California home prices down 12% since Nov. '06

Good afternoon and Merry Christmas in advance. The California Association of Realtors reported Friday -- late Friday, according to commenter Cal -- that November home sales fell 36% from year-ago levels, and median sales prices fell 11.9%, also from year-ago levels.  That's a newsworthy decline -- steeper than most accounts I have seen of the California market.

CAR's figures also show a 12% drop in median sales prices in the Los Angeles region, from a median of $590,790 last November to $520,960 in November of '07.

More, from the CAR press release: “The large decreases in the statewide median price of the past few months have resulted from difficulties in obtaining jumbo loans, particularly in the upper and middle tiers of the market,” said CAR Vice President and Chief Economist Leslie Appleton-Young. “Whether this trend will continue after the liquidity crunch has eased remains to be seen.”

One more: "CAR's Unsold Inventory Index for existing, single-family detached homes in November 2007 was 15.3 months, compared with 6.4 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate."

Your thoughts? Comments? Insights?  Email story tips to peter.viles@latimes.com.
Hat tip: Cal

Comments

[Joseph]

Merry Christmas everybody!

Good news for buyers! The more affordable the market becomes, the better chances for families to buy their own homes...

It's always a good time to buy if you qualify!

[Pasadena'd]

…yes is it is, Joseph—especially for those qualified buyers who don't mind losing 20% more off the value of their home if they buy now.

C'mon, potential SoCal home buyers, it's only money! Not like you worked hard to earn it, right?

Merry Christmas and to all a happy home buying season!

(in 2010 and on…)

[john boy]

the cost of plywood and bricks are down too.maybe i should buy a trailer.

[lefty]

and metro LA is holding up there with the best locations!! don't miss out people, now is the absolute perfect time to get yourself a house! i've been around the world including the south of spain and south france, and there is no place like southern CA!!

[Peter]

Buyers - we should hold till is sinks and then some.
Even with resent declines the prices are just unreasonable.
There is just no such a think as a bungalow for 1/2 million. Please hold your horses in buying - there is much more low the market will go. I am total Bear on the market and especially the housing.

[Joseph]

To: Pasadena'd, John Boy, Lefty, Peter,

You are not going to manipulate the market with your comments...

Are you guys buying all cash? then wait for the bottom...5-7 years from now...But if you are financing your purchase, like most people out there, the best time to buy is when you are ready.

Some of you may never be ready...

Do you want to buy a home? or a Business?

How much in payments are you going to miss in 7 years? Is it going to be worth the savings in Price Reductions?

Buy now! and pay that home in 10, 15, 20 years!

Make some sacrifices...It's a game...

But if you rather choose your expensive "Toys"(Cars, Boats, Etc.) , then don't complaint!

[Joseph]

Peter,

I could show you the numbers...

[mbob]

Lefty!

Buy Now!

Just Go Ask The San Bernardino Tent Dwellers!

They Did!

[David Raether]

Tell me, why, anyone would buy a house now? It's December and there's 15.3 months of inventory on the market. Inventory always spikes upward in 1st quarter.

Don't be fooled!

Wait!

Prices still have a long way down to go.

[producer08]

that is bs, the prices need to drop by 80-90% then the market will have corrected itself, just like the dow needs to drop by 6000 points.

Remember our dollar is now worth 25% less than other currencies, we have a long long way to go !!!!!!

[shockg]

"…yes is it is, Joseph—especially for those qualified buyers who don't mind losing 20% more off the value of their home if they buy now."

What a tired and baseless statement. Why not just say "please don't buy because im trying to time the market and I don't want anyone ruining my chances."

[Martin]

Median ... shmedian.

If there has been 12% drop in the price of my home, that suggests it should now be worth $1,144,000 ... a 12% decline from its $1.3 million apraised value a year ago.

It ain't.

I don't even think my house would sell at even one half the year-ago value. In short, there are no real buyers out there now. The market is, in a word, a mess. Statistics cannot adequately profile the real picture.

What's a homeowner to do? If one can, wait it out for as long as it takes and focus on other parts of life that continue to grow. ....Like people and love.

Merry Christmas everyone!

[John Boom]

The market going down only hurts people who buy and sell houses for a living, or people who have no savings and use there house as collateral. Of course, lower prices are good if you just want to buy a home and actually live there

[craig]

What does the dollar vs other currencies have to do with home prices in L.A.?

[John]

It's been a while since I've lived in California, but from what I can tell from the real estate ads, the houses there are still terribly overpricedl. Are the sellers delusional? That would appear to be the case. Oh well. The day the average buyer can actually afford the average house will be a good day for California. Until then? Stay away.

[butterfly soup]

If you've ever regretted not buying a home in the recent past, be grateful now that you didn't. You have freedom to move. Do not buy now unless you know, with no uncertainty, that you will never want to leave that house. That's because as soon as you buy a house now, it will be less than what you paid for it, and you will be what's called "underwater" on your mortgage. You won't be able to sell the house without owing the mortgage lender, a debt that only declaring bankruptcy and giving up all your assets will be able to cure. Rents are going up--so do your best to live below your means and wait out this ten-year debacle foisted upon the American people by the Financial-Insurance-Real Estate (FIRE) economy supported by Wall Street, the Federal Reserve, the politicians and mainstream media.

[Michael Snyder]

In an interesting note AP released an article Sunday documenting the plight of the American consumer as it's reflected by credit card defaults. I'm afraid this will be the second wave in this economic tsunami. Wall Street's into the pump side of the last quarter numbers with the dump due right after the books close next Monday night.
Although a point a month seems precipitous, it isn't out of line given the intensity of the run up.
Pricing aside; I don't see anything but continued market stagnation until lenders start writing loans for new home purchases.
Or.....
With Realtors like lefty I'm sure the market will turn around after the first of the year on a renewed burst of underwriter confidence brought on by the train load of Federal bail-out plans for distressed bankers...
Peter,
Thanks for taking the heat all year.
Merry Christmas to all!

[CD]

A year ago people laughed when we argued prices will keep falling, the banks are out of money, the stock market will drop further in January. After the Holidays all hell will brake loose...No reason to lie anymore to the stockholders,Xmas season is over, we are about to enter a full on recession.One more year and prices will be down another 20%, so why bother, just wait and see. Keep your cash you may need it.It's not about the real estate anymore, it is about the economy and our major institutions are collapsing. Happy New Year Kool-aid drinkers !!!!!

[Louis M]

Wait.Wait. Wait. The sale hasn't even begun. 2009-10 maybe start looking, but buy before then and you're losing equity the moment you sign. We ain't seen nothing yet.

Happy Holidays!

[vultur]

CAR's figures also show a 12% drop in median sales prices in the Los Angeles region, from a median of $590,790 last November to $520,960 in November of '07.
____________
Forgot about the extent of the fall for a moment, what angers me is the inconsistency of the info. Peter reported median sales price of $496k recently yet this stat shows $521k!

How hard is it to tally up all the sales in the region and pick the middle number? How could it be so far off?

[Steve]

You make your own market bottom by making multiple low offers now. Like everyone else I do not know when when the bottom will be, buy I know this when the current whores in office lower the interest rates to <5% because it is an election year it will be a better time to buy then after the 08 election. Make 2 written offers a week starting at 50% of the asking price and you will get a deal now.

[andree]

All of us who waited for the price-mania to settle will be benefiting from it without a question. Math is not everybody's place of comfort. So lets play with some numbers.

First of all lenders are now bound by law to screen who can pay for the mortgage. Now that is first nail in this balloon. Most of speculator and investors without dough will be out. Now you think people donot need houses, we all need one.
So to sell a home to me with 100,000 income what price will be right. You think I will be buying those shacks for 600,000 and bailing out one speculator ,na,na.
Any body can check on red fin the price of home, 200,000 in 2000 and 700,000 in 20007.
Wow , who is making such money and hope to make such in the coming years. Those who donot believe me please run a Google search for average income family and individual.
So if 80% cannot afford ,the perhaps we need to import buyers from rich placed who want to buy shacks for 700,000 because they want to enjoy S california weather.
May I ask anyone of Us have bought something in 401 retirement when we know it is going to shed its value. So why such big investment which is losing value, when we are careful in buying 100-2000 dollars of our 401 k money.
So what you guys say and agree

[Dontbeasucker]

Resets continuing for the next few years, recession, the remains of 2 trillion in credit write off, the writers strike, tightening credit rules. Save your money and wait til 2012. RE will return to 1996 price levels.

[Joseph]

I met people in their 60's, and 70's who never purchased any property, and I would not want to be in their shoes....

[G Spot1]

“The large decreases in the statewide median price of the past few months have resulted from difficulties in obtaining jumbo loans, particularly in the upper and middle tiers of the market,” said CAR Vice President and Chief Economist Leslie Appleton-Young. “Whether this trend will continue after the liquidity crunch has eased remains to be seen.”

The "liquidity crunch" in jumbos is a return to sanity in lending standards and underwriting. This is not temporary. The down payment requirements are not going away for at least a generation. Pay options are history. In short, the cheap money that let people making less than 6 figures buy a 7 figure home is no more, and prices will come down to reflect that.

[Rob]

Whats wrong with Kool-Aid ? ..... Lefty ?

[Kat]

What am I missing here? So the fact that you can now get a "starter" home in a DMZ for $520,000 is "good" news"

Is it really that great living in L.A.? I've been to L.A. and I'm not sure what I missed(I used to live in Northern California). Maybe you folks are living in a secret part of L.A. that mere mortals can't see without special glasses because there's not an inch of L.A. that makes the housing costs worth it to me. How great can one place be? And as far as being close to family, is there any family that great?

[Kelvy]

I agree with Joseph, I see people in their 50s, 60s and 70s who have never bought, or always been waiting to buy a house, I do not want to be them when I get to retirement. Even if prices go down some, I am glad I own...

[Kelvy]

Kat, doesn't everyone in Northern CA hat So. Cal? Aside from the social hatred that No. Cal. has for So. Cal., most people in the world do like L.A. a great deal, which is why historically house prices and rents have been well above the national average for a long time. To be honest, I do not see why people are willing to pay more for a hosue in No. Cal. where is rains all the time in the winter - yuck. But, aside from the way I feel, many people do like No. Cal., after all, look at the crazy prices that people are paying for houses up there.

One more question, why do so many people in No. Cal. hate So. Cal., are they jealous?

[Rob]

There called "beer goggles", because everything looks better through rose-colored glasses. Sorry couldn’t resist...

[Kat]

I only lived in California for a few years and that was a long time ago. I didn't nor do I "hate" So.Cal. My point was that So.Cal was nice but not great enough to be worth what it takes to live there - no place is as far as I'm concerned but that's just me. Actually, I can see paying through the nose to live in the So.Cal of the 40s, 50s or 60s. It must have been something in those days. But since the Mexicans and gangs took it over you couldn't pay me to live there

And I agree with you about No.Cal weather. It was the biggest reason I left.

[Kelvy]

Kat, I personally love the Hipanic influence here in So. Cal. it adds to the rich cultural diversity we have. I agree the gangs are a problem, and from what I can tell the gangs are not being dealt with very well. But they have been a problem here for a long time, even in the 40's, 50's and 60's... So. Cal. has its issues, but I, as many people, do love it here - read this blog: http://latimesblogs.latimes.com/laland/2007/12/
living-in-la-an.html?cid=94866624#comments

[Pasadena'd]

"Make some sacrifices...It's a game... But if you rather choose your expensive "Toys"(Cars, Boats, Etc.) , then don't complaint!"

GAME?! Uh, Joseph,…did you really just refer to purchasing a home as a "game"? Wasn't "gaming" a big contributor to the mess the market is in right now? As far as home ownership goes, I bought years ago before the artificial price run-up (1997) and have bought all my "toys" with cash, so I'm not "complainTing" one bit.

"What a tired and baseless statement. Why not just say "please don't buy because im trying to time the market and I don't want anyone ruining my chances."

Hey, shockg, you seem to know me in and out. Good for you. What chances of mine are you referring too? There are a lot of people out there looking forward to home prices coming back down to Earth for reasons beyond your grasp of simple assumptions. As I already said, I bought ten years ago and never played the HELOC "game" (is that what you meant, Joseph?). I hope someday soon more will buy without being raked over the coals by ridiculously high prices and equally ridiculous financing options.

As for those poor, sad folks in their 50s, 60s and up who still don't own a home and are renting, I'd rather be in their shoes than the folks losing their homes because of suicide financing they signed up for to buy into "the dream". Wake up, people.

[joeinlosangeles]

That's an irrelevant point, though in the current market. The question is whether it's better to buy now or wait a year or two and rent. In the first equation, you might be believe that by waiting a year or two you'll save $100,000 or more on the purchase price. If you buy now and keep your house for 15 years, you'll do fine regardless. It's just if you want a year or two to buy and keep your house for 15 years, you might do a lot better. Now, you might say you can't time markets, which is true. But you can certainly look at indicators and base your decision for buying on that. Otherwise you are just living by the realtor's mantra of "Anytime is a good time to buy, because anytime you buy I get a commission!"

--I agree with Joseph, I see people in their 50s, 60s and 70s who have never bought, or always been waiting to buy a house, I do not want to be them when I get to retirement. Even if prices go down some, I am glad I own...--

[Kat]

Variety is the spice of life and I enjoy a good mix of racial and ethnic diversity and wish we had more of it where I live. But to be called a gringo in my own country? To be required to speak Spanish before being a cop, a teacher or any number of jobs? To live where Americans are a minority in their own country? No thanks.

What befuddles me most about this situation is not the fact that L.A. has more Mexicans that Mexicao but that people with household incomes well in to six figures are willing to live in quasi slums or to rent thier entire lives. It must be damn great in L.A. because it took me 40 years to get to a six figure income and I'll be G! damned if I would come this far and rent! But then like 4 million people disagree with me. So, to each his own.

And will someone explain to me where non-English speaking, illegal immigrant wage slaves live in a market where a "starter" home is half a million dollars?

[JK]

And will someone explain to me where non-English speaking, illegal immigrant wage slaves live in a market where a "starter" home is half a million dollars?

Posted by: Kat | December 26, 2007 at 02:01 PM

Kat,

They live mostly in the historically Black neighorhoods forcing Blacks to migrate out and seek refuge in the Inland Empire. The Whites that moved out to the Inland Empire years ago are fleeing the Black invasion to the safer portions of LA (Westside), moving further East or abandoning California altogether.

The illegals can afford this by living 2-3 families to one house. They buy the house and bring in more family and friends to the neighborhood. They take on the fast food or entry level jobs typically held by Black teenagers who are not unemployable because they don't speak Spanish. They overwhelm the local schools with their non-English speaking children, overwhelm the hospital emergency rooms with their common colds and overwhelm the social service offices with welfare requests for their anchor babies. Their teenagers fight with the Blacks that are in the neighborhood schools and a lot join gangs to go against the Black gangs, taking over their "turf" using sheer numbers.

Pretty soon, no one wants to live in the neighborhood except them and "others" are forced to find a safer place to live, contributing to the high cost of neighborhoods with decent schools and safe streets. So the Blacks flee the Mexicans and the Whites flee the Blacks, typical California migration pattern.

Before anyone calls me a racist for pointing out the big white elephant in the room, tell me which part of this isn't true?

[ChrisL]

Kat, they prettty much live all over the place. South LA, East LA, all around downtown, South Bay, the SF Valley, SG Valley. They do live in half-million dollar homes, but 3 or 4 to a room.

[Mark]

Kat, The Undocumented residents in the U.S (not only in So Cal) CANNOT buy a house... (no social Scty #... you know, credit rating...) they live in houses bought by all those of you fortunate enough to afford a mortgage; THANKFULLY... Those undocumented residents contribute to the economy by accepting the "ilegal" label our society assigns them, they take the jobs and low wages ( making your franchises profitable...you know the bottom line... ) that Corporate America and business owners are willing to offer them dispite their "ilegal" status ( By the way, your spoiled kids are not employable because they think they are "too cool" to work the drive thru ) these families have no choice but to rent at your high rates, and settle for your conditions, which make you ("legal" R.E investors) able to build your networth... the best part of the deal is that the region at one point actually belonged to Mexico... Capitalism, that's the "GAME"!

[Tio Guillermo]

"the region at one point actually belonged to Mexico..."

Yeppers, and the U.S. purchased it as a part of Guadalupe Hidalgo($18,000,000 bucks! That's about $400,000,000 in today's dollars. California is 164,000 square miles, so they would need to offer us about 2,400 bucks per square mile or 80 million burritos if they wanted us to take them seriously again. That's just raw land. Factor in all that quality construction, and we're definitely over the $401,000,000 mark.)

Campo de Cahuenga, site of the Cahuenga Treaty that ended the war in CA actually still exists. It's hidden deep beside the bowels of the North Hollywood subway station.

If we're going back to who was here first, let's factor in the folks that came in over the bering straight. Since they were here first, and nobody paid them anything at all for their land, they probably have the best claim of all. Dried fish stands... now that I could go for. Any Tongva out there? Head over to the country recorder's office and tear up the deeds.

[Kat]

Mark,

It's a statistical fact that illegals take back far more than they put into the system. The societal cost of being able to buy strawberrys for $3.00 a quart is far higher than what we save (medical care, education, uninsured drivers, incarceration, property values etc.). Then there is the whole issue of how they've dragged down wages. In areas where illegals have been raided out, corporations who've exploited cheap labor are required to pay a living wage to get protected people to work for them. And I would bet you one billion dollars if I had it that if illegals were given some sort of legal status the first thing they would do is exploit the system (worker's comp, unemployment, welfare) just like their American counterparts. They aren't superior beings or workers, they just have no choice.

I also know that Mexicans will work like dogs. I've seen it. They are treated about one step above slaves. They are exploited by people who know they've got them by the short hairs. It's really a sad situation all around.

As far as my kids being spoiled that much is true. I don't know how someone like me ended up raising kids who think it's a constitutional right to have a cell phone but I did.

[Cal]

"Undocumented residents in the U.S (not only in So Cal) CANNOT buy a house... (no social Scty #... you know, credit rating...) they live in houses bought by all those of you fortunate enough to afford a mortgage"

Untrue. There were many banks giving ITIN loans and anyone can get an ITIN number. Plus with the mass use of stated income loans it just took one person with a score above 620 to get into a home.

In California the unleashing of massive quantities of credit to people who traditionally could get very little was very much a driver of our housing price growth. But we are seeing the stories now of many of these people who aren't financially qualified (or financially literate) to own defaulting on their mortgages. Illegals, hispanic and otherwise, were very much a part of the equation in our housing market.