Los Angeles Business Journal: Uptick in volume may not presage rising prices
Why have I not blogged about the South Bay real estate market in two years? Because it would have been a complete and utter waste of time.
What has positively changed since the earthquakes started hitting the asset markets in 2007 and 2008? Other than a few heroin injections provided by Washington to stimulate the economy, all charged on a gigantic credit card to be repaid by the debt and tax slave labor of you and your children and their children, absolutely nothing. We have been in the eye of the storm. While we have been enjoying the relative calm in the storm's eye, Washington politicians and the financiers who bankroll their campaigns are as corrupt as ever and there are still trainloads of suckers out there who actually believe we are in a recovery.
I still have several of my tea party signs from 2009 in my closet here at home. Since nothing has changed they are still 100% relevant. I would welcome an opportunity to hold these signs up again and even create new ones. In the meantime, the tea party organization has become a joke, seduced by the likes of Sarah Palin, a shill for John McCain, GOP presidential candidate in the 2008 election who actually suspended his campaign at one point to rush back to Washington and vote for a heroin injection. Another tea party seducer has been Newt Gingrich, he of the high and mighty moral ground who left an ex-wife while she was dying of cancer. There may even have been child support issues, though I have not seen confirmation of that. Yep, just the kind of character we need running this country.
I quit the local tea party here long ago, in total disgust. I just don't believe in false idol worship of Ronald Reagan - he of the war on drugs, and of restrictions on how much money you can transfer or carry - because you might be one of those damn drug dealers! He talked a few good lines but he was an actor and he was supposed to say those lines. Nor do I believe in labeling Jimmy Carter a freak simply because he had the audacity to turn down the thermostat in the White House and wear a sweater to save on energy costs. Last week, for the 36th district congressional primary, I turned in my first blank ballot - ever. I regret not having written in, "None of the above."
We so desperately need people with integrity in office with the backbones to go after these bankers that have committed financial fraud, who have wrongly foreclosed on peoples' homes with "mistakes in paperwork", at the same time going after those who have lied on loan applications. Liars who have broken laws need to feel justice, no matter what rung of the ladder they have landed on. We are all supposed to be equal under the law.
Nobody in Washington - not even Ron Paul - is truly sounding this alarm nor taking any concrete steps to go after fraud perpetrators. He is the House Chairman of Domestic Monetary Policies and I have not heard a single word about the actions of Bank of America, Wells Fargo, or other lenders or of any plans to bring these institutions before justice. Dr. Paul may want to blame all our problems on the Federal Reserve, on shifting away from our Constitutional groundings, or on the credit bubble, but individuals, corporations and governments are still responsible for their own fraudulent actions, bubble or no bubble. While reducing the size of government sounds like the right thing to do, how does this idea translate into the more pressing and immediate matter of dealing with maybe millions of angry Americans who may resort to violent action because food costs have soared and they are about to lose their homes? They don't understand credit bubbles and Austrian economics. This country has no sheriff.
Enough of that. Here are the latest figures out of the L.A. Business Journal. Over the last two years, the journal has not been diligent about putting a leader on its front page when there is a residential real estate story. Nobody likes being the announcer of bad news so I think that has been a deliberate choice. The upshot of that is that I don't have LABJ data from the last two years, only whatever pieces I have picked up here and there:
-------------------------- SFR -------------------------------- COMMUNITY ZIP Apr %YOY Apr %YOY Sales Change Price Change L.A County 3,745 -10% $340,000 -3% El Segundo 90245 4 0% $845,000 +9% Hermosa Beach 90254 7 -13% $1,355,000 +52% Manhattan Beach 90266 19 -24% $963,000 -23% Redondo Beach 90277 11 +57% $899,000 -10% Redondo Beach 90278 14 0% $652,000 -8% ------------------------ CONDO -------------------------------- COMMUNITY ZIP Apr %YOY Apr %YOY Sales Change Price Change L.A. County 1,433 -6% $275,000 -11% El Segundo 90245 3 -25% $539,000 +32% Hermosa Beach 90254 4 -50% $865,000 -3% Manhattan Beach 90266 9 +200% $1,215,000 +16% Redondo Beach 90277 15 +36% $610,000 +1% Redondo Beach 90278 25 -17% $570,000 -15%
I got the impression from the LABJ article that the industry may be one step closer to facing reality. The headlines says "Uptick in Volume May Not Presage Rising Prices." Maybe somebody is finally catching on.
Let's face it. Some people don't recognize reality until the walls come crashing in on them and the water rushes in.
Right now I think is a dangerous time to even consider buying real estate, even though there are a few decent prices elsewhere in the country. Why dangerous? Because desperate governments short of funds do desperate things. That includes local governments. They will do what they damn well please regardless of the laws in the books designed to protect you because they know nobody's going to enforce those laws.
In front of me is an article called "A Homesteaders Journal", from the May/June 2011 edition of Backwoods Home Magazine, written by somebody with 20
undeveloped acres she had not improved out in the middle of nowhere. This is what really caught my eye - last year, her property taxes were $14. In one year, they were increased to $460. That's a 3185% property tax increase in one year. When you are retired and don't have steady income (how are you making out on the interest on your Treasury bills lately?) that sucks.
Another article in front of me is from the January 13, 2011 edition of the Manhattan Beach Reporter. Apparently the Hermosa Beach City Council tried to raise residential parking fees and the residents screamed bloody murder. One resident wrote,
"[Under] what rock have our City Council members been living? Is it possible these individuals are not aware that property values have plummeted and unemployment rates and home foreclosures are at an all time high?"
So in the land of sunshine and strand bicycling and beach parties, not all is well. Some people feel like they are hanging on by a thread. All it will take is another financial tsunami to tip them over.
I have an e-mailbox stuffed with over two years of real estate listings I have yet to enter in my database, plus over two years worth of sales clippings out of the Manhattan Beach Reporter that all need to be entered in my database - when I have the time. Today, I was amazed that I was actually able to import my old local real estate database into a newer version of MySQL on my new computer without a bit of struggle. So I am up and running. I am working at my real job close to 12 hours a day leaving me little time for other pursuits, so I will only state that I will do what I can do for this blog when I can.