 when some bull pointed out case shiller was falling but westside was not, some bear accused him of being in denial and claiming "its different here"

Now that the shoe is on the other foot and prices are rising, how ironic is it that the bears are now employing the "its different here" line. Denial anyone???

Anonymous said...

Ok, my prediction is that prices will drop over the next 2 years, then stabilize. Some neighborhoods will drop far more than others because they have mroe overextended buyers and more marginal neighborhood fundamentals. Pico area will continue to tank, why anyone ever paid high prices for that area boggles the mind. All of the icky Culver City neighborhoods will tank and much of Venice will slip. The areas of So Cal that have already dropped 50% or more may or may not drop a bit and will stablize low. Prices wills tay low for 2-5 years after which they will go right on up again. Real price stability or drops may be masked if inflation sets in. Inflation is still 1-3 years off.

A year later we can look back at the predictions and see how our crystal balls did.

Anonymous said...

I hear you. I agree with you. But what is your prediction for North of Montana?

Robert said...

higher prices breed even higher prices. what do you think makes prices go up ? it's the fear of missing the boat.
what most except one anonymous writer miss is that there is so much money on the sidelines. houses are being bought, of course not like the madness of 2005-2008, but in a healthy way. when there is a decent property up for sale, it sells and sometimes at a higher price than list. that is not a sign of a flagging market. (see 721 19th St. for one home with multiples of bidders and which went well over list price).
5 % mortgages are freakin' gifts. the government offers all of us that gift, and we are waiting for what? the end of the world would have happened early last year, if at all. all here we all are continuing to pontificate. take the government's gift of 5 % money and never look back.
Can't you all see that the government's real jonb is to get inflation back into the system. Deflation is a killer and almost impossible to correct (ask Japan for the last 20 years). What does this mean to a house at reasonably low prices, take the government's money and ride the wave once again. if you do not, I promise you that you will be left at the starting gate waiting for the next pullback which may come 15 or 20 years from now.

Anonymous said...

Robert, I am glad you are here. Everyone on this blog is saying wait wait wait. I personally agree with what every one on this blog is saying and disagree with your message but it was getting kind of boring here without you. So can you explain the way you evaluated the decision between 90402 and Brentwood? How did you evaluate the areas and weigh them

Anonymous said...

There are bidding wars already on properties that are priced right or in good neighborhoods with good schools. People who sold homes at the top and made money in the valley or other spots that are getting crushed now are buying in the westside or southbay. Foreigners are buying. If you are waiting you will be priced out or you will be buying in encino or van nuys. Bottomline I that there is still slot of people with money and they will gobble up the westside and southbay. There are no more beaches to be developed around here. So all you negative people will end up buying and gentrifying Compton.

Robert said...

To the person who asked how I evaluated 90402 vs. Brentwood.....

1. in 90402 lots are small and hardly private while I found an amazing area which even my son says does not look like Los Angeles. My lot is larger than any NOM except the estate lots which I could not afford.
2. I did the Open House routine every Sunday for a year and a half and found that only the run-down homes in SM were in my price range. I just did not want to buy a 1.8 million dollar home and then start to fix it up for hundreds of thousands more. Besides, what's so great about living in a long line of houses anyway. I wanted a home for the rest of my life (I am 67) and not to worry about what would be built next door or across the street. I did find that fabulous area in 90049 by looking and looking on my realtors choosing the home for me.
My agent just did the negotiating and the closing.
3. No one can tell me that shopping on Montna is such a treat that I must live there. At my age I am far more interested in restaurants than boutiques. I do not know the school system in Brentwood, but if Franklin is superior, then you have your answer.
I live within walking distance of the town along San Vicente which has many many more restaurants than Montana. Brentwwod seems less stuck up if you know what I mean. There is an attitude there.
Also there are some unbelievably fabulous homes near me which make any home in SM look like the maid's quarters. The place just feels good to me.
4. I like that fact that there are few homes for sale, or so it seems. That means to me that Brentwood Park area, where I live, is full of substantial families. I love to see the kids on bikes and many residents walking their dogs.
5. One of the main reason I was attracted to SM in the first place was the beautiful walking/running/jogging area along San Vicente.
Well Brentwood has the same thing.

Anonymous said...

In my case I just don't care about NoMo. I know people who live there and we are not in that economic bracket. I have also looked at the crime stats and they are not so pretty. I home school so school district is irrelvant to me.

We ar epreparing to put in offers in Ladera Heights. The crime is low and prices have already dropped nearly 50%, plus by neighborhood income stats people were never as overextended there. The fact that most people put their kids in private schools or homeschools makes us more culturally normal there. I am starting to see some reall values, no fixers at what used to be fixer prices. Nice homes on large lots are in the $650k range. Some fixers have sold under $600k. Since I prefer to grow my own veggies a large lot is nice for me. I have another white friend who lives in that neighborhood and loves it. The crime is lower than in higher priced neighborhoods.

I also have friends in Brentwood and I agree with Robert ont eh vibe. A good friend of mine lives across from the Frank Lloyd Wright house and that is a great area. I think it is a better value than NoMo, but neighborhoods are about personal tastes.

I find the Santa Monica teenagers over scheduled, stressed out and super competitive. I am looking for an area with a more relaxed vibe. I want my kids to feel they have succeeded by being good people whether they are garbage men, teachers, policemen, businessmen, lawyers or surgeons. I don't want them to think they have to keep up with dad to be a success, what he does just happens to pay well, but he followed his passion and I want my kids to do the same. The pressure on kids here to make lots of money can be extreme.

Anonymous said...

I agee with you both. You both bring up some good points

That being said, when ever I have been to Brentwood Park I have noticed no sidewalks -

Is there a part of Brentwood Park with sidewalks? Cause I know for sure the part near 26th street North of San Vicente has big lots but no sidewalks.

Are sidewalks right to your house important to you

Anonymous said...

Your blog keeps getting better and better! Your older articles are not as good as newer ones you have a lot more creativity and originality now keep it up!

Anonymous said...

Remember the scene in LA Story where Steve Martin drives from one side of the street to the other to see a friend? LA is not a walking city. That said I have walked dogs with my friend in Brentwood and walking on the side of the street is no problem. People drive carefully.

Anonymous said...

I do not know Brentwood well. So the below comments will seem simplistic to some of you. But I would divide Brentwood in to four pieces. The interesting restaurants are on San Vicente generally, so I will discuss how easy it is to walk to San Vicente.

First of all, part of Brentwood is North of Sunset. Forget this part if you love walking, since to get to the good restaurants you would have to cross Sunset. Crossing Sunset is *not* pleasant as a pedestrian

Second part of Brentwood is South of San Vicente. This neighborhood is mostly multi family. Great sidewalks, great pedestrian access, but multi family. So forget this if you want a single family lifestyle

Third part of Brentwood is between San Vicente and Sunset, West side of Brentwood. This part of Brentwood is generally known as "Brentwood Park" . The western border of this neighborhood is the street that is called "26th street" or "Allenford" (basically Allenford and 26th are the same street, just named differently depending on where you are on the street)
OK Brentwood Park is an all around wonderful neighborhood. Best known as the neighborhood where the OJ Simpson murder took place. But as far as I know there are no sidewalks at all in Brentwood Park. Those of us with 7 and 8 year old kids might feel uncomfortable letting them walk to and from the houses of their friends in the neighborhood since it seems overall more dangerous to have kids walking the streets instead of the sidewalks.

The 4th part of Brentwood is the part between San Vicente and Sunset on the EAST part of Brentwood. I am thinking Westgate Avenue and Saltair Avenue - these streets in the EAST side of Brentwood seem to have Sidewalks and so you get the benefit of a green family friendly neighborood with single family homes and the easy walk to the restaurants of San Vicente - and sidewalks.

So I know the EAST side of brentwood north of san vicente has sidewalks and the WEST side of brentwood north of san vicente does not have sidewalks. But I have no idea exactly where in Brentwood the transition from sidewalks to no sidewalks takes place

In any event, I understand that most readers of this blog don't have kids and don't care about the issue of sidewalks vs no sidewalks but I do want to discuss that topic if there are other people here with the sam focus that I have

Anonymous said...

"Anonymous said...
Robert, I am glad you are here. Everyone on this blog is saying wait wait wait. I personally agree with what every one on this blog is saying and disagree with your message but it was getting kind of boring here without you."

Well I wish you would leave Robert. I want this blog to be an echo chamber of those firmly convinced we have a "long ways to go". This blog is not interested in reality - it is doom based escapism (and really great fun). Please leave us here to wallow in our monolithic fantasies of doom.

Anonymous said...

This blog brings together a huge number of people with a huge number of different view points. No need to try to reach an agreement.

Some people think it is smart to buy right now some think it is smart to wait two years. Why debate that right now? Instead let's debate the merits of each of the individual neighborhoods on the West Side. Lots of good discussion to be had debating PP below sunset, PP above sunset, GRS, and each of the other sub markets we might buy in

Anonymous said...


Your 67?! If that's the case it makes sense to buy.. Most of my grandparents died in their 70s, so you really don't have anything to lose... You could buy more home than you can afford and not have to worry to much.. the bank will have to take it back after your passing.

Those of us in our 20s-30s don't really want to risk being a "indentured servant" to our homes for the rest of our lives. We have less money and if we can save twice as much by renting a similar property then it makes sense. The housing market in CA will fluctuate 5-10% over the next 5-10 years.. We have time to wait and save...

Anonymous said...

Old people think that 70 is the new 50....

Anonymous said...

when buying a home as primary residence, stick to the fundamentals:

-3-4x income
-15 or 30 yr fixed mortgage
-at least 20% down payment
-35% of take home monthly income for mortgage
-18 months worth of cash savings to cover mortgage as back up

there is a high barrier to home ownership in WLA.

Latesummer2009 said...

Pending housing sales came in with a THUD. 16% drop from October to November. It is interesting to see what the real market looks like without a gov't crutch to prop it up.($8000 tax credit extended until March)

The other trend that is obvious is the mini-bubble being blown as far as financing purchases around $750,000. I't doesn't take a rocket scientist to figure that one out:

$750,000 purchase
3% down = $22,500
credit = $8,000

Total = $14,500 needed to "buy"a home.

That part sounds nice, Let's look at the next part:

Mortgage payment = $5000/month
Income required = $180,000/year

Are their really that many people that will live in a total fixer on the Westside, just so they can "own" a piece of property. I would think that most at that income level aren't going to want to live those particular neighborhoods. Meanwhile, the mid and upper tiers on the Westside are dropping in prices without the benefit of any bogus loans. Yet, now the gov't is the lender of last resort and still trying to breathe air into one last housing bubble.

Rent a place for half the price of buying in a neighborhood you WANT to live in, and watch the gov't run out of tricks. Prices will not be going up soon as long as we are stuck in defation.

blahblahblah said...

The great thing about housing is that its cycles move sloooooooowwwwllllyyyyy.

I dont know which way housing will go. But I am on the sidleines with my 20% down payment. Why? because if the market recovers, i will still have a loooonnnggg time (2years) to get in and still be able to ride the wave.

As of now, however, the direction is giving very conflicting signals. It looked like we bottommed a few months ago. Now, it looks like we may leg down again. Either way, in real estate, if you pay attention and don't cloud your judgement, positively or negatively, its hard to miss the boat.

The only losers are those who panic. Panic transactions, either buys or sells, and up as mistakes. Don't panic.

Anonymous said...

"Latesummer2009 said...
Pending housing sales came in with a THUD. 16% drop from October to November."

And yet, on a YOY basis pendings were up over 15% -- OH HOW SAD FOR YOU!!!!

Jon T. said...

"And yet, on a YOY basis pendings were up over 15% -- OH HOW SAD FOR YOU!!!!"

Nice catch Anon. I remember years ago when I came to this and other blogs and they educated me on how the NAR likes to post MOM numbers when it suits their agenda. The message was clear - NEVER trust anyone who spins the numbers depending upon the season.

I never thought I would see LS2009 doing the same thing to support (what is increasingly looking like) and all doom all the time agenda. Im ashamed to admit I used to believe in him.

Anonymous said...

The bottom was March of 2009? That crosses the line from optimistic to looney tunes.

Latesummer2009 said...

It is not a requirement to believe whatever I say on this blog, but I would hope you back up your blasts with some sort of evidence. Anyone can pop off here, but it just shows how uneducated you really are. I happened to think these MOM results are significant in that we just had a string of nine consecutive months of increasing pending sales. Then, what "experts" believed was going to be a 2% drop came in at 16%. That it coincided with the gov't tax credit extension, makes me believe the previous months gains were artificialy inflated.

Robert said...

For the person who believes I bought because I have 3 years to live, I just wanted you to know that my mother is 92 and still playing golf and has her own personal trainer.
I have worked very hard all my life. The home in Brentwood Park is the reward.
The great thing about the USA is that it is there for all of us...always was and always will be.
Just one more comment----this blog just brings out all the complainers....too bad. We are all masters of our own fate. Cool the blame game.

Anonymous said...

"but I would hope you back up your blasts with some sort of evidence."

Evidence of what? I am not making a statement as to what "is". I am simply pointing out the dubious nature of MOM stats when (and only when) they support your agenda.

"Anyone can pop off here, but it just shows how uneducated you really are."

Why is that? After all it was YOU who pointed out time and time again how erroneous it was to rely on MOM stats.

"I happened to think these MOM results are significant in that we just had a string of nine consecutive months of increasing pending sales."

Of course you think its significant - all part of your doom agenda. Why are you shocked that the consecutive streak was broken. Was it simply supposed to go up MOM forever? Is there anything out of the ordinary about having Dec pendings less than Nov pendings (other than it happens just about every year since 1983)???

Anonymous said...

“For the person who believes I bought because I have 3 years to live, I just wanted you to know that my mother is 92 and still playing golf and has her own personal trainer.”

I thought that post was pretty sad and it goes to show how insensitive we've become as a society. My grandmother is 95. Most of my relatives on her side lived past 100. The secrete is they are humble but live defensively (never taking things for granted and ready to fight when they are down). Your mind controls your body, therefore, good health is in the mind.

Anonymous said...

Can we have a new thread
this one is tired

Anonymous said...

As realtors once again get nervous that their livelihoods are threatened, and homes owners confident that home values would return to previously unsustainable levels, the message is getting out their that things are still not quiet on the western front. The intellectual weight seems to sit firmly behind a diminution of the recent remission, and that tax credits translate dollar for dollar into price hikes. Let prices fall and buyers will come out of the wood work.

gio said...
This comment has been removed by the author.
Anonymous said...

"The bottom was March of 2009? That crosses the line from optimistic to looney tunes."

keep waiting you will be priced out. your going to be living in valenicia. buy when no one wants to buy sell when everyone wants to buy. Now is a great time to buy. too many people are scared and if you are scared then stay scared and get priced out.

Anonymous said...

No one is getting priced out! All these agents and sellers playing the fear game. Last I checked there was still a thing called income-to-mortgage ratio. During the bubble years, people used exotic mortgages to leverage 5-10 times their income, now that's gone who's gonna buy your crappy house. This is not even looking at the job picture. My real estate agent is now in law school. I suggest all you fear mongers go do the same!