Real Estate prices still way out of line in desirable parts of LA... (Los Angeles: sales, credit)

[Delron]

US home prices at 2004 levels, sales off 3.1 pct: Financial News - Yahoo! Finance (http://biz.yahoo.com/ap/081124/economy.html - broken link)

"Compared with last month, sales were down in much of the country. But in the West sales were up 40.5 percent compared with October last year, without adjusting for seasonal factors. Buyers in places like Las Vegas and Orange County, Calif., snapped up distressed properties at bargain prices."

I don't know what they're talking about in terms of Orange County. Maybe in the lousy areas and overbuilt new developments, but in the desirable areas, are properties moving? I'd think sellers would still be overpricing and unrealistic, the way it is in Los Angeles.

Did anyone take a look at the listings in the Real Estate (westside version) section of the LA Times this past weekend? Everything is still ridiculously overpriced, and the only homes listed at remotely reasonable prices, were for awful, tiny shoeboxes - often needing a lot of updating at the very least, tiny lots, tiny post WW2 cookie cutter shoeboxes.

These realtors/agents in the article begging for a handout and complaining about slow business sure have some nerve - they didn't seem to mind when they were making 5 figure commissions without actually earning it. They should be complaining to the delusional sellers they represent, who continue to ask unrealistic prices for their properties.

[BennyPhoenix]

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

[ConsideringLA]

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.

Expect them to drop as time marches on. There is nothing, I mean nothing, that will keep pricing out of whack with the incomes of a respective area.

This isn't sacred ground.

Prices always fall to a historical mean - this isn't a "new paradigm." Count on it.

[BennyPhoenix]

Originally Posted by ConsideringLA

Expect them to drop as time marches on. There is nothing, I mean nothing, that will keep pricing out of whack with the incomes of a respective area.

This isn't sacred ground.

Prices always fall to a historical mean - this isn't a "new paradigm." Count on it.

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.

[ConsideringLA]

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.

You're pulling numbers out of your backside. I expect prices to drop to the point of affordability for people that live (or have the means to live) in a given area. That's the demand side of your logic.

ps Don't mistake desire for demand. Not unless it brings a down payment and financing.

[BennyPhoenix]

Let's talk 2 years from now and see who is right.

[ConsideringLA]

Originally Posted by BennyPhoenix

Let's talk 2 years from now and see who is right.

OK. Let's make it 2.5. With all due respect, I give a li'l more weight to a Yale economist and the banks who facilitate the purchase of said assets than a local Real-estate "professional."

http://www.irvinehousingblog.com/wp-content/uploads/2008/03/projections-using-case-shiller-index-los-angeles1987-2012.jpg (broken link)

[BennyPhoenix]

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

[hsw]

IIRC, prices in desirable parts of Westside (BH, BelAir, Brentwood) fell some 40% from '89 peak in early '90s recession

Today's credit crisis is far more severe than easy stuff of early '90s; many wealthy are facing margin calls, as their holdings of stock plummet in value; many houses on Westside are wkend houses of wealthy people from SiliconValley, Chicago, etc, so are rather discretionary houses that can be quietly put on mkt if owners need to raise cash

House prices in super-affluent areas take longer to begin to fall (but market forces ultimately prevail at every socio-economic level) as many wealthy have more lawyers to delay forced sales at low prices....but new, spec houses in Greenwich, CT (a fairly wealthy, allegedly old-money place) are already selling for some 50% of '06 prices....and the layoffs in NYC's high-income investment banking industry are just beginning

[ConsideringLA]

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.

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.