Monday, May 28, 2007

Other measures of beach cities market activity, April 2007

Shorewood has published April numbers, and I'm afraid the format they published in is a disgrace. I have already contacted Shorewood to ask them why the numbers aren't in a table like in all their other monthly activity reports. As it stands now, I have to make guesses about inventory, which I can correct in a future report.

The average DOM for the beach cities, by Shorewood's calculations, is 51, which is well up from a year ago. I have not had time to run DOM numbers on what I've tabulated for Redondo Beach sales, but my initial impression is that I am surprised this hasn't fallen a little lower, because many properties have been listed and sold relatively quickly this year. It's the properties whose owners got caught at the top and who resist lowering their prices that are not selling and accumulating horrifically long DOMs.

Things are rather interesting now because there seem to be two levels of consciousness running through the market - the "I absolutely refuse to lower my asking price" train of thought versus the "I'm pricing this competitively, just get me out now" train of thought. Guess which homes are spending less time on the market. If and when that nasty slump that many realtors are pretending never happened comes back, these conflicting modes of thought are bound to create some fireworks. And I see no reason why that slump shouldn't come back. Realtors have been calling the market in the years prior to 2006 "healthy", when it was anything but - fueled by speculation and shaky loans.

My measure of supply strength (demand weakness) is estimated this month since Shorewood has not published actual inventory numbers, only months of supply. I took a wild-ass guess at inventory and charted the I-S/S ratio. By this measure much lost ground has been regained. However, I've been noticing in May that the gap between new inventory coming to market and homes getting sold has narrowed substantially. If I am wrong about a resumption of the slump, and the recovery continues, then we'll know we're in full blown mania mode (and buyers wiill be at an even greater disadvantage) again when this ratio is within a few hairs of 0.

I consider Shorewood's tracking of median price more reliable than the breakouts by DataQuick. Overall, prices are slightly down from a year ago - not enough to make a substantial difference to a frustrated potential buyer.

In other words, it's the same old, same old. Oversized bloatominiums are still selling. Last week I talked to some neighbors who mentioned friends who were saving their money with plans to leave the state. I certainly don't blame their friends.

South Bay Resale Activity for April 2007

If you've read my previous posts on the DataQuick numbers at all, you'll know that except for the countywide SFR and condo numbers, which contain sample sizes of several thousand, I don't take these numbers by zip code and by dwelling type too seriously, because the sample sizes are too small to know anything statistically significant about trends.

And in a way the countywide numbers are meaningless for the average homeowner or prospective homebuyer - who cares that the county looks good if I only just want to transact one house in one particular neighborhood?

Nevertheless, Los Angeles County trendlines are still managing to snake up, though not nearly at the frantic pace of a few years back. Not even recent fallout by the subprime lenders have appeared to unhinge the market - not yet, anyway.

The talking heads on Bloomberg keep marveling at current conditions, noting that the housing market (overall, nationally) appears to be weak, but the economy is "good" (whatever that means), so the situation we are in is unprecedented. Is this the talk of somebody who has entered a tunnel and does not recognize the sight of an oncoming train?

Wednesday, May 16, 2007

4112 Nataab

4112 Naatab is directly across from me. I've posted about this property before, but I will refresh your memory. There was once a lovely 4 bedroom home that sat on this lot, over 2000 square feet, with a gorgeous leafy palm in the backyard. The property was sold to a builder in 2003 for $620,000. Two townhomes were then built. Unit A sold in late 2004 for $899,000.

To the best of my knowledge, the owners were in some kind of tax default in 2006, but I think they have caught up on their taxes. The annual property taxes are over $10,000 a year. The property taxes alone are two-thirds of what we pay in rent!

Unit A went on the market last August for $1,200,000. After a change of realtors the price was knocked down to $1,049,000 in October, then earlier this year knocked down to $985,000. I remembered thinking to myself that they would have to knock the price to down below $950,000 before they'd be taken seriously.

Well finally it happened. It is now reduced to $929,000. That's 22.5% down from the original asking price. March and April were very good selling months and they missed that opportunity to sell. Now that inventory is starting to pour back on they had no choice but to reduce further. I'll be interested to see what this poster child will finally sell for.

Quick look at Redondo Beach Sales stats through April 2007

For those of you who might be curious about such things, this is what my database and spreadsheets currently spit out in sales statistics for recent months:

STAT     DEC 2006   JAN 2007    FEB 2007    MAR 2007    APR 2007
records        50         48          64         105         114
MEDIAN   $737,000   $724,500    $745,358    $755,000    $799,000   
AVERAGE  $769,170   $762,005    $787,799    $813,252    $884,271
MIN      $400,000   $389,000    $387,500    $370,000    $470,000
MAX    $1,400,000 $2,100,000  $1,878,000  $2,027,000  $1,750,000

These are from pure sale records scraped out of Zillow. If the calculated median is of any use, it shows an increase of 8.4% since December.

So far this month, Redondo has been booming, especially South Redondo. South Redondo did very well last month, which I'm sure accounts for much of that jump in median price. I don't get the sense that people are panic-buying before any easy credit foreclosure windows close. I think they are buying because they are impatient and tired of waiting.

When I say "booming", that means "better than 2006 sales." In April, South Redondo sales volume exceeded April 2006 sales volume substantially, and barely exceeded April 2005 sales volume. The way things stand now, I think South Redondo May 2007 sales volume is almost certain to exceed May 2006 sales volume but I don't think it will come near to matching May 2005 sales volume.

And how about North Redondo? North Redondo April 2007 sales volume did not hit that of April 2006 but managed to squeak over April 2005 sales volume. As things stand now, I don't think May 2007 sales volume will exceed that of May 2006, but I might be surprised.

As I am posting this, inventory is accumulating at a rate of about 4 new listings a day (and by "new", I mean a property that is not just a relisting since last September). This is the heaviest I've seen it accumulate since I've started record keeping last September. If this continues, I imagine it will start to weigh on sales soon.

Tuesday, May 08, 2007

Real Estate $$$ Transacted through April 2007

Realtors are getting fat and happy again. Sales volume and dollar volume have continued strong through April particularly in the westside, including beach cities, though not as strong as in March. By outward appearances it looks as if the beach cities have shaken off their slump and are poised to resume their manic property appreciation, but I don't think so.

It looks as if some areas that may have particularly benefited from sub-prime lending, such as Inglewood, are now taking big hits. Look at the charts for Inglewood (90301 through 90305), Baldwin Hills (90008), South Central L.A. (90037, 90047), and Ladera Heights (90057) for examples of this. On the westside, Rancho Park (90064) is the biggest comeback story, followed by the beach cities. Yep, it feels like 2005 all over again. Prices have even leveled off somewhat - well the townhouse across the street just had its price slashed again, but that's a long story for another post.

Remember that the first figure (the percentage) is the % YOY change on the doubly smooth 3 month moving average of real estate transaction dollar volume in that particular zip code. The second figure is my "relative pain" measure. From a range of 0.1 - 4.4, the higher the number, the less chronic pain that zip code has felt. Roughly, anything below 1.0 has felt some pain, and anything above 1.0 has not felt very much pain.

Realtors fat and happy
90064        35.8%   0.3    Rancho Park/Cheviot Hills
90250        17.8%   1.1    Hawthorne
90503        16.9%   0.6    Torrance
90066        16.0%   0.4    Mar Vista

Doing very well
90278        12.8%   0.4    Redondo Beach (north)
90293        11.0%   0.6    Playa del Rey
90275        10.1%   0.1    Palos Verdes Estates
90045         5.4%   0.6    Westchester

Hanging in there
90277-90278   1.5%   0.3    Redondo Beach combined
beach cities -6.3%   0.3    4 Beach Cities combined
90254        -7.2%   0.3    Hermosa Beach
90732        -7.8%   0.8    San Pedro/Rancho PV
90249        -8.2%   1.0    Gardena
90505        -8.9%   0.3    Torrance
90230       -10.2%   0.8    Culver City
90266       -12.1%   0.3    Manhattan Beach
90277       -12.2%   0.1    Redondo Beach (south)
90501-90505 -12.7%   0.6    Torrance Combined
90047       -13.6%   1.6    South Central
90291       -14.3%   0.5    Venice
90717       -14.9%   0.5    Lomita

Slip sliding away

90303       -15.4%   1.4    Inglewood
90501       -15.7%   0.9    Torrance
90245       -15.9%   0.6    El Segundo
90034       -19.4%   1.9    Palms
90035       -19.8%   0.5    West Fairfax
90036       -20.9%   0.5    Park La Brea
90746       -21.5%   2.1    Carson
90301       -21.7%   1.3    Inglewood
90401-90405 -22.2%   0.4    Santa Monica combined
90043       -24.0%   1.1    Hyde Park, Windsor Hills
90504       -24.5%   0.5    Torrance
90232       -24.8%   0.7    Culver City

About to head over a cliff?

90304       -28.5%   1.3    Lennox
90044       -28.7%   2.3    Athens
90019       -30.5%   0.9    Country Club Park/Mid City
90062       -30.6%   1.5    South Central
90037       -31.5%   1.3    South Central
90008       -35.4%   0.8    Baldwin Hills / Leimart Park
90745       -35.6%   1.3    Carson
90301-90305 -35.8%   1.6    Inglewood/Lennox combined
90016       -37.2%   1.3    West Adams
90018       -38.1%   1.4    Jefferson Park
90302       -38.7%   1.4    Inglewood
90260       -39.7%   1.0    Lawndale
90292       -39.9%   1.7    Marina del Rey
90056       -40.8%   0.6    Ladera Heights
90502       -44.1%   1.6    Torrance
90094       -47.3%   4.4    Playa Vista

Over the cliff

90007       -50.2%   1.3    South Central
90305       -52.1%   3.5    Inglewood
90744       -84.3%   0.7    Wilmington

You can check the real estate $$$ tracker (link in sidebar) for detail about a particular zip code, though I only show charts for the area south of the 10 and west of the 110.

I notice that Redondo Beach inventory started picking up again right after Easter. Currently it is running at about 4 new properties a day. This is the highest rate I've seen new inventory hit Redondo Beach since New Year's.

I have been keeping track of whatever preforeclosure and foreclosure activity I find out about, but it has not been easy doing so. In addition, maintaining good sales data has been sucking up tons of my time. I have found the Easy Reader to be a good source of data so that my sale records are now more complete.

Right now I have over 1000 "supply" records of properties, most having been listed since the end of last September. Of these records, about 62% have no record of having been sold, and 38% have a record of being sold. The ratio of sold inventory to overall inventory has been rising, but that could be in part due to improved source data and my improved record keeping as a result.

I'm hoping this weekend to be able to resume my more usual blogging pace. Hang in there, I'll be back!