Tuesday, February 28, 2006

Realtor reports, end of February 2006

Here are some local realtor reports. These realtors rate the current market on a scale of 1 to 5, with 1 being a strong buyer's market and 5 being a strong seller's market. They also rate the current price trend 1 to 5, with 1 meaning a strong trend in falling prices and 5 being a strong trend in rising prices.

The South Bay Home Team does not have anything new to report on February 23. Q4 2005 showed 248 sales in all of Redondo Beach (SFR, townhouses, condos) with a median price of $799,000. In constrast, Q4 2004 had 340 sales with a median price os $679,000. Number of sales fell by 27% while the median price rose by 18%. They rate the current market 5 and the price trend 5.

Don Tambini rates the current Redondo Beach market 3 and the price trend 3. He reports that sales activity has definitely slowed. January 2006 days on the market for SFR was 76 days, compared to 32 days for SFR in January 2005. SFR and condo prices were about the same in January 2006 compared to January 2005, though townhouse prices have increased. 15 SFR sold for an average of $1,051,000 compared to 30 SFR selling for an average $920,000 January 2005.

As of February 24 there are 84 SFR on the market with an average price of $1,075,000. They have been on the market for a 36 day average. There are 103 townhouses on the market listed an average 31 days at an average price of $863,000. There are 30 condos on the market listed an average of 39 days at an average price of $796,000.

According to Don Tambini, Manhattan Beach is a different story. Both number of sales and prices for SFR were higher in January 2006 than January 2005. 23 sold for an average $2,125,000, compared to 19 sold for an average $1,806,000 in January 2005. Days on market for SFR, however, increased to 89 from 36 days YOY. Townhouse and condo sales are about the same YOY with prices increasing. Currently as of February 24, there are 84 SFR listed for an average 33 days at an average price of $2,564,000. 1 condo is listed for $879,000. 39 townhouses are listed for an average 46 days with an average price of $1,407,000. He's got both the current market and the current price trend ranked 3/5. (Note: We're not sure if Maria Sharapova bought her house here in January, but if so that sale was bound to skew prices up, ya think?)

Don Tambini also reports Hermosa Beach. Sales activity is slower for SFR; 4 sold in January 2006 listed an average 73 days, compared to 8 in January 2005 listed for an average 32 days. There was a relatively mild average price increase when compared to recent years - from $1,117,000 to $1,178,00. Currently, as of February 24, there 27 SFR on the market listed for an average 41 days at an average price of $1,836,000, 29 townhouses listed for an average 36 days at an average price of $1,269,000, and 5 condos averaging $571,000 listed for an average 17 days. Current market and price trend are ranked 3/3.

You can view more realtor market condition reports by clicking the links on this blog's sidebar.

Sunday, February 26, 2006

Sunday excursion, February 26, 2006

This week is a milestone. It's the first week where I am seeing numerous real estate listings with asking prices around the Zillow Zestimate, or well within the Zillow value range, and not above that range. Maybe some of the sharper realtors are using Zillow to help their clients price their properties more realistically. Or maybe the more realistic pricing has been there and I'm just now noticing it.

Visitors on this blog have pointed out that the local papers are now reporting YOY average home prices, as opposed to median prices. The YOY median home prices are now starting to look less than rosy. Just look for the link on the sidebar that says "So Cal Monthly Resale Activity", which reports median home prices, and you'll see what we mean. All it takes is for a few luxury megabubble sales in a group of lower-end depressed sales to boost the average value in order to make the average look good. On the other hand, the median is selected from the middle of an ordered list of sold homes, which is more indicative of where some real activity is. The averages, on the other hand can be fantasy figures.

Also, do not be taken by number of home sales for any particular zip code. They vary too much YOY and are not particularly indicative of a trend in either direction. The number of sales have declined for many zip codes - yes - but they have declined at this time in earlier years prior to zooming up again. We could see higher home sales zoom up again - but perhaps at drastically reduced prices, if the median price figures are pointing the way to the future. When this debacle is is full force and the deceptions are clear, perhaps reforms will be made in how home sales data is reported.

In any case, it does not look like much future momentum is being built into some asking prices for the moment, as they have in prior years. That has been the pattern here - to build in future momentum in asking prices. Will this now come to a shrieking halt? For the sake of the sellers who want to sell their homes quickly, I hope so.

And now, here are some of the properties we've gone by this weekend:

3122 Ruofud #B 3 bed / 3 bath / 2310 sq ft is located across and from our white dog-owning neighbors.

(as of February 26, 2006)
Asking price: $799,900   
Zestimate:    $758,175
Value range:  $667,194 - $818,829

Price History:             Year built: 1998
Aug 94:  $250,000
Apr 94:  $200,556

If the sellers get their asking price right now, that's nearly a 220% increase in 11.5 years. That averages out to about 10.6% a year. That's definitely higher than the official rate of inflation over those years.

3582 Drakcnip Avenue 3 bed / 2 bath SFR We did not swing around to get a photo of this - maybe next week? This one is currently priced out of the Zillow range.

Asking price: $899,000  (as of February 26, 2006)
Zestimate:    $788,079
Value range:  $693,510 - $851,125

Price History:      Year built: 1943, updated 1956
Mar 99  $363,000 
Jan 94: $260,000

This house has a 1 bed / 1 bath detached addition.

If this property sells now for its asking price, that's a 147% increase in 7 years, about 13.8% annually. Compare that to the 39.6% increase in just over 5 years from the 1994 sale. If you average out the increase rate between 1994 and 1999, it's about 6.9% a year. Although higher than the official rate of inflation during those years, it's certainly more "normal" than the average 13.8% annual price increase between 1999 and now. This quantifies why we have suspected a bubble in this area for years.

9142 Tnarg Avenue #B 3 bed / 2+ bath 1603 sq ft No photo.

Asking price:  $729,500
Zestimate:     $762,527
Value range:   $671,024 - $823,529

Price History:     Year built:  2003
Apr 03 $506,500

If this unit sells right now for its asking price, that's a 44% increase in just under 3 years. That's an average 12.9% increase per year.

4291 Sitruc 3 bed / 2+ bath 2047 sq ft TOWNHOUSE

(as of February 26, 2006)
Asking price:  $779,999
Zestimate:     $757,835
Value range:   $666,895 - $818,462

Price History:      Year Built:  1988
May 98  $320,000
Aug 94  $250,000
Mar 94: $202,631

If the seller gets the asking price right now, that's nearly a 143% increase in just under 8 years, or about 11.8% annualized. From the March 1994 sale, that's a 285% increase in about 12 years, or about 11.9% annualized. Notice the multiple sales in 1994. This was a very bad time for real estate around here and when asset prices collapse, they can overshoot the bottom end, then recover.

Just so you know what we mean about pricing in momentum, look at the following property. It has been listed since 12/27/2005. Notice the relatively recent price history. Whomever bought this last September either changed their mind about owning it in a hurry or was in for a quick flip. The asking price is well out of the Zillow value range. (Thanks to the reader who sent this in.)

2181 Rellefekcor SFR. No photo.

Asking price:  $910,000  (as of February 26, 2006)
Zestimate:     $793,181
Value range:   $697,999 - $856,635

Price History:         Year Built:  1992
Sep 05: $825,000
Apr 93: $370,000

If the seller gets the asking price right now, that's a 10.2% increase in 6 months, or over 20% annualized. Compare that to the 123% increase from the 1993 sale to the Sep 2005 sale (about 6.6% average annual).

Saturday, February 25, 2006

Single Family Home Prices 2005, YOY

The print version of the Easy Reader published this chart in the February 16, 2006 edition. Click through and you will see a larger image.

In case it is unreadable, the text says,

"Common wisdom says the real estate market is slowing down. It has to, but not just yet. Average sale prices at the beach in January showed double digit increases over Jan. 05's sales, with the exception of Hermosa, where prices have risen just three percent. El Segundo lead the way with a 43 percent average price increase over Jan. 05; followed by North Redondo at 23 percent; Manhattan Beach at 14 percent; and South Redondo at 12 percent. Source: Melissa Data."

The graph does not seem to match the text though. For example, the graph shows South Redondo down but the text says South Redondo is up 12%. Given that prices here have been unsinkable, at least up to now, we think the text is probably correct, and the graph is erroneous.

Thursday, February 23, 2006

Latest Housing Affordability Index numbers

According to data released on February 23 by the National Association of Homebuilders for the Los-Angeles-Long Beach-Glendale area, the median home price in Q4 2005 is $500K, and the median family income is about $54K. The housing opportunity index (HOI) is down to 2.3.

Back in Q1 1994, the median home price was $170K, the median family income was about $45K, and the HOI was 45.2.

Is it any wonder Angelenos are feeling a bit squeezed these days?

Sunday, February 19, 2006

Updates, February 19, 2006

Here are some quick market updates. According to the Los Angeles Daily News on January 16, 2006, home sales in Southern California in January fell to their lowest January level in 5 years, shedding 7.4%. However DataQuick pointed out that January is one of the weakest homeselling months of the year.

Sales have now fallen for two consecutive months, according to John Karevoll of DataQuick, but this does not signal a trend, he said. It will take until March to get a sense of how the market concludes a long boom cycle.

However, Annette Haddad of the LA Times used starkly different words.

Six months of gains in Southern California's median home price were wiped out in January while sales activity dropped sharply, further signs that the region's once-hot real estate market continues to lose steam.

Last Sunday (February 12) we stopped by this new construction, which is currently being offered at $1,299,900. It has been on the market since February 7. We didn't bother to go in.

We actually stopped at the open house at 0212 Ruofud #20. This is one of 28 condos in a complex just two doors from us. The open house was our very first chance (after living in this neighborhood well over 10 years) of seeing the inside of this complex. It is actually rather quiet inside, and the courtyard seems spacious. However the condo itself, although nice, with a shaded patio, seemed cramped, with small rooms (it is 3 bd/3 bath, 1368 sq ft). This was listed last year at $579,000. That listing expired and it has been relisted at $570,000 since January 25, 2006.

Unit #19 in this complex is also for sale, with identical beds/baths and square footage. It was listed October 19, 2005 at $610,000, which was reduced December 1 to $595,000. The current asking price of $589,000 was set December 20. We are not sure why #19 warrants an asking price of about $19K over #20, since #20 is actually off the street and has even more privacy.

Here are the recent price histories I could find for these units:

Unit #19 10/02/1998  $190,500
Unit #20 09/17/1997  $157,700
Unit #20 05/05/1997  $170,900

Zillow estimates are as follows:

         Zestimate Value range 
Unit #19 $525,976  $462,859-$568,054 ($589K asking)
Unit #20 $531,852  $468,030-$574,400 ($570K asking)

If Unit #19 sells right now for its current asking price, that's a 209% (over 3X) gain in 7 years, 4 months. If Unit #20 sells right now for its current asking price, that's a 277% (over 3.7X) gain in 8 years, 5 months.

Tuesday, February 14, 2006

Manhattan Beach SFR median price over the years

From this November 9, 2003 article in the LA Times called Sports stars' home turf is Manhattan Beach, you can see how the median SFR price has fared over the years. Notice the 10% slump in the first half of the 90's, which rebounded well. (The median price of a SFR is now about $1,473,000, as of about February 2, 2006, according to realtor Robert Kissig.)

Year...Median Price


*Year to date

Monday, February 13, 2006

Redondo Realtor Report, February 11, 2006

Realtor observations are still a mixed bag in Redondo Beach.

Realtor Don Tambini rates the current market 3 out of 5 (1=buyer's, 5=seller's) and the current price trend 3 out of 5 (1=falling, 5=rising). He reports:

Sales activity has slowed in Redondo Beach compared to last year. Single family residence (SFR) and condo prices were about the same in January of 2006 compared to January of 2005 but townhouse prices have risen.
                      Jan 2006    Jan 2005
Number SFRs sold:     15          30              
Average price:        $1,051,000  $920,000        +14.2%
Avg time on market:   76          32              +137%           

As of February 11:
SFRs on market:         77
Average price:          $1,065,000
avg time on market:     38
townhouses on market:   87
avg price:              $844,000
avg time on market:     33
condos on market:       33
avg price:              $799,000
avg time on market:     35
South Bay Home Team has not released any data for January, choosing instead to focus on the final quarter of 2005. SBHT ranks current market and current price trend both 5 out of 5. This is the SBHT data for Q4 2005 (which is not particularly new data):
                    Q4 2005      Q4 2004
number home sales:  248          340         -27%
median price:       $799,000     $679,000    +18%
median DOM:         32

Sunday, February 12, 2006

Sunday morning excursion, February 12, 2006

Yet another dog park excursion with the canine companion we borrow from our neighbors. Today was an unusually warm, very still day.

There are 3 condos in this complex at 1291 Swehtam. Unit A has an asking price of $969,000. Here are Zillow's current value estimates, along with available Domania/Zillow/tax assessor price history.
Zillow (as of Feb 17, 2006)     Value Range Estimate (as of Feb 17, 2006):
Unit A  $837,549   (2337 sq ft) $737,043 - $904,553
Unit B  $805,737   (2192 sq ft) $709,049 - $870,196
Unit C  $947,295   (2747 sq ft) $833,620 - $1,023,079

Sale price history:
Mar 04 Unit B  $639,006   (tax assessor)
Sep 02 Unit A  $529,000   (domania)
Aug 02 Unit B  $459,000   (domania)
3391 Swehtam is just a few doors down from the previous property. This is a townhouse. Asking price on Unit B is $889,000. The price history is not clear since Zip Realty says this property is brand-new, built in 2006. Zillow's price estimates, along with Zillow/Domania/tax assessor price history follows:
Zillow (as of Feb 17, 2006)  Value Range Estimate (as of Feb 17, 2006):
$709,247   (1950 sq ft)      $624,137 - $765,987

Sale price history:
Oct 04  $575,000
Jun 01  $295,000
8102 Nosibor has an asking price of $998,000. Original asking price when listed on Jan 1 was $1,150,000 and was cut on Jan 11 to $1,100,000. The asking price was cut again on Jan 14 to $998,000. So far that is a 13.2% reduction from original asking price, which is the first reduction from original asking price I've ever observed over 10%.
Zillow (as of Feb 17, 2006)  Value Range Estimate (as of Feb 17, 2006):
$830,676  (2100 sq ft)       $730,995 - $897,130

Sale price history:
Jun 96  $315,000

Friday, February 10, 2006

Signposts from Two Eras

This first image is from the book Timing the Real Estate Market, by Robert Campbell, a highly experienced builder in San Diego. You can read my quick review here. (I was a tad critical of his book because collecting the data he wants us to analyze seems a bit cumbersome - still, he has the exact right idea.) This picture from his book consists of headlines from the LA Times and the San Diego Union Tribune from 1991 to 1994.

The second image contains the titles of classes in the February - March - April 2006 edition of The Learning Annex. This is only a portion of the classes offered about real estate.

What do you think these two images say about real estate markets?

By the way, one of the classes offered at Learning Annex (not shown in this second image) is about how to time real estate markets in Los Angeles, by the same Robert Campbell. After reading his book I think I can safely say he will not fill your ears with any blather about it always being a good time to buy real estate. He'll actually teach something useful - a way of calculating market tops and bottoms. If you are interested, search the Learning Annex web site by typing in 874E. Or try this link.

Paying homeowner association fees on "air" condos

Centex Fusion devotees, more power to you if you're willing to plunk down money on a condo in a market that's about to tank, but I hope you read the fine ultra-tiny 2 point font fine print in your covenants, conditions and restrictions (CC&Rs).

According to California legal precedent, "air" condo owners must start paying assessments once the first condo is built in a sub-development, or they face foreclosure. The California appellate court ruling was (how appropriate) Bear Creek Master Association v. Edwards. There is a tiny amount of wiggle room out insofar that the association can discount out a portion of the fee that would go toward condo maintenance - since the condo isn't yet built.

This is a February 10 Inman News story by G. M. Filisko.

Thursday, February 09, 2006

California Association of Realtors News Release

According to a February 9 news release by the California Association of Realtors, the percentage of households in California able to afford a median-priced home was at 14% in December, down from 19% a year earlier. Your household had to earn $134,200 last year in order to be able to buy the median-priced home of $548,430. For us Angelenos, CAR's measure of affordability in LA County was 12%, up from 11% November 2005 but down from 17% December 2004. Just for fun, I perused the CAR's economic forecast for 2006:
The market will continue to be buoyed by repeat homebuyers, who have accounted for seven out of 10 purchases in recent years. These households will continue to use their equity gains from rising home prices to trade up or to buy a second home. However, would-be first-time homebuyers will find that it’s increasingly difficult to buy a home with both home prices and interest rates on the rise.
OK, so if the first time homebuyers are shut out from the market, who are the repeat homebuyers going to sell to? Was my significant other correct when he said that what drives the South Bay economy is "people selling real estate to each other and teaching each other yoga"? I couldn't help but notice their statement about "cautious optimism". These guys are sounding more and more like Wall Street stockbrokers.

Tuesday, February 07, 2006

Manhattan Beach market conditions - still up

The housing market may be slowing nationwide, but Manhattan Beach, a town described by realtors as casually affluent, shows no signs of slowing down. Robert Kissig, in his February 2 Manhattan Beach market conditions report for January, ranks both the current market and the price trend 5 out of 5 (pure sellers market, rising price trend). According to his report:
Single Family Homes Median Price:  $1,473,000 (+13.3% from 11/05)
Condo/TwnHse Median Price:         $1,294,000 (+21.2% from 11/05)
The big news in the local papers is that tennis star Maria Sharapova has bought property here about a block from the ocean. Manhattan Beach has been home to a number of sport stars, such as Tiger Woods, and George Best, the famous British soccer player who died last year.

Monday, February 06, 2006

February 4, 2006 market conditions report

Shorewood realtor Maddy Cespedes rates the current market a 3 out of 5 (1=buyers, 5=sellers), and current price trends 3 out of 5 (1=falling, 5=rising). She reports:
Homes that are well-situated, priced correctly and marketed properly are selling quickly (an average of 30 days). There has been 44 residential sales in the month of January 2006, 24 in North Redondo and 20 in South Redondo. Condominium prices started at $ 399,000.The highest price paid for a single family residence was $1,300,000 in North Redondo. Properties had been in the market for an average of 72 days.
I haven't seen anything listed in the local papers for below $400K, though I have noticed a few listings at Zip Realty coming in under $500K. We don't know yet if that $1.3 million North Redondo home is the one we blogged at 0143 Egdnir Lane, but if it is, that's a 60% gain in home value in just over 3 years.

Sunday, February 05, 2006

Sunday excursion, February 5, 2006

Another Sunday excursion to the dog park with our neighbors' cute white dog.

5122 Ruofud is on the same street where our dog-loving neighbors live, just a few doors down and across the street. It has been listed at Zip Realty since October 11, 2005 with an asking price of $900,000. The owners are clearly targeting a builder who wants to build two bubbleminiums on the lot.
The info on the Los Angeles County Tax Assessor doesn't look complete, but it looks like as of January 2002 it at least had a tax assessment value of around $247,203.

2002 Nosnibor is currently for sale at $769,000. It's probably one of the better deals around here, but it's all very relative. The current owner has been there, since 1985, I believe.

We stopped at the open house for 3191 Setag. Asking price is $1,198,000 and the property went on the market January 24, 2006. Built in 1994. The property has a back yard - a small one, but a back yard. Most of the new bubbleminiums have a yard the size of a postage stamp. The rooms here are sunny and spacious, kind of cheery. The house sits on a hill and has a good view west. The down side is that there is noisy traffic from the main street just half a block away. Overall, nicer than a lot of the bubble construction we've seen. The house needs some maintenance work though. From the info by the tax assessor, the tax base for this property was $542,128 in September 2000. It's difficult to think that somebody will likely pay over $1,000,000 and maybe even over $1.1 million for this.

Update: 0212 Ruofud is a complex of 28 condominiums. It's hard to believe they can cram all that in there. In an earlier post I mentioned two properties for sale in this complex.
The listing for #20 at $579,000 with Catalist Homes apparently expired, and the property is relisted with Prudential Homes for $570,000 as of January 25, 2006.
I would expect these lower end properties to be bought fairly quickly once spring selling season kicks in, because these are among the most affordable properties here in North Redondo. Of course it's all quite relative when I say "affordable".
By the way, Mr. Tax Man says that as of September 1997 the tax assessment base was $234,825.

And here we are resting after collecting all that information.

Friday, February 03, 2006

Mortgage delinquencies in California

According to this LA Times article dated February 3, 2006, mortgage delinquencies are increasing in California.

As housing price increases slowed in the last three months of 2005, the number of default notices sent to homeowners in Q4 rose 19% over the number of notices sent out in Q3, and was 15.6% more than the number of notices sent out in Q4 2004. All areas saw a rise in notices, but the counties with the largest percentage increase in notices were Napa, San Luis Obispo, San Francisco, Riverside, Orange, and San Diego.

The article states that only about 5% of homeowners who receive notices end up losing their homes. In rising markets they are often able to avoid foreclosure by selling their properties. The state's home appreciation rate peaked in Q2 2004 and has declined since then, and is expected to decline below 10% this year. The number of homeowners in default has been rising since Q3 2004.

(Things could get ugly real quick if the market deteriorates and delinquent homeowners find themselves unable to sell their properties to avoid foreclosure.)

Thursday, February 02, 2006

Redondo Realtor reports for December-January

Not even the realtors here in Redondo Beach see things the same. But one thing is for sure, this area still seems relatively resistant to the slowdown that has infiltrated real estate markets in other parts of the state and the country.

As of February 2, 2006, realtor Robert Kissig ranks the current market conditions as 5/5, with 1=buyer's market and 5=seller's market. Current price trend he ranks 5/5, with 1=falling and 5=rising. He reports the following current stats, up from November 2005:

   NORTH Redondo:
   SFR median home price:          $765,000     +17.6%
   condo/townhouse median price:   $675,000     +8%

   SOUTH Redondo:
   SFR median home price:          $951,000     +7.4%
   condo/townhouse median price:   $663,000     +8%

According to realtor Don Tambini, in his January 31, 2006 Realty Times report, sales activity has slowed quite a bit in Redondo Beach. On a scale of 1 to 5 he gives the current market a 3 (midway between buyers and sellers) and the current price trend is 3 (flat, between falling and rising). The prices for single family residences (SFRs) was down slightly in December 2005 from December 2004, but condo prices have risen.

                     Dec 2005   Dec 2004
Number SFRs sold:    13         38
Average price:       $784,000   $841,000
Avg time on market:  46         24

For January:
SFRs on the market:        81
avg price:                 $1,113,000
avg time on market:        37
townhouses on the market:  91
avg price:                 $842,000
avg time on market:        38
condos on the market:      24
avg price:                 $741,000
avg time on market:        44

As of January 30, South Bay Home Team ranks the current market and the current price trend 5/5. SBHT reports the following YOY stats for December:

                                      Dec 2005   Dec 2004
Number of sales, all residence type:       248        340     -27%
Median sales price:                   $799,000   $679,000     +18%

(I don't understand why they rank the current market rating 5/5 if number of sales is -27%.)

Realtor Martine Klein ranks both the current market and the current price trend a 4/5. As of January 26, she reports longer days on the the market, lower prices per sq foot, and offers being accepted below asking prices. She believes this is the "usual slowdown at this time of year".

As of January 15, 2006, realtor Kay Grundhaus also thinks the cooling off is "normal for this time of year". She ranks the current market rating as 4/5 and the current price trend 3/5. She expects prices to go up another 10% in 2006.