L.A. listing prices drop another $5K, to $410K

Another week, another $5,000 decline in median listing prices in Los Angeles, according to Housing Tracker's weekly analysis of MLS listings.

The median price of L.A. listings fell to $410,000, from $415,000 last week, and is now 22.3% below the year-ago level and $170,000 below the peak reached in April 2006. The inventory of homes and condos for sale continued to decline, dipping just over 300 units, to 42,279.

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%)
7/08               $425,000 (down 20.6%)                 44,636 (up 4.6%)
8/4/08           $419,000 (down 20.9%)                 42,812 (down 2.7%) 
8/11/08         $415,000 (down 21.6%)                 42,612 (down 4.2%)
8/18/08         $410,000 (down 22.3%)                 42,279 (down 5.1%)

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

Comments

[Laker]

Let me do a gross guess that is sure to be wrong. But just for sake of a dumb guess....
Say the trend continues the same way for another 12 months...
We will have median price at $350,000 and inventory at 39300.
Or if it continues for the next 24 month, we'll get median price of $290,000 and inventory at 36300.

So using this dumb un-educational guess, price is dropping much faster than inventory....
At inventory of 27000 (reached at april 2006) could be reached around 2013..., and median price will be $110,000.
That is assuming 5 years of constant behavior of $60,000 decline in price and 3000 in inventory....
All this is sure a big joke, but for a funny example, it sure worth a thought.

[IToldu2CashOut]

Consistently the price drops seems to be getting bigger. Not a good sign for people picking a bottom, also could mean softness on the west side. Meanwhile inventory going down because morons taking houses off the market.

[Wes Boudville]

So by sometime in September, we'll cross below the $400 000 mark? Any doubters about this?

[David]

According to today's LA Times, the median sales price is already at $400k, so I'm sure median listing will drop below, however with inventory still declining, i think we're in for a soft landing before the end of 2008. As Laker pointed out, It can't continue this way much longer. Prepare for the botttom!

[yours truly, Johnny Dollar]

like a rock.....home in my Palm Springs neighborhood
in March had a for sale sign with a $445,000 price tag;
same home last a week ago Monday evening had a
for sale sign with a $219,000 price tag the added note:
"bank owned."
I've got my Garmin 1000 out looking for the intersection
of Supply Blvd. and Demand Avenue.

[Laker]

David,
I'm not so sure it can't continue that long...as 2013...The decline rate might moderate, and i think the bottom might be reached in 2010-2011. But I don't expect price to rise from that point. I think prices will be flat for at least 5-8 years after 2010.

Johnny dollar, take a look at bottom street. it is very close to the intersection of demand ave and supply blvd. However, like in any correction or return to the mean, expect an over correction. The reason there is a mean is because there are peaks (bubble highs) and also bubble lows so the end result is a mean/sustainable wage pegged house prices...

[dwr]

OK, this time is definitely the bottom! Right Peter?

[Juanito]

Would someone please enlighten this confused little mind! I keep looking at inventory numbers posted by the blog and for the last 8 postings it has been hovering consistently around 42K(with one freak exception). Where is the dip in inventory? Yes, some houses/condos sell and the number therefore changes. I hardly call that a drop.

[latesummer2008]

Some areas in So Cal have already bottomed. Just look at the activity in the Inland Empire. 0ver 50% price drops, and it's Foreclosure City. The same thing has happened on the outskirts of San Diego which was at least 1 year ahead of Los Angeles. The key here is foreclosures. We have experienced the "subprime" wave and now are gearing up for the next waves of exotic loan failures. These will hit the middle and higher levels of the Real Estate Food Chain beginning this year. What's really scary is these loans can "reset" faster if the Loan to Value reaches (LTV) reaches 110-125% as opposed to being "Fixed" for 5-7 years, as many people believe.

Zillow just reported up to 71% of the LA Area buyers from 2006 as owing more on their mortgages than their house is presently worth. Some buyers even back to 2003 are "underwater" It is just a matter of time before affluent areas such as the Westside are hit, and hit hard. Once those loans go bad, the banks will have no choice but to unload, causing big price declines.

50 -60% off the peak (2007) on the Westside is very possible.

http://www.westsideremeltdown.blogspot.com

[gomedohree]

I call $370K!

Anyone want to start a betting pool? I think it might be fun to match what our collective opinions and beliefs are with the actual market psychology.

I'm imagining something like Curbed LA's PriceSpotter game. It's been fun reconciling what people have been guessing for a particular property with how much it actually sold for.

Is this too gimmicky for LA Times?

[E]

"Soft Landing" David?

If you get any *more* nostalgic you'll just have to go ahead and say that there was no bubble.

LOL

[CD]

THESE ARE NOT THE ONLY NUMBERS TO LOOK AT.
The banks are failing , retailers are way down, even high end like Saks, Wallmart is the only one doing well. People are losing their jobs here in CA, it is a vicious cycle, round and round, it feeds on itself now and it is going global, sorry but, California is not on a different planet... Real estate and banks started it all but now it has a life on its on. Inflation is out of control it will cut on the buyers' savings.
Pick all the worst case scenarios discussed here and it will come trough, rough ride ahead. No relief in sight.

[Susie]

Based on futures prices, I call 325 in Aug '09 and stabilization around 315 in 2012...

[IToldu2CashOut]

I think this number is going well below 300k personally. For an official guess I'm going to go with 210k. Of course its going to take a few years so I'm pretty sure no one will remember or care who was right.

[Qatar Boy]

My 2c - just based on instincts and general common sense... The prices will stabliize at ~330K - 350K and will linger there for 3-4 years while inflation takes care additional 20% drop. My primary inputs are afordability numbers and the overall income levels. Also, I am talking LA county median and would not dare to venture into predicting what's going to happen to SM, MB and other exotic places...

[puckhead]

Laker,

If you take your analysis further, at some point I will have to PAY someone to take my house off of my hands. And people will still be complaining that I'm not paying them enough.

[shockg]

Nice spin Laker. Too bad nobody buys it.

[loveMEsomeME]

I originally thought 385k by years end but who knows now. Could 370k or even 360k be possible by years end. This is getting erie even for someone like myself who was the only one of my friends who didn't buy in the last two and a half years. My final bottom line prediction is $295k. I think the over correction will happen for a moment have a moderately quick jump back to $320-330K and then move very very slowly back up for the next 3-5 years.

[el guapo]

Peter,

I seem to recall an informal poll a few months back regarding the median asking price in LA at the end of the year. I think I weighed in with 375K, but I'm not postive. It might be fun to post the results from that poll and see how we're doing. It might be even more fun to post some prominent bloggers predictions (cal, shockg, laker, etc..)Just an idea - merely an exhibition, not a competition.

[dwr]

"Some areas in So Cal have already bottomed."

wanna bet?

[Laker]

shock,
it was a joke and i described it as dumb guess.
You actaully fell for this dumb guess...what gives?