L.A. listing prices slipping

The median listing price of a home in greater L.A. fell slightly in the past week, to $529,900, as inventory continued to pile up on the market, according to Housing Tracker's analysis of MLS listings, which we track here every week.

The dip in asking prices -- although only by $100 -- confirms a clear trend: overall, listing prices are slipping in Los Angeles -- they're down 7.5% since this time last year.  Inventory spiked by 313 listings in the past week, and now stands at 43,989-- up 3.5% over the past month, and 14.1% over the past year.

Date         Median Price             Inventory
4/16         $545,000                 35,489
5/14         $545,000                 38,297
6/11         $540,000                 40,766  (up 20.4% y/y)
7/16         $535,000                 42,685 (up 14.5% y/y)
7/23         $535,000                43,225 (Up 14.5% y/y)
7/30         $530,000                43,676 (Up 14.0% y/y)
8/6          $529,900               43,989 (Up 14.1% y/y)

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Comments

[Jonah]

Has anyone seen this???

http://money.cnn.com/2007/08/07/real_estate/jumbo_jam/index.htm?cnn=yes

[Pete Viles]

Jonah -- thanks for pointing that out. We'll work up a full post eventually, but we want to hear more about Hillary's housing plan. The story Jonah found shows a sharp increase in financing costs for jumbo mortgages, which is very important for the LA market. It means that, even if prices are beginning to slip (and we believe they are), the cost of buying a home in Los Angeles is probably rising at the moment. This indicates a longer and deeper real estate slump. For the link-averse, here's the top of that story:

"Don't look now but the cost of financing a home purchase in some of the nation's priciest areas just got more expensive.

"Wells Fargo, one of the nation's biggest mortgage lenders, raised the interest rates on it 30-year, fixed-rate, non-conforming (AKA jumbo) loan to 8 percent last week, up from 6.875 percent. Other lenders followed suit and more are likely to join them.

"The rate jump means the monthly bill for a $600,000 mortgage would hit $4,403, compared to $3,942 previously, an increase of $461."

[Cal]

Watching the broker boards has been interesting in the past month, the credit tightening has taken things to a whole new level. Anyone specializing n loans above the conforming loan limit (417k) is really hurting. I thought this post was interesting:

http://forum.brokeroutpost.com/loans/forum/2/150139.htm

"A chunk of the california mortgage industry is going to outright collapse. A large majority of the loans are jumbo, thus 'stated' or no doc, cause the average income isnt 300 grand a year.

Now that they cant refi, certainly the ability to find buyers will PLUMMET into the turf, and lenders, brokers and realtors only have themselves to blame in the first place.

Probably take several years to stabilize. Prices will have to CRASH down to a point where people can go full doc to afford to purchase the house. If the average actual income in california is 75k per year, then a realistic mortgage will be 2000 per month, then you have escrow on top of that, other debt, and of course living expenses, car, gas etc........

300k loan amount is 1900 per month @ 6.5% interest. If escrow is 500 inclusive, then the back end will be 2400 with a generous limit of 38% then without any other tradeline bills your income has to be $6315.

This is doable , not just for the short term but long term. These 500k , 700k loan amounts are just not realistic full doc. The price of houses has to come down."

[Todd in WeHo]

I'm like a lot of other potential buyers who are now waiting on the sideline with cash in pocket to see just how far down home prices will go. It's impossible to keep up with all the 'breaking news' about the real estate market but all I can say is I hope the government won't intercede on behalf of people who were not smart enough (I'm being kind) to fully understand the financial implications of all the creative financing that's been going on for the past few years. It's this combination of ignorance and greed that has elevated real estate prices beyond what's rational. I say 'let prices fall.'

[Jonah]

By the time the government acts it will be too late anyway. But I hear what you're saying...it's crazy that I have to help bail out a careless buyer.