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 We link often to the doom-and-gloom bubble blogs, so it's only fair we link to this: a post from a Manhattan Beach realtor who says the market's fine, prices are "fairly even", and the bloggers got it all wrong. Here's Realtor Kaye Thomas on the the blogs: "I'm noting some major changes in the last 6-8 months on most of these blogs. For one thing the authors have either gotten day jobs or don't have as much to say because the number and frequency of posts has declined on most sites. The volume of readership has also decreased compared last year when the media frenzy was at it's height predicting 30%-50% price declines." And here's her take on the market in her area: "It appears we may have reached that place called a normal market. Most people don't remember what that is but the general characteristics are...prices move up and down as does the volume of sales. The key to a normal market is no highs or lows... just mellow for a period of time."
 There is a kind of grave-dancing going on tonight at housing bubble blogs -- the man housing bubble bloggers love to hate, and to ridicule, is moving on. That would be David Lereah, chief economist for the National Association of Realtors, the most prominent spokesman and cheerleader for the home-selling industry. The NAR announced he will leave next month (that's soon, no?) to join a company known as Move Inc. Lereah's 2005 book, which came out when prices were still rising sharply, asked: "Are You Missing the Real Estate Boom?: Why Home Values and Other Real Estate Investments Will Climb Through the End of the Decade -- and How to Profit From Them." A sampling of reaction to Lereah's departue: At TheHousingBubbleBlog.com, commenter "Eastofwest" remarks: "I’m speechless..if that’s not the ringin’ of the final bell, I don’t know what is..Now I’m waiting for someone to go after ‘realestatenevergoesdown-Dave’. I have to think there will be a mob with torches looking for an effigy to burn..he’s gonna be the poster child of animosity." At DavidLereahWatch.com: "Mr. Lereah has lost credibility during the past few years, as he cheered the housing bubble and then called a 'bottom' at least four times. Was he forced to leave because he lost credibility?" For the record, an NAR spokesman is quoted saying Lereah is widely respected and did an excellent job. Thoughts? Comments?
 The number of homes for sale in Los Angeles spiked by nearly 1,000 over the past week, according to HousingTracker.net, which tracks MLS listings. Median asking prices were flat week-to-week at $545,000, and down 5.9% over the past 12 months.
The total number of listings ballooned from 36,348 to 37,338 -- that represents 33.0% more inventory than was on the market a year ago.
As we've reported here before, HousingTracker.net tracks MLS listings and monitors asking prices. True, we have no idea what these homes will eventually sell for, but this sample represents the entire universes of houses listed on the MLS -- not just the much smaller sample of those that sell in a given month, which is where median sales price comes from.
Thoughts? Comments? Undeniably brilliant analysis?
 First the news: Realestalker is reporting that the Beckhams have bought a home in Beverly Hills. From Your Mama at Realestalker: "We had long heard the couple wanted to spend between $12 and $15 million, but it looks like they've blown the budget with this one having paid, we're told by a tipster right around $20,000,000. Various notes: --LA Land doesn't read British tabloids and I'm not sure which nicknames are current for the Beckhams, so I didn't try. Posh? Becks? Sexy? Whatever. --Apparently the exact address is a secret given that Beckham is so famous and has little children he wants to protect. So we run his picture, not the picture of the house. --Contrary to many media reports, the soccer team in Los Angeles is not paying Beckham $250 million over any period of time. The team only said that it's possible he could make that much money on his own... provided he endorses everything from sneakers to soft drinks to sub-prime mortgages. The New York Times has reported the team itself is paying him $27.5 million over five years.
As promised, more on the Bill Gross' Plankton theory of real estate. Bear with me, it's a short post and there will not be a test.
To begin, one popular theory of the current LA real estate market holds that the subprime meltdown hitting the Antelope Valley and the Inland Empire will never climb its way up the food chain, and up the price ladder, to the $900,000 and above market, let alone to Beverly Hills and Bel Air.
Then there is Bill Gross' Plankton Theory: that it's all one big market, it's all related, and every part of the market is vulnerable to trouble at the bottom.
He wrote this a long time ago, in the summer of 1980, before Reagan was elected: "Plankton, of course, are almost microscopic organisms that serve as food for higher life forms. Without plankton almost every fish and mammal in the sea could not survive, since most species depend upon other fish for their existence and plankton are the initial building blocks of the entire process."
What does that have to do with housing prices? Be patient, grasshopper. Again, this is Gross from August 1980: "In the case of real estate, the plankton would be the first-time buyer (perhaps a young married couple) with a desire to own their own home but with very little capital to carry it off. When the time comes that they can’t pull it off – either through an inability to come up with a down payment, or to service the monthly mortgage – then the ‘plankton’ would disappear and the rapid escalation in housing prices would ease as well. For, unless the current homeowner has someone to sell his house to, he’ll be unable to afford the house with the view or that extra bedroom, and the process would continue into the echelons of Beverly Hills and Shaker Heights. In the end, the entire market would wither on the investment vine and home prices would stop increasing at the same rapid rate. So to gauge the health of the housing market, look first at the plankton."
There, that wasn't so complicated, was it? But do you agree? Comments are always welcome.
As I have written before, I plead guilty to being a member of the Bill Gross Fan Club. His writings about the economy are as clear and engaging as anything you'll find, but he also gives you some heart and soul and history. Can you name another economist (or another person in all of corporate America) who has published his personal thoughts about the Iraq war? Seriously, if you can, I'd like to hear it.
If you missed it, Gross' economic column last month began by quoting the great anti-war anthem "War" by Edwin Starr:"I can only conclude from personal experience in Viet Nam, and redundant renderings of history books that Motown singer Edwin Starr was right – war is good for absolutely nothing."
But I digress; this is about real estate. Click here to find video of Gross on CNBC explaining the following: Why houses are 20% overvalued, why subprime loans are dinosaurs, why the Plankton theory applies to housing, and why a series of Fed rate cuts is coming later this year to save the housing market from disaster.
I find the Plankton theory particularly relevant, so I'll do a separate post about it later this morning.
Thoughts? Comments? Insights?
Good morning. There's an excellent piece in Business Week today about the unusual efforts by lenders to help homeowners avoid foreclosure. Why are the lenders trying so hard? Because "never before have prices fallen so broadly," and they don't want to own houses that are sinking in value. More important, Wall Street is pressuring the lenders: "a big chunk of the loans made recently are held not by federally insured thrifts or banks but by hard-charging hedge funds and other big investors that are aggressively pushing lenders to stop the bleeding."
But the foreclosures are piling up, which means more properties are being auctioned off on courthouse steps. In the LA Times, Annette Haddad's story of the foreclosure auction game -- told through the experience of a newbie -- is a good read. I won't spoil the ending, but I will remind you that most of these courthouse foreclosure auctions are duds: Roughly 90 percent of the homes listed for courthouse auction in California don't really sell -- they're taken back by the banks or lenders that own the mortgage.
Thoughts? Comments? Use the comment button, or send story tips to lalandblog@yahoo.com.
The Inland Empire is the 14th largest Metro area in America, and one of the fastest growing, home to roughly as many people as the state of Kentucky. So it matters, big time. And the housing market is weakening rapidly, as this takeout from the OC Register documents.
If you don't have time for the whole thing:
--The number of defaults ending in actual foreclosures in the IE rose from 8 percent in the fourth quarter of 2005 to 32 percent in the fourth quarter of 2006.
--At the current pace of sales, it would take 13.2 months to sell all the houses now for sale in the IE; that’s compared to 6.9 months a year earlier.
--A Lake Elsinore homeowner listed his house last June for $499,900, and hasn’t sold it, even though he has dropped his asking price twelve times, by a total of $100,000.
Comments, thoughts, insights?
Sunday morning roundup, before the kids wake up: Big Brad Garrett, the sitcom actor, is selling his big place in Hidden Hills. Brad by the numbers: He's asking $9.495 million for a 10,300-square-foot-compound, and he's 47 and a bit taller than 6-foot-8.
The morning's must-read is Gayle Pollard-Terry's takeout on why the LA housing market is mixed right now. Reasonably-priced entry-level homes are attracting multiple bids right away, but inventory is bloating: The Realtors' own index says there is a 9.6-month supply of unsold houses on the market in LA, up from a 5.2-month supply a year ago.
Do you really need earthquake insurance? In a story refreshingly free of nannyish financial advice ("You need insurance against everything!") The Times points out that only about 1 in 8 Southern California homeowners has quake insurance (it's expensive and deductibles are high).
Why does the headline say Greenspan has a housing obsession? Well, because he's semi-retired and can do anything he wants, and he chooses to spend his time crunching numbers on how much consumer spending was generated by extracting cash from home equity. His conclusion: 2.1% of all consumer spending in 2005. Doesn't sound like a lot, but the economy would really miss it if went away.
Lastly, Why are closing costs so high? In part because title insurance is a big ripoff, at least according to a government report cited here by columnist Kenneth Harney. The study concludes only 10% to 20% of what you pay for "title insurance" actually goes to insurance premiums.
Comments? Thoughts? Please share your brilliant analysis. And thank you for reading LA Land in its first week of publication. Email story tips to lalandblog@yahoo.com.
The price of land, and houses, is slipping, but they are still building houses like crazy out in Ontario, as the Times' Alana Semuels reports today.
I know that the Inland Empire economy is booming; I just get the impression the growth industry out there is growth itself. What happens to a region built on building if the building stops?
Worth noting from her report:
--City planners forsee 30,000 new houses, and 120,000 new residents, in Ontario over the next twenty years.
--"In March, sales of existing homes in the city were down 59% from the same month last year... , The median sale price fell to $408,000 from $425,000."
--"The value of undeveloped land, much of it still home to cows, has fallen by as much as $100,000 an acre in this part of San Bernardino County in the last six months..."
She ends with an anecdote about a farmer who had a deal to sell 20 acres of farmland at $515,000 an acre in 2005 -- that's a bit more than $10 million. But the deal fell through, and the farmer is balking at a reduced offer of $375,000 per acre, or $7.5 million. "He figures it will be more than seven years before prices will climb to where he wants them," Semuels reports.
That is a confident farmer, I guess. Your thoughts?
There's nothing sub-prime about Angelo Mozilo's compensation for running Countrywide Financial in Calabasas. The Times' Kathy Kristof reports he took home $120 million last year, and $284 million over the past two years.
So far, Countrywide has survived the subprime meltdown, though it is building up a pretty big pile of foreclosed houses that it will need to sell. This Countrywide Foreclosure Blog calculates that the company now owns 7,610 houses it has foreclosed on.
But Jeez, $284 million? I'm not sure what to say. Go, Angelo, Go? You Da Man?
You tell me.
Another excellent (and troubling) column from Kenneth Harney: he's uncovered a scheme in which people with sub-par credit can go out and BUY a better credit history so that they can qualify for a better mortgage.
"... federal and state authorities fear that some borrowers are turning to a fast-growing business on the Internet: companies that claim to boost credit scores by transplanting the credit DNA of people with excellent payment histories into the credit files of people with subpar histories -- ostensibly without breaking any law.
"Big bucks -- and a strong potential for fraud on mortgage applications -- are involved. Some website promoters say they can add 80 to 120 authorized users onto a high-quality credit card account before banks or lenders get suspicious. Each account can rent for as much as $1,500 to $2,000 for a 180-day usage. The primary credit card holder receives a cut of the rental fee, often hundreds of dollars for each authorized user added to the account."
Comments? Thoughts? Comments, in good taste, are always welcome.
SANTA MONICA -- The equity in your house is vanishing, your mortgage payment is spiking, traffic stinks. But they can't take away your garden, can they? Which is why every Saturday morning we celebrate a tree, shrub or flower of the week that will brighten your yard and add value to your house.
This week we are pleased to honor the Marina Strawberry Tree, which comes highly recommended from Jonathan Bennett at the Armstrong Gardens Center on Wilshire in Santa Monica. (Admit it, you thought we'd go with Bougainvillea, didn't you?)
No, we honor Arbutus X 'Marina', a handsome little patio tree. "It's a fantastic color," Jonathan told me, noting that its mahogany-colored bark is rare in Southern California. "It's incredibly beautiful. It's a classic patio tree-- it gives shade, it's not invasive, it will fit into a small patio."
Here's what the gardening site www.monrovia.com says about it: "Delightful small garden tree having larger dark green leaves than the species. Rosy pink flowers appear at the same time as the red and yellow strawberry-like fruit ripens from previous season flowers."
Jonathan says it will grow quickly to a height of about 25 feet. His were selling for $59.99. "It's not my favorite tree, don't get me wrong," he said. "But it's a very useful tree."
Someday we'll come back to Jonathan and his favorite tree. In the meantime, if you have a favorite tree, flower or shrub -- the kind you think every Angeleno should have in the garden -- send your nominations to lalandblog@yahoo.com
We often get a laugh out of Dr. Housing Bubble, whose blog is subtitled "How I Learned to Love So Cal and Forget the Housing Bubble."
We particularly like this entry -- in a riff on the hillarious Bud Light ads ("Real Men of Genius"), he gives us "Real Homes of Genius," and spotlights this gem in Compton -- 588 Square Feet of urban glory for less than $300,000!
He points out the house sold for $106,000 in the Summer of 2003, which begs the question: has Compton real estate really tripled in value in four years?
Comments are always welcome. Note to readers: I apologize for a software glitch that has, to my dismay, removed all the paragraph breaks in previous posts. I like to write in paragraphs, but for now the software gods have decided there will be no paragraphs. I'm trying to fix it.
 Let's face it, real estate bubble arguments can get so tiresome. "It's a bubble!" ... "Is not!" ... "Is too!" ... "I know you are, but what am I?"
Next time you are stuck in this endless loop, here's a game-changing thought: you say, "The WHOLE THING is a bubble, ALL of it! Every last asset on the planet is overvalued!!! Then you talk knowingly about this Street.com post that says it's ALL a bubble -- stocks, bonds, real estate, NBA salaries, ALL of it: a giant global bubble.
A taste: "Legendary value investor Jeremy Grantham says we are now seeing the first worldwide bubble in history covering all asset classes." "From Indian antiquities to modern Chinese art," he wrote in a letter to clients this week following a six-week world tour, "from land in Panama to Mayfair; from forestry, infrastructure and the junkiest bonds to mundane blue chips; it's bubble time!" "Everyone, everywhere is reinforcing one another," he wrote. "Wherever you travel you will hear it confirmed that 'they don't make any more land,' and that 'with these growth rates and low interest rates, equity markets must keep rising,' and 'private equity will continue to drive the markets.' " Thoughts? Comments? Use the comment button without fear or favor.
 Back by popular demand: the real estate rollercoaster video link. It's free, it's safe for work, it's scary. Ride it. What is it? Housing prices over the past century, plotted onto a rollercoaster. If the line is too long at that link, or the server too slow, try this one at YouTube. Sixty-six thousand people have taken the ride on YouTube. Comments? Thoughts?
If you don't like to read about high-end real estate, this one is not for you. (I hate to tell you, but if you don't like high-end real estate, Los Angeles may not be for you either.) If you do like reading about houses you can't afford, though, this is right up your alley: The story of the "queen of the high-end house flip", told as only Your Mama can tell it.
Read the whole thing if you can, but here's a quick primer: The house is a $6.8 million flipper on Swallow Drive, one of the coveted "bird streets" above Sunset; the flipper is Xorin Balbes; his secret is a "special kind of (politically incorrect) magic"; the "high priestess of real estate gossip" is the Times' Ruth Ryon; and "Your Mama" is the voice of the real estate blog Realestalker.
Sample of Mama's notes: "Balbes takes houses with some sort of architectural merit, buys them at a good price, and injects them with a dramatic, new-fangled sort of modern. He himself lives up in Los Feliz in an extraordinary house designed by luminescent architect Lloyd Wright, son of Frank. The intricate and complicated stone work on the exterior gives the house a distinct look of a Mayan temple and the interior has been kitted out with all the modern amenities a rich gay decorator could ever want including a sleek kitchen and a heated swimming pool."
For my money, Countrywide Financial in Calabasas is as good a barometer for the mortgage industry as you'll find. If this big company stays healthy, the mortgage business will do OK. And Countrywide is doing OK, or at least is still making about $5 million a day in profits. That's a 37% dip in profits, but it's still a big profit. The Times reports Countrywide has cut back sharply in the riskiest kinds of sub-prime loans -- in particular, the wildly risky no-money-down sub-prime loans with the low teaser rates. Other stuff worth noting: OC Register real estate blogger Jon Lansner has an early jump on April home sales in Orange County: in a word, lame. "This looks to be the 19th straight month where sales couldn't meet last year's pace," he reports. Lastly, this blog asks, "Why don't they call it South Central any more, and why are houses so expensive in a neighborhood with such celebrated problems?" Median home price in what is now called South Los Angeles: $457,000 and change. And, according to DataQuick, still rising. Comments? Staggeringly Brilliant Analsysis? Use the comment button.
 The Times is running a long piece today detailing the troubles faced by South Los Angeles 15 years after the riots: poverty, unemployment, wages failing to keep pace with the rest of the city. So here's a question: what explains why the median home price, as measured by recent sales, in such a troubled place, is $457,250? That may sound like a bargain in Los Angeles, but it is more than double the national median price. Why are homes so expensive in South LA? Your thoughts? Comments?
 In the old days, if you made a bunch of bad decisions and lost a bunch of money, well, you would probably hide in shame. Not any more. Now you'd start a BLOG, tell your story, then be profiled on ABC's Nightline, then maybe even get a book deal. No, I'm not talking about myself. I'm talking about a 24-year-old kid from the Sacramento area who is blogging all the way to the poorhouse. His blog is I Am Facing Foreclosure, and the way I read it, foreclosure is winning. Casey Serin (pictured above) describes himself as "a 24 yr old 'would-be real estate mogul' from Sacramento CA. After going to a few seminars I bought 8 houses in 8 months in 4 states with no money down looking to fix 'n flip. I made some mistakes and am now millions in debt, trying to avoid foreclosure, sell quickly, repay everyone, and share my lessons to help others in trouble." If I read the blog correctly, Casey has lost four houses to foreclosure. He was in fact profiled on ABC's Nightline, does in fact blog about the mosquitoes-in-the-pool problem at one of his vacant houses, and may or may not have a book deal. You can't make this stuff up. (I should clarify: I can't make it up, but on the web, it's quite possible that Casey is making some of it up.) Comments? Thoughts? Always welcome, but please keep it PG-rated.
 I promise this blog will not be unremittingly negative. But this post will be. Forbes.com reports there is "No End in Sight for Housing Woes", based on another crummy quarterly report from a big homebuilder today. This time it is Beazer Homes, which lost $43 million in the first quarter and withdrew its business forecast for the rest of 2007. Forbes.com: "Beazer missed Wall Street's earnings expectations by a long shot on Thursday, and the company is operating under the cloud of a federal investigation. But even grimmer news than all that was the homebuilder's statement that there is no end in site for the problems wracking its industry." More Forbes.com: "We still have yet to see any meaningful evidence of a sustainable recovery in the housing market, and we expect current conditions will continue to put pressure on homebuilders' operating results," said the Beazer chief executive, Ian J. McCarthy, Thursday morning. Comments? Thoughts? Insights? Use the comment button, or email story ideas to lalandblog@yahoo.com.
 Underwater on three houses to the tune of $45,000 each, a house flipper named Jeff lets it all out in a website for San Diego real estate investors: he's sick, he can't sleep, he's looking at a loss of $135,000, and he's thinking about just walking away from the mess. One problem for Jeff: he's been bragging about his investment savvy on the same website for months, and Southern California Real Estate Bubble Crash Blog has been keeping track of it all. The whole thing is worth reading, but here are the highlights. First came "Smart" Jeff (smarter than Warren Buffett): "The government pays me to invest in RE. Isn’t America great! ... Debt juggling is just fine... The truth that all investors know is that there is risk to any investment, and that the highest risks are associated with the highest gains. Even Mr. Buffet knows this…" Then, "Way Ahead" Jeff: "I am not batting 1000. I didn’t really expect to, but admitting it anyway was hard. My three houses in Cape Coral are going to end up being HUGE mistakes…On the flip side, every other purchase I made that year was a good one. So not counting the Cape Coral homes I am WAY ahead. Anyway, am I happy I did it? You bet. I’ll be even happier in 20 years when I retire with 8 million in equity (assuming 6% appreciation). Now, "Walk Away" Jeff: "Anyway, what should I do? ... I would just like to “walk away” from these homes but of course I am too embarrassed to do that (so far) and I suspect it is not an option anyway…I go round and round with what to do on these properties…at first I say hold until the market returns and keep borrowing on my HELOC, then I say no way that is too expensive, sell. But when I think about selling I think about the ~45k loss for each house! I will have to make payments on that ~135k loss for 30 years! So I think about 'walking away,' but then I think about the credit score hit I will take and how many years that will follow me – so I go back to the hold until the market turns solution. Around and around…I am dizzy thinking of it." Eesh. Comments? Use the comment button, but please, be nice.
 The LA Times sees spillover effects from the weak U.S. home-building market on Mexico. Marla Dickerson, reporting from Mexico City, says the slowdown in U.S. construction means that less money is being sent home to Mexico by Mexican immigrants who build the houses. It's not mentioned in that story, but other reports have pointed out that, because a large portion of the homebuilding industry is off-the-books labor, often done by illegal immigrants, the U.S. government is underestimating the econommic impact of a slowing home-building market. Over at the Native Intelligence section of LA Observed, TJ Sullivan argues you can't trust the realtors when they start talking about housing affordability. He says the realtors have cooked the numbers to make it appear that the California housing market is becoming MORE affordable to first-time buyers. The article is a bit weighty, but you can remember the conclusion: Median, Schmedian. On the subject of homebuilding, Pulte Homes and Calabasas-based Ryland Group -- both big homebuilders -- reported crummy financial results. The media usually calls these stories "earnings reports," but in this case, that would be wrong, because there were no "earnings" involved -- only losings. Together the two companies lost $110 million in the first quarter. A year ago, they reported combined earnings of $352 million in the first quarter. In a pretty unusual move for a big publicly-traded company, Ryland isn't even offering a guesstimate of what its business will be like for the rest of the year. Comments? Feedback? Insight? Use the comment button, or send story tips to lalandblog@yahoo.com.
 A while back, when LA Land was blogging in the dark (not yet linked to LATimes.com), we wrote about beautiful Cliff May-designed ranch homes in Long Beach that sell in the $700,000 to $800,000 range. This item is also about a Cliff May ranch house, but that's where the similarities end. Realestalker reports that producer Brian Grazer has listed HIS Cliff May ranch house in Pacific Palisades for $27.5 million. It's actually a compound of sorts -- sounds to me like house, plus guest house, plus office/gym/studio, plus the pool. Somewhere in all of that is what Realestalker calls the "best projection room in LA." Half the fun of Realestalker is guidance like this from "Your Mama": "The house is located on a promontory way up in hills above Pacific Palisades in an area called The Riviera. The flag lot ensures total privacy and seclusion. Children, you could roam the three acre property stark nekkid without even the possibility of being seen by the neighbors."
 Free and clear of the UCLA Anderson Forecast (which sees "no recession imminent"), economist Christopher Thornberg is now predicting the hardest of hard landings for California real estate: a housing-induced recession. He laughs at the notion that the subprime mortgage meltdown is to blame for continued weakness in the housing market. "That's ridiculous -- subprime credit CREATED this bubble," Thorberg told LA Land this afternoon. "How could prices get so high in relation to income? Prices can only get this high when people have available to them 'crazy credit.' It allows them to gamble. It's crazy credit!" The foreclosure crisis now surfacing in the Inland Empire and the Antelope Valley will make its way to the San Fernando Valley and South Central LA, he says. "Absolutely. There's no doubt about it. It isn't going to hit Beverly Hills, it isn't going to hit Bel Air, it probably isn't even going to hit the Westside. But any place where you have a lot of first-time buyers, this is going to come home to roost." Overall, he sees two more economic shocks coming on top of the subprime mortgage crisis. "There's two other shoes to drop," predicted Thornberg, now with the consulting firm Beacon Economics. "First, this mortgage problem has not played out." He noted that investors continue to price mortgages as if the housing market will stablize, not deteriorate. "There is still an astonishing amount of either sheer stupidity or head-in-the-sand mentality when it comes to these mortgages. There's a shockingly low amount of risk being placed on these assets." Shoe number two (number three, actually -- the subprime meltdown was the first): Consumers. "The money they've been spending is money they've yanked out of their homes. This is one of those weird little vicious cycles. Prices are going down, and the consumer is eventually going to say, 'Holy crap, I've got to pull back on spending.'" "You have an entire U.S. economy right now that's completely driven by consumer spending," he told me. "And consumer spending is driven by the housing market." Cheerful, huh? Thoughts, analysis, rebuttals? Use the comment button.
 A hint of good news for some Ventura County homeowners in USA Today's front-page story today on rising property taxes. The story notes that around the country some property taxes are rising even though underlying values are falling. But in Ventura County ... "Ventura County, Calif., is looking at 20,000 home sales since the end of 2005 to see whether any owners deserve a tax cut. The median home price in Ventura County is $567,000, down 5% from its peak in March 2006, according to DataQuick, which tracks prices." Story continues, "'To get a tax cut, you have to buy a home at the peak and have it lose value quickly,' says Ventura County Assessor Dan Goodwin. In other words, if you bought before 2005, don't count on a tax cut. 'You can't enjoy double-digit increases in your home value and then expect a tax cut when the market dips," Goodwin says. Thoughts? Comments? Use the comment button. Email story tips to: lalandblog@yahoo.com.
 Pathetic or Creative? You be the judge. Up in the Bay Area, Coldwell Banker Solano Pacific is putting on an Open House Poker Night on May 6th. From the link above: "The way it works is each time someone visits an open house on May 6th from 1 to 4 p.m. they will draw a playing card. Each open house will have a special deck of labeled cards for that specific home. At the end of the day, whoever has the best 5 card poker hand will win a prize. Prizes will be $250 for first place, $100 for second place, and $50 for the third place winner." Evidence California real estate is falling of a clliff? Or just resourceful realtors having fun? Comments? Thoughts? Use the comment button.
 Realtors were blaming "unusually bad winter weather in February" for yesterday's crummy sales numbers. But as the blog at Inman.com plainly points out, sales declines were the worst in the West, where February weather was just fine. Fine as in normal. Sunny. Nice. Pleasant. Here's part of the post: "While it's true that the Midwest and Northeast experienced a pretty brutal cold snap in February, it was actually the sunny Western states that saw the most dramatic drop in March home sales -- 16.7 percent. Maybe people were worried about exposure to the sun's ultraviolet rays?" Comments are always welcome.
 Quote of the Day goes to LA economist Christopher Thornberg, who tells the LA Times, "Housing has no more 'up' in it. Prices have to start coming down or the market will stall." Crunching yesterday's weak sales numbers, Thornberg also offers an interesting take on the "affordability" issue: Years of rising prices have shrunk the pool of potential buyers so much that momentum is now impossible to sustain, Thornberg said. A 10% down payment to get into today's median-priced Southern California home requires a buyer to spend $40,000 a year in housing costs from then on, he estimated. "How many families can afford that? The answer is: not many," Thornberg said. Elsewhere, OC Register business columnist and real estate blogger Jon Lansner points out the peril of Orange County's increasing reliance on real estate and financial jobs. He notes that employment in real estate and finance in the county has started to decline and asks, "Did you know that 115,000 of those 425,000 jobs added in Orange County since (1993) came from real estate or finance? That's 27 percent of the workplace." Comments? Use the comment button. Email story tips to lalandblog@yahoo.com.
Where I grew up, the old timers had an expression for it: "Figures don't lie, but liars can figure." Looking back over the posts on this blog, I'm starting to see a bewildering assortment of statistics, often contradictory. LA asking prices are slipping, but median sales prices are rising? And the Case-Shiller index, whatever that is, says LA prices are falling? So what is really going on? The goal of this blog is to answer that question, with your help. And there won't be a single answer for all of Los Angeles -- the LA real estate market is made up of hundreds of smaller local markets -- neighborhoods, if you will. In some, listings are scarce and prices are rising; in others, prices are sinking and foreclosed houses are popping up like crabgrass. So what about the stats? I'm going to err on the side of giving you too much information; I'll try to hold back, however, on the standard spin from industry insiders. I hope you will provide the analysis, interpretation, and, if you care to, the spin. That said, the comment bar is open.
 The headlines from today's March sales report from the California Association of Realtors were grim and grimmer: sales of existing homes down 20.8% in March, the supply of homes sitting on the market has nearly doubled in a year and would take, at this rate of sales, 8.7 months to sell.
In the fine print, though, mixed numbers from LA County, showing strong price gains in some parts of the county from March 06 to March 07.
Big Gainers:
Area Median Price % Change from March 06
Tarzana $540,000 25.3%
Culver City $595,000 22.2%
Los Angeles $590,000 17.9%
Palos Verdes $1.25 million 16.3%
Hawthorne $578,000 15.6%
Big Losers
Brentwood $920,000 -39.0%
West Hills $569,000 -16.3%
San Dimas $523,000 -14.7%
Stevenson Ranch $653,000 -14.6%
Valencia $511,000 -11.9%
Source: DataQuick for CAR
To see the entire DataQuick/CAR local analysis, click here.
Important guidance, from CAR: "Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices may be exaggerated due to compositional changes in housing demand."
 Maybe it isn't happening in Mar Vista, but all across the country and up and down California, the housing market is wheezing and sputtering. I could fill this blog with posts from near and far documenting all that, but the goal here is to stick closer to home, to what's going on in and around Los Angeles. That said, there are some great bubble-busting blogs out there. I particularly like: The Housing Bubble Blog, which does a great job of tracking down regional news from all over the nation and grouping it into posts, and then unleashing a flood of comments. Patrick.net, another strong, and very quick, aggregator of housing news and commentary. The site is usually fully loaded early in the morning. Inman News, a combination blog, aggregator and housing news wire that is full of useful stuff. The Mortgage Lender Implode-O-Meter, a racous recounting of the collapse of the sub-prime lending industry. Not for the faint of heart. Lastly, I'll throw in a fun one: Real Estalker, a gossipy, LA-centric blog about celebrities and houses. Thoughts? Favorite real estate blogs, local or otherwise?
 MAR VISTA -- LA real estate brokers get the first look at new listings on Tuesdays in what's known as "brokers' caravan" -- a series of broker-only open houses that let brokers and agents shop in advance on behalf of buyers, and sniff out pricing trends on behalf of sellers. Hoping to take the pulse of the market in various ways, LA Land tagged along with Judy Sheller and Jeff Pantanella of Bizzy Blondes. For fun, I added Zillow.com's estimated values of the homes. 1) 12326 Stanwood Drive: $849,000 for a plain-Jane 4-bedroom, 2-bath house that "just fell out" (translation: was in escrow, deal fell through, is now available again). Note: This is a Bizzy Blonde listing. Judy's comments: one of the lowest prices on Mar Vista Hill; problem: close to Centinella Avenue and noisy traffic. House has been on and off the market for four months. Judy: "That's a loooooong time." Zillow.com "Zestimate": $1.113 million. 2) 13224 Lake Street: $1.445 million for a 2700-square foot, 4-bedroom, 3-bath total remodel. Kidney-shaped pool. Judy, looking at a large walk-in closet: "Oooh. It's got a closet I could like!" Zillow.com "Zestimate": $836,000 (likely prior to remodel). 3) 13049 Appleton Way: $939,000 for a totally remodeled, 1,490-square foot, 2-bedroom, 2-bath; Bizzy Blondes has the listing. LA Land notices very cool, private, outdoor shower. Judy: "We think we've priced it for multiple bids." Zillow.com "Zestimate": $1.067 million. 4) 3425 Greenwood Avenue: $2.395 million for 3,200-square foot, 4-bedroom, 4 1/2 bath "stunning new modern." No shoes in the house, please, not on the "rift white oak" floors. Beautiful house, but $2.4 million is a lot of money for Mar Vista. Judy: "Wow, this is cool!" Later, though, remarks that the 6,000-square foot lot is on the small size for that price. Zillow.com "Zestimate": $1.049 million (likely the estimated value of house that was torn down). 5) 3665 Stewart Avenue (pictured above): $1.077 million for a 1,920-square foot, 4-bedroom, 3 1/2 bath on a 3,478-square foot lot. Judy: "Small lot. That's the biggest complaint. For that kind of money, people want a yard." Zillow.com "Zestimate": $1.029 million. Comments, thoughts? On Mar Vista, on the homes above, on Zillow.com? On the neighborhood you'd like to see profiled next Tuesday? Use the comment button.
 MAR VISTA -- Warning to bargain hunters, bubble-poppers and doom-and-gloomers: I didn't see much evidence of market weakness today in Mar Vista, where modest-sized single-family homes are selling in the mid-$900,000s. "Mar Vista is holding up fabulously," Judy Sheller of the Bizzy Blondes told me before we jetted off to see eight houses in an hour (I'll post more on Brokers' Caravan in Mar Vista later this afternoon). True, she sells houses in Mar Vista, so has reason to chat it up. But you don't see any evidence here of sub-prime meltdown contagion. The biggest trend: very little inventory, contrary to regional and national trends. "The market right now is not where we expected it to be," Sheller says. "We expected to have more listings. Sellers just don't know what they want to do." Late last year, she said, there were 120 to 125 homes listed in the area of Mar Vista the Blondes serve. This week it's 66 listings, and 46 pending sales -- which means there is less than 1 1/2 months' worth of inventory on the market. "One-and-a-half months? That's a seller's market," Sheller says. One trend in evidence: tearing down ranch-style homes and building "Architectural Moderns" -- the one pictured above, 3425 Greenwood Avenue, came on the market today listed at $2.395 million. Other insights from Sheller: --"If a house is in a great neighborhood, is really cool, and is priced competitively, it will sell for more than the asking price." -- "If a house has been on the market here for more than three weeks, there's a problem."
 The morning's big housing news is a big drop in existing home sales. Blaming bad weather and the subprime mortgage crisis, the National Association of Realtors says sales of existing homes fell 8.4 percent in March, and median prices fell 0.3% from a year ago. Chief Realtor economist David Lereah now says median prices nationwide will fall 1% to 3% in 2007. The Realtors' report contains no information on the LA market; however, the Case-Shiller Home Price Index does, and it shows prices of LA-area homes slipped 0.4% from February 06 to February 07. That's better than the Case-Shiller 20-city composite, which shows prices down 1.5% over the same period. Comments? Thoughts? Insights? Use the "comments" button.
 Median asking prices in LA, as tracked by the website housingtracker.net, were flat over the past week, holding at $545,000. That's a decline of 5.9% over the past 12 months. Inventory listed on MLS stood at 36,348 homes -- up 29.5% percent over the past 12 months. Backstory: Housingtracker calculates median asking prices on the theory that they tell a side of the real estate story that sales prices don't tell -- that is, they include those houses that don't sell. Other numbers we like to follow: Countrywide keeps collecting homes. It now owns 1,196 in California and 7,382 nationwide, according to this Countrywide foreclosure blog, which tracks the growing pile of houses the company is stuck with at any given moment. Those numbers are up from 1,173 and 7,230 last week. At some point Countrywide -- because it is not in the business of owning or renting houses -- is going to have to start selling these houses. Thoughts? Are asking prices a relevant way to measure the market? Use the comment button.
 BRENTWOOD -- The ginormous (16,000 square feet) Italian Villa where Larry David and his buddies have been shooting "Curb Your Enthusiasm" is for sale. The 6-bedroom, 7 1/2-bath home at 537 Moreno is listed for $8.2 million. Susan Kastner of Sotheby's International is the broker. LA Land nosed around a bit at the Open House on Sunday, but was disappointed to find not one shred of Larry memorabilia in the place. It has been dressed up, staged up and trussed up by Meridith Baer and Associates and all evidence of Larryness has been removed. Comments? Use the comment button at your pleasure.
 LA Downtown News is reporting that developer David Houk hopes to break ground in October on what would be the tallest building in LA, in fact the tallest building west of the Mississippi. The condo and hotel project, dubbed Park Fifth, would be up to 76 stories, with up to 750 condos. Downtown News calls it a "quiet giant of a project" located in the block bounded by Fifth, Olive and Hill. You tell me: is it critical mass for downtown living, or foolish overbuilding into a glutted market? (I suppose it could be neither, but what fun would that be?) Thoughts? Insights? Comments? Use the comment button or send story tips to lalandblog@yahoo.com.
 Why does it matter that some guy in Orange County named Mark Kiesel has sold his house and is still renting? Because he's a big shot at PIMCO in Newport Beach, which is a bunch of really smart people who manage $700 billion (yes, billion with a "b") in other people's money, and he has decided to sit out the housing market because he thinks it's a bubble. In an essay titled "Still Renting" (so succinct, those PIMCO guys), he writes: "Based on the current outlook for housing, I will likely be renting for one to two more years. While many factors that influence housing prices have turned negative, I suspect we have not yet hit bottom. In fact, housing prices should head lower throughout the rest of this year and next year as well." He continues, "This is all great news for renters and buyers who are patient. Over time, housing prices and interest rates should decline, resulting in improved affordability. This adjustment, however, will take time and occur over a period of years, not months. Housing is illiquid and prices are sticky." Other Stuff Worth Reading: The Financial Times is telling rich people in London that "trouble is brewing in the Inland Empire." Goldman Sachs, for my money one of the smartest outfits on Wall Street, is telling its clients that California real estate is heading for a fall, and the big lender Countrywide Financial is vulnerable. "Many metros in California have home prices that are not justified by the underlying fundamentals," Goldman writes. "Instead house price trends have been driven by the availability of subprime and non-traditional credit." We found the Goldman report through a blog we like: www.lenderimplode.com, which tracks the subprime lending crisis with great enthusiasm. Comments? Use the comment button with reckless abandon.
So the broker didn't call and finally you called him and asked: Anything? Any bids? Any nibbles? None. Your house has been sitting on the market for a while. If you haven't, you need to go through Richard Johnston's checklist of what's wrong with the way you listed your house. Hint: make sure your broker springs for a professional photographer.
Maybe you need to web-ify your listing. Check out www.3924redwood.com Eugene Ridenour's web page for, yes, 3924 Redwood Avenue in Mar Vista. (That's the house pictured -- excellent photography, in this case by the owner of the home).
Advice on staging and dressing a house is a growth business in Orange County, where there are 14,000 houses on the market. This story from the OC Register will help you get your act together. Hint: Clean the bathroom, OK?
Once the place is spotless, get it all staged up. (Or | |
We link often to the doom-and-gloom bubble blogs, so it's only fair we link to this: a post from a Manhattan Beach realtor who says the market's fine, prices are "fairly even", and the bloggers got it all wrong. Here's Realtor Kaye Thomas on the the blogs: "I'm noting some major changes in the last 6-8 months on most of these blogs. For one thing the authors have either gotten day jobs or don't have as much to say because the number and frequency of posts has declined on most sites. The volume of readership has also decreased compared last year when the media frenzy was at it's height predicting 30%-50% price declines." And here's her take on the market in her area: "It appears we may have reached that place called a normal market. Most people don't remember what that is but the general characteristics are...prices move up and down as does the volume of sales. The key to a normal market is no highs or lows... just mellow for a period of time."
