Tracking: City of Los Angeles real estate trends

Faithful readers will know I am now officially enamored of Redfin's neighborhood tracking widget, which allows you to track price trends in any city or ZIP Code. Micro-medians, I call them.

Without further ado, an update on the City of Los Angeles -- which rarely shows up in housing stats, because the most widely reported numbers are county-wide.

Date                              August 13    Oct. 2        Oct. 28

--Listed for sale             16,859         16,127       16,003
(home and condos)
--Foreclosures for sale     1,698          2,032          2,040
--Median list price        $475,000       $459,000   $450,000
--Median sales price*    $400,000       $380,000   $365,000
--Median sold price/sf        n/a             n/a          $252
--Median days listed         85                 90              92
--% reduced in price         43.9%             44.7%       44%
--Median total reduction   9.3%            10.0%         10.1%

*Based on homes sold or taken off the market in the previous 90 days

Two cents: I don't see any sign of a bottom in these numbers. The Los Angeles market is absorbing foreclosed properties at roughly the same rate they are coming onto the market. In other words, the market is working, but it also weakening.

-- Peter Viles

Pictured: "Wolf's Lair," an eight-bedroom mansion overlooking Lake Hollywood. First listed for sale for $7.5 million, since reduced to $5.99 million.

Photo Credit: Michael McCreary

Comments

[Tim K.]

I agree - these graphs are incredibly useful for determining the true direction of the housing market in a narrow area.

I personally watch the Pasadena and Claremont areas, and it's quite interesting to see the steady downward march of price per square foot. At the current rate, it seems 2 years from now we should be approaching 1998 prices! I do realize that it is not likely to continue in a straight linear fashion - after all, that's the kind of extrapolation that got many people in 2004 thinking house prices were going in a straight line up! But the trend is unmistakable, and it definitely encourages me to wait.

[MyLessThanPrimeBeef]

I am no economist, but if I am interested in winning a Nobel, I'd write a paper on a new index called the (Sellers') Fantasy Index, which will track the median listing prices versus the median sales prices.

And this is the (Sellers') Fantasy Index for our Fantasy County:

Aug 13: 1.19
Oct 2: 1.21
Oct 28: 1.23

As Ricardo Montalban would say, Welcome to Fantasy County where sellers are getting more fantastical every day!

[LA-renter]

The Seller's Fantasy Index (SFI) would be more useful with context: What is normal fantasy?

A value of
3 - LA in 2006
2 - LA in 2005
1.5 - LA in 2004
1.3 - LA in 2007
1.2 LA in 2008
1.1 -LA in 2009
1.0 - LA in 2010
0.9 - LA in 2011
0.8 - "it's just land with a huge liability sitting on it"

[Mucker]

My less than:

If I follow your index it means that sellers are listing at a higher ratio than what they are selling for as we march forward. although it may be a fantasy index it portends I believe a greater sense of reality on sellers parts. They are listing by the prior month sales hoping they can sell for a small discount from that but facing reality taking a bigger cut to sell, thus becoming more realistic.

If you had to sell a home would you not want to get the most for it. If so you'd list for more than you would take. It's not possible to raise a price in a declining market. If they listed it for what they are letting go for they'd most likely get even less. More power to 'em.

Eventually the power will come to those of us who wait.

[MyLessThanPrimeBeef]

LA-renter, in 2005, I think SFI was more like below 1.00 where buyers were trying to outbid each other, often topping the listing prices.

A more relevant index for the bubble period might be, I don't know if I should write about it in a family newspaper, but it might be something like Sellers' W**dream Index, which tracks strictly how over priced the sales prices are above the historical trendline.

Mucker, you are right, the fantasy part is only temporary as all fantasies are by nature. Reality hits when offers come in way below and the seller eventually does what he has to do to get out of his albatross.

[srla]

Peter, you're definitely right that no bottom is is sight. It's pretty clear from a glance at the graph included in Peter Hong's article about the recent Case-Schiller exactly where we are on the bubble curve.- http://www.latimes.com/business/
la-fi-homes29-2008oct29-g,0,4334472.graphic

It's always uncanny just how perfectly bubble patterns conform to a bell curve on the way up and down. The further we get along the downward slope of the graph, the easier it is to see just where we are headed.

The only real question now seems to be whether prices will bottom out in 2010 o 2011 at around 100.00 on that graph (the inflation-tracking trend level) or if we will overshoot the trend level due to a prolonged recession and other factors.

[Drew]

People seem to forget -- not every house that is listed for sale must be sold.

There are still people out there who would like to sell, but don't have to sell -- and they will sell only if they receive their predetermined number.

If that number doesn't come in, they pull the house and try again later. Maybe they're "stuck" in a house they'd rather not be in, but they don't have to worry about losing it, either.

[latesummer209]

The most interesting data point here, is the $35,000 drop in SALES PRICE over 46 days. Sales price figures are the only numbers that matter here, as listing prices can be based on may "seller" variables. Homes actually SELLING is what we should be paying attention to. The sales price numbers demonstrate a 8.75% drop or:

1) $760 / day
2) $23,333 / month (-5.8%)

This obviously, is due to the increasing amount of foreclosure sales vs regular sales. What is truly amazing is, the RATE in which sales prices are falling. Sellers need to be aware of this or, they will be caught chasing prices down, in our declining market.

All areas are now experiencing declines.

http://www.westsideremeltdown.blogspot.com