L.A. listing prices take a tiny step lower

Listing prices in Greater Los Angeles slipped by a statistically insignificant $100 over the last week, according to Housing Tracker's weekly analysis of MLS listings.  (Oddly enough, this is exactly what I predicted on the blog earlier today. Pure dumb luck, trust me.)

The trend this spring is clear: Listing prices have been flat and inventory of homes and condos for sale has also been flat, consistent with a listless market that is neither deteriorating nor showing signs of life.

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%)
4/08               $450,000 (down 17.4%)               42,430 (up 16.7%)
5/5/08           $450,000 (down 17.4%)                42,647 (up 13.7%)
5/12/08         $449,900 (down 17.4%)                42,532 (up 11.1%)

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

Comments

[jb]

No change is the same as a drop during the spring bounce.

[John]

Statistically insignificant, but HUGELY significant psychologically.

The median home price is now below $450k, so now I'd bet we'll see a pretty quick drop to the next sticking point of $425k.

[shockg]

Inventory slowly going down. Prices flat flat flat. Read Lakers damage control below.

[Fred]

Just you wait, Peter. This summer and fall will be incredibly ugly.

[Laker]

Thanks shockg for calming us down....and only down we shell go from here...
The only damage control is being done (poorly i must say) by you and on rare occasion by lefty.
see you at the bottom...pal.

[Ace]

Measuring inventory as a raw number is not a very accurate way to measure it. Most housing economists measure inventory by how many months of inventory are on the market.

As of April 08, there is 14.5 months of inventory on the market at the current sales rate (2918 houses sold in April and 42,430 on the market).

As of April 07, there was 6.9 months of inventory on the market (5096 houses sold versus 35,489 available).

I think that it is more accurate to say that there is twice as much inventory (14.5 month supply versus 6.9 month supply) than to say that inventory is up 16.7 percent as a raw number.

[tealeaf]

shockg:

inventory is up substantially over last year. all leading indicators, including housing starts and mortgage apps, are looking pitiful.

talk to lereah...

there is no damage control. this is a completely lifeless market, with sellers doing all the scrambling and/or giving up in frustration.

please check back in with reality, we're all waiting for you.

[peter m]

It will be a stagnant spring and summer for sales in the pricy parts of LA followed by a catastrophic drop this fall and winter. Those resets of alt-a combined with continued subprime metdown will reach a critcal mass from now till 2009. The housing bailout package will fail. Economy continues to plunge and CA UEmployment rate is racheting up. The outer exurbs and inner ghettoized areas are already in meltdown, and are working their way inexorably into the better areas.
Ca gov't is flat broke and pink slips given to gov't workers at all levels will have further neg impacts upon housing sales prices. Fed is really cracking down hard on illegals and many are also self-deporting which will reduce demand for lower end homes all over Scal.
The CC credit spigiot and house ATM is drying up with result that consumer spending & retail sales, the drivers of the US econmoy , are sputtering. Bammo, economy comes to a screeching halt, and in a feedback loop housing prices plunge further.
Add to all this the neg effects of $4.00 gas prices and 10 % inflation rate which is severly impacting consumer spending on dicretionaries.
There will of course be a tiny few wealthy investors and buyers who will prop up prices in a handful of westside zips but this effects but a tiny % of the LA population. The income and wealth disparity of LA is about the same now as the third world tinpot dictatorship countries, and the middle class and assorted businesses are fleeing LA & CA to escape confiscatory taxes, fees, and onerous anti-business regulations.

[E]

I suspect that we will continue to see some more downside which will finally have the people that bought 500k homes in 2001 realize that they aren't going to get 1.5-2M now.

If you bought a home in the early 2000's and "couldn't afford to buy it now" at the price that you are trying to sell it. ...doesn't that say something?

Not many others can afford it either....people don't *make* that much more now than they did then.

[waitingitout]

shockg,

prices have fallen twice as fast as inventory since February. I don't know what data you're looking at.

[pugtv]

ShockG,

So when you say "prices could still fall a bit", what is your definition of a bit? 1%, 5%, 10%, 20%?

Also, I suggest you let the "greedy" accusations go. We're all greedy. The people who speculated pre-bubble and the people who are speculating post bubble. There is nothing wrong with taking risks with greed in mind. Just don't complain when the bet goes sour.

[jesse]

To everyone and anyone--especially you Peter.

I am looking at this list intently and reading this blog religiously. I want to buy a house in a year.

I finally found a job. I am single. no debt. super cheap.
Have about 29K saved. And the job will pay 55K gross.

In my dreams, I want to buy a house in Pasadena.

It would be my first home purchase. Wish me luck. And any pointers, advice, throw them at me.

[Joseph]

Here's another, less-discussed reason why no L.A.-area neighborhood is immune from the faltering housng market and economy: with growing income disparity and collapsing neighborhoods, just watch the gang presence return to Venice, Santa Monica, and even nibble the edges of Westwood. Don't forget what happened in the early 90's (barricades in Westwood, riots in L.A.).

Fasten your seatbelts, folks. L.A.'s about to get interesting again.

[miguel]

jesse

go to www.naca.com, its a community development organization that gives 100%loans at lower than market interest. Its a wonderful program, but the lending limit will more than likely not get you into pasadena but, it may.

check it out.

ps. Im in the same boat but I have much more debt and much higher income and its working for me.

[Ragnar]

Good call on the $100 price drop, Peter. I saw your prediction on the "Ask Peter Vol. 3" thread last night.

I am in agreement with John that a median listing price under $450,000 is a significant psychological barrier to break.

[MyLessThanPrimeBeef]

I will be shocked, shocked, I tell you, if the Dutch will let you tell them that little Peter (different Peter) thought that little, tiny hole in the dyke was no big deal.

So, not only is small beautiful (I love that book), but small can also very significant. Now, don't all get chaotic on me now, but it only takes one flap of a butterfly's wings in Brazil to have a huge tornado in Texas. Remember that.

The way I see it, it may be just a tiny step downward by desparate flippers, but a huge leap forward for patient sideliners. At this moment, we are hearing the barrier of unsound lending crack, as the $450K resistance level begrudgingly gives away, and a brave new world dawns on mankind.

[MyLessThanPrimeBeef]

Jesse, I wish you and all of us here good luck.

Personally, I think the time to buy is when everyone avoids real estate like the plague. To pass time, I recommend The Money Pit with Tom Hanks and Shelly Long, or the reality show version of it starring the couple from Santa Cruz.

As for my dream, it is to have a yurt and a couple of Przewalsky's horses (if the zoning people would allow it) by the sea.

[MyLessThanPrimeBeef]

Ace, if you take involuntary sales, the number for April, 08 is more like 29 voluntary months of inventory, vs 7 voluntary months in April 07.

[Ryan]

Jesse, I think youll have to move to Midland Texas. You cant afford a house in Pasadena.

[eprobert]

Jesse - the bank will average 3 years' income when you apply for a loan so 1 year will be too soon for you unless you can work some magic with a subprime lender (very difficult right now).

That bit me in the a$$ in 2004 when I finished grad school.

[TakeFive]

"...and inventory of homes and condos for sale has also been flat..."

I think a stable number of listings on the MLS is misleading on the direction of the market.

Look at the REO pages for the banks. They are expanding week after week. What's odd is that the foreclosed properties drop off the REO list after about 30 days, but don't necessarily show up on MLS.

Another consideration is demographics, and the reason there’s a Walgreens, Rite Aid, or CVS on damn near every corner. A big chunk of the population is getting on in years. I’m seeing an increasing number of homes being sold because the resident has died or moved to a facility, rather than because of a job transfer or need of a bigger home.

Went to a couple of estate sales recently and spoke to the person running the sale. In both cases these were professional sales operations, rather than some relative – hence all the signs posted about sales tax being collected. I asked if they were doing a lot of these sales – both said they were extremely busy.

Kind of depressing though – seeing strangers picking through someone’s fathers day gift with the card from the kids still attached.

[TakeFive]

jesse wrote:

"Have about 29K saved. And the job will pay 55K gross.
In my dreams, I want to buy a house in Pasadena."

You can probably get into northwest Pasadena or West Altadena. I know - not the greatest area. But I spent a lot of time there without much trouble. Just stay away from Kings Village after dark.

Demographics are shifting from Black to Brown with a few White gentrification pioneers, if that's a consideration.

[Milla]

jesse -- check out highland park and other communities in Northeast LA, which is just west of South Pas, for greater affordability. check out CalHFA's first-time homebuyer program for down-payment assistance and 40-year loan options. good luck!

[Nelcisco]

In response to Jesse, stay in your job for 2 yrs. and try to go FHA, its a full doc loan that requires 2 yrs of W-2's, 3% down and buy the house with the intent of living in it, not as some hot stock that you can flip later.

For pugtv, although I agree that one should'nt complain when thing goes sour for taking risks, I have to disagree that there's nothing wrong with greed, investing as a way to improve your lifestyle monotarily is great, we all want that on different levels, but lets not confuse that with greed. Greed is the reason why we're in this crisis.

Great comment last night PeterM, my sentiments are the same, I've said for 3 years that the people who'll be able afford a house anywhere in L.A. at the rate it was going are 'A' list actors, sitcom stars, Lakers, Dodgers, Angles and Kings, middle class working people, in Compton, but what middle income responsible family man or woman 35k to 40k/yr want to raise a family in gang territory. FORGET IT!!!!

[CD]

Peter m is right all the way.