Listing prices slip by $2,500

Median listing prices in Greater L.A. resumed their downward march over the past week, dropping by $2,500, according to Housing Tracker's weekly analysis of MLS listings.

Numbers: Median listing prices fell to $446,500, down from $449,000 a week ago, and down 17.3% from year-ago levels. Inventory of for-sale houses and condos slipped to 42,458, which is 4.9% above 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%)
5/5/08           $450,000 (down 17.4%)            42,647 (up 13.7%)
5/12/08         $449,900 (down 17.4%)            42,532 (up 11.1%)
5/19/08         $449,000 (down 17.6%)            42,532 (up 8.8%)
5/26/08         $449,000 (down 16.9%)            42,518 (up 6.5%)
6/02/08         $446,500 (down 17.3%)            42,458 (up 4.9%)

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

Comments

[Nelcisco]

Not enough, needs to come down more

[Laker]

Nelcisco,
patience my friend. We are falling down the slippery slope. It will only stop when renting will be MORE expensive than buying. As some suggested, renting should be more expensive as it gives you the benefit of freely moving when you want without incurring the costs of sale.
During 1993-1997, renting was MORE expensive than buying her in LA....There is nothing to prevent that from coming again...

[shockg]

down $3500 in the last 2 months. "Yawn". At this rate Laker will have his 20% in 2020. By then everyone will be so fearfull of the market, houses will be free because everyone will have moved away. At which point Laker and Teabag will have all of southern Ca to themselves.

[Valley Observer]

Looks like lenders are putting a steady drip of foreclosed houses on the market, hoping to maintain the prices. Woe to those who get a job out of state and have to sell. Methinks it would be better if the lenders quickly made deals with the owners, because they're going to take serious losses in any event. Otherwise the huge supply of foreclosed or otherwise abandoned houses is going to stay around for a long time, which will keep the lower and middle markets from finding their true level and keep buyers on the sidelines waiting for yet lower prices. Some sort of national mandated solution seems attractive compared to the current sub-optimizing, as it might lead to a "normal" market reasonably quickly, if the "correct" price level can be determined.

[Fred]

What, you want 50% of the pie to disappear in one week, Nelcisco? :)

[Renter]

Bring back 1999 prices, and im a happy camper.

[IToldu2CashOut]

Looks like last week we got our dead cat bounce.

People like myself will buy again when places become affordable. Delusional list prices aren't helping anyone.

[left of lefty]

i don't think listing price is a good metric anymore. it used to be that listing price indicates what sellers hope to get for their property. in the past month, i'm seeing sellers 'low-balling' the listing price in the hopes of generating interest and bidding wars, and have no intention of selling at list. this is especially true for short sales, where the listing price has no reality to what the bank would approve.

[anon]

Median listing prices are misleading. Here's a house that by all standards is a median house yet it is selling for $1.5m:

http://www.realtor.com/search/
listingdetail.aspx?lid=1096141616

The sharks smell blood, but they aren't close enough to feed yet.

[John T Watts]

Check out Realtor.com for Burbank. Estimated mortgage payments for the least expensive homes are starting to be shown as less than some of the least expensive rents on Realtor.com for that area. Is that happening in other areas of Southern California as well? An owner must also pay taxes and insurance of course but they are tax deductable.

[tealeaf]

Gasp!

Foreclosures in the Hamptons!

From Newsday:
http://tinyurl.com/5esq2p

Say it ain't so.

Coming to a "never gonna happen" neighborhood near you.

[Brad Neal]

Laker, rents in most parts of the westside of LA between 93 to 97 were not less expensive than owning the same product. In fact, after the destruction of thousands of apartments and homes resulting from the Northridge Earthquake,Landlords experienced a significant spike in demand and consequently rental rates. generalizing about LA is ludicrous and your statement that nothing stands in the way of rents in LA slipping below the costs of owning. I presume that you are speaking about the identical product. Today, a Gregory Ain tract home in Mar Vista will sell for no less than $1.25MIl and the last confirmed sale was $1.5MIL. These same properties can be rented for $4,000 per month, That is approximately a 3 to 1 ratio after factoring 20% downpayment, taxes, insurance etc. Don't hold your breath Laker, rents in the most desirable areas of the westside that are well built and designed are commanding greater value than just 12 months ago. I'll give you a little more education. I recently re-rented (2) third floor ocean front Lofts last month for 20% and 17% more than these same units were rented for 18 months ago. It seems the aversion to ownership has become a powerful attraction to well built and well designed rentals. Laker, seriously do a little homework cause your not making much sense.

[Ragnar]

Keep the downtrending going. Hopefully we will be able to time the market well in 2010 or 2011, when we will be in a position to purchase a home in the LA area. Probably wishful thinking on both fronts, but we can always dream and the trends over the past year seem to be taking us there.

[mike]

you guys keep talking rents vs. mortgage but you need to remember that the banks have little money to lend and if they are going to lend you have to have a big down and your credit needs to be 700 +.......... i own houses, have excellent equity and credit and cannot borrow money. so you tell me who has money to lend at a resonable rate and i will buy another house.

[Nelcisco]

do you want 50% of the pie to disappear in one week?
-Fred

No fred I don't, the market seems to drop in small bite sizes as if people will now start buying, meanwhile the months turn into quarters, quarters turn into 1/2 yr, you get the picture.
here' what I mean.

5/5/08 450k to 446k after a month. from a mortgage standpoint here's what it looks like, for those of you w/ a mortgage calculator follow along.

5/5/08, 450k - 80% LTV=$360,000 loan amount @ 6.25% which is considered a decent int. rate is $2343.75/mo P/I (principle & intrest) without impounds, meaning no tax & ins.

As of yesterday 6/2/08, 446k- 80% LTV=357,200 loan amount @ 6.25% =$2199.34/mo P/I. At this pace we can be in this delema for another 2 yrs.

thanx for the word of encouragement Laker.

[LA]

Pete - would like to see you include the price and inventory changes since the market peak as well as since a year ago. Year to year and peak to present are both useful.

[puckhead]

Very interesting stats. Since the beginning of the year the prices for the 25th percentile has gone down 14%, 50th percentile has gone down 10% and the 75th percentile has essentially been flat. I know, I know, it’s only a matter of time before the higher selling houses come down like all other houses and that the prices in such neighborhoods are still too high and that houses are not selling in these neighborhoods etc. But if that’s the case, why are the inventory levels flat the last 6 months? I cannot speak of the Westside and the South Bay, but I’m looking to buy in my neck of the woods and I don’t see a lot of inventory at decent prices. Any other observations?

[tealeaf]

John:

Quick correction. Insurance is not tax deductible, and the income requirement for most Burbank homes renders the property tax non-deductible (subject to AMT).

We did this exercise a few days ago - one Burbank RE agent mentioned one 1br/1ba property that was about 20% more expensive than a comparable rental property. That was the extent of it.

If you can show us a property for sale that is comparable to an equivalent craigslist rental (not Realtor.com rentals - those are distressed/distraught sellers using an agent that is tacking on a prop mgmt fee), please do so. Be glad to collaboratively work together on this.

My statement from last week stands: as soon as pricing comes in line with local incomes, I'm a buyer. I'm even willing to pay a premium to renting, which puts me left of Laker, who rightly believes rentals should have a premium to owning.

[Arti]

It is still far cheaper to rent per month than pay the monthly interest/taxes on the exact same property's mortgage at the current home values. This means prices must come down another 40% from here.

Also, keep in mind this is all non-high-end neighborhoods. In the truly high-end neighborhoods like Santa Monica, although data is unreliable my Realtor relatives tell me that prices on SFRs have not only held up, but that they keep going up. They're at an all-time high in Santa Monica right now, and they say that interest rates are going up so we must buy now or be forever priced out of Santa Monica, forever.

[WeHo19]

"Pete - would like to see you include the price and inventory changes since the market peak as well as since a year ago. Year to year and peak to present are both useful."

Also - Can you also post the 04/99-04/05 YOY price/inventory changes, if available? It will help to see where we are headed since the bubble started.

[MyLessThanPrimeBeef]

If you are a driver, you know the distortion of looking backwards through your rear view mirror. In fact, they even warn you about it: Caution, objects appear closer than they really are.

Same with looking backwards on the housing market: Caution, houses appear more valuable than they are!

Tatke for example, that $579,666 house back in 4/06. Well, it wasn't really worth that much. It's just an illusion, fata morgana, mirage, or whatever you want to call it. So, you might mistakenly think you're getting 17.3% off, looking back, but in fact, you are probably overpaying by about 50%, if you buy it today for $446,500, looking forward.

[Fred]

Nelcisco,
We're going to be in this mess for far longer than 2 more years, so get used to it. I suspect that most of the price chopping will happen in the next 20 months or so, and then there will be about 5 years of static prices. Also, I wouldn't look to the past couple of months as evidence of prices moving very slowly. The downward pressure on prices has been counteracted by the annual (through time immemorial) spring sales bounce. Things will accelerate quickly near the end of the summer and fall.

[Nelcisco]

Lord help us if we go 6 more yrs of this. Fred, you could be right.

[Jeff S]

A lot of sound and fury signifying nothing. That is the state of this blog.

We are in peak season for house sales and prices are flat. Same as last year. We all know how well that worked out?

Call me in 4 months and then we can see which way the wind (or hurricaine) is blowing.

[Dontmatta]

Nelcisco, are you sure your calculations are correct?
I'm getting 2216.58 for the $360k loan