Flat, flat, flat, flat: Listing prices unchanged, again

No names will be mentioned, Keith, but a certain commenter (Keith) mocked and ridiculed me a week ago for suggesting that the decline in listing prices may have stalled.

Update: Median listing prices were flat again in greater L.A. over the last week, holding steady at $450,000 for the fourth week in a row, according to Housing Tracker's analysis of MLS listings. Inventory of unsold houses and condos was also essentially flat.

Regardless of whether prices have reached a bottom, a temporary bottom, or none of the above, there is a clear trend here: inventory is not building.  I'd love to hear your interpretations of that trend.

The numbers:
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%)
3/08               $464,900 (down 15.5%)               42,098 (Up 31.4%)
3/31/08         $459,900 (down 16.2%)               42,038 (Up 27.6%)
4/7/08           $455,000 (down 16.7%)                42,482 (Up 23.3%)
4/14/08         $450,000 (down 17.4%)                42,428 (Up 19.6%)
4/21/08         $450,000 (down 17.4%)                42,430 (up 16.7%)
4/28/08         $450,000 (down 17.4%)                42,728 (up 14.4%)
5/5/08           $450,000 (down 17.4%)              42,647 (up 13.7%)

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: Getty Images

Comments

[E]

Nobody is asking for a house for free Shockg.

We're just not going to buy a house from somebody for 1.25X (or more) when that house was purchased in 2005-2007 for X.

[left of lefty]

Doug wrote:

"As would-be buyers learn that short sales involve long waits for a very uncertain lender approval, some will focus exclusively on non-short sale properties."

that's a very good point! short sales are listed in the inventory, but are not 'saleable.' they're like homes with too-lofty listing prices. many buyers just don't bother.

so the 'real' inventory is composed of only 1) those with equity, and 2) reos.

unfortunately it's hard to quantify short sales and reos from the mls data, since not all are flagged as such. the rise in short sale listings corresponds to the rise in reos. while we can get public data on the number of reos, there's no such data for the number of short sale listings. so it's hard to determine whether the saleable inventory is actually rising, dropping, or staying steady.

anecdotally, bidding wars are becoming more common, while they were unheard of at the beginning of the year. so i think your assessment of more buyers chasing after fewer saleable properties, thus holding up pricing, is probably legitimate.

[Tim Hebb]

The arrested climb in inventory and stalled list prices, I'd guess, are reflections of a "deer-in-the-headlights" paralysis of the market. Sellers are feeling in unison a jolt of cold electricity from their first true perception of the beast bearing down on them - and their utter helplessness to escape it. Submission, either by pulling properties off the market or by succumbing to dramatic price cuts, is the next step in the psychological progression. The next round of price cuts will be more than large enough to make up for the temporary hesitation.

[firesale]

Peter, if you believe this bleep, it's a great time to buy...
let us know how your house hunting turns out.

[Michael T]

I just think it's a case where sellers who don't HAVE to sell are battening down the hatches and trying to wait the market out. After all, your house only sells at a loss if you sell it. I have also noticed some recent sales activity on short sale homes in my area, indicating that investors think there might be some decent values out there. I myself haven't pulled the trigger yet, but I've considered it. Houses in the Inland Empire are getting low enough that you can pay the mortgage plus taxes and insurance on what you can get in rent. That seems to say opportunity to me.

[sandiegan]

San Diego median is up for the first time in a long time according to Housingtracker this week.

4/28/08 $418K
5/5/08 $419K

Woo-hoo!

Okay. It's just a grand. But better than dropping another grand.

http://www.housingtracker.net/askingprices/
California/SanDiego-Carlsbad-SanMarcos/

[l.a.guy]

It would be interesting to see what the average house is selling for.

As one who fanatically follows the Sherman Oaks/Studio City/Toluca Lake area, I see a lot of listings where the sellers are not publicly dropping the asking price because they know they're going to get hammered on the price when (if) they get an offer. So why keep dropping the asking price when that becomes the starting point for the "big discount". Psychologically I think most buyers are expecting at least 5-10% off of the asking price. Right now a good asking price is one that doesn't scare off potential buyers.

[JW]

Listing prices have stalled in L.A. because many of the sellers believe the propaganda that the real estate industry is spewing about how the housing market has turned the corner. The truth will reveal itself soon enough when their homes don't sell and then acceptance and desperation will begin to set in. Then, there's that persistent problem of a buyer qualifying for a loan, getting an appraisal for their overpriced property and closing the deal. It ain't gonna be a pretty sight.

[yourkillingmelarry]

Peter,

bubbletracking did an excellent post addressing the flattening out of inventoory. It may be worthy of a post

ttp://tinyurl.com/6hh5zh

"Despite having 9 NOD filings within a week in the 92127 zipcode, only two of these homes are on the MLS. This fits with what we are seeing with our foreclosure/pre-foreclosure tracking data as well as our inventory tracking data. In short, the distress is increasing, but the distressed owners are not listing.

Market psychology is a very important factor. Here we have 7 out of 9 distressed homeowners simply giving up and just letting the clock run its course, what does that say about the seller psychology? More impressively, of the 5 homes owned by REALTORS®, only 2 out of 5 are bothering with a listing. If even the cheerleaders are tossing away their pom poms, oh boy..."

[Kathy]

Was it Robert Schiller or Christopher Thornberg who said listing prices could stay flat for years and still have a significant impact because of inflation? Still, it's hard to see how a stalemate could persist at these price levels; at some point people need to buy, rent or move out of town. If rents keep going up, there's little incentive to stick around, if you can leave.

[puckhead]

I agree with Peter. The most surprising thing about the stats is not the selling price because I think everyone is agreement that prices will continue to go down, but that the inventory levels are flat. We’re being inundated with stories about whole neighborhoods turning into ghost towns and of how everyone is walking away from their loans. If this is the case, why not a continual build up of inventory? They only thing I can think of is that the RE environment is toxic now that the only people listing their houses are the only ones that absolutely have to move. Whether it be financial reasons or job change. We’re not getting people who would “like” to move to a larger house because they see little hope in selling their current home, so they stay put instead. If that’s the case, then maybe it’s a good thing. It’s always good for the neighborhoods if people stay and put down some roots instead of jumping every few years

[El Guapo]

I think it's a function of product mix. It would make sense that there is some upward pressure on listing prices as Alt A loans come back on the market. Alt A loans are bigger than subprime and therefore, the market will have more "higher end" homes in the mix.

A similar statistical quirk happened last spring when jumbo financing tightened. Prices were falling, but it wasn't reflected in the median because the subprime was suppressed and the high end was still moving. Once the high end felt the same pain in financing, we saw back to back months of $25K median price drops. It was quite dramatic, but in actuality had been dropping for some time (just masked by the shift in product mix).

So.....we may even see a period where prices go up for a little while. But that will be a mirage.

[Valley Observer]

It may be that the number of listings isn't increasing. But I often drive off the main streets around my Lake Balboa neighborhood to see what's going on, and there are more and more abandoned or unoccupied or unmaintained houses that look like they will be listed some day.

These are concentrated in the less expensive micro-neighborhoods -- the Valley is a mosaic of little neighborhoods, many no more than 1/4 mile on a side. In one location I see lots 12,000 sq ft and up, larger houses (even if originally only 50s tract houses), with hardly any for sale or abandoned. Nearby it's 5,000 sq ft lots, smaller houses, and ~5% with a for sale sign, ~10% unoccupied.

[NoWayinLA]

This is the season where home-buying should heat up, but the dead cat didn't even bounce. He must have gotten caught on a hook or something.

[heyjoe]

Real Estate 101: look at the rents. If you can rent the house next door for less, then why buy the house for sale? The house you live in, is not an investment. It is a box. You won't be able to retire by selling your box. Smart people, who invest in property are waiting for prices to fall, so they can rent the houses out, and still have money (profit) left over. The house I currently rent would cost me an additional 2K per month if I were to buy it. Why the hell would I give 2K a month to the bank, when I can save that money and still live in the house? If your Realtor is so confident that now is the time to buy, ask them to sign an agreement to repay you any equity you lose in the first year as a result of falling prices. They should sign it without hesitation if things are so rosy.

[Laker]

Peter, you mentioned seasonality in inventory trends many many times, yet now, you claim that inventory is flat or decreasing. If you want true number look at Year Over Year numbers to cancel the seasonality affect.
Based on the numbers from housing tracker and your post:

4/06 $579,666 27,251
4/07 $545,000 35,489
4/08 $450,000 (down 17.4%) 42,728 (up 14.4%)
So inventory is 27251, 35489, 42728.

Yes peter, inventory is decreasing.....LOL
There are so many properties that are been pulled from the MLS with the hope of market change in a month or two. Also, i know at least 5 houses just in one zip code that are now REO but the bank does not list them for sale....my guess is that they are so busy that they can't find the time to do that...I don't think the banks are waiting for market recovery soon. And banks are not in the business of holding houses but more like lending money and collecting payments.

As Cal said, you shockg really reached a new low bottom.

[peteviles]

Laker - Thanks as always. The point I would make in response: In February, inventory was running 38% ahead of year-ago levels; now it is running 13% ahead of last year's levels. I stand by what I wrote: inventory is not building.

Don't get me wrong -- I'm not saying this is the bottom, or that the lack of inventory growth is a sign of the market stabilizing -- I don't believe either of those things.

[John T Watts]

Buyers, just know that there are people out there who absolutely must sell and they will accept a much lower offer. It's all about motivation. But you have to get out there and look for them. Don't wait until it is a sellers market again. That time will come.

[Rich]

I'll cast my vote with those who are saying that "flat" is this year's Spring "bounce"; I think seasonal buying may be temporarily holding prices against inventory. It isn't a very good sign for later, however. When I sold a condo in my right-coast fair-priced market this Winter I saw signs of pent-up demand and Ithought there would be a healthy Spring buying season here even if your California market was still hurting, but the disarray of the lending market is killing the Spring season even here, where our median house prices slipped from $285k to $265k. Prices like that in California would cause a stampede, but if first time buyers can't get a loan anywhere then it doesn't matter what the price is...

[kosher krab]

As someone with a house for sale I can say that we haven't dropped the price (again) this month b/c there has been a real uptick in interest lately.

[shockg]

"As Cal said, you shockg really reached a new low bottom."

No laker, After looking at your one-sided steaming pile of feces of a "Bubble Blog" I realized that you are completely investing in this housing crash hysteria. Do you expect anyone to view your opinions as balanced when you operate a fantasy blog? You spend all day CHERRY PICKING listings that fit your narrow minded agenda. So lets see, you "shorted" your families home in anticipation of a huge payday. You operate a fantasy blog of cherry picked listings. You pollute other housing blogs with your doom and gloom agenda and you are a greedy, arrogant, entitled SOB. Yeah real credible.

[Eddie of Long Beach]

jeez, just do a seasonal adjustment so we can see really see the trend from the norm. You see the historical uptick come spring time right?!? We see it every year..so this year the downward pressure has flattened it out..its not rocket science. Just adjust those listing prices for seasonal variations (ie subtract out the period 1 year data from the time history of prices) and then you can have a worthwhile look at things..

[Laker]

shockg,
Out of respect to the blog, the readers, and Peter, i would now answer your personal attack and say what i think about you.
However to the point,
"....one-sided steaming pile of feces of a "Bubble Blog".... investing in this housing crash hysteria...opinions as balanced when you operate a fantasy blog....spend all day CHERRY PICKING listings that fit your narrow minded agenda......pollute other housing blogs with your doom and gloom agenda...."

1) I happen to check the market and the available listings couple of hours a week. I definitely do not have to time to spend ALL day doing that.
2) I don't think it is one sided. You are welcome to show me listings that prove the other way. Show me houses that are today selling for more than 2006 prices that are in the normal pricing range of up to $1.5 million
3) I agree that some of the houses i find and post on my blog could be described as pile of feces...AGREE.
4) From your hysteria about me having a bubble blog, I assume you still in denial of any housing bubble...right?
5) I might not be 100% balanced, but sure I'm "more" balanced that you. Your agenda is sure wide and balanced... The only crazier person on this blog is lefty. But i give him a break since he is not real...
6) I don't think I pollute this blog with my doom and gloom agenda. I just try to bring FACTS and information that i find useful for the other bloggers/readers. I think that YOUR agenda is doom and gloom. You and people like you have created this ponzi scheme and housing crisis from 2001-2007...Now we are actually in the period of fixing it.

I really feel sorry for you on losing your house or other investment houses to foreclosure. I 'm sorry you can't flip right now...and really sorry that you have no other abilities to make money and find a real job.
Maybe you should go to school and learn some trade/skills?

[keith]

Hey! There are two different "keith" 's on this blog. I am innocent of all charges.

[shockg]

"You and people like you have created this ponzi scheme and housing crisis from 2001-2007...Now we are actually in the period of fixing it."

Laker, don't play the victim. If you really sold your home at the peak and moved your family to a rental you actually helped set the inflated comps. You had your hand in this from the start. Now you need prices to crash so you can buy back in. So thats what i mean when you are 100% invested in this housing crash. I have a well paying job and would never play Vegas with my primary residence. I bet your wife left you for being so greedy and selfish. And operating a bogus bubble blog doesnt give you credibility. You call people flippers when in reality thats what you are. You obviously need instant equity once you buy. You sir are one desperate person. Keep trying to talk down the market.