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 Both far afield, but both worth noting:
Bankruptcy in Vegas -- From the Review-Journal today: "In
one of the potentially largest bankruptcies in Nevada history, Lake Las
Vegas (pictured), a 3,592-acre residential and resort development in Henderson,
filed for Chapter 11 bankruptcy Thursday.... The new owners cited 'poor liquidity, substantial debt service,
(and) extremely challenging real estate market conditions' as reasons
for seeking bankruptcy court protection. It filed under Chapter 11,
which allows a business to continue operations while seeking to
reorganize."
Vacancy in the O.C. -- The O.C. Register's Lansner on Real Estate reports a stunning drop in commercial construction in Orange County: "Voit Commercial Brokerage
reports that construction of O.C. office buildings plunged 90.8% in the
second quarter to 325,276 square feet. Last year in the second quarter,
3.5 million square feet was under construction. ... All the added space pushed the second quarter office vacancy rate to 14.46%. A year ago, vacancies were at 8.95%."
A 91% decline in commercial construction.
Posted by Peter Viles
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: A.P.
 A couple of follow-ups on DataQuick's monthly reports on home sales, both here and in the Bay Area:
DataQuick President John Walsh made an excellent point Wednesday that often gets lost in day-to-day coverage lately (mine included) of the housing meltdown and the government response to it: Credit is extremely tight. Walsh: "Policy decisions about underwriting don't really mean much if there's little or no money to lend. Even some very well-qualified households aren't getting mortgages these days, although this could all change fast if liquidity comes back."
Another way to put what Walsh said: The Fed's move this week to limit "shady" mortgage lending is somewhat irrelevant to today's market; it's a crackdown on some loan products that don't exist any more. Yes, it's probably the right thing to do, but it doesn't have much effect on the mortgage market as we know it today.
One more from DataQuick worth noting: In today's report on home sales in the Bay Area, DQ sees signs that California's coastal market is weakening. "Credit remained tightest for potential high-end buyers on the coast, where sales were generally anemic and prices showed signs of increased erosion, the real estate information service reported. .... 'So far it's been mostly the inland areas where prices have dropped enough to rejuvenate sales,' Walsh said. 'Our latest stats might be signaling greater price reductions on the coast, where sales have been severely restrained by several factors: higher prices, tighter lending guidelines, inadequate liquidity for jumbo mortgages and depreciation in inland areas that's left homeowners there with less equity with which to purchase a home on the coast.' "
-- Peter Viles
Comments? Thoughts? E-mail story tips to peter.viles@latimes.com.
Photo: Bloomberg News
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
There are no surprises in today’s latest report on Southland home sales by DataQuick Information  Systems. The spring home-buying season was a dud.
The median Southern California home price plummeted 29.3% to $355,000 from a year ago, when the median price was at a near peak of $502,000. (The SoCal record price stands at $505,000 reached in the spring of 2007.)
Sales, meanwhile, fell 13.6% to 17,424 from last June.
But a couple of stats today stand out: In Riverside and San Bernardino counties, sales increased from a year ago, thanks to the flood of foreclosures that are seemingly being snapped up by bargain hunters. Of the 3,757 homes sold in Riverside County last month, two-thirds were foreclosure resales.
Times staff writer Peter Hong has more on the latest Southern California real estate market trends.
-- Posted by Times staff writer Annette Haddad
Comments? Questions? Email: annette.haddad@latimes.com
Photo credit: Nick Ut / Associated Press
A while back I bloviated that the housing collapse was not an equal-opportunity destroyer of value and would ultimately be "worse out there" -- that is, worse in remote suburbs. The enterprising folks at zillow.com have documented exactly that. The above graphic shows declining home values in concentric rings spreading out from the center of Los Angeles. Here are the numbers:
0- to 10-mile radius (Los Angeles, Glendale, Pasadena, Inglewood): -14.2%
10- to 20-mile radius (Long Beach, Los Angeles, Whittier, Torrance): -16.0%
20- to 30-mile radius (Anaheim, Huntington Beach, Garden Grove, Fullerton) -18.4%
30- to 40-mile radius (Irvine, Palmdale, Santa Ana, Ontario) -20.5%
40- to 50-mile radius (Riverside, Fontana, Lancaster, Corona) -23.5%
The percentages represent year-over-year decline in home values, as estimated by Zillow, from Q1 2007 to Q1 2008.
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
 A large number of you were critical of a post I put up on July 2 linking to a Washington Post article headlined "Obama Got Discount on Home Loan."
That said, many of you will be interested in the Post's own follow-up, in which the paper's ombudsman asks whether the story was fair.
Highlights: The Post received more than 1,700 comments on the story, many complaining that it was unfair and negative. So was the story unfair? The ombudsman, Deborah Howell, hedges. She quotes critics of the story: "No story," says financial adviser Stephen B. Smith. "It's a very normal mortgage gotten by normal people, not even a sweetheart deal.
She also quotes defenders of the story: "I wish I had written the story," says Holden Lewis, who covers mortgages for Bankrate.com. "I realize that the story annoyed some people, but this was a case of an enterprising reporter asking a question that had to be asked and who got it answered thoroughly."
The Post's final verdict, as I read it: The story had news value and belonged in the paper but was unneccessarily negative.
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo Credit: Bloomberg News.
 If you are a bank or a thrift, today is not a good day to be in the spotlight. Washington Mutual is in the spotlight.
From Bloomberg News: "Washington Mutual Inc., the biggest U.S. savings and loan, fell the most since it went public in 1983 after Lehman Brothers Holdings Inc. said the lender may report $26 billion in losses this year."
WAMU shares at 11:25 PDT this morning were down 32%, or $1.59 for the day, at $3.36, representing a decline of 91.5% over the last year.
A local bank to watch: Downey Financial. From this morning's New York Times: "In recent weeks, the share prices of some regional banks, like the BankUnited Financial Corporation, in Florida, and the Downey Financial Corporation, in California, have stumbled hard amid concern about their financial health."
Downey shares at 11:25 PDT this morning were down 12.4%, or 21 cents for the day, at $1.48, representing a decline of 97.7% over the last year.
Your thoughts? Other local banks you'd like to see included in coverage? E-mail story tips to peter.viles@latimes.com.
Photo: Bloomberg News
 Bank of America CEO Ken Lewis says the bank expects a further 20% decline in California home prices. From Today's L.A. Times: "... Lewis said Bank of America's latest forecast called for a further 15% decline in home prices nationwide, with the decline going into at least the first quarter of next year. In the case of California, Florida and other markets that had the biggest booms, a further 20% decline is more realistic, he said."
For those of you wondering, here's what another 20% decline would look like if applied to median sales prices as tracked by DataQuick:
In Los Angeles, the median would decline from $422,000 in May 2008 to $337,600. That, in turn, would represent at decline of 38.7% from peak Los Angeles median pricing of $550,000.
In all of California, the median would decline from $339,000 in May 2008 to $271,200. That, in turn, would represent at total decline of 44% from peak California pricing of $484,000.
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo: Associated Press
The big mortgage news locally yesterday was IndyMac's dramatic exit from the mortgage business, at a cost of 3,800 jobs. But investors knew IndyMac was toast, and something like this was coming -- that's why IndyMac has been a penny stock lately.
The bigger news -- at least financially -- was the sharp sell-off in shares of Fannie Mae and Freddie Mac, which is Wall Street's way of saying the following: the housing and mortgage markets are deteriorating, and Fannie and Freddie are going to need to raise money to survive. If you don't believe Wall Street's analysis, take it from the Fed chairman this morning: "The financial turmoil is ongoing, and our efforts today are
concentrated on helping the financial system return to more normal
functioning," Ben Bernanke said in a speech in Virginia.
The New York Times on the Fannie/Freddie selloff: "Fannie Mae and Freddie Mac are the largest U.S. buyers of home
mortgages, and traditionally the government’s backstop for the housing
economy. But with the plunge Monday, each of these 'government-sponsored enterprises' has now lost more than 60 percent of
its market value this year. The declines, along with a falling stock
market and growing unease about the possibility of more losses at big
banks, reflect a growing consensus among investors that the current
housing slump will last longer, and prove more severe, than initially
feared."
More: " 'If Fannie or Freddie ever became critically undercapitalized, their
regulator would have no choice but to put in place a taxpayer rescue,'
said Karen Shaw Petrou, managing partner of Federal Financial
Analytics, a consulting company."
It's received wisdom at this point that Washington will find a way to bail out Fannie and Freddie if they run into deep trouble. With your money, of course. It's a question I'd like to see put to Obama and McCain, just to understand their thinking on the issue -- would they support such a bailout?
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo Credit: Bloomberg News
 Happy Independence Day. Reader Tsky pointed out this Reuters story in the comment section, and it's worth a post: "A lawsuit filed by a Wisconsin couple against their mortgage lender could have major implications for banks should a U.S. appeals court agree that borrowers can cancel their loans en masse when their lenders violate a federal lending disclosure law."
The suit in question was filed by a Wisconsin couple who said they believed their "teaser rate" -- 1.95% -- was locked in for five years. Instead it more than doubled by their second monthly payment. Before you dismiss their argument, here's the crucial ruling: A federal judge ruled that their lender, Chevy Chase Bank, had violated the Truth in Lending Act and that thousands of other Chevy Chase borrowers could join them as plaintiffs.
More from Reuters: "The judge transformed the case from a run-of-the-mill class action to a potential nightmare for the U.S. banking industry by also finding that the borrowers could force the bank to cancel, or rescind, their loans. That decision was stayed pending an appeal to the 7th U.S. Circuit Court of Appeals, which is expected to rule any day."
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: Reuters
Hat tip: Tsky via comments, link via Patrick.net
 Shares of Pasadena-based IndyMac slipped by 19 cents today, which would be no big deal for most stocks. But IndyMac is a penny stock these days, so a loss of less than two dimes a share wiped out roughly a quarter of its value. It closed at 62 cents a share.
Over at Money & Co., Tom Petruno details the near-run on the bank Friday and Saturday, as investors lined up to pull their money out of the bank, which has been battered to the brink of survival by bad loans. As Petruno explains, Sen. Charles Schumer (D-N.Y.) didn't do IndyMac any favors when he wrote to federal regulators saying he was "concerned that IndyMac’s financial deterioration poses significant risks to both taxpayers and borrowers."
Over at LA Biz Observed, Mark Lacter notes that IndyMac is about to become America's largest independent mortgage company, -- if it survives the next few days. "A new report by the Center for Responsible Lending finds that IndyMac engaged in the now-familiar pattern of loosey-goosey lending practices that fueled the mortgage boom. The nonprofit organization says it interviewed former employees who spoke of the pressure to cut deals with little regard for their customers' ability to repay the loans."
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: Bloomberg News
 California's housing market continued its historic decline in May, as a flood of foreclosed homes for sale drove down the median price paid for a single-family home by a stunning 35% from year-earlier levels, the California Assn. of Realtors reported today.
The median price paid for a single-family home in the state dropped by almost $210,000, from $594,530 in May 2007 to $384,840 in May 2008, the association reported. That drop represents a decline of $3,800 per week, or $549 per day, and is the highest ever measured by the association. The price decline appeared to be accelerating from April to May, as median prices dropped by 4.7% in that period.
“The statewide median price declined 35.3% to $384,840 in May, a record for year-to-year percentage decreases in the median, reflecting the effect of large numbers of short sales and foreclosures in the market,” said association Vice President and Chief Economist Leslie Appleton-Young. “With the statewide median in the $585,000- to $595,000-range through August of last year, we expect the market to continue to experience large year-to-year adjustments through the summer, even if the median price holds steady over the next few months.”
There was a glimmer of hope in the report: the number of homes sold in the state rose 18% from year-ago levels, marking the second straight month of year-over-year gains after 30 straight months of decline. The Realtors' group attributed the pickup in sales to a flood of cheaper houses -- many previously foreclosed on -- that has dramatically changed the state's real estate market. Additionaly, inventory of for-sale homes has decreased when expressed in terms of how long it would take to sell off all the inventory: "C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in May 2008 was 8.4 months, compared with 10.7 months (revised) for the same period a year ago," the association reported.
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo credit: Getty Images
 Sam Zell, the real estate mogul who runs the Tribune Company, put out this stunner this morning: he's willing entertain offers for the company's prize real estate holdings, which include the Tribune Tower in Chicago and the Times Mirror Square complex here in Los Angeles (pictured), which many know as the Los Angeles Times building.
Here's how Thomas Mulligan is covering the story for the L.A. Times: "Tribune Co. is putting two of its most historic properties -- the L.A. Times building and Tribune Tower in Chicago -- on the block."
This from an e-mail Sam sent to me personally, as well as every other Tribune employee: "... we are in the process of asking a number of real estate firms to give us their best thinking on how we can generate more value from Tribune Tower in Chicago, and the Times Mirror Square complex in Los Angeles."
More: "We’ll be considering numerous options to maximize the value of these properties. While a near-term transaction is possible, we’ll be focusing on opportunities that allow for some level of ongoing occupancy in both buildings for the mid-term (defined as five years), for farther out (15 years), and beyond.
"Most importantly, we are not rushing this process, and I can assure you we will not accept anything but full market value for these assets. As we made clear on our first quarter earnings call, Tribune has sufficient liquidity to satisfy our principal amortization requirements through 2008, due to the proceeds we will realize from the Newsday transaction, and from our plans to create an asset-backed commercial paper program.
"Our request for proposals, which is being issued today, is likely to generate media attention and debate about what we should or should not do with the properties. Both Tribune Tower and Times Mirror Square are iconic structures, deeply intertwined with the history of this company. But, they are also both under-utilized, and as employee-owners, it’s in our best interests to maximize the value of all our assets."
Your thoughts? Comment? E-mail story tips to peter.viles@latimes.com.
Photo: Los Angeles Times
Today's Case-Shiller report on home prices in large cities shows that home price declines in Los Angeles are accelerating, as foreclosures continue to weaken the region's housing market.
The Case-Shiller report for April shows prices in Los Angeles falling at an annual rate of 23.1%, an increase from an annual rate of decline of 21.7% in March. Nationwide, Case-Shiller's composite of 20 large cities also shows housing price declines accelerating, now falling at a rate of 15.3% from year-earlier levels.
Bloomberg News: "Home prices in 20 U.S. metropolitan
areas fell in April by the most on record, signaling the housing
recession is far from over, a private survey showed today."
The Case-Shiller report continues to show that the housing collapse is most severe in the west and Florida, with cities in those regions showing price declines much worse than the rest of the country. These are the markets where prices are falling fastest, according to Case-Shiller:
Las Vegas: -26.8%
Miami: -26.7%
Phoenix: -25.0%
Los Angeles: -23.1%
San Diego: -22.4%
San Francisco: -22.1%
Average of 20 large cities: -15.3%
Chicago: -9.3%
New York: -8.4%
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
California's housing slump continued to accelerate across the state in May, as the median price of homes sold fell a stunning 30% from year-earlier levels, with median prices falling by $2,700 per week, DataQuick Information Services reports today.
The median price paid for a California home in May was $339,000, a decline of $145,000 from the median price of $484,000 in May 2007. DataQuick estimates that roughly half of the decline is due to depreciation in home values, and the other half due to changes in the "mix" of homes selling, with cheaper, previously foreclosed houses increasingly dominating sales numbers.
DataQuick had earlier reported that Southern California home prices fell by 27% in the same period, but the statewide numbers are even weaker, as they include the hard-hit Central Valley of the state, where foreclosures are widespread.
Statewide sales of new and existing homes in May were 10.7% below year-ago levels, and 38.3% of the homes that sold in May were "foreclosure resales," DataQuick reported. A year ago that percentage stood at only 5.4%.
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
News item from today's L.A. Times: Small banks that backed homebuilders and developers are suffering the repercussions of bad loans: "... as foreclosures rise and home prices fall, many smaller banks and
thrifts that backed residential developers and home builders are
watching black ink turn red and are spending uncomfortable amounts of
time with regulators. The financial institutions also are enduring jabs
from critics who say they tossed lending standards out the window."
Here's the money quote: "PFF Chief Executive Kevin McCarthy said in an interview that his bank
started pulling back on land loans two years ago, anticipating a
downturn like "the normal economic cycles we've always had out here."
"But nobody foresaw what would happen to the housing market, or that
sub-prime mortgages would collapse so completely," he said.
Sound familiar? Here's Countrywide Chairman Angelo Mozilo back in March: "The problem that we face today was unanticipated and is much more severe than any cycle in the past.... It bears noting that no one predicted the severity and force of the housing downturn that followed."
With all due respect to the money men, it bears repeating that many did predict an epic housing bust. Angelo and Kevin clearly were not listening, but this bust was predicted on blogs like housing panic and www.patrick.net and by bearish economists such as Christopher Thornberg. Biggest boom leads to biggest bust. Biggest bubble leads to biggest bubble popping. What goes up must come down. Etc.
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Bookmark this link: It lets you look up median sales prices and year-over-year percentage change by ZIP Code in Southern California.
I ran some numbers on ZIP Codes with the biggest year-over-year declines in median price paid. Here's a partial list of the 40%-and-more club:
ZIP Code Location May '07 May '08 % change
90059 Los Angeles $410,000 $197,500 -51.8%
90002 Los Angeles $400,363 $207,500 -48.2%
93550 Palmdale $315,000 $170,000 -46.0%
90222 Compton $360,000 $200,000 -44.4%
90534 Lancaster $275,000 $154,750 -43.7%
90041 Los Angeles $670,000 $377,000 -43.7%
91040 Sunland $680,000 $386,000 -43.2%
91042 Tujunga $619,000 $355,000 -42.6%
Source: DataQuick Information Systems
Caveat: A lack of market activity, or a change in the composition of homes sold, in a single month sometimes leads to wide fluctuations in median sales prices.
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Housing prices in Southern California continued their record-setting decline in May, falling 27% from year-ago levels, as lenders continued to depress median prices by dumping foreclosed homes in rising numbers, according to DataQuick Information Systems. Housing prices have now rolled back to early 2004 levels, DataQuick reports.
Highlights of DataQuick's report on May sales in the region: Overall home sales for the region fell 14.9% from year-earlier levels and fell 26.7% in Los Angeles County. The overall level of sales in May was the lowest ever measured by DataQuick, which has tracked the regional market for 20 years.
The L.A. Times' Roger Vincent reports potential homebuyers are "doing their best to beat down
prices, even if it means delaying the purchase of homes they truly
want, agents said."
"Buyers are being very aggressive in the offers they are writing," said
Lynette Williams of Re/Max in Pasadena. "They are hearing about
foreclosures, hearing prices are dropping and feeling that if they wait
long enough the seller is going to come down in price."
Numbers: Median price pad for the Southern California region in May was $370,000, down from $385,000 in April and down 26.7% from the peak median of $505,000 reached in May 2007. The last time prices were that low was March 2004. In Los Angeles, the median price paid fell to $422,000, down $13,000 from April levels, and down 23.3% from the year-ago peak of $550,000, DataQuick reported.
Foreclosed houses made up 37.4% of the region's home sales in May, a dramatic increase from 5.5% a year ago. In hard-hit Riverside County, 56.6% of the homes sold in May had previously been foreclosed on. “What horsepower this market can generate right now is mainly fueled by bargain shopping, especially by first-time buyers and investors in inland areas,” said Andrew LePage, an analyst for DataQuick. “Meanwhile, sales remain especially slow in most higher-end markets, with jumbo mortgages (over $417,000) making up only a slightly higher percentage of all purchase loans in May than in April. That doesn’t bode well for the high-end, where so far prices have come off their peaks but have generally held up best.”
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
The Washington Post is in the middle of a three-part series on the housing bubble -- how it happened, what happened, and what happened when it burst. Worthwhile reading if you can carve a few minutes out of your day. Eye-poppers from the first installment, which chronicles the boom in sub-prime lending:
The annals of strange: Kevin Connelly, a loan officer at Pinnacle Financial, remembers the borrower who wanted to sign on behalf of her boyfriend because he was unavailable. Unavailable why? Well, you see, he was in jail. "Not a problem. Almost anyone could borrow hundreds of thousands of dollars for a house in those wild days. Connelly agreed to send the paperwork to the courthouse where the boyfriend had a hearing.... Still, Connelly said, "that was one of mine that goes down in the annals of the strange."
Connelly also remembered securing "many loans for restaurant workers, including one for $500,000 for a McDonald's employee who earned about $35,000 a year."
And who was selling the loans? A mortgage lender could hire practically anybody. "It's not rocket science," Connelly would tell new hires, such as the busboy who quickly traded in his Toyota Tercel (value: $1,000) for a Mazda Miata sports car (value: $25,000).
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
 Regular commenter TakeFive points out another troubled development, in addition to the three covered earlier today: in Azusa, where early buyers are ticked off that a master-planned community development has stalled.
Again from the Pasadena Star-News: "Frustrated over problems at what will be a new 1,250-home community, some residents want a home builder to buy back their homes."
More: "Two of four home builders at Rosedale, Fieldstone Homes and William Lyon Homes, stopped construction this year at the city's first master-planned community in the foothills. Neighbors living in Fieldstone's Arborview neighborhood said they feel cheated, others said being surrounded by vacant homes and unkempt grounds causes safety concerns."
The developer, through a spokesperson, denies allegations of shoddy upkeep, but acknowledges that new home construction in Rosedale is on hold.
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo credit: Submitted to Your Scene at LATimes.com by Dan Simpson.
 News item from Reuters: "LandSource Communities Development LLC, a large
Californian property developer backed by Calpers, the biggest public
U.S. pension fund, said on Sunday it had filed for bankruptcy
protection."
More: "While not a shock, the news is a blow to companies and funds unable
to extricate themselves from troubles in an industry laid low by the
credit crisis."
LandSource's primary investment, per Reuters, is The Newhall Land and Farming Company, which owns 15,000 acres of land north of Los Angeles (pictured).
The news is not a shock, according to Reuters, because it was widely reported a month ago that LandSource had defaulted on a loan. At the time, though, LandSource made noises indicating it could avoid bankcrupty: May 9, from the Los Angeles Business Journal: "“(LandSource) did go into default but they are
still talking to the lenders about restructuring the debt or modifying
the terms,” said Tamara Taylor, a spokeswoman for LandSource. “The hope
is that they will be able to renegotiate the terms of the loan to
everybody’s satisfaction.”
Aside: Bankcruptcy is not usually to everybody's satisfaction.
May 19, from the L.A. Times: "CalPERS President Rob Feckner said he hoped to forestall a bankruptcy
but stressed that "if we incur any losses, they will be minor" because
the pension fund is "very well diversified, in good shape."
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: L.A. Times
 Oil prices spiked sharply today, closing at $138.54, according to this report on latimes.com, which quotes a gas station owner predicting a 10-cent rise in gas prices later today:
"I'm expecting a 10-cent increase for my gasoline from Shell today," said Andre Van der Valk, who operates two Shell-brand stations and was selling regular for $4.49 a gallon. "From the consumer end of it, it's a killer."
Here's the A.P. from earlier in the day: "Oil prices shot up more than $10 to a new record above $139 Friday after a major investment bank predicted a spike to $150 in the coming weeks and rising tensions in the Middle East left investors uneasy about supply."
The connection to housing? Our region is built on many assumptions, one of them being the expectation that people here can travel easily and cheaply across vast distances without using mass transportation. I don't know of too many people who penciled out a budget that includes the cost of gas at $5/gallon, or higher. If oil prices hold at these levels it is a sucker punch to this region's economy, and by extension, to the housing market.
One more thought: The gas price pictured above, in Santa Monica on Thursday, does not reflect the $139-per-barrel price. This latest spike in oil prices hasn't hit us yet.
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo: L.A. Land, from the Pain at the Pump gallery on Your Scene at latimes.com.
Read more Update: Oil prices rise to $138 a barrel »
I know some of you are tired of reading about rising gas prices on this blog, but I'm not tired of writing about the subject. News items:
From the L.A. Times: "The average cost of gasoline in California, climbing 37% in four months, reached a record $4.24 a gallon Monday and helped drive the national average to the brink of $4, the Energy Department said. ... Pump prices in the state were the country's most expensive, according to the department's weekly survey."
In related news, from the Associated Press this morning: "General Motors is closing four truck and SUV plants in the U.S., Canada and Mexico as surging fuel prices hasten a dramatic shift to smaller vehicles. ... CEO Rick Wagoner also said the iconic Hummer brand may be discontinued."
Analysis: No other vehicle comes close to the Hummer as a symbol of the days of cheap oil and cheap credit of the late '90s and early 2000s. If you took all 28,000 comments posted on this blog, and searched them for rants about the toys that Americans bought with equity extracted from their homes, no toy would be mentioned more often than the Hummer.
What do gas prices have to do with L.A. Land? If they keep rising, they will change the way we move across L.A. Land, and where we live.
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo: Reuters file photo shows Arnold Schwarzenegger giving a thumbs-up at the world premiere of a 2001 model Hummer.
 In a sign of how difficult it is to sell new homes in Southern California right now, a San Diego developer is offering a "buy one, get one free" deal, pairing million-dollar homes with less expensive homes.
"We thought, 'Why does it just have to be on Pop Tarts and restaurants? Why not buy one home, get one free,'" Dawn Berry of Michael Crews Development told 10 News in San Diego.
More: "Michael Crews Development is offering new, 2000-square foot cityscape row-homes worth $400,000 in Escondido for free -- if you buy one Royal View Estate home in San Pasqual Valley starting at $1.6 million. 'You know it's a straight-up legit deal; no prices have been increased, there are no hidden costs. Michael is just giving away a free home for people that buy at Royal View,' said Berry."
"Adam Rossman of Michael Crews Development added, 'People have been coming in saying, 'How can you do this?' Well, it's our way of dealing with current market conditions to move some inventory.' "
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: Michael Crews Development
 The latest Case-Shiller report on home prices shows Los Angeles prices fell by 21.7% over the last year and were falling at an even faster rate this spring.
Nationally, Case-Shiller shows prices falling by 14.4% in 20 large American cities (see note below), by far the steepest rate of decline in the 20-year history of the index.
"There are very few silver linings that one can see in the data. Most of the nation appears to remain on a downward path," said David Blitzer, chairman of S&P's index committee.
The Case-Shiller report, which analyzes repeat sales of the same homes in large U.S. cities, shows the housing slump continues to be most pronounced in large western cities. The five biggest annual declines in price in March:
Las Vegas down 25.9%
Miami down 24.6%
Phoenix down 23.0%
Los Angeles down 21.7%
San Diego down 20.5%
Los Angeles continues to show accelerating annual price declines, although the month-to-month decline did slow a bit -- from 4.3% in the January-to-February period to 3.6% in the February-to-March period. Still, the 3.6% decline in the most recent monthly period makes Los Angeles the third-weakest housing market in the nation by that measure, with only Miami (-4.5%) and Las Vegas (-4.4%) losing more value.
Note on "20 large cities": An earlier version of this post reported, incorrectly, that the Case-Shiller index tracks home prices in the "20 largest cities." It does not, as Bruce Webb points out in his comment below. It tracks home prices in 20 cities, but they are not the largest in America.
Your thoughs? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: Associated Press
 There is another ugly headline, but also a hint of recovery in the new monthly sales statistics from the California Association of Realtors.
Ugly headline: Median sales prices in the state plummeted 32% from year-ago levels in April. From the Silicon Valley Business Journal: "The median price of an existing, single-family detached home in California during April was $403,870, a 32 percent decrease from the revised $594,110 median for April 2007, C.A.R. reported. The April 2008 median price fell 2.6 percent compared with March's revised $414,640 median price."
If you are scoring at home, that's a decline of $190,000 in a year, or $3,600 per week. I understand the median price is an imperfect measure, and doesn't indicate that individual homes lost that much value. Still, that is Tom Petty stuff, my friend, because that is free-falling (It's Friday, a bonus link).
Now the glimmer of recovery: Sales in April actually increased 2.5% over year-ago levels, breaking a 30-month streak of declines, the CAR reported.
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: Bloomberg News
 We have so many members of Congress in California that they often escape media coverage. That said, I thought I'd learn a little about Rep. Laura Richardson (D-Long Beach) (pictured, left), and pass it on. Richardson has denied press reports this week that she lost her Sacramento home to foreclosure.
--She's a Sen. Hillary Clinton supporter. She endorsed Clinton in September.
--She likes the Realtors, and they like her. She filed financial disclosure forms with the House Ethics Committee reporting the National Assn. of Realtors flew her to Las Vegas in November to help swear in the new president of the association, Realtor Dick Gaylord of Long Beach.
--In suggested remarks* at the NAR gathering, also filed with the House, Richardson's script read: "I might be one of the newest members of Congress but I am not a new member of the REALTOR Party. When I needed help to win a tough primary, REALTORS stood up and backed me even though I was the underdog."
--Real estate industry professionals have given her $39,500 in campaign contributions in the current election cycle, according to Open Secrets. Various unions really like her: they've given her $153,000 this cycle, according to Open Secrets.
--She won her seat in a special election last year after the incumbent, Juanita Millender-McDonald, died.
--Her district, the 37th, includes Compton, Carson, and parts of Long Beach.
--She faces a primary challenge on June 3 from Democrats Lee Davis and Peter Mathews, but their combined vote total in last year's 16-person Democratic primary was just 4%, and her hometown paper, the Long Beach Press-Telegram, has called her "a virtual shoo-in for re-election based on last year's Democratic primary results."
* It is not clear whether Richardson actually delivered the prepared remarks she filed with the House. Her office has not responded to questions regarding the trip.
Photo: Los Angeles Times
 The L.A. Times' Peter Hong reports this morning that the luxury real estate market is beginning to crack. Homes like the Beverly Hills mansion at left are being reduced in price -- this one was originally listed at $12 million, then reduced to just under $10 million.
"Median sale prices fell by 13% in Beverly Hills in April, compared with the same month last year. Rancho Palos Verdes dropped 18% over the same period, while Newport Beach's 92660 ZIP Code took a 34% hit, according to DataQuick Information Systems."
More: "Experts say these areas and others are catching up with price declines that struck first in outlying suburbs such as the Antelope Valley and the Inland Empire, where many first-time home buyers purchased their properties with sub-prime loans. 'You can't have one market hugely cheaper than another forever,' said UC Berkeley professor Thomas Davidoff, who specializes in real estate."
I'm curious to hear your thoughts on this story, as this is one of the two or three most-discussed subjects on this blog: whether expensive neighborhoods will eventually see large price declines. I know many of you have been waiting and hoping for significant declines and haven't seen them yet in your neighborhoods of choice. Thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo Credit: Los Angeles Times
More on today's DataQuick report on April home sales in Southern California: Median sales prices in Los Angeles have fallen 20.9% from peak levels, 19.4% over the past year, and have now rolled back to March 2005 levels, according to DataQuick's analysis.
The level of 12-month trailing sales in the L.A. market (the column at right below) continues to plummet, and is now running 40% below year-ago levels. Trailing 12-month sales provided a good overview of market activity;
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
Note: June 2004 stats are added to show peak levels of 12-month L.A. sales and y/y change in median sales prices.
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
 Breaking News: DataQuick reports a big bounce in April home sales in Southern California, with sales surging 21.9% from March levels to the highest level of sales since last August. DataQuick attributed the increase to "more sales of homes under $500,000 in inland areas where depreciation and foreclosures have been greatest."
Los Angeles County reported the weakest sales numbers for the Southern California region, showing a 30.6% decline from year-ago levels and a $5,000 drop in median prices paid.
Peter Hong's L.A. Times coverage is here; the entire DataQuick release is below. Highlights:
-- Despite the increase from March to April, the April sales total was 19% below year-ago levels and reflects the weakest April sales total in 13 years.
-- "Post-foreclosure homes continued to play a major role in the Southland market," DataQuick said, making up 37.5% of the market in April, up from 35.8% in March.
-- Median price paid across Southern California was $385,000 in April, unchanged from March, and down 23.8% from the peak median of $505,000 in April 2007.
-- In Los Angeles County: Sales were down 30.6% from year-ago levels, and median prices dropped by $5,000, from $440,000 to $435,000.
Photo Credit: AP
Click below to read the entire DataQuick news release.
Read more A bounce in April sales in SoCal; weakness in L.A. »
Here's a wacky one: "A former Arizona real estate agent is suspected in five armed robberies
in San Luis Obispo County, including one of a real estate agent and
another at a real estate office.
More, from SanLuisObispo.com: "David
Albertsen, 64, is suspected of robbing the agent during an open house
in Atascadero on April 27, two days after he allegedly walked into a
real estate office in Arroyo Grande and robbed an employee at gunpoint,
according to police. Albertsen was licensed in Arizona, according to that state’s Department of Real Estate. He obtained it in February 2007, but it is currently listed as inactive."
Armed robbery generally isn't funny, but you have to admit there is an element of humor in this guy's alleged MO: "Paso Robles investigators say Albertsen robbed a man sitting in a
car at a gas station May 2, adding that he seemed rather apologetic
during the crime. 'He said, 'Sorry dude, but I’m kind of desperate,' the victim told police. The man was robbed of about $45."
The "Sorry Dude" robber.
Hat tip: KP via e-mail.
News item from your government today: "The Securities and Exchange Commission today filed securities fraud charges against the promoters of a real estate investment scheme targeting the African-American community in the Los Angeles area and other locations in Nevada and Georgia."
In short, the alleged scheme was this: An Altadena woman named Jeanetta M. Standefor, through a Pasadena company called Accelerated Funding Group, operated an allegedly fraudulent "foreclosure reinstatement" scheme. More than 600 people invested $18 million in the scheme between 2005 and 2007, believing they could reap returns of up to 50% within 30 to 45 days, the SEC says. Investors were led to believe that their wildly profitable investments would also help distressed homeowners avoid foreclosure.
The SEC press release alleges this was the crudest, most primitive kind of financial fraud: There was no "foreclosure reinstatement" program at all. It was just a ponzi scheme -- you "invest" money with me, and later I give some of it back to you, telling you that is your profit. I raise more money and pay some of it back as "profit" to the new investors, keeping some of that money too. It's not complicated: I raise money and keep some of it. I don't invest any of it in anything.
From the SEC: "Standefor also used more than $1.9 million of investor funds for personal expenses such as her lavish wedding and honeymoon, cars, jewelry, tickets to entertainment event and home renovations. Standefor and AFG also misused investor funds to pay $121,000 in 'consulting fees' to Standefor's husband Darrell R. Dansby."
My attempts to reach Standefor for comment at Acclerated Funding Group were unsuccessful. The company still has a working phone line, but it goes to voicemail and the mailbox is full.
Bloviation: This is a bit harsh, but I'll say it anyway: The investors in this case may have been defrauded, but they were chasing a really silly dream. Anyone who believes they can make an investment relating to foreclosure, and then get a return of up to 50% within 30 to 45 days, is asking to be separated from their money. There's a name for that kind of thinking: greed.
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
 From L.A. Times staff writer Scott Reckard:
Will California become the central feeding ground for real estate vulture investors?
That’s what was suggested today in a report from London describing something called the California Distressed Land Fund Ltd.
The fund’s manager, David Michelson, plans to raise $150 million from European investors to buy raw land from developers and banks in places like the Inland Empire where home values have sunk lowest.
Michelson told Bloomberg News that he has developed and managed residential projects in California for more than 25 years. He said he's currently bidding for Riverside County land at “Armageddon” prices -- 20% of what it had been valued by builders.
The idea is to hang onto the property for six or seven years and then resell it. Michelson predicted he will eventually be buying from some updated version of the Resolution Trust Corp., the federal agency that liquidated the property the government inherited from 700 failed savings and loans in the 1980s.
He said his fund won't compete with dozens of hedge funds that are raising capital to buy securities whose prices have been battered by defaults on exotic mortgages.
“They're all looking to buy paper, we're looking at the dirt,” Michelson told Bloomberg. “We're builders. They wouldn't know how to file a building permit.”
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: Cape Vultures in South Africa, via A.P.
Though the market showed a few signs of life in April, Los Angeles home sales continue to slide dramatically from year-ago levels, with median prices also slipping, according to HomeData Corp.
HomeData numbers first reported in the Los Angeles Business Journal show:
--Sales for April increased 15% from March, but were still 43% below year-ago levels when April 2008 numbers are adjusted to show a four-week selling period.
--The median sales price slipped to $456,000.
--LABJ leads its story with the March-to-April jump in sales: "Los Angeles County home sales continued their rebound in April as warmer weather and falling prices coaxed home buyers back into the market." But the Journal adds, "While prospective buyers are leaving the sidelines, real estate observers believe it will take the market a few years or more to recover as foreclosures continue to muddy the market."
Separate stats from the SoCalMLS, however, show almost no April bounce from March sales levels, and show the median home price flat at $475,000.
One caveat: The most widely quoted and reported stats on SoCal home sales are the DataQuick numbers, due out later in the month. I generally err on the side of publishing too much information rather than too little. You guys are smart enough to deal with two sets of data. Or three.
Hat tip: To Cal, via comments, on both sets of data. Thanks, Cal.
Comments? Thoughts? E-mail story tips to peter.viles@latimes.com.
 You tell me what you think of this one, just breaking on LATimes.com: "The Los Angeles City Council today approved new rules to address major byproducts of the gentrification that has swept the city: Limiting the size of 'mansionization' additions and making it harder for developers to convert low-income housing on skid row into luxury lofts.
"The new rules radically limit the size of remodeled homes in the city's flatlands to 3,000 square feet in most cases, curtailing what homeowners say is a plague of behemoth, ugly stucco boxes that are killing neighborhood character."
One more: "The city has been criticized for years for not doing more to preserve the look and character of existing neighborhoods against "tear-downs," in which property owners demolish original homes and replace them with dwellings often two or three times larger.
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: Large house in Cheviot Hills, from LATimes
 Remember David Lereah? The bullish NAR economist and author of "Why the Real Estate Boom Will Not Bust"? Of course you do. Newsweek has an interesting interview with him here. Money quotes:
"We're not at the bottom ... we're not there yet. The leading indicators are still very bad. Pending home sales are still in bad shape. Mortgage applications are low … There's still supply out there in abundance … This thing is going to get worse before it gets better."
More: ""[I] just didn't realize the scope, the extent, the magnitude of the loose underwriting—not looking at incomes and wages, just providing so many mortgage loans based on [expected] future price appreciation rather than the creditworthiness of the borrower," Lereah says. "That got so out of hand, and none of us realized the magnitude of it until it was too late."
Now, then. That clears everything up, doesn't it? Of course it doesn't. Banks and lenders were throwing mortgages at borrowers like throw beads at a Mardi Gras parade, and the NAR "didn't' realize the magnitude of it"? Sorry, not buying it.
Your thou | |
Both far afield, but both worth noting:
