Housing market cooling in So Cal
Yet another L.A. Times story, by Jesus Sanchez on July 12, discusses the latest DataQuick median price figures.
We already know that San Diego is now officially sagging, down 1% YOY to $488,000. Los Angeles County continues to forge ahead, with the median price rising 8.8% YOY to $517,000, though that trend is slowing. New house sales increased 19.2%, while sales of all detached houses and condos dropped 14.6% and sales of existing condos dropped 21.5%, and existing home sales dropped 16.8%. Figures are not yet available for other Southern California counties (hmmm...)
It's interesting that new home sales continue to "hold up" while existing home sales drop. My own theory on that is that new homes are being sold by builders, who see the homes as merchandise that must be moved and will mark down prices quickly if necessary, whereas existing homesellers have emotional attachments or ego or both tied up in their homes and their asking prices, and are more reluctant to reduce prices since they perceive their homes as having a specific $$ worth. Even if that is true, though, we know from past downturns that builders still can go bust.
posted by bearmaster at 8:58 AM
1 Comments:
My own theory on that is that new homes are being sold by builders, who see the homes as merchandise that must be moved and will mark down prices quickly if necessary, whereas existing homesellers have emotional attachments or ego or both tied up in their homes and their asking prices, and are more reluctant to reduce prices since they perceive their homes as having a specific $$ worth.
Exactly. By the time the average homeowner catches to what's going on the builders will have already ruined the comps for them.
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