Do you think housing prices are STILL going down in California? (Los Angeles: rental market, home)

[sheri257]

Originally Posted by Charles

I still want to know why Los Angeles/SoCal housing prices jumped so much higher as a percentage than most of the rest of the country.

Access to the "funny loans" was everywhere. The mortgage rules are pretty much the same across the country. What was it about LA?

Why the huge increase in LA and not Denver (which is sort of representative of most of the country)?

It's pretty simple. More people want to live in LA and SoCal ... than want to live in Denver. Basic supply and demand.

[Charles]

Originally Posted by sheri257

It's pretty simple. More people want to live in LA and SoCal ... than want to live in Denver. Basic supply and demand.

If it is pure demand, why did the demand increase so much during the steepest positive slope of the curve? If it is pure demand, why all of a sudden in 2002 did people want to live in LA?

[greggd]

Originally Posted by orthopodfrancis

Prices will always revert to the average. Take a look at the Case-Shiller graphs. L.A. is in one of the biggest housing bubbles in the last century. Prices are STILL 2-3X more than what they should be. Go look at some older pre-bubble house prices from 2000-2002.

Sustainable prices are typically 2.6-3 x the average income for an area, which in Los angeles - the average income is 48K dollars - there fore typical historical housing prices should average 150,000.

Santa Monica median household income is 75,000 - so average price should be around 225,000


There is a huge bubble, and it will likely be over in 2010, when all the Alt-A loans have reset (se Credit Suisse mortage graphs).

The ongoing recession, and possible upcoming depression may even further depress housing prices.

Expensive areas are being hit too, as Bev Hills/Pallisades are facing increasing short sales, and gasp! foreclosures.


Median prices going up, just reflect that the low end stuff is not selling, which means a troubled market.

If prices in santa monica drop to $225k, Many will be purchasing entire city blocks.

I see very few foreclosures in Palisades, Malibu, and Beverly Hills Most of the time they are on the market and sold at market price.

[Charles]

Originally Posted by greggd

I see very few foreclosures in Palisades, Malibu, and Beverly Hills Most of the time they are on the market and sold at market price.

"Foreclosures, which had been almost unheard of in high-end markets a year ago, now account for a substantial share of listings. In Coto de Caza, where the average listing price is $2 million, 17% of the 167 homes for sale are either foreclosures or "short sales," in which the listing price is below the amount owed on the property, Thomas said.

In Mission Viejo and Laguna Hills, Thomas added, foreclosures and short sales make up more than 40% of the homes for sale."


"Median sale prices fell by 13% in Beverly Hills in April, compared with the same month last year. Rancho Palos Verdes dropped 18% over the same period, while Newport Beach's 92660 ZIP Code took a 34% hit, according to DataQuick Information Systems."

"Simon Lee, a commercial real estate investor who has been shopping for a house in Bel-Air, Pacific Palisades and Brentwood, said he believes that prices in those areas are still inflated in today's market.

"I think it needs a major adjustment, 25% or 30%," he said."



from

At the luxury end, home prices are falling - Los Angeles Times


(Use Bugmenot.com - login with these free web passwords to bypass compulsory registration for logins and passwords if necessary.)

[MisterMark]

Originally Posted by sheri257

It's pretty simple. More people want to live in LA and SoCal ... than want to live in Denver. Basic supply and demand.

Well, it's not that simple or basic. No one should believe that the housing bubble was caused simply by "supply and demand".

[sheri257]

Originally Posted by MisterMark

Well, it's not that simple or basic. No one should believe that the housing bubble was caused simply by "supply and demand".

Ok but ... the question was why prices rose so much higher in LA than Denver. To me, the answer would be obvious ...

It's LA ... for crying out loud. People were obviously willing to borrow through the roof for LA ... not for Denver.

[greggd]

Originally Posted by Charles

"Foreclosures, which had been almost unheard of in high-end markets a year ago, now account for a substantial share of listings. In Coto de Caza, where the average listing price is $2 million, 17% of the 167 homes for sale are either foreclosures or "short sales," in which the listing price is below the amount owed on the property, Thomas said.

In Mission Viejo and Laguna Hills, Thomas added, foreclosures and short sales make up more than 40% of the homes for sale."


"Median sale prices fell by 13% in Beverly Hills in April, compared with the same month last year. Rancho Palos Verdes dropped 18% over the same period, while Newport Beach's 92660 ZIP Code took a 34% hit, according to DataQuick Information Systems."

"Simon Lee, a commercial real estate investor who has been shopping for a house in Bel-Air, Pacific Palisades and Brentwood, said he believes that prices in those areas are still inflated in today's market.

"I think it needs a major adjustment, 25% or 30%," he said."



from

At the luxury end, home prices are falling - Los Angeles Times


(Use Bugmenot.com - login with these free web passwords to bypass compulsory registration for logins and passwords if necessary.)

Interesting..and while dataquick is reliable source of real estate info, I have been continously watching certain select areas of west la and haven't really found any change in pricing from last year to this year. I notice these articles always sneak a common/tract name neighborhood or two in order to cover their bases and to dilute everything to match their theory.

I'm really just looking at certain sections of Malibu, Brentwood, and Pac Pal So my comments are really based on a much smaller community.
I will say that there are a few homes I've looked at that have been on the market for a 4+ months now.. Totally overpriced in comparison to other homes on the market and even in comparison to homes that were on the market in 07 and 06.

I would be happy to see a 30% reduction.

[12buttons]

Originally Posted by sheri257

Ok but ... the question was why prices rose so much higher in LA than Denver. To me, the answer would be obvious ...

It's LA ... for crying out loud. People were obviously willing to borrow through the roof for LA ... not for Denver.

there's no accounting for insanity..hahaha..I lived in Los Angeles for 7 years - was just awful..I woulnd't live there if they were GIVING the stuff away...and I lived in Santa Monica - not exactly the dumps..and I still hated it...move there only if you like passive aggressives, lots of traffic, and relentless sun and smog...at any price it's a bad deal...the ONLY2 things I miss are the fresh fruits and veggies from the farmers market and my shiatsu masseur...thats it...lol

[sheri257]

Originally Posted by greggd

I have been continously watching certain select areas of west la and haven't really found any change in pricing from last year to this year.

I will say that there are a few homes I've looked at that have been on the market for a 4+ months now.. Totally overpriced in comparison to other homes on the market and even in comparison to homes that were on the market in 07 and 06.

I don't follow LA that closely but, generally, I've noticed the same thing. If prices are "holding" it tends to be only one or two sales. Nothing else is moving. If properties are moving in greater numbers then, that's when you tend to see the price drops.

[Charles]

Originally Posted by sheri257

I don't follow LA that closely but, generally, I've noticed the same thing. If prices are "holding" it tends to be only one or two sales. Nothing else is moving. If properties are moving in greater numbers then, that's when you tend to see the price drops.

We've noticed this too.

The neighborhood where we moved from, Lang Ranch in Thousand Oaks, is outstanding. Very family, beautiful, excellent schools. We drove around there last week (we still have friends and family there). Nothing at all for sale. Its zip code code 91362 median prices have fallen 21% (Dataquick) since last year but in the Lang Ranch neighborhood there is nothing for sale. Nothing. People aren't selling.

We definitely noticed this.