L.A. Times: Southland Home Sales at a Nine Year Low
According to an August 15, 2006 article by Annette Haddad of the L.A. Times, price appreciation is "taking a haircut" and home sales volume, which has fallen for the last eight months, has now fallen to nine year lows in July here in Southern California.
Sales were 27% lower than July 2005, at 22,712 homes, and the fewest since July 1997. The median price, on the other hand, is still trending up, +4.9% July YOY to $492,000. That is the slowest YOY rate of appreciation since 2000. And the median price came down -0.2% from June.
In what may be the Understatement of 2006, DataQuick analysts declare the market is "heading into a lull". The 22% sales volume drop between June and July was the most since DataQuick started keeping records back in 1988.
San Bernadino County homes continue to enjoy double-digit gains, though sales volume there, too, is slowing, along with Riverside, Los Angeles, Orange, Ventura, and San Diego counties. For July, YOY median price changes were as follows: San Bernadino, +11.6% to $366,000; Los Angeles to $520,000; Ventura to $634,000; Orange +6.3% to $639,000; Riverside +7.5% to $414,000; San Diego -1.8% to $487,000.
Gee, whatever happened to all that insatiable demand the local realtors and economists were spouting off about just late last year? What happened to those bidding wars in which you had to write a letter to the owners begging them to sell you their house? Doesn't everybody want to live here?? These economists and realtors who comment on the current conditions did not say anything last year about sales in southern California dropping more than 25%, and they do not recognize the magnitude of what lies ahead.
posted by bearmaster at 4:34 PM
5 Comments:
Bearmaster,
I've become enarmored of the "uhaul index" as an indicator of job directional flow. Now, LA has a growing retirement population, so this won't 100% capture the middle class job blow but here are some numbers. (I picked Redondo beach on a whim.)
So I did an article on my blog! :)
http://recomments.blogspot.com/
This is the first article I consider "ready" for public consumption (outside of my family). :)
Is that offer for a link still good? :)
I feel my article is related, as I believe home prices are driving job flow and soon vice versa.
Neil
Neil,
Is there a source of data talking about a growing retirement population in this state?
"this won't 100% capture the middle class job blow"
That is exactly why I don't think property values in this state, or area, will readily bounce back - according to Californians in exodus, Californians are in net exodus. Retirees (the smarter ones, anyway) are looking to retire elsewhere, according to Californians plan exit strategy.
These articles confirm what Schizomania has hypothesized, in terms of very long term United States migration patterns. Have you read it yet? It captures why I am such a bear on this area.
Neil,
To answer your question I will put your link up in my housing bubble blog map on my housing bubble page.
Bearmaster
Thank you. Now I'll get two hits. ;)
Seriously, how come economists can never predict a recession 6 months or a year out? This one is far to obvious. Then again, looking at restaurant sales (say CAKE), it looks like it started six or seven months ago...
This is going to be scary. Between the job losses in Detroit, the continued rebuilding on New Orleans, Florida facing massive job flight, etc... no one will pity Southern California. We're going to have to dig ourselves out. :(
The more I read... the scarier its getting.
Neil
Neil,
I consider economics as practiced by our economists a pseudo-science, because the way our economists operate they think the economy is a machine that will operate correctly with the right button pressed here and the right pedal pushed there.
There is a whole science of social prediction evolving that explains a lot of things that economics cannot - I'm sure you've read books like Manias, Panics, and Crashes, but books like Bob Prechter's Socionomics tries to put mass psychology as the social driver in a usable framework. That was a life-changing book for me and it has totally altered the way I look at the world. You can download and view a documentary that touches on it at History's Hidden Engine.
The news media has got it all wrong. They try to explain what the stock market (or other asset market) did during the day in light of the day's news but they've got it totally backwards. It's mass psychology that creates events that we hear in the news, and it's the same mass psychology that drives the asset markets.
(I happen to have the box set on Socionomics available for sale but I haven't listed any of my copies out on Amazon marketplace yet.)
I consider Schizomania another groundbreaking work that has the direction of causality right - mass psychology drives a megatrend in real estate migration patterns.
The information is out there, but it needs to be read and digested.
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