Hottest and coldest L.A. ZIP Codes

Good morning again. We leafed through DataQuick's October sales report to find the hottest and coldest Zip Codes in L.A. County, comparing median sales prices from October 2006 to October 2007. Our ground rule: only Zip Codes  in which 10 or more homes were sold in October qualified. A few comments below.

Hottest
Area/zip                          % change   Oct. 07 median sales price
Beverly Hills/90210          192%         $3.65 million
Beverly Hills/90212          71.8%        $2.19 million
Sherman Oaks/91403       66.7%        $1.27 million
Pacific Palisades/90272    41.8%        $2.69 million
LA/Brentwood/90049       32.4%        $2.25 million
LA/Rancho Park/90064     31.0%        $1.31 million
LA/90027                         30.7%        $1.24 million
Palos Verdes/90274           24.8%        $1.50 million
Rowland Heights/91748    22.6%         $650,000
Manhattan Beach/90266    16.4%         $1.66 million

Coldest
Tujunga/91042                 -37.2%          $386,000
Malibu/90265                   -34.9%          $1.59 million
Palmdale/903550             -29.9%           $235,000
Downey/90240                 -26.8%           $504,000
Encino/91316                   -25.9%          $515,000
Lancaster/93534              -25.0%           $224,000
Lancaster/93535              -24.1%           $239,000
LA/Windsor Hills/90043    -23.9%          $415,000
LA/Firestone Park/90001  -23.9%          $350,000
Downey/90242                 -23.0%          $423,000

Commentary: Take out the two outliers -- Malibu and Rowland Heights -- and the trend is clear: median sales prices are rising in expensive neighborhoods -- $1.2 million and up; they are falling in neighborhoods where sales prices are below the county's overall median sales price, which was $525,000 in October.  Let me try that again, more clearly this time: The zip codes registering the biggest year-over-year median price gains are in expensive areas. The zip codes registering the biggest year-over-year price declines are in inexpensive areas. You can't really tell from these numbers that there is a problem with jumbo mortgages; you can, however, see the impact of the evaporation of sub-prime mortgages.

Your thoughts? Comments? Email story tips to lalandblog@yahoo.com

Comments

[Bubblewatcher]

It won't last. They call it a "property ladder" for a reason, after all. Eventually, the market in these higher-end neighborhoods will run out of "trade up" buyers, because those buyers won't be able to sell their places, either. This is exactly what happened in the last bubble-bust -- just as some people now are inclined to believe this is all about Palmdale or other exurbs, becauses it's all being caused by subprimes -- back in the mid 90s there were people who would have you believe the housing bubble bust was concentrated on places like Lakewood, because it was all about the demise of defense industry jobs.

In the end, it's all about affordability, period. And it will catch up to everyone. It'll just take a little longer to reach Beverly Hills than it has to reach Temecula.

A more interesting question might be how the impact of price implosions differs across different demographic lines. To what extent to people with multi-million dollar mansions HAVE to sell the way their Culver City counterparts do? And how does this difference affect pricing?

[Elian]

To some extent this is true, but expensive areas also have some tremendously expensive homes whose sale can also distort overall figures as well since the absolute numbers of houses being sold in any one area are not that large.

[John]

Zip code 91402 is Panorama City, not Tujunga (91042). The median price suggests that this entry is actually Panorama City.

[arroyogrande]

Watch out for the use of "median price", as it can be affected by the mix of houses sold (eg a greater percentage of large houses sold one year vs. another).

Another (possibly better?) measure of the direction of the housing market is the price per square foot. Price per square foot isn't (in theory) affected much by the sizes of the houses selling (again, in theory).

For example, Rowland Heights (91748), median house $/sq. ft.:
Oct 2006: $357
Oct 2007: $295

A 17% drop in median price per square foot vs. a year ago.

Manhattan Beach (90266), median house $/sq. ft.:
Oct 2006: $997
Oct 2007: $740

A 25% drop in median price per square foot vs. a year ago.

Contrast this to Beverly Hills (90210) median house $/sq. ft.:
Oct 2006: $645
Oct 2007: $992

A 53%(!!!) increase in price per square foot vs. a year ago.

This data is from DataQuick (I cache the numbers each month so that I can keep track of the trend).

- arroyogrande

[Nancy]

What does this prove? I live in the 91403 (Sherman Oaks) and I see lotsa condos on Dickens St. NOT selling.

So the rich are still rich, and still buying. Whoopee.

[Cal]

The volume is so thin by zip i'd be careful making any conclusion on the numbers. With medians and low volume you get wild variations that are meaningless.

Not that large volume and medians is much better (though by zip you will reduce compositional bias) .

I thought it was interesting in the DQ report that the average monthly payment when adjusted for inflation was down 17.5% from the peak. People are unable or unwilling to stretch as much as they dd.

[pop]

If, rather than a ground rule of 10 or more home sales you had randomly chosen 9 or more you would've had to include the following:

"LA/Bel-Air 90077 9 $1,517 -79.8%"

So Beverly Hills is rocketing away and Bel-Air is cratering?

[Jorge]

I'm interested in Tujunga's price downfall and whether it will lead to lower prices in nearby Montrose and La Crescenta. Those neighborhoods are attractive to me, but still overpriced.

[Nine Squirrels]

I don't get how Encino can be down 26% while Sherman Oaks is up 67%. What would cause such a big disparity in appreciation/depreciation in areas that similar?

[Rob]

Lets all please take a moment of silence for the middle class. * sniff.. * sniff...

Thank you, now carry on...

[Pete Viles]

John wrote, "Zip code 91402 is Panorama City, not Tujunga (91042). The median price suggests that this entry is actually Panorama City."

Thanks, John, you are *partly* correct. The original post contained a typo. The area is in fact Tujunga, the originally posted zip was wrong. It is 91042, as you point out. To repeat: Tujunga 91042 is the worst-performing zip code in the county, with median sales prices falling 37% to $386,000.

[puckhead]

"I'm interested in Tujunga's price downfall and whether it will lead to lower prices in nearby Montrose and La Crescenta. Those neighborhoods are attractive to me, but still overpriced"

It's all about the schools. Tijunga is part of LAUSD and has crappy schools while La Crescenta and Montrose have good schools. To send one child to a decent private school from K-12 costs >$150K and you can see how houses with decent schools are priced, especially if you consider multiple child households.

[investorguy]

Let's not forget that a lot of the money coming into Beverly Hills is coming from overseas. The dollar is at a perfect level to entice buyers from Asia and the Middle East. And that money has traditionally gravitated to Bev Hills, not to Bel-Air.

[peter m]

I track LA zips like a fine tooth comb each month and it is prepostorous to suggest that median Prices are all risiing in the LA expensive Zips. I can show you at least as many hi-end zips as are displayed above which had Sizable YOY % drops. Anyway 10 houses per zip is too small a sample-one expensive new small development of 1 Million $ + homes or even condos could skew the median up 100% and next month that same zip could skew down 100%.. A better sample is 25 or more homes per zip, and anyway LA has 270 zips and maybe 35-40 are hi--end, and at any month half of those are up and the other half down yoy % wise.
Every hi-end zip listed above has seen yoy % price drops of -10 to -100% maybe 1-3 times over past 6-8 months . These zips sometimes have only 1 to 3 multi-million $ homes sold for one particular month which would skew the median up 150% for that month, so median prices in hi-end zips really don't say anything about trend of prices in LA super hi-end zips.

[peter m]

Here is a more comprehensive list of hi-end LA zips having 10+ homes sold and ave prices over a million ( zip 90803 is the highest priced LB zip so it is included )

Encino 91436 12 $1,000 -17.4% *
Calabasas 91302 20 $1,275 1.2% *
LA 90027 14 $1,243 30.7%
La Canada Flintridge 91011 16 $1,284 12.6%

LA/Brentwood 90049 12 $2,250 32.4%
Malibu 90265 14 $1,595 -34.9% *
Manhattan Beach 90266 14 $1,665 16.4%
LA/Hollywood 90068 24 $1,230 12.8%
Long Beach 90803 13 $905 -13.4% *

Pacific Palisades 90272 13 $2,695 41.8%
Rancho P.V . 90275 23 $1,016 0.0% *
Redondo Beach 90277 10 $1,200 -8.4% *
San Marino 91108 15 $1,463 1.7% *
West Hollywood/LA 90046 20 $1,270 12.4%

West Hollywood/LA 90048 12 $1,240 17.6%
LA/Rancho Park 90064 20 $1,310 31.0%
Beverly Hills 90210 20 $3,650 192.0%
Tarzana 91356 20 $1,070 -0.6% *
Studio City 91604 14 $1,006 3.3%

Of the 19 zips 8 showed negative or anenic(less than 2% positive) yoy.
These are marked with an asterisk. Looks like the renewed availability of super jumbos made hi-end purchases possible for the well-heeled, and perhaps there might be an infusion of foreign RE investors in such zips as Bev hills, brentwood and PV.

[James S]

Shame on you, that is sloppy journalism. Study up on statistics before you write slop like that again.

[Pete Viles]

peter m wrote, "I track LA zips like a fine tooth comb each month and it is prepostorous to suggest that median Prices are all risiing in the LA expensive Zips. I can show you at least as many hi-end zips as are displayed above which had Sizable YOY % drops.

Thanks, Peter m, for this comment and the next one, where you laid out some numbers. And my mistake -- sloppy writing on my part. What I meant to say is that the places where median prices are rising the most tend to be expensive areas. But I'm not suggesting prices are rising in all expensive areas.

[srla]

While the communities at the upper end of the real estate pricing ladder are still relative islands of prosperity, median incomes in these areas are hardly that spectacular in comparison to county-wide figures, and they're certainly not high enough to justify current pricing.

Take Manhattan Beach, for example. Average family income is about $120,000, or roughly twice the L.A. County average. Yet the median sales price is over three times the LA County average.

This means that the real estate pricing in this area (and others like it) is even more detached from fundementals than that in L.A. County as a whole. The $1.66 million average sales price figure quoted above is a staggering 16 times the average yearly household income in Manhattan Beach (approximately $100,000).

So while there is this perception that the "upper class" are insulated from bubble dynamics, they might well prove to be even more vulerable than those in less affluent areas. This perception of insulation might help sustain bubble pricing in these higher end areas for a while, but inevitably, market forces will come into play. If housing prices in neighboring areas plummet, it will eventually have an effect on even the most affluent areas. This is what happened before during the collapse of the reional bubbles in San Diego and LA in the early '90s, and it is bound to happen again.

[Cal]

Zillow came out with their Q3 home price data for LA and the surroundings:

http://www.zillow.com/static/xls/2007Q3_
Los_Angeles_Riverside_Orange_County_CA_CMSA.xls

Select the Counties tab and look at E3-E8, this data supports your thesis.

Case/Shiller now breaks out high, middle, and low end as well.

[Ken Alpern]

We are starting to sound like a broken record...

At least the rif-raf have not started moving in to 90064...

[tony almonte]

Price per sq ft is also not a great indicator as it does not take into account condition of the home. New home will command larger dollars than a tear down.
My RE friends tell me that new construction in expensive areas, like Pacific Palisades, is moving. Tear downs are not. Older homes that have been repaired or gussied up are sitting and prices falling. I guess no figures tell the whole story and you have to just go to the open houses and see what's for sale house by house.

[producer08]

How come everytime wall street goes down by 100-400 points they say it was a wallop, that is horse shit, it needs to drop by 2000-4000 points then we can rebuild. There are to many safety features built in, if it does not crash soon then WE WILL BE IN A DEPRESSION !!!!!!!!!! AND THIS GREAT COUNTRY OF OURS WILL BE BANKRUPT AND SOLD OFF IN PIECES TO THIRD WORLD COUNTRIES not to mention EUROPE, INDIA, JAPAN, CHINA AND RUSSIA !!!!!!!!!!!!

BUSH IS KILLING US.

[SKP]

Well, if anything, Im hoping this cleans out alot of the older, less expensive areas with alot of old history and eventually get 'revived'. Rif-Raf can go out to the desert cookie cutters. I miss my old L.A. that I grew up in...

[GDC]

I agree the expensive areas will get hit and hit hard but will take longer. Look at the dotcom bust - when the NASDAQ started falling, no one bought the speculative, high flyers. But people still bought "safe haven" stocks like Microsoft, Cisco, Dell, etc. Eventually though, even those stocks took huge hits later because the prices didn't support fundamentals. Believe me, in two or three years, people that buy or live in high end homes with huge mortgages are not going to be envied - they will get sympathy instead.

[Kellyn]

Bush is killing us? Get a life!

Kellyn
Northridge

[Paul]

10 houses per zip code is not a large enough sample to base a change in values. Additonally, per square foot costs will be a better gauge than overall median price.