Real Estate prices still way out of line in desirable parts of LA... (Oxnard: short sales, foreclose)

[BennyPhoenix]

Originally Posted by ConsideringLA

Alright "BennyPhoenix" - lay it out - Brentwood? Palisades? Santa Monica?


Extra credit if you can name one area that has ever survived a real estate bubble.

ps all boats rise and fall together.

Home prices may rise and fall together, but not at the same rate.

[Delron]

Originally Posted by BennyPhoenix

Dont expect homes in desirable areas to drop more than 50% off the high, if that much.
Less desirable areas have already dropped 50% and more. Supply and demand.

Originally Posted by BennyPhoenix

Prices in the desirable parts of LA have not dropped much. There's a reason that they're desirable. Dont expect bargains.

Okay, so which is it? Don't expect bargains, or don't expect them to drop more than 50% off the high?

They've come down from the over-inflated peak about 25% or so, some a bit more and some a bit less, still no bargain indeed. But I do expect them to drop somewhat in line with other local parts that are less desirable, just as they did in the 90's downturn. There was an interesting study done, and it indicated that yes indeed, it may have taken longer, but prices int he affluent zip codes dropped by the same percentage as the least affluent areas.

[Delron]

Originally Posted by BennyPhoenix

That analysis is for the LA market as a whole.
I'm talking desirable areas only, not the whole of LA.

Ah but the desirable areas do fall by the same percentage as the less desirable areas/whole. At least that has been the case in the last few downturns, in SoCal/LA and elsewhere. It just may take a bit longer.

Now the big problem is all the "help" the government, NAR, homebuilders etc. are calling for which could blunt or slow even further the drop in these desirable areas.

[greggd]

Originally Posted by Delron

Ah but the desirable areas do fall by the same percentage as the less desirable areas/whole. At least that has been the case in the last few downturns, in SoCal/LA and elsewhere. It just may take a bit longer.

Now the big problem is all the "help" the government, NAR, homebuilders etc. are calling for which could blunt or slow even further the drop in these desirable areas.

I've seen about a 10% drop in prices in the nicer parts of West LA and Malibu.
In some cases 12%-15% if they are not so nice problem/properties in nice areas.

One thing for sure they are on the market longer than they were a few years ago.

About 3 years ago there was a place near moonshadows that was high 900k and now it's supposedly in foreclosure and listed for aprox. 1.5 mill.

I can see further declines in prices but its really going to depend on what will happen next year with the commercial real estate sector and the economy in general. I don't think the prices will fall to the same % as places further east, such as in the suburbs, riverside, lancaster, east valley etc. Those homes are in traditionally undesirable & inconvenient areas and housed many
1st time buyers who are really renters.

A good % of those people have now gone back to renting or should I say they pay their monthly rent to an individual rather than a bank.

[EscapeCalifornia]

Does anyone know that 100 on the Case-Schiller index equates to in terms of dollars? (either total sales price or per square foot?)

[Charles]

Originally Posted by EscapeCalifornia

Does anyone know that 100 on the Case-Schiller index equates to in terms of dollars? (either total sales price or per square foot?)

Does it provide today's $/sqft? If so, work backwards. If today's $/sqft = $300 an the Case Shiller is 200, then wouldn't Case Shiller 100 = $150/sqft?

[ConsideringLA]

Originally Posted by Delron

Now the big problem is all the "help" the government, NAR, homebuilders etc. are calling for which could blunt or slow even further the drop in these desirable areas.

If history is any guide, this "help" just delays the inevitable. 'Tis better to let the market correct quickly so it can return to normalcy.

If you believe Benny, this market needs no "fixing..."

[SOON2BNSURPRISE]

I don't know what kind of areas that you want to live in or what you are comparing prices to. Is it possible that home prices in desirable areas have declined but some still feel that the prices are out of line for them? Lets say at the top of the market a home sold for $9,000,000 and at those prices we the general population could not afford it. Now if that home lost 40% of its value and is now selling for $5,400,000 chances are that we the general public still will not be purchasing that home. This is all acedemic in my oppinion anyway. Another thought to this is that although the general public may not have the entrance fee to live in Brentwood, Pacific palisades, Malibu, or some other place, those that can pull it off are probably not concerened as much with a recession as we are and chances are will still ask a pretty penney for the home they may be selling, or take that home off the market alltogether till things pick up. The truth is that prices may never decline as drastically on some locales because those living there may not have a need to sell.

[BennyPhoenix]

Originally Posted by ConsideringLA

If history is any guide, this "help" just delays the inevitable. 'Tis better to let the market correct quickly so it can return to normalcy.

If you believe Benny, this market needs no "fixing..."

What is there to fix? The prices will go to what people are willing to pay. It's all the fooling with the market that causes trouble. If the govt didn't keep interest rates so low and make laws compelling banks to loan money to people who could not pay back the loans then the market would not have become so inflated.

[edwardius]

Originally Posted by SOON2BNSURPRISE

I don't know what kind of areas that you want to live in or what you are comparing prices to. Is it possible that home prices in desirable areas have declined but some still feel that the prices are out of line for them? Lets say at the top of the market a home sold for $9,000,000 and at those prices we the general population could not afford it. Now if that home lost 40% of its value and is now selling for $5,400,000 chances are that we the general public still will not be purchasing that home. This is all acedemic in my oppinion anyway. Another thought to this is that although the general public may not have the entrance fee to live in Brentwood, Pacific palisades, Malibu, or some other place, those that can pull it off are probably not concerened as much with a recession as we are and chances are will still ask a pretty penney for the home they may be selling, or take that home off the market alltogether till things pick up. The truth is that prices may never decline as drastically on some locales because those living there may not have a need to sell.

Chris Cagen has demonstrated that over the course of the real estate cycle, prices correct in all area of the community. The price corrections don't occur at the same time at all price points, but no area is immune from a correction. see the diagrams on pg 11 -28 here.

http://www.facorelogic.com/uploadedF...eBurn_1104.pdf