Finally some good news for LA home buyers (Los Angeles: middle-class, short sale)

[Parker501]

As a LA resident wanting to buy his first house I was very pleased to read the latest California Association or Realtors sales report.
The median sales price has finally dropped. And not just a little. Sales price for November was down $52,000 from October. A 10% decline. Along with sales numbers dropping by 28%.
I'm hoping this trend will continue so that some of us can finally get into the housing market for reasonable prices. Given the interest rate hikes today I would assume even more people are reluctant to buy at these prices.

November home sales and price report

[STFUNerd]

From your article:


The median price of an existing, single-family detached California home dipped 0.2 percent in November to $475,000 from $475,990 in October. November’s median price was 6.8 percent higher than the revised $444,630 recorded in November 2014.


Month to month sales definitely went down, but trailing twelve is still up significantly. Maybe it's the beginning of a downward trend, hard to tell.

[No_Recess]

If house prices dip low enough all the people who left CA for Texas can come back.

That way we won't need 500 threads comparing the 2 states.

[Parker501]

Originally Posted by STFUNerd

From your article:


The median price of an existing, single-family detached California home dipped 0.2 percent in November to $475,000 from $475,990 in October. November’s median price was 6.8 percent higher than the revised $444,630 recorded in November 2014.


Month to month sales definitely went down, but trailing twelve is still up significantly. Maybe it's the beginning of a downward trend, hard to tell.

Those are for the whole state. Chart on bottom breaks down region/city showing LAs $52k drop



Los Angeles Nov $457,870 Oct $509,570 -10.1%

[Parker501]

Originally Posted by No_Recess

If house prices dip low enough all the people who left CA for Texas can come back.

That way we won't need 500 threads comparing the 2 states.

Haha. But those are always an entertaining read

[thelopez2]

Originally Posted by Parker501

Those are for the whole state. Chart on bottom breaks down region/city showing LAs $52k drop



Los Angeles Nov $457,870 Oct $509,570 -10.1%

This is good news for buyers? Do you want to buy a house in a market that is on the decline? Do you want to buy a house that might go down 10% in one year? If that $457k house drops another 10% it'd be $412K. Two years ago it was $510k now it is $412K, people would have lost $100,000 in home value now their 20% equity and downpayment are lost, they might start walking away, homes go into foreclosure. Homes drop another 10% due to foreclosures and bankruptcy. Now the home owners are underwater and can't sell because they don't have the cash to pay off the shortage, so they have to request a short sale with the lender. Now falling prices recent sales don't meet appraisal values and buyers can't get loans so properties sit vacant. The investors come and buy up everything for cash and put it in their REIT portfolio and the neighborhood becomes full of renters. Although they are talking about median price, I'm treating it as a same sale which can be significantly different.

Is there a reason you didn't buy in 2010?

[harhar]

Originally Posted by thelopez2

This is good news for buyers? Do you want to buy a house in a market that is on the decline? Do you want to buy a house that might go down 10% in one year? If that $457k house drops another 10% it'd be $412K. Two years ago it was $510k now it is $412K, people would have lost $100,000 in home value now their 20% equity and downpayment are lost, they might start walking away, homes go into foreclosure. Homes drop another 10% due to foreclosures and bankruptcy. Now the home owners are underwater and can't sell because they don't have the cash to pay off the shortage, so they have to request a short sale with the lender. Now falling prices recent sales don't meet appraisal values and buyers can't get loans so properties sit vacant. The investors come and buy up everything for cash and put it in their REIT portfolio and the neighborhood becomes full of renters. Although they are talking about median price, I'm treating it as a same sale which can be significantly different.

Is there a reason you didn't buy in 2010?

From the very small bit I know about REITs, I think you may be right.

However I don't see a major drop in housing prices I am seeing a slowdown and this IS a good thing for those middle-class first-time buyers looking to get into the market.

In the metro areas prices need to stabilize because 10%+ growth year after year isn't sustainable either; that's bubble territory and I think in a year or two that's where we'd been headed if interest rates weren't raised.

Although its not the biggest reason...another plus side of higher interest rates would be the ability to refinance after a few years. People who bought during the valley of interest rates will probably not be able to refinance for a very long time.

I think the goal here is to normalize prices and to return homes into homes and not investments. As long as prices don't go down dramatically and prices slowly increase, that would be ideal.

[Parker501]

Originally Posted by thelopez2

This is good news for buyers? Do you want to buy a house in a market that is on the decline? Do you want to buy a house that might go down 10% in one year? If that $457k house drops another 10% it'd be $412K. Two years ago it was $510k now it is $412K, people would have lost $100,000 in home value now their 20% equity and downpayment are lost, they might start walking away, homes go into foreclosure. Homes drop another 10% due to foreclosures and bankruptcy. Now the home owners are underwater and can't sell because they don't have the cash to pay off the shortage, so they have to request a short sale with the lender. Now falling prices recent sales don't meet appraisal values and buyers can't get loans so properties sit vacant. The investors come and buy up everything for cash and put it in their REIT portfolio and the neighborhood becomes full of renters. Although they are talking about median price, I'm treating it as a same sale which can be significantly different.

Is there a reason you didn't buy in 2010?

In 2010 I was in my 20s and still paying off student debt and had almost no savings. I worked hard in school so that I could have a good career and make something of myself. And now that I'm finally there I look around and see a huge asset bubble and no opportunities left. The stock market is over valued, housing prices in Los Angeles are peaked above the last housing bubble and there are a lot of young people like myself who are basically screwed if something doesn't give.
Quite frankly I couldn't care less about investors losing their money. This whole asset bubble is their fault anyways. They bought up all the properties, causing huge increases in RE costs and then jack up the rent to squeeze every dime they can out of the working class. Of course I don't want regular folks to lose their money but if you were naive enough to buy when prices were clearly going to unsustainable highs than thats a hard lesson to learn.
And really, prices can continue to sky rocket, this might be a blip. But for someone like myself it gives me a glimmer of hope that I can still make a good life for myself here.

[genjy]

Originally Posted by No_Recess

If house prices dip low enough all the people who left CA for Texas can come back.

But we don't want them back. They can stay in their perfect Texas--their new home.

[Mr_Geek]

Sweet. Only another 100k or so before I can buy a craphole in a bad area of the city.