Tracking L.A. home prices and sales

A quick follow-up on today's DataQuick numbers. As you can see below, the year-over-year percentage decline in median prices paid in Los Angeles hit a new peak in June, down 23.9% from June 2007. The trailing 12-month sales total for L.A. County hit a new low and is running 54% below 2004 levels.

Read more about the DataQuick numbers here (Annette Haddad on the spike in sales in the Inland Empire), and here (Peter Hong on the overall numbers for Southern California).

Month    L.A. median sales price       y/y change       12-month L.A. sales total

June 04  $414,000                        32.3%                127,027
Jan. 07   $520,000                        6.0%                 108,755
Feb 07    $528,000                        8.0%                 107,966
Mar 07    $540,000                        6.0%                 105,514
Apr 07    $540,000                        6.0%                 103,450
May 07   $550,000                        7.0%                  100,160
Jun 07    $545,000                        5.0%                   96,513
Jul 07    $547,500                        5.0%                    94,478
Aug 07  $550,000                        6.0%                    90,985
Sept 07 $525,000                         1.2%                    86,610
Oct 07  $500,000                         -3.8%                   82,527
Nov 07  $499,000                         -3.5%                  78,712
Dec 07 $470,000                        -10.5%                  74,663
Jan 08 $458,000                         -11.9%                 71,256
Feb 08 $460,000                       -12.9%                  68,424
Mar 08 $440,000                       -18.5%                  64,334
Apr 08  $435,000                      -19.4%                  62,125
May 08  $422,000                       -23.3%                60,144
June 08 $415,000                       -23.9%                58,242   

Note: June 2004 stats are added to show peak levels of 12-month L.A. sales and y/y change in median sales prices. Source: DataQuick Information Systems.

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

Comments

[Laker]

Peter,
Thanks for bringing the numbers here but i think you are waisting your time.
You could summarize all post with one line:

June 04 $414,000 32.3% 127,027

At June 2004 we had $414,000 price BUT 32.3% YoY increase from June 2003.....

This is enough to prove that we are nowhere near the bottom. PERIOD.
Every moron knows that you can't have normal housing appreciation of 32% annual rate...That means the price of June 2004 was already a crazy bubble.
Wake us up when the median will hit June 2003...
I have a feeling we are not going to have a long uninterrupted sleep.

[Westside Bubble]

To me the key number is -24.5% from Los Angeles County's peak in August, 2007.

A year ago we were still waiting to see any fall in DataQuick median prices for Los Angeles, and some were arguing they wouldn't. Now it's a certainty, they're down a quarter in less than a year, losing over three years of increase.

See http://westside-bubble.blogspot.com for graphs.

[campechano]

What people do NOT seem to comprehend is the fact that we are talking about 30-40 % off PEAK prices. Peak prices are no where near what a realistic Boom should look like in fact they are beyond the stratosphere of not only affordability but just simple common sense. In order to correct, the market needs to come down a LOT further from the peak that the so-called experts are talking about. While buying some how, some way, might make sense for a very few people right now, things will continue to adjust downward ever so rapidly. In my not so humble opinion I truly believe the market--just like it did in its upward trend--will OVERCORRECT dramatically downward, surprising even the real estate bears. This --unprecedented-- psychologically driven real estate craze will result in a symmetrically opposite unprecedented downward spiral that is sure to remain in the history books for generations to come. Lastly, especially in areas where the correction (from the peak) has been slower than others, the fall will be harder and many people will suffer from that. God help us all.

[Anthony]

Looks like we're now back at June 2004 prices. Yet all the homes I'm seeing are still listed at June 2006 prices . . . no wonder there are so few sales. Where I'm looking--mostly the miracle mile area (90019--the northern part of the zip--and 90036)--I have seen 3 bedroom homes priced above $1 million when the sellers purchased them for $400K within the last 6 years. I saw one 4 bedroom listed at $1.3 million, even though the seller bought it in 2002 for $500K. When will sellers get a clue?

[sheila]

a little levity from the Onion:

Recession-Plagued Nation Demands New Bubble to Invest In

http://www.theonion.com/content/news/
recession_plagued_nation_demands

[Fred]

I would just like to point out that the fundamentals won't support home prices until the median is $250,000. That's a further 38% decline. And that's based on a generous 5x price-to-income ratio.

Until we hit $250,000, there is no bottom.

[Nick]

The sellers will "get a clue" eventually, when they need to due to the market. The fact that there are still sales is evidence that the market is declining as fast as it should be, no faster is slower. It just takes time to work through the NOD/foreclosure process, especially with all the delays built-in to the foreclosure process and alt-a loans, and human psychology needs time to adjust.

Unlike the stock market, the housing market doesn't adjust immediately to where all the knowledgeable people think it should be at, because the irrational and uninformed people are making the market currently. Were it not for the high costs of trading in the housing market (both in commissions and psychology), we'd probably see a much faster correction, but people would also panic more, and we'd probably get more idiotic government intervention as a result. I count my blessings that the correction is slow, and hopefully that will help mitigate the amount of disastrous legislation in response.

[Jack]

No one has yet commented on the big difference between the June '04 and '08 figures -- look at the number of sales then and now. The demand was more than twice the level in 2004 compared to what it is now, so that means current prices are still way too high. This is Econ 101 stuff.

I still say prices will drop to about 2000 or 2001 levels.

[Kathy]

Does anyone happen to know when was the last year the median home price (in L.A. county) matched the median income? Did it ever?

[It All Happens on the Margin]

Hey Kathy:

If you're asking when housing was in line with rentals, the answer is 2000. In 1998, buying was cheaper than renting.

So the issue is less about median incomes as it is about relationship to buying and renting.

Rental pricing adjusts very fast to what local folks can afford for housing for the respective area.

Median income has baked-in distortion because not all folks are eligible to afford a home...

[Fred]

Kathy,
Don't know exactly what you mean by home prices "matching" median incomes. There is a historical ratio certainly. It ranges from 4x-6x. Right now we're at about 8.5x or 9x (tough to pin down today's median income - last census data was 2004). There will be roughly another 38% decline. That's fundamentals for you.

So, I think the answer to your question is, YES. L.A.has always "matched" median incomes, except during the anomalous bubble periods.

[Fred]

Margin,
One minor quibble: price-to-income is just as valid a measurement as price-to-rent. The "baked-in distortion" you mention is all factored in to the ratio, and it always has been.

[It All Happens on the Margin]

Fred,

Why not go right to price-to-rent? It reflects the potential yield or cap rate of a given property, which is what the smart guys are using to seek value? Price-to-income for a given area has further distortion because folks sometimes simply "pay more" of their discretionary dollars to live in a given area, like the beach. Secondly, the data for household incomes is generally by zip code. In dense areas around OC/LA, the properties for a zip vary widely. Worse, the household income data are old ... rents are near real-time.

[Leo]

If commenters here think we have in no way hit bottom (and I'm not saying we have - my crystal ball broke recently), can anyone explain why Pasadena & San Gabriel has seen increased sales and the valley has seen 5 straight months of increased number of sales, AND both markets are seeing multiple offers again (some as many as 19 offers) in both high and low price ranges? In a fair market economy, supply and demand still rules, regardless of statistics. The market is hardly EVER rational!

[Fred]

Margin,
I like price-to-income better because rents fluctuate much too much. Sometimes they're up, sometimes they're down. Median income barely moves.

[Suzi]

I usually view the Home Price Trends at the following website:

http://homepricetrend.com

homepricetrend . com