Listing prices now down 159K from bubble peak

Median listing prices in Los Angeles County slipped another $4,000 over the past week, falling to $420,000 -- a decline of $159,000 since asking prices peaked in April of 2006, according to Housing Tracker's weekly analysis of MLS listings.

Inventory of houses and condos for sale continued to decline, and is now trailing year-ago levels by 1.4%.

Numbers: At $420,000, median listing prices are down 20.8% from year-ago levels -- the steepest decline yet measured in this slump -- and are 27.6% below their peak level of $579,666. The inventory of homes and condos for sale dropped by nearly 500 units, to 43,086.

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%)
6/08               $440,000 (down 18.5%)                42,398 (up 4.0%)
7/7/08           $425,000 (down 20.6%)                44,726 (up 5.2%)
7/14/08         $425,000 (down 20.6%)                44,636 (up 4.6%)
7/21/08         $424,000 (down 20.7%)                43,584 (up 0.8%)
7/28/08         $420,000 (down 20.8%)                43,086 (down 1.4%)

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

Comments

[E]

Just the junk REO's that flippers are buying.

[Fred]

Something that would be helpful would be the inventory broken down into the same 25%/50%/75% tiers that that prices are broken down into. I suspect the high end is not moving much at all. There just aren't enough buyers at those prices now that creative financing is gone and loans are tied to incomes. The only way the high-end could maintain these prices is if the 75th percentile earner in Los Angeles receives about an 80% pay raise starting tomorrow. What are the chances of that in our current economy (or the real world, for that matter)?

25th percentile has lost 33% from peak.
50th percentile has lost 27.5% from peak.
75th percentile has lost 20% from peak.

That's the domino effect of the subprime foreclosures. The 75th percentile will catch up. And with the Alt-A resets beginning this year (and continuing for many after), it will start happen sooner rather than later.

[shockg]

Typical of Peter to leave any mention of dropping inventory out of the headline.

[IToldu2CashOut]

Smart people lowering the list price. Dumb people taking houses off the market. Same old story. The greedier sellers are now, the more they will be getting burned later. Imagine what will happen to prices when rates start going up. YIKES!

The bubble is not imagined and the downturn is not caused by the media. Look out below...

[Brad Neal]

Just thought you gloom and doomers that were criticizing the list price of the Gregory Ain house in Mar Vista for $1,000 per square foot ought to know that it's in escrow. That's right, $1,000 per square foot for poorly built but wonderfully designed livable art.

[toby]

Just thought you gloom and doomers that were criticizing the list price of the Gregory Ain house in Mar Vista for $1,000 per square foot ought to know that it's in escrow. That's right, $1,000 per square foot for poorly built but wonderfully designed livable art.

Posted by: Brad Neal

LOL, yeah, lets talk in a year. When that "poorly built but wonderfully designed livable art." is underwater 20%.

Remember, just because some goof ball is throwing away 250,000 to 500,000 dollars, doesn't mean it's a good time to buy.

[normanpheeny]

Shockg's whining post had a good point. Peter, let's add "inventory up 58% from the market price peak" to your headline.

P.S. I'm glad you are still on staff Peter V.

[SmartBuyer]

Peter mentions that Inventory dropped by 500 units. With all the news of foreclosures, my assumption was that by now we would begin to see a steady increase in inventory. In reality, Inventory has been fairly stable over the last few months hovering around 45K in LA metro according to Housing Tracker.

I wonder if this is because all the foreclosure activity takes many months to work through all the notices and legal work or if the foreclosures are being worked out somehow without ever making it to the courthouse steps.

[John D.]

"25th percentile has lost 33% from peak.
50th percentile has lost 27.5% from peak.
75th percentile has lost 20% from peak."

You may be right that there will be a cascade of downward values, but your numbers just show that there are a ton of inexpensive houses on the market. That will heavily impact where the 75% is. A number of professionals, business owners, etc. have enjoyed significant increases in pay over the past decade. The starting salary at many law firms increased 100%, for instance, in inflation adjusted dollars. There is a lot more wealth out there than you think, particularly in LA. Also, the person with the 75%-ile salary, probably buys a 30-40%-ile house. You are forgetting that most people rent.

[waitingitout]

shockg,

if you think a 500-unit drop in listings is a result of net sales, you're sadly mistaken. What was it, 5 days ago? The NAR said we're at a 10-year low in sales activity. NO ONE IS BUYING. So whether listings dropped 500, were flat, or got up on stage and did a spot-on rendition of Wings' "Band on the Run" is pretty damned irrelevant.

There is still way more supply than demand, and with a ton of units converting to rentals and even more foreclosed properties in queue to be processed, the shadow demand is anything but falling.