40% year-over-year price declines in some L.A. ZIPs

Bookmark this link: It lets you look up median sales prices and year-over-year percentage change by ZIP Code in Southern California.

I ran some numbers on ZIP Codes with the biggest year-over-year declines in median price paid. Here's a partial list of the 40%-and-more club:

ZIP Code  Location          May '07     May '08       % change
90059      Los Angeles      $410,000   $197,500       -51.8%
90002      Los Angeles      $400,363   $207,500       -48.2%
93550      Palmdale          $315,000   $170,000       -46.0%
90222      Compton          $360,000   $200,000       -44.4%
90534      Lancaster         $275,000   $154,750       -43.7%
90041      Los Angeles      $670,000   $377,000       -43.7%
91040      Sunland            $680,000   $386,000       -43.2%
91042      Tujunga           $619,000   $355,000       -42.6%

Source: DataQuick Information Systems

Caveat: A lack of market activity, or a change in the composition of homes sold, in a single month sometimes leads to wide fluctuations in median sales prices.

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

Comments

[Ed]

Seems like according to your Data, west LA is still going up

90069
May 2007 May 2008 Change
$1,670,000 $3,325,000 99.1%

90405
May 2007 May 2008 Change
$1,275,000 $1,490,000 16.9%

90034
May 2007 May 2008 Change
$775,000 $810,000 4.5%

[shockg]

So Peter, your saying these ghettos are skewing the overall median? Thanks for confirming.

[IToldu2CashOut]

Whats interesting is that we're probably only half way there. More foreclosures, more ARM resets, raising interest rates, income verification will continue to put downward pressure on prices.

Its interesting, talking to a co-worker this morning who bought in '99 seemed unaware that his home had lost any value in the last two years. I didn't bother to tell him that his house is probably worth 40% less than what he thinks and its only going to get worse. Future sellers are going to have an even ruder awakening.

[RZ]

Sure these house prices are down over the last year...BUT they are still way, way higher than they were in 2000. Until they drop down further, it's not much of a story to me.

[Ryan]

91103 Pasadena -65%
91106 Pasadena +18.5%

I think the note about market activity or composition is rining true in both these cases.

[Cal]

Its funny, people were in denial because the median kept on going up even after it was painfully clear the median was only rising because the low end was eviscerated.

Now that the low end sales are recovering a bit and high end sales are stalled, people are realizing the issue because their precious median has fallen.

Median price (by itself) is a horrible indicator of value. But people take it as gospel.

The mid to high end is now hurting and is in the same denial that people were in last year about the low end. The people on the high end have the same choice as the people on the low end did... either sell at a lower price or chose to stay and live in the home. Having more money will allow people to denial reality longer.. but it doesn't change reality one bit.

[puckhead]

IToldu2cashout,

If your friend bought in 99 and did not take any money out of his house and does not plan to move anytime soon, why would he care that the price of his house is down the last two years? Not everyone is obsessed with the value of their house month by month.

[MyLessThanPrimeBeef]

This is like Douglas MacArthur's famous leap-frogging strategy he used in the Second World War against the Imperial Japanese Army - he took the easy, weak objectivs, bypassing the stronger islands, but eventually, without the support fromt the weak places, the stronger ones gave in as well.

[puckhead]

Ryan,

Both of these zip codes are in Pasadena but are as different as night and day. Parts of 91106 borders San Marino and is higher income and has some very nice houses on large lots. The other part of 91106 is East of Lake and that area is generally very nice. Some parts of 91103 are nice, but that zip also includes NW Pasadena which is no better than South LA. There are lots of lower income and foreclosures in 91103.

[gotforeclosure]

The median home price is notoriously bad for gauging anything but the most overall tendencies. The smaller the sample (e.g. zip code vs. county) the less useful are the comparative results. Because you never know HOW MANY sales are being compared (on both sides of the year-over-year numbers), and what the "median size" of the sample is.

In most zip codes this is literally comparing the average price of MANY APPLES that sold in one year with the price of A FEW ORANGES that sold in the next.

CHeers!

[Nelcisco]

that noth'in shockg, wait till the ghettos get down to $70k, $200 in Compton is still waaay too much

[westside renter]

Based on the link above:

90025 (Westwood S. of SM Blvd and WLA) - down 9.4%
90064 (Rancho and Cheviot) - down 14.8%
90024 (Westwood N. of SM Blvd) - No info (presumably not enough sales)

The westside is DEFINITELY falling too, just not as much as Inland Empire. I'm willing to wait a year or two to see if we catch up. If Dataquick is saying the slow high end sales doesn't bode well for prices in those areas, then you KNOW it must be bad.

[Tim K.]

Pasadena:

91107: -7.8%
91104: -26.1%

Points well taken about 91103 and 91106, but I think a better representative of Pasadena Single Family Homes is 91107 and 91104. 91107 is a pretty large area that has the nice Hastings Ranch area as well as some cheaper, dumpier homes on the east end of Pasadena south of the 210 freeway. It's not ghetto like NW pasadena in 91103, but it's not super nice either. 91104 is a good central swath of Pasadena north of the 210 freeway that avoids both the high end areas as well as the true dumps.

But to solidify the numbers, I've been examining individual homes in 91107, 91103, 91104, 91106 and 91105 and I've seen the EXACT SAME HOMES sell in 2004-2006 sell for 15-35% less in April-May 2008.

So I can say although you like to discount the median on the way up and on the way down, IMO it is still a good indicator and the proof is that single family homes that I would like to live in (1500-2500 sq ft) ARE DROPPING IN PRICE, CASE CLOSED.

[catfish]

90041 is Eagle Rock, hardly a ghetto shockg.

[IToldu2CashOut]

Puckhead,

He probably wouldn't care. Because he bought in 99 his mortgage payments are probably lower than most people's rent. Although I do not think it is as simple as brushing it off by saying "value month to month". In his case he probably believes his home is worth around 500k or more when in reality it is probably going to be worth around 200k in a few years and stay there for many more years. This is going to come as a shock to people not following the news/market when they try to sell. I would agree though he shouldn't really care. Those gains he thought he had were imaginary so he shouldn't care about losing them. They will be real like thirty years from now though, so he has something to look forward to.

[Laker]

shockg,
check out Tarzana 91356 ghetto down 30%
check out Woodland Hills 91364 ghetto down 23%

Median price only shows current trend not actual price. Prices are very much local, but the direction is global.
You can't deny that the market is 20% down YoY on average...

[bum]

I'm out.

For at least a year anyway. I just took my downpayment and purchased a CD that won't mature for a year. I just don't want to buy and see that investment decrease in value by another 27% and then be stuck. It's not about affordability anymore, it's about my freedom!

[Cal]

There is a mortgage application index called "theMax" (no link) which shows deduped mortgage applications and breaks out California specifically. The person who writes that report is predicting that California sales have probably already peaked for the year based on the number of mortgage applications he is seeing. With closings taking longer and nobody measuring the number of properties falling out of escrow it is hard to say whether he is right or not but is is an interesting theory. What if that was it for the big spring surge?

[Housing Prices]

Help me.

I've fallen and I can't get up.

[desmo]

Bum, you did the right thing...

I just took my downpayment and purchased a CD that won't mature for a year. I just don't want to buy and see that investment decrease in value by another 27% and then be stuck.

Not only will you save the 27% (probably a lot more), gain a few % on the CD, but if you buy close to the bottom, you will gain the small appreciation (if any) on the house purchase. Great job, and don't be in a hurry to buy.

[neko30]

i'm tracking prices in the atwater area and found this:

90039: LOS ANGELES
Median sale price
May 2007 May 2008 Change
$619,000 $983,000 58.8%

Number of transactions
May 2007 May 2008 Change
12 15 25.0%

any thoughts on this contradiction to the recent trends?

[Mike G]

I think that you see different reasons for these particular declines.

For Watts (90059 and 90002) the incomes are quite low. The census has median family income at $24k in 2000 with a 35% poverty rate. Also, many are immigrants, who are less likely to stick around during an economic downturn. With the construction industry hurting and with strong ties to other regions, there is no incentive for them to stick around here and pay on an upside down house.

Compton (90222) has more solid household income, $38k. This is closer to the number for California as a whole, at $44k. Plus, the housing stock is much nicer.
Housing is closer to its fundamentally stable price than Watts.

Palmdale (93550) and Lancaster (93534) has more to do with its high availability of new mini-mcmansion style housing. The older 1950s/1960s houses can't compete, and people are dumping them right and left. The gas prices are scaring the "drive until you qualify" buyers. Compare than to 93536 which is new mini-mcmansion construction and holding up a little better.

[l.a.guy]

There's no denying the overall direction of housing prices, but some of these stats can be misleading.

In this case it is just a YOY comparison of what the median price is for a zip code. It could be that the high end properties are not selling, or their owners are choosing not to sale, and so predominantly lower end houses are selling, and are bringing the median price waaaay down. Unless the price comparisons are for the same set of properties I'm not sure how valuable the information is. But I don't doubt prices have fallen and will continue to do so.

[Dean Ross]

I'm loving all this. Watch'in people lose there houses. They took the chance and lost. Of course their not responsible. Some one else is, of course. I'm cleaning up on short sales and foreclosure bus tours. Yea, yea, yea. I love it............Dean

[el guapo]

Ed,

You left out the real story here. If you can cherry pick a few zips where prices are rising on the west side, you should also look at the volume. That's the leading indicator. Zip codes that are doing any volume are seeing serious price cuts. The zip codes in denial will come around as nothing is selling (Option ARM time bomb). To wit:

The three zips you referenced are:

90069 down 55.6% in volume (18 to 6)
90405 down 53.3% in volume (15 to 7)
90034 down 6.3% in volume (16 to 15)

Out of the 3 zips you used to make your case, only one isn't slowing down appreciably in volume. Of course, price was only up 4.5%. In the face of mountains of evidence to the contrary, this isn't going to sway anyone. Might make Shockg and Lefty feel better, but that's it.

[Jack]

Here's where boots on the ground can give you more info than just looking at stats, and here's where median stats sometimes can be misleading. The median price in Sunland was skewed way up in May '07 because of one small tract of homes priced far above the typical Sunland listing (notice only 14 properties closed in that month).

About 98 percent of homes in Sunland run around 1.5K to 2K square feet. They were closing in May '07 for an average of about $520K per MLS records. So the actual drop for a "typical" Sunland home was about 26 percent, not 43 percent. Still painful, but not as painful as the somewhat misleading median suggests.

(I'm still glad I sold my Sunland home in 2007, tho!)

[Dan]

Anyone knows how can I find L.A. Times' listing of housing price by zip code? I think it goes by county and periodically appears in Sunday's Real Estate section. Anyone knows the link?

[Domino]

Falling house prices are like a lot of wildfires - they start in the East and spread Westwards. Rising prices travel in the opposite deirection (people priced out of the West move East).
Mediocre areas adjacent to these ZIPs will feel downward pressure which in time will export downward pressure to the truly desirable areas.
The dominos are falling!

[Housing Bull Chorus]

If you fear mongering racist renters would have kept your negative opinions to yourself those numbers would have been UP 50% instead of down.

Are you happy now? Look what you bloggers have done to housing values. The price of gas probably wouldn't be so high if that nasty, evil, mean Pete Viles hadn't blogged about it.

You had better not start talking about my neighborhood because if you bring values down there I'm really going to be pissed.

[Michael Snyder]

Housing Bull Choirs,
I always love anonymous threats placed by miss informed cowards. If this humble bunch of bloggers had the ability to manipulate the housing market my business would be in much better shape. But alas, we to are subject to the machinations of those "well above our pay grade" who actually control the "cash taps" that govern this market.
By the way, where do you live? I'd be really interested in the opinions of the dozens of well informed folks participating here with regard to your little slice of the American dream.

[Patient)vulture]

"I'm tracking prices in the atwater area and found this:

90039: LOS ANGELES
Median sale price
May 2007 May 2008 Change
$619,000 $983,000 58.8%

Number of transactions
May 2007 May 2008 Change
12 15 25.0%

any thoughts on this contradiction to the recent trends?"

--------------
There's something wrong with the LA times formula. Data quick shows -29% decline for 90039 from April 07 to April 08, with 15 transactions.

http://www.dqnews.com/Charts/Monthly-Charts/
LA-Times-Charts/ZIPLAT.aspx

[Housing Bull Chorus]

l.a. guy

What are you smoking?

The "high end" houses aren't selling therefore skewing the sales mix?

Since when did any of these places have "high end houses"?

Yeah...let me get one of them "High End" Compton Crack Houses!

[xtine]

HOUSING BULL - We WANT the prices to go down so we can buy something.

Can you recommend another blog where I can make bearish comments? Because by pissing off you ARM-buying-no-downpayment-making-foreclosing-getting-in-over-your-head-risk-takers I can give my children a backyard.

Unless you're joking. And I can't tell if you are. But IF you are....haha. Good one.

[arroyogrande]

"Anyone knows how can I find L.A. Times' listing of housing price by zip code"

Do you mean this?

http://www.dqnews.com/Charts/Monthly-Charts/LA-Times-Charts/ZIPLAT.aspx

(DQ News LA Times SOUTHERN CALIFORNIA HOME RESALE ACTIVITY)

- arroyogrande

[tarbubble]

pssst.... i think housing bull chorus is being sarcastic.

[Marina]

Yes, most definitely: Housing Bull Chorus is sarcastic.
Gave me a good chuckle when I read it.

[RO]

So South Pas saw a 17% decline and La Canada 35%. San Marino saw a 40% increase. Something is wrong with the numbers. I haven't seen swings this extreme in any of these neighborhoods.

[Dan]

Thanks, ArroyoGrande for your help!

[xtine]

Of course - housing bull was being sarcastic.
I must have been in a super-literal mood yesterday.

[Bonaficio de Brentwood]

Personally, I can't imagine seeing Eagle Rock (90041) declining in such value before other less sought after areas.

These numbers seem a bit inaccurate.

Is there a better source for real estate numbers?