Median listing prices down $110K from peak

Median listing prices in greater L.A. dipped another $5,000 over the past week, to $470,000, and have now fallen $110,000 from their April 2006 peak, according to Housing Tracker's weekly analysis of MLS listings.

Headlines: Median listing prices have now fallen 18.9% since their peak, and 14.5% over the past year.

Inventory of unsold houses and condos fell from week to week, to 41,830, but is running 32.3% ahead of year-ago levels.

Date               Median listing price                Inventory

4/06               $579,666                              27,251
4/07               $545,000                              35,489
5/07               $545,000                               38,297
6/07               $540,000                               40,766 (up 20.4% y/y)
7/07               $535,000                               42,685 (up 14.5% y/y)
8/07               $529,000                               44,483 (up 13.6% y/y)
9/07               $520,000                               46,414 (up 16.9% y/y)
10/07             $510,000                                46,603 (up 15.6% y/y)
11/07             $499,900                                 46,503 (up 19.0% y/y)
12/07             $495,000 (down 10.0% y/y)      43,174 (up 28.2% y/y)
1/08              $479,900 (down 12.6%)            40,850 (up 33.3% y/y)
2/4/08           $475,000 (down 13.5%)            41,653 (Up 36.7%)
2/11/08         $475,000 (down 13.5%)            43,625 (Up 38.3%)
2/18/08         $470,000 (down 14.5%)         41,830 (Up 32.3%)

Thoughts? Comments? E-mail story tips to peter.viles@latimes.com

Comments

[Raul]

Look like we are not building equity any more, I wonder if we need to think it over, the rules of the game have changed. No more buying in this environment, if we do it , we will be losing what we dont have, but then again is just money, maybe Lefty is right.

[Elian]

Was last weeks inventory info wrong? IT seems like an aberration compared to this week and the week before last....

[lefty]

whoa, stabilizing inventory levels! guys, don't get stuck in riverside; when you're dealing with the finest location on earth, which is metro L.A., it is time to jump in!! call momma if you have to, it's worth it!

[l.a.guy]

I'm watching prices in Sherman Oaks, Studio City and Toluca Lake closely (yes I'm looking to buy a house) and I think part of that inventory shrinkage is due to people taking their homes off the market. Using various websites I am tracking a number of listings that have become "inactive" with no hint that they sold. My guess is that these are people who don't really have to sale and have decided to stay put until the dust settles. (Likely a very long wait before they see peek 2007 prices again)

I also see a number of people listing houses they purchased in the past 12-24 months with an asking price considerably more than what they paid for the homes. I assume they're trying to get out while they still can and at least with a 5% profit to offset the brokers cost. But one thing I don't think they're taking into account is that even if they were able to find someone stupid enough to pay them their asking price, I can't imagine any of these homes appraising for even their 2006/7 purchase price, much less more than those prices. It seems to me that every house (barring renovations or massive improvements) is by definition worth less now than what it was in 2006/7. Seems like a big waste of time to me.

I went to a few open houses this past weekend and the agents look shell shocked. It's almost enough to make you feel sorry for them.

[adoptivefather]

Here's one for the record books. RE agent threatening "last price reduction". House started at $1,349,000.00 and now at $1,111,111.00

Wonder if the new price isn't a psyc effort by the agent to remind himself of his former sales status.

3316 shelby dr,los angeles, CA 90034
Area: (8) Cheviot Hills - Rancho Park
LAST REDUCTION - LAST OPEN HOUSE ON 02/24 BEFORE WITHDRAWAL FROM THE MARKET. Hardwood floors on upper level and Berber carpet on lower, eat-in kitchen, formal dining room, large living room, huge storage space, two fireplaces, veranda, crown moldings and recessed lightings. Entertainment/family room downstairs features kitchenette/wet bar and leads to private backyard with mature vegetation and recently re-plastered pool and spa. Seller is licensed real estate agent in the state of California.

[Laker]

l.a.guy,
I actually feel sorry for them. Really, no matter what is their job, it is still a job, and now they have a problem bringing food to the table. I think the tax payers should help them...
well maybe not. Let them tap into their huge incomes for the last couple of years!

Elian, I think you are correct regarding the inventory. I'm tracking some websites for interesting listings and i saw many houses disappear from the MLS and not because of pending sale / backup offers. Usually, theses are houses that were listed for 180 days, and now pulled out in order to get relisted with lower price and most importantly with a look of a new listing... - old RE trick.
Other than that, i spoke with a realtor (honest guy). He told me that houses in SFV are now dropping 1-2% every month and he sees that continuing for the next 2 years. I asked him whether he was sure...he said he is working in the RE business for the last 35 years. He has never seen such an "appreciation" as in 2000-2007, so he know prices in this area will go down to pre 2000 levels. I always thought that prices should be in the 2001 levels, but he told me that the actual "crazy appreciation" started in 1998 and not in 2001...
The thing i liked about this RE agent is that he is loaded with money and has 3 houses paid off. He works for fun, as he said "I don't make money now, buy if i stop working, at my age, i will become sick or worse, so i just do it for fun, it is really my hobby,..."

[amir]

I see more and more houses that haven't sold for months (sometimes more than twelve months) offered as a rental. A rise in rental inventory means lower rent prices which will make buying houses seem even more expensive in comparison. That will put even more pressure on lowering prices.

[arroyogrande]

I'm just wondering how long people falling into foreclosure will be called "victims":

Today's LA Times had an article by Mr. Riccardi and Mr. Hamburger on Hilary and Obama, and included the line:

"In Ohio, a state where 79,000 homeowners in 2007 fell victim to mortgage foreclosures"

I really don't understand how people in this most recent foreclosure wave are "victims". There may be special cases where loan documents were changed AFTER the borrower signed them, but in the vast majority of the cases, the "victims" willingly signed documents that they either didn't understand, or understood to be a gamble. Either way, they could have refused to sign...especially when you are talking about a half a million dollar or more loan (such as you had in the Los Angeles area).

[Enlightenment]

Prices are not even close to bottom yet, and just waiting for 2009 to 2010 to arrive before I start looking again.

[producer 08]

Another 70% drop in the median price and we will be there and we can then begin to rebuild.

The median for a house in LA should be in the 100k range.

[Ex-Agoura Hills, now in Arizona]

You're all insane...move now! It's cheaper out of state!

[Jet]

I still think that houses are $200K overpriced in the high-end market. If that doesn't go down back to at least 2004 level then this misery will still continue. House prices should go down for both low-end and high-end market for us to be back to normal.

I still suspect that this housing market will be like Japan where it took them more than 10 years to be normal. 2013-2015 should be the right time to buy.

[Ace]

I wouldn't put too much faith in the inventory numbers. These numbers are single family houses and condos. There are a lot more than 42,000 units on the market... they are just not listed.

In fact, just looking out my window in NoHo, I am looking at 450 units to the north, 100 to the east, another 25 units right next to me. None of them are listed.

Cruise out to Woodland Hills and I can show you 1000 more units that are not listed.

If you want single family listings, lets hit one of the new developments in Valencia. There are hundreds of new houses that are not in inventory.

Bottom line, even if prices get much lower, there is still probably 2 years of inventory out there.

[Lost in Pearlblossom]

Do people consider the cyclical nature of the real estate market in Southern California? To be frank, I am not old enough to remember the up's and down's of the 1970s and 1980s but my impression is that those two decades, if anything, were cyclical.

If this is true, why?

And why here?

I read a story in the NY Times a few days ago that shared that there are places in the U.S. that have housing that are appreciating in value. From this article I will make a presumption that the norms of the housing market in Southern California are not the same in other regions. Again, why?

[Raul]

There is a abundance of real estate agents aka whores out there who didn't give a damn about retention, they were purely driven by unbridled greed and they still are.

We are witnessing the collapse of the biggest Ponzi scheme in the history of mankind and repercussions are just starting to kick in on a global scale.

That is a fact Jack.

[Cal]

Ace,

From a technical perspective on the MLS how can you tell a home is wanting to sell but isnt listed?

[Raul]

Pearlblossom,

You forgot to mention the prices of those homes in those areas.

Would you like to be more specific?

LOL

[shockg]

WOW, Inventory trending down down down!!

[shannon]

"The median for a house in LA should be in the 100k range."

Haha!!!!! Wow.

If the median price of a home in LA is ever 100K, you're going to be standing in bread lines or picking up the pieces after The Big One and you STILL won't be able to afford a home.

This is still LA. You aren't going to see an Oklahoma City median here, and if you do, you'll be sorry you did.

As for Enlightenment's contention that the bottom won't be seen for up to two years, I highly doubt it. Wait till 2010 and you'll be buying as the numbers swing back up.

Oh, they're dropping. And they'll continue to do so, for sure. My prediction since at least 2004 has been that when the bubble bursts, we'd ultimately drop to around where we left off at the begining of the bubble - say, '01 to '02 levels.

But I think we're going to see that long, long before 2010. Sit around and wait for the ultimate bottom and you might find yourself priced out yet again.

[Ace]

Cal,

Sorry, I guess I didn't make that very clear. I was talking about the new condo developments that are springing up all over the valley. A lot of the projects that were started during the glory days of 05 are now completed and ready for sale.

Most of the time, the developer only lists 10 percent of the condos for sale in the MLS. Take the Met in Woodland Hills. They currently have 500 units available but only 30 listed for sale. The NoHo 14 has about 450 available and none listed for sale. Everywhere you look in the Valley there are new condos or condo conversions that are available or will be available by the summer selling season. Only a small percentage of them are actually listed as inventory.

[Thomas Soteros-McNamara]

There's a assumption here which is not true. Namely, that inflation (which is probably going to continue to rise markedly this year) has no impact on home prices because it's not factored into to how either the CPI or PCE is computed.

However, I would guess that prices may appear in nominal terms to stabilize seemingly in a few months only because inflation will be so prevalent a decline in nominal dollars would indicate a decline in real values as to be impossible i.e. over 100%. But this doesn't mean that the real values for the region won't fall 40% from their peaks...it's just that inflation is likely going to make the nominal change (which is all Peter has reported) to be less certain.

[lefty]

hey people, you want the best price you should buy metro L.A. right now!! there will be no voice from heaven saying 'this is the bottom' lol ! just be reasonable and pick your favorite spots now! good luck!

[El Guapo]

Peter,

May I respectfully suggest a poll on where people think we'll be at the end of 08 with regards to listing / sales medians. I think it would be interesting to see (sort of like the Michigan consumer confidence index) So here's my prediction, just for kicks. If we just assume that the next ten months will be the same as the last, then 12/31/08 should show LA with a $395K median. I believe that this bust is different as most busts start with a recession - this one started one - and is so huge that I think folks will be "under water" by so much that they will just waive the white flag at some point. Now as we enter the recession and we socialize the idea of intentional foreclosure, and lending standards tighten, I think the drops accelerate a bit. Sure, the government will try to slow it down, but I think to only a nominal effect. So I am predicting $375K by year's end.

[Cal]

Ace,

Thanks for the response.

[Ragnar]

At this rate, by the time we are ready to move to Los Angeles in three years, we should have no trouble finding a decent house in a decent area within our price range. Don't need a McMansion - just a nice little place to call home. We'll still pay more in LA for a comprable house in WI, but we've had over 80 inches of snow and ice in Madison already this winter, and we don't really want to stick around to see if Madison breaks the record again.