Big dip in listing prices: Down $6,500 in a week

Median listing prices in greater Los Angeles fell by $6,500 over the past week as lower-priced homes continue to dominate the market for both listings and sales, according to Housing Tracker's weekly analysis of MLS listings.

The numbers: Median listing price fell from $446,500 to $440,000 in the week ending Monday. Listing prices have fallen 11.8% in six months and 18.5% over the past year. Inventory of for-sale houses and condos remains fairly stable -- dipping slightly to 42,398, an increase of 4.0% over 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%)
3/08               $464,900 (down 15.5%)            42,098 (Up 31.4%)
4/08               $450,000 (down 17.4%)            42,430 (up 16.7%)
5/08               $449,900 (down 17.4%)            42,532 (up 11.1%)
 6/02/08         $446,500 (down 17.3%)            42,458 (up 4.9%)
6/09/08         $440,000 (down 18.5%)            42,398 (up 4.0%)

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

Comments

[Laker]

I wouldn't make such a big deal in the big dip of $6500 in only one week as i didn't think last month "flat" asking prices suggesting that market has stabilized. This curve or graph is going to have some spikes. in order to get any meaningful information from it, we need to smooth this curve and get the general shape.
Seeing that low end decreased the most, the median follows and the high end pretty much very slow to drop only suggest one thing. The whole housing market is decreasing in value. The median by itself is not a good metric to generalize (even though it is called median) It just suggests that the middle point of houses less expensive and more expensive. I've been monitoring the MLS and could see many new listings that are higher than $679,000 but they are not selling. The low end selling by much larger quantities. If/when the high end will start selling, we will see huge decrease in 75% percentile downwards, and that will signal capitulation. I don't see it happening at least before October or November.
Keep in mind what this foreclosure radar.com owner said about him stopping fro buying foreclosures....he stated that he does not want to catch falling knives. Since he got way more money than me, i trust that he is at least as smart as me if not smarter than me...
So I think i would follow his advice....will not catch falling knives. Will keep offering 2001 prices top!

[Fred]

And the worst is yet to come:

http://www.businessweek.com/lifestyle/
content/jun2008/bw2008065_526168.htm?ref=patrick.net

[MyLessThanPrimeBeef]

Perhaps Ed McMahon is doing his part to bring some sanity into this mad, mad, mad world, where the solution, the big M, is right there in front of everyone but no one can see it.

[IToldu2CashOut]

Take a look at Trulia and search for-sale homes in an area and then do another search for sold homes. You will see a crazy large gap between list prices and what is actually selling. There actually seems to be some descent prices out there for large homes, unfortunately most of them in gang territory, but at least some of the delusional listing prices are going away for some properties. I've seen what looks like very similar homes on the same block, one house is listed for 325k and another for 550k. In some cases the 325k house actually seems far superior. This is a crazy market now and theres only one direction prices are going: DOWN.

[Cal]

OT:
Wamu trying rescind sale of Richardson home.
http://www2.presstelegram.com/news/ci_9535752

Basically, James York is a small fry and would have to lay out a lot of money fighting this. Wamu is clearly doing political favors, I hope someone backs York with some pro bono work and drags this out for Richardson.

[Littleguy]

The story about L.Richardson is very interesting to say the least --what's really going on and how come it's not front page news?

[dwr]

Clearly we're at the bottom now, right Peter?

[Arti]

This is not even the beginning of the decline. Most of these were caused by marginal areas no one wants to live in anyway, the ghost towns outside LA's job markets. Santa Monica, Palisades, etc. haven't been touched at all. The high-end has 30-50% declines to go before we can begin to talk about bottoms. This is going to take another couple of years.

[Uncle Billy Glares At Mt. Pelerin]

MLTPB: What's the big "M"?

This just in: Lansner in OC reports that a company that tracks nationwide Axiometrics reports that rents are down 3% in OC. Axoiometrics says that they have more reliable reporting because they survey 100% of 12,000 properties and talk to the leasing agents instead of the owners/managers.

Weeeeell... might be a little more reliable, but you can't convince me that the agents don't put up a big front. The big complexes around us don't seem to be able to even afford the sign flippers anymore -- they just put up big signs that say 2 monts free rent and advertise their spaces of hundreds of dollars less on westside rentals.

So if they say 3%, I say you can nearly double that. People who work at DWP and other utilities... what are the real vacancy rates, please?

[tealeaf]

Arti: You're right. The westside areas haven't been "touched" at all - sales volumes are way off as noone wants to pay bubble prices.

Oh - did you check realtytrac? Quite a few NODs filed along our beloved sacred coast, right in SM and Palisades.

And so it begins...

[Robert in Palm Springs]

As you can see from the numbers, the median price keeps falling but inventory is not shrinking significantly. So, despite lower prices, we clearly have not found the bottom. In fact, I believe the real downturn is still ahead of us.

There is a strong correlation between the current housing cycle and the housing bust of the 1920s and 1930s. The housing boom started in 1920 and peaked in 1925. It declined until 1929 when, along with the stock market, it collapsed until 1932. The “recovery” took until the end of World War II (17 years).

Our stock market has not crashed yet, but it will, and that event will take housing with it. Do not expect prices to recover until some time in the very distant future, if at all. Economic imbalances, fiscal irresponsibility and greed still dominate the market. Confidence, patience, savings and rational thinking are in short supply. Everyone wants this to be over when the real fireworks haven’t even started yet.

In the PS area, realtors saw an increase in activity in April and May and declared it a trend. With foreclosures now selling, the volume has to go up somewhat, but it does not mean higher prices or that the market is turning higher. Look around. Thousands of acres have been destroyed for developments that probably won’t be finished for 10-20 years, if ever, causing huge sand storms along I-10 (not good for the paint job on your car). Finished projects sit empty. More and more homeless are on the streets and freeway exit ramps. Retail stores and restaurants are closing throughout the valley; I expect to see many more closing as the year goes on now that our tourist season is over.

Many developers and sellers refuse to see reality. With houses and townhouses listed for $700,000+, there are no buyers because they are still too expensive. Even at lower price points, it is a tough market. Our friend did sell his house after 2+ years. Originally listed @ $619,000, the house finally sold for $365,000, a 41% drop. This is what it takes to sell!

Hang on to your cash. Much lower prices are coming soon to a neighborhood near you!

[Uncle Billy Is Puzzled By Mt. Pelerin]

Let's look a couple of years out from now. Let's say we have hyperinflation. So maybe you'll need $1 Million to buy what you can buy today with $1. Let's say that wages keep up - same 1-1M ratio. Think about it... that half million dollar mortgage? 50 cents, baby! Trillion dollar trade deficit? Now worth $1 Million.

Now... take a look at these comments by Greenspan from a number of years ago (haven't verified them):

http://www.strike-the-root.com/51/smith/smith4.html

Never mind that this is taken from a goofy anarchocapitalist website. Pay attention to the fact that Greenspan is saying that we really don't know what money is anymore (But he probably does). If we don't know what it is, then we can't measure it. If we can't measure it, we can't measure inflation, and so on, right? (He also claims here that M3 doesn't measure money, only the expansion of banking).

The banks have the right idea here... don't own paper, own stuff. Paper seems to be losing its usefulness. (Yes, those little ones and zeros in the banks' computers too).

[shockg]

Gotta love the falling knife fear mongering commnets that gets thrown around these bubble blogs. That guy lost his credibilty when he said that. He reduced himself to the level of many here.

[tealeaf]

Let's see: trust an investor who has bought 140+ homes in the past 5 years who founded foreclosuretracker, or trust shockg's subjective "credibility" meter.

My money is on O'Toole, not O'Troll.

[Bob Warren]

Despite the slightly larger drop in prices, this still fits a linear declining function that accounts for over 98% of the variance (plotted in days since Jan 1 2007 to June 9, 2008). Assuming continuation of the linear trend, median list price should be $385,124.63 at year's end.

[lookout below]

SM and PP aren't touched at all? Where are you, Phoenix? Inventory is up 2-3x and pretty much the only things selling are those that you can move into right away AND big-time reduced / priced near 2004. If this ain't touched what is?

[BrantW]

"Let's say we have hyperinflation."

Lets say the toothfairly leaves me a million dollars in unmarked C-Notes.

When you have small or moderate debt levels, you can inflate them away. When you have massive debt levles, you can not.

WHY?

Easy, so much of our debt is shorter term, and has to be rolled over. This means infation can not get too far ahead of debt service. Real incomes in the US are flat or falling. Since we consume that we produce, inflation will take money out of our pockets.

What this all means is that there is a natural counterbalance to policy actions that might lead to out of control inflation. The more inflation we have and the more interest rates rise accordingly...the closer we get to a point of sudden collapse, which will obliterate economic activity and thus be deflationary.

The FED continues to try to walk a tightrope. Fall right -> deflation. Fall left - >inflation. The problem is that the rope is about to break.

[NV]

to understand a little bit the west side story consider this. on my street in West LA, three (3) condo conversion jobs came to market since August 2007, one unit sold out (close to $700k) of maybe close to 75 (say 25 units per building), the rest are now chasing tenants. The one that come to market in August saw the light by Christmas and immediately filled up with tenants, the other two are just shifting gears now. The new tenants seem to all be pet owners, something that was frowned upon prior to this conversions. I personally don't care whatever happens to their carpets, but the streets in my neighborhood have that Paris look, dog poop everywhere.

[NV]

It is my professional opinion that now is the time to...PANIC!

[IToldu2CashOut]

I've been saying all along, if you are a seller it is best you consider lowering your price, because much lower prices aren't too far away. Better to count your loses now and still lock in some of your gains if you weren't a speculator. This isn't going to be like a bad stock that maybe could turn around if only profits are great next quarter. There are to many broad economic forces at work here. You house never was worth what you thought it was. Stop being greedy and start getting real.

[yours truly, Johnny Dollar]

Okay, which one of you out there was it?

At the intersection of Palm Canyon and Alejo,
someone was holding a piece of cardboard
which read:
"Will close escrow for carton of Evian."
(and, what does it mean?)

[yours truly, Johnny Dollar]

It must be a re-make of the Hollywood cult classic;
but, I only caught part of the headline (and I am afraid
to ask who is starring in it); the headline was
something about "Invasion of the Killer Tomatoes."

[yours truly, Johnny Dollar]

In 1979 I bought a house in Palm Springs; every woman
I met had her real estate license. These ladies were the
original "Desperate Housewives?"

[Joseph]

Ah, the value of archives:

"The fear monger speculators won't admit the market is slowly stabilizing. No handouts for them. You all sold your home for this?? LOL"
Posted by: shockg | April 28, 2008 at 09:56 PM

How's that stabilization coming, shockg? I'll re-post this beautiful quote of yours from time to time and see how it matches up with reality. You know, that little thing called "reality". Once the kool-aid intoxication wears off, you'll recognize it again. Ouch.

[shockg]

Ah, the value of archives:

"The fear monger speculators won't admit the market is slowly stabilizing. No handouts for them. You all sold your home for this?? LOL"
Posted by: shockg | April 28, 2008 at 09:56 PM

How's that stabilization coming, shockg? I'll re-post this beautiful quote of yours from time to time and see how it matches up with reality. You know, that little thing called "reality". Once the kool-aid intoxication wears off, you'll recognize it again. Ouch.

Posted by: Joseph | June 11, 2008 at 07:11 AM

Joe, are you really celebrating the skewed median? LOL. Lets see....more lower priced homes are selling right now. The mid-point of whats selling right now is the median so therefore your excited that lower priced homes are selling?? Does that represent a big drop in values?? Nope. Funny how you won't address the inventory levels. Why don't you take a look at demand. What do you think happens to prices when demand increases?? hmmm.

[yours truly, Johnny Dollar]

For all the people who called other people who live in
trailer parks "trailer trash," what do they get to now
call you in foreclosure "living" in your SUVs?