Listing prices now down $114K from peak

Median listing prices in greater L.A. slipped by $500 per day over the past week, dropping to $3,500 over the course ot the week, to $465,500, according to Housing Tracker's analysis of MLS listings.

Highlights: Median listing prices have fallen 15.4% over the past year, and 20% from their peak of just under $580,000 in April 2006.

The inventory of unsold homes and condos slipped over the past week, to 41,838. Inventory is still pacing 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)
2/08               $475,000 (down 13.5%)           43,625 (Up 38.3%)
3/3/08            $469,000 (down 14.7%)           42,356 (Up 35.0%)
3/10/08         $465,500 (down 15.4%)            41,838 (Up 32.3%)

Thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo Credit: AP

Comments

[campechano]

you hear that sound?
It's the bubble hissing....!

[NAR is WRONG]

Assuming the easy, no obligation mortgage loans disappear, wouldn’t it be expected that inventory levels would soon rise much higher than 32.3%? 100-150% does not seem unrealistic given many homes have been priced-to-sit for almost a year now. Do we think L.A. real estate is anywhere near a bottom?

Just how many people can afford $465,500 for a house using their own money? Furthermore, of the people that can actually afford this price for a home, I doubt they would settle for what those asking $465,500 actual buys in L.A.. Oh sorry, this is L.A..

[John]

Peter,

Can you start a housing bottom betting pool for charity?

Each person kicks in 5 bucks, and the winner gets dinner or LA Times swag and bragging rights, and the money goes to some good cause, (keeping kids out of gangs, making Laura Chick and Connie Rice co-emperors for life of Los Angeles, helping the NAR fund an economist who knows something about economics, etc.)

[Hugh Jorgan]

Even at 15% off the peak, the prices are still more than they should be. Let 'em fall even more, then watch the bargain hunters come out.

Seriously, as long as the inventory continues to grow, no investor should consider buying. When inventory levels off, that is when the real buying will begin.

[Truth2Pwr]

Yawn.

Somebody wake me when it gets down around $250K. That's when I'll consider watching for a bottom. If this pace continues, that would be right around July of 2009. Hard to believe, I know, but wouldn't shock me in the least if it came to pass.

[bottom line]

Can we all have a chorus of

Don't catch a falling kinfe, don't let it hit your pocket,
always hold it away
Greenspan is a traitor, Cheney's off to Dubai,
will they ever fade away

Carlyle Cap levered $32 to $1 of worth, Blackstone wants your money bad, why, cause they need it!

Just burn this mother down, & BearStearns, you're FIRST. Hey Herbert Walker, lets cough up the do-re-mi to bail out Carlyle Cap, or have you & the neo-cons and Zionists no honor .

The book "The Three Trillion Dollar War" make it painfully obvious why you can't separate the incidental "mortgage mess" from the actions of the traitors in the DOJ, NSA, CIA, the supremes, & 5 deferrment dick & the shrub.

Don't like my politics, well I don't like 'em much myself. America was a lot different before you had fascists calling it "the homeland", lol, ala Herr Goebbels and that freak that was Brownie's boss. Oh, yeah, Paulson also, assisstant to John Erlichmann in '71& '72.

Click on the WaPo or the NYT to see why this pup is crawling into the dumper. Hey the LAT has the stuff too.

[Dominic Smith]

So $500 a day price decreases in listing prices and the houses are spending how many average days on market?
So after 100 days you subtract 50K to keep keep competitive with the newest listings and then you ...
spend another 100 days subtracting 50K.
I'm happy to neither a buyer or seller be just now.

[srla]

In order to reach a bottom, one of two things must occur - either ownership costs must approach the costs of renting, or market psychology must reverse.

Housing prices are still more than two and a half times the cost of renting in most of L.A., so we are far, far off from the point where fundamentals will dictate a bottom.

Market psychology is showing no signs of reversing any time soon, and why should it? Potential buyers see rising interest rates, tightened lending standards, and plummeting prices. Where is the incentive to buy? Given the precipitous plunge we are currently experiencing, it will take a prolonged leveling off in prices before any significant number of buyers will even consider jumping back into the market.

The time will come when real estate again becomes a viable investment. But based on any logical analysis of the present situation, that day looks to be a long, long way off.

[srla]

Oh, and by the way, what ever happened to "Investorguy"? Have all the unflappable real estate bulls vanished into thin air?

[LA-renter]

I'm curious if anyone can address what kind of buyer is buying, and what kind of seller is getting sales.

I would guess that fewer buyers are first timers, and more buyers are selling their own place in the same falling market. Is there must stomach for buying anew with the anticipation that you could "lose" a significant portion of the purchase in only a year or two?

I imagine that, whatever you believed the house was worth at the bubble peak, most owners did not purchase at the peak. Thus, price slashing is disappointing but not devastating to most sellers. Would the most desperate to sell ironically be the most reluctant to give on price and not sell?

[Dan T]

Great chart. If you could add an additional entry as to when the median listing price was at $465,500 prior to the peak, it'd would provide a poignant reference point.

[someday the ants will eat grasshoppers]

I'd like to see Peter or someone here comment on why the same data from housingtracker.net show the price of the 75th percentile going up for the past few weeks for LA.

Is this an artifact of the cheaper homes selling and the expensive ones not moving? Or are the asking prices in the higher end really still rising?

Peter, help us out on this one. I'm tired of hearing realtors say that "good properties don't go down in price." What gives?

[John T Watts]

Maybe it helps some when people who retire move to other parts of the country where they can get more for their money. People who are in the LA area for employment reasons don't always have that option. Vacancies created by retiring people moving out might improve affordability for working people who need to be there. It might improve life for both groups of people.

[Truth2Pwr]

First off in the post-bust reality, the whole "living in L.A. for employment opportunities" concept is about as valid as the "moving to L.A. to become a famous movie star" concept. When many people are forking over 40%, or more, of their salary to pay their mortgage and commuting 2 hours each way to work, I'd say a job waiting tables in Montana probably leaves you with the same amount of take home pay and more time to spend with your family. Bottom line, if you aren't pulling at least six-figs here...leave.

As for "who buys?" in this environment, I can give you one example. I desperately urged my best friend to sell his house and get out before the RE market crashed, which he finally did in November. He moved his wife and daughter into a nice SFR in the same area. No problem, he's golden right?

Well his $400 gucci bag buying wife started whining about wanting to "own" their house. I sent him listings of gorgeous rentals and told him to move into one and tell her to STFU for a couple of years, but of course she (and a bunch of delusional RE agents) finally badgered him into buying a house that had been purchased for $800K in 2005 and was now offered for $625K. That was last month. According to this thread, he probably lost $3,500 last week alone. I just checked and for the same amount of money they could have just moved into the Ritz-Carlton Laguna Beach for the next year or two and still come out ahead. Instead, they live in a 3+2 in Long Beach.

Be careful who you marry boys. You might wind up catching a falling knife.

[sfvrealestate]

--Housing prices are still more than two and a half times the cost of renting in most of L.A--

SRLA, I'm curious as to what numbers you're using? Here in the SFV, a 2+1 house in a decent neighborhood rents for $1500 to $2300. A mortgage for same is $2000 - $3000/mo.

[markl]

Peter,can we finally get what the real peak median price is?In this article you say 580k in april 2006 but the last few weeks you have stated in other posts/articles it was 550k in august 2007.Which is it please?

[peteviles]

markl writes, "Peter,can we finally get what the real peak median price is?In this article you say 580k in april 2006 but the last few weeks you have stated in other posts/articles it was 550k in august 2007.Which is it please?"

Thanks, mark. Sorry to confuse you. Let me un-confuse you.
Median LISTING prices in greater L.A. peaked at $579,666 in April 2006, according to Housing Tracker.
Median SALES prices in L.A. County peaked at $550,000 in August 2007, according to DataQuick.
Two different statistics produced by different organizations using different methods and measuring different areas.

[m]

while I whole heartedly agree with most comments on this blog, I take issue with the insistence that women/wives are causng so many men to buy houses. I am not bashing men, but please stop blaming women for the current problems. If a man bought a house because his wife wanted him to, then possibly the marriage was not in the best shape before the purchase (i.e. a joined effort).

[DF]

This is always good information to have, but it's also deceptive because it's not uniformly distributed. The outlying areas of greater LA are getting crushed, while the traditionally desirable areas like Santa Monica or WeHo are staying steady.

For example, I happened by an open house near where I live (a lovely place you can check out here: 1914catalina.com). It's a gorgeously done old-style CA bungalow on a large-ish lot. Sold for around $500k in 2002, asking $1.08m in 2008. I suggested this might be a bit rich to the realtor, in light of the housing decline, and he responded that his sector of the market (high-end properties in Los Feliz) were still going up and were unaffected by the downturn.

Obviously this point needs to be taken with an entire shaker of salt considering the source, but it does seem that there's been very little downward pressure on higher-end property in desirable areas within LA itself. What does this mean? That the only deals caused by the housing downturn will be on outlying and/or lower-priced properties? Or that the crash has yet to affect higher-end properties? If anyone has thoughts, I'd love to hear them. Thx.

[Roger Moore]

"Median LISTING prices in greater L.A. peaked at $579,666 in April 2006, according to Housing Tracker." --peterviles

Actually, Peter, the Housing Tracker stats are for LA county only. If you look at the fine print, they say that the figures you're quoting are for "The Los Angeles-Long Beach-Glendale Metropolitan Division of the Los Angeles-Long Beach-Santa Ana Metropolitan Statistical Area". That's census speak for LA county.

That's why Housing Tracker has separate listings for Orange County (17,198 listings, $549,000 median price, +17.5% and -15.5% respectively) and Riverside (also include San Bernardino, 49,206, $320,000, +14.9%, -23.6%). Obviously the numbers can't be for Greater LA, since there are more listed in the Inland Empire than the figure you're quoting.

[eprobert]

SFVRealestate - I'd love to know where these $2000 a month (purchased) houses are. I've been looking for one for a while!

$2000 month X12 months = $24,000 per year, interest-only that's a $300,000-ish house. Add in RE taxes and you're at $260,000, but to give you the benefit of the doubt we'll assume the taxes will be a wash, so we're back at $300,000.

Where does one find a 2+1 in the SFV for $300,000? Or even $330,000 with a 10% down payment (which is about 3x the median 1st-time buyer down payment according to the CAR and NAR)?

[ILuvLA]

The inventory figures are now suffering the same problem that commonly appears in unemployment figures: discouraged sellers.

Unemployment figures don't count "discouraged workers," people who have given up and are no longer seeking work. Similarly, some would-be sellers are pulling their houses of the market because they either can't get the price they want or need, or because their houses languished on the market for so long.

This is depressing inventory, which is actually good for housing prices in the short term. In the longer term it means that there's a constant "reserve" of sellable houses to keep the inventory steady (and fairly high).

On the question of why the 75th percentile might be rising: keep in mind that the various weaknesses in the housing market are not evenly distributed, either geographically or by price. We all know that things out in Riverside county or up in Palmdale are really bad. West L.A. may not be great, but it's not at all the same situation (insert standard disclaimer about mortgages coming home to roost). So, yes, it's possible for that 75th percentile to blip up while most of the rest of the market continues to be in trouble. There's also a pickiness factor among buyers now, who just aren't in the "Buy anything, it doesn't matter what flaws it has!" mindset.

[TheHiddenCosts]

sfvrealestate, don't forget that renters don't pay for property taxes, maintenance and upkeep, homeowners insurance and in some cases utilities. I know that doesn't account for all the difference between you and SRLA (OK, renters don't get the tax deduction for mortgage interest and property taxes which further muddies the waters here), but I'm guessing that SRLA isn't comparing apples to apples - most rentals in the city are apartments, not houses. If a two-bedroom apartment ends up costing 1.5 to 2 times less than a 2-bedroom house in the same neighborhood, I can understand why many people would choose to, or have to rent rather than pay that kind of a premium for the house.

But shouldn't there be a premium (even a slight one) for home ownership over renting? I don't buy into the idea that house prices have to be equal to rental costs, they just have to be close enough that people who are renting see the long-term value of buying a house (or condo) AND they can afford to make the jump. We're obviously not there right now.

The knife is falling but it's still too high for for anyone making under 100k to worry about catching it. If they all followed Truth2Pwr's advice and moved to Montana to wait tables, we'd lose most of our police officers, firefighters, teachers, office workers, recent college grads and pretty much the majority of the work force in the city. Yeah that sounds like a great idea, they should all leave.

[GDC]

Truth2Pwr:

$400 Gucci bag? I wish I had married such a frugal wife.

[tew]

Seems odd that prices are only down 15% from the peak at this point. In reality in many LA markets prices are down much more than that.