Redondo Beach Foreclosure Activity for late June

You can check out the sidebar link "Southland area foreclosures" for more details on these cases. I am mentioning them because there happen to be a lot of them this week.

 
Address            Date of Auction      
The Village  105      2007-07-12     
182nd Place           2007-07-11    
Artesia Boulevard     2007-07-06     
Grant Avenue 3        2007-07-05     
Voorhees Avenue       2007-07-05     
Kingsdale Avenue      2007-07-05     
Camino de la Costa 3  2007-07-05     
McBain  Avenue        2007-06-28     
The Village 103       2007-06-28 

I do not have enough data from a year ago to compare with this year to be able to make any statements about increases in financial distress activity, but I believe there is in fact such an increase. With enough time I'll have more data to make a case.

Tropical open house party at Fusion Saturday, June 30

When I started this blog one thing I did not want to do was give free advertising to what I considered overbuilt high-density housing. I know better now - one little blog is not going to have an impact one way or another. The housing market is what it is, and huge forces have been set in motion to drive it to its destination.

Therefore, I might as well tell you that Centex is having a Tropical theme open house party at their Fusion condos, where you'll get to tour the models.

Saturday, June 30, 11 AM - 4 PM
5513 149th Place
Hawthorne, California

Speaker, Hawthorne Mayor Larry Guidi

I am going to try and go in the early afternoon. I figure with a crowd of people there I won't get pounced on by a salesman so that would be an excellent time to look around. If any fellow bubble bloggers or blog readers are planning to go, maybe I'll see you there!

Unfortunately Google maps does not point to the correct location when I type in that address, so if you are unsure of where it is, head for Aviation Blvd and Marine. Fusion is above the intersection (north), on the right side (east side) of Aviation. I assume there will be flags and balloons and sign twirlers so you can't possibly miss it.

Additional Charts for Beach Cities and Redondo Beach, May 2007

It is now June 24 but at this point in time Zillow has yet to post any Redondo Beach sales for June. Yet, Melissa Data shows 72 RB sales so far for the month of June. At that pace, sales volume for June will exceed what it was a year ago. I'd like to know why there is a reporting delay.

My figures differ very slightly for May, depending on whether I calculate them from the sales recorded on my SUPPLY records or from the original SALE records I've kept. But here are original asking prices, final sale prices, sqft, DOM, and PCTRED (percent reduction) out of (now) 70 SUPPLY records. Remember that if PCTRED is negative, that means that there were properties that sold above their original asking prices:

           ORIG      SALE       SQFT   DOM     PCTRED
          ASKPRICE  PRICE 
MEDIAN    823500    778500     1806     88     1.8
AVERAGE   881684    846226     1911    122     3.6
MIN       459000    453000      619     30    -2.8
MAX      1670000   1600000     4700    369    18.1

Out of my SALE records, SALEPRICE and SQFT are:

         SALEPRICE  SQFT
MEDIAN    777000    1787
AVERAGE   855228    1905

This chart is RB sales by square feet. We know median SQFT sold hovers somewhere in the 1787-1806 range (roughly).

Now here's one of those "food for thought" charts. Historically, sales volume in Redondo Beach has not been exactly bullish for several years! Look how high it was in April-May 2002, spiking past 180, and look where it is now,around 120. Higher and higher prices have been sustaining this market - the industry clearly does not "make it up on volume."

The moving average hit a peak around June 2002 (about 140), and the moving average around July 2005 tried, but didn't quite hit that previous peak. There was a slide downward, a bit of bounce, a retrace, and now the moving average bounce is about at where it sat July 2006.

At the moment both sales volume lines are pointed upwards - will the sales volume trend continue growing? At current sales rates, I guesstimate that RB will sell perhaps 102 units in June. We shall see.

The beach cities sales volume, too, closely resembles that of its component city Redondo Beach:

Other measures of Los Angeles beach cities market activity, May 2007

Shorewood has published May numbers. The format remains completely garbled and I have to make an educated guess as to what the inventory for the beach cities was for May. Fortunately I did get a correction from Shorewood for the April inventory.

Average Days on Market (DOM) for the beach cities has dropped down to 41.

If you've been following my posts, you'll know that I have recently been calculating a real median DOM for Redondo Beach at about 3 months, and a real average DOM at close to 4 months. My calculation counts the number of days from when a property was first listed to the time it sells.

Supply strength (AKA demand weakness) apparently bottomed in March and is now crawling back up. Unfortunately Shorewood's report does not report an inventory number for May, so I had to make an estimate based on what was sold in May (173 homes) and what Shorewood referred to as the months to sell off current inventory (3.0). If I-S/S continues to crawl up, I expect that eventually it will impact prices.

The median price of a house sold in the beach cities in May has hit a new record - $1,000,000. This is probably a better measure than the DataQuick numbers, and I think it reflects the trend of relatively recent years toward construction of bloatominiums and McMansionization.

Before you tear out your hair in despair thinking this market will never correct, let me remind you all what happened last time Southern California experienced a substantial housing downturn. The top was in 1988. There was notable weakness in 1989 that hit the lower end and middle tier of housing first. ARMs holders started feeling the pain. First-time buyers were effectively shut out of the market and the trade up market came to a standstill. In October of 1990 an executive from Shorewood was quoted in the L.A. Times as saying:

If they are waiting for the bottom to fall out, they are waiting in the wrong neighborhood...There just has never been any evidence of that in the South Bay.

But the housing downturn quickly overtook the high-end and coastal areas with a vengeance. By February 1991 DataQuick admitted that "the high end of the market had dropped off much more profoundly than any other part of the market." Bel-Air house prices had dropped 50% in 18 months. By May 1991 the L.A. Times reported in a special South Bay edition that both sales and median prices were down by 16%. By November 1992 peninsula foreclosures were selling for less than half their peak price. By June 1993 median peninsula prices were down by some 28%. A March 1994 south bay edition story reported that while many "dreams" have been fulfilled, many fortunes in the south bay had also been busted, thanks to the housing market.

One big difference between then and now is that back then, in the initial years of the downturn, lenders refused to allow home sellers to engage in a short sale, thus forcing them into foreclosure. Then later on, overwhelmed by all the foreclosures on their books, lenders eased up a little on short sales and accepted low offers for the foreclosed properties in their books. This time around, some lenders are bending over backwards to "restructure" problem loans so people can stay in their houses. The FHA is busy restructuring 2 out of every 3 of its problem loans, according to a June 15 New York Times story. Lenders are probably doing it so they don't have a pile of foreclosures on their hands. It's interesting how, in spite of that effort, foreclosure charts appear to be tracing out a rocket-path trajectory, isn't it. In my opinion, lenders are just delaying the inevitable.

Los Angeles Beach Cities Resale activity for May 2007

The fantasy persists. Never mind that price cuts are coming in thick and fast in Redondo Beach... the Los Angeles County median house price, as well as the beach city prices, seemingly defy gravity.

Long-time readers know I don't like the way HomeData and DataQuick report these numbers, but nevertheless I will continue to report these numbers. I do notice one thing interesting on these charts. With the exception of the Los Angeles County graphs, and the SFR chart for 90277, no prices, in terms of the moving average, have very recently hit new highs.

                          SFR   MEDIAN   %YOY    CONDO  MEDIAN   %YOY  
COMMUNITY         ZIP    SALES   SFR      CHG    SALES  CONDO    CHG
LA/Westchester    90045   31    $813     -2.9%     3     $366   -18.7%  
El Segundo        90245    9    $850      7.1%     2     $592    11.7% 
Hawthorne         90250   20    $554      6.5%     2     $414    -4.9%  
Hermosa Beach     90254   20    $925    -41.4%     7   $1,179     4.3%  
Lawndale          90260    6    $548      2.3%     6     $434    41.4%  
Manhattan Beach   90266   34  $1,450     20.6%    11   $1,594    49.8%  
Palos Verdes Pen. 90274   28  $1,533     12.2%     2     $385   -67.1%  
Rancho P.V.       90275   39  $1,072    -10.5%     5     $587    -6.1%   
Redondo Beach     90277   22  $1,035     18.6%    15     $763     4.5%   
Redondo Beach     90278   26    $765     -4.1%    30     $670    -5.4%  

The more I look at this data, and the more I compare it to what is going on around me, the more I think this type of reporting has flaws. The Case-Shiller index, in case you are not familiar with it, eliminates the upward median bias due to the trend in construction in recent years to inflate and bloat everything. What we need is a Case-Shiller index for the beach cities. Any volunteers out there? (Sigh.)

Redondo Beach square footage of unsold new construction, 2006-2007

I thought it would be interesting to see what builders are actually building so I can later compare it to what buyers are actually buying. After overhauling my data records to show the construction year (only for new homes), I was finally able to chart this:

And here are the stats:

           CURRENT   PCTRED  SQFT
           ASKING
MEDIAN   $1,195,000    0.0   2434
AVERAGE  $1,338,402    2.7   2564
MIN        $699,000   -5.2   1600
MAX      $4,990,000   19.2   4700

There is nothing that is being built that is less than 1600 sqft. In my next post I'll check and see exactly how existing smaller homes are selling. I suspect they are selling reasonably well, as long as they are very competitively priced. I wonder if the availability of smaller homes in places like Torrance, plus the availability of new high-density housing units such as Fusion in Hawthorne, limit the small-home "upside" (not to mention tightening credit and an overall market that is slumping anyway)...

Redondo Beach sales stats through May 2007

The following numbers are taken from the SALE records in my database.

STAT     DEC 2006   JAN 2007    FEB 2007    MAR 2007    APR 2007    MAY 2007
records        50         48          64         105         114          91
MEDIAN   $737,000   $724,500    $745,358    $755,000    $799,000    $777,000   
AVERAGE  $769,170   $762,005    $787,799    $813,252    $884,271    $855,228
MIN      $400,000   $389,000    $387,500    $370,000    $470,000    $453,000   
MAX    $1,400,000 $2,100,000  $1,878,000  $2,027,000  $1,750,000  $1,640,000  

My SUPPLY records which have recorded sales for May 2007 number about 68. According to my SUPPLY records, DOM, original asking price, sale price, percent reduction from original asking price, and square feet are as follows:

                ORIGINAL   SALE       PCTRED    SQFT
         DOM    ASKING     PRICE
MEDIAN    88    823500    802250        1.8     1806
AVERAGE  122    873072    836850        3.7     1886
MIN       30    459000    453000       -2.8      619
MAX      369   1670000   1600000       18.1     4700

From these numbers I notice that square footage has pushed up. When I ran these numbers for March sales on my SUPPLY records, median square footage was 1691 and average square footage was 1773. Median sale price was $749,000 and average sale price was $785,129.

If you divide March average sale price $785,129 by average square footage 1773, then compare it to May average sale price $836,850 divided by average square footage 1886, there is practically no difference.

Because of the push up in square footage, I figure that in May, buying BIGGER was the rage. 90277, home of the bigger more ostentatious homes, has particularly done well these last few months.

It sort of makes me wonder if there is one buying/selling season for Joe Schmo (March), and another season for Richie Rich (May).

I notice too from these numbers that median DOM has finally dropped. This could be the effect of newer inventory priced more competitively and selling more quickly. Also, it is unclear to me to what extent, if any, these numbers represent foreclosures being resolved through auctions, although there are some distress-type sales in these records.

I'm still not sure all the May sale records that I'm going to find are in. I can't guarantee it but I'll try to do the bar charts for May records this week.

L.A. Business Journal: Home prices set another record

According to this June 11 story by Daniel Miller (link may expire), the median home price in L.A. County is up again for May 2007. However, the story does state that the market is quite "lopsided", with the ultra high priced homes still doing relatively well while the lower priced homes lag. The median price for May, according to HomeData Corporation, was $585,000, which was 6.4% up YOY.

However, there were 5,666 sales in L.A. County for May, -37% from May 2006, which was -17% from May 2005.

Many local real estate professionals agree that the subprime implosion has made its impact. "Now you have to qualify at the full adjustable rate, and that is keeping out some of the buyers." Mortgage brokers are reporting that the tightened lending standards are "killing some deals that would have been made months ago", and that the lower end of the market is "falling out with a steeper drop in sales."

The California Association of Realtors (CAR) says that there has been slowing in every segment of the market, but the inventory buildup has been greatest in the below-$500,000 range. (Of course here in the four major beach cities, properties priced in that range are about non-existent!) For April 2007, there was 14.6 months of unsold inventory in Los Angeles County in the below-$500,000 range. For all price ranges in Los Angeles County, April saw 12.1 months of unsold inventory, over double from 5.6 months YOY.

According to the article, the experts are saying a "healthy" market has about a 7 month supply. For April 2007, days on market (DOM) has been averaging 55.5 days, compared with 34.5 days YOY. From the calculations I've run on inventory for my Redondo Beach records, I estimate real average DOM for RB to be double that.

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As long-time readers of this blog know, I don't care for the way HomeData or DataQuick report median home sale figures because of the potential statistical problems of small numbers. Nevertheless, this is all we've got to go on, so for you curiosity-seekers I'll list the May 2007 numbers for the beach cities and some of the surrounding areas. These numbers are not shown in the online version of the article, only the print edition:

SFR SALES

       May Home Sales                   May Median Price
Zip    2007    2006    % Change        2007         2006      % Change
90045    33      41      -19.5%    $800,000     $845,000        -5.3%
90245    10      18      -44.4%    $837,000     $887,000        -5.6%
90250    42      64      -34.4%    $552,000     $528,000         4.5% 
90254    29      23       26.1%  $1,255,000   $1,260,000        -0.4%
90260    11      27      -59.3%    $675,000     $600,000        12.5%
90266    48      52       -7.7%  $1,704,000   $1,766,000        -3.5%
90274    26      19       36.8%  $1,365,000   $1,350,000         1.1%
90275    31      43      -27.9%  $1,175,000   $1,145,000         2.6%
90277    27      14       92.9%  $1,069,000   $1,112,000        -3.9%
90278    31      36      -13.9%    $775,000     $855,000        -9.4%
90501    27      30      -10.0%    $594,000     $594,000         0.0%
90502    11      15      -26.7%    $539,000     $531,000         1.5%
90503    30      23       30.4%    $765,000     $750,000         2.0%
90504    25      40      -37.5%    $590,000     $622,000        -5.1%
90505    24      37      -35.1%    $800,000     $810,000        -1.2%

CONDO SALES

       May Condo Sales                   May Median Price
Zip    2007    2006    % Change        2007         2006      % Change
90045     4       6      -33.3%    $406,000     $432,000        -6.0%
90245     4       8      -50.0%    $548,000     $696,000       -21.3%
90250     7       7        0.0%    $593,000     $435,000        36.3% 
90254     3       6      -50.0%    $444,000     $789,000       -43.7%
90260     5       3       66.7%    $430,000     $307,000        40.1%
90266     5       3       66.7%    $900,000     $900,000         0.0%
90274     3       1      200.0%    $460,000     $743,000       -38.1%
90275     5       6      -16.7%    $695,000     $550,000        26.4%
90277    20      19        5.3%    $769,000     $721,000         6.7%
90278    40      41       -2.4%    $686,000     $740,000        -7.3%
90501    18      11       63.6%    $525,000     $492,000         6.7%
90502    10      32      -68.8%    $347,000     $369,000        -6.0%
90503    20      17       17.6%    $541,000     $535,000         1.1%
90504     1       3      -66.7%    $434,000     $440,000        -1.4%
90505     3       3        0.0%    $462,000     $450,000         2.7%

What does Mischa Barton have to do with L.A. County's beach cities housing market?

Hello blog readers, I wrote this article for another website, and thought you'd enjoy it, even if it is a little kooky.

Mischa Barton and the beach cities housing market

Snapshot of outstanding Redondo Beach inventory, June 9, 2007

After spending an evening updating my data records with the latest asking price reductions, I thought I ought to take another snapshot of inventory to see where things stand. We just might see some unraveling from here - who knows.

I have a feeling that a lot of realtors are getting yelled at right now by frustrated sellers who haven't yet faced the reality of falling prices. Take a look at this June 9 Craigslist ad, for instance (link will expire):

$549000 Seller wants out now!!!

Perfect for the first time buyers or investors!!! Over $18,000 remodeling thru out 
the house. New carpet, new bathroom, new stove & range... Got to see to appreciate 
this gem. End unit with two large bedrooms and vaulted ceilings. Each with own sink 
vanity. Step-up dining area leads to kitchen with glass cabinets facing dining room. 
New stove and range. Windows with custom blinds. Lots of linen storage. New laminated 
wood floor. Attached 2 car garage has washer/dryer & extra storage room. 4 Guest 
parking within the complex. Pet friendly private patio. Low HOA. House includes 
stove, range, refrigerator, washer and dryer!!! Close to beach, park and school. 
Submit an offer cause seller is VERY VERY motivated!!!

2510 Voorhees unit 8 at Inglewood Ave  

This property has been listed about a year. Over the past year, the asking price was fiddled with. At one point it was down to $519,000. Then it was raised back up this spring - what were they thinking?!? That prices had bottomed? Maybe we can start measuring frustration levels by the number of adjectives that appear in front of "motivated."

It's not like the seller "needs" this price (unless he's been using the house as a teller machine). The seller acquired the townhouse in September 2000 for $221,000. But let's face it, this is the least desirable part of north Redondo, the east side along Inglewood Avenue, so it's practically Lawndale.

If sellers are losing it, that would probably explain the tenseness I sensed in the visit I got from a local realtor on Friday night. Some realtors are in the position of being the bearers of bad news and may be unable to convince clients to lower asking prices despite printed reams of comparables.

Back to the snapshot. From the latest batch of updates I sense that the price reductions are coming more quickly and are steeper. But when I tried putting the price cuts in a chart, amazingly, nearly 79% of the outstanding inventory in my records have price reductions of 0 to less than 5%! Most of these are 0% - that's where the median percent price reduction lies. This data wasn't worth putting in a chart because, in spite of some rather dramatic cuts, reductions are still relatively few compared to all the inventory out there.

This is the data I was going to chart:

> 25% red       1      0.1% 
20-25% red      5      0.7% 
15-20% red      6      0.8% 
10-15% red     36      5.0% 
5-10% red      90     12.5% 
0-5% red      568     78.9% 
0-5% inc        9      1.3% 
5-10% inc       4      0.6% 
> 10% inc       1      0.1% 

Here are the latest days on market (DOM) numbers:

MEDIAN   114
AVERAGE  142
MIN        0
MAX      493

There was actually a record showing 524 days on market, but I threw it out for this particular calculation, because I'm not really sure the property is still for sale. That outlier is a condo which happens to be part of a big complex located just a few doors away from me, and as far as I know, it was rented out and selling plans were deferred.

I was sort of expecting these numbers to drop since I last calculated them (maybe 4-5 months ago), since we've had a lot of sales in the spring with relatively short DOMs. If anything, the numbers are higher. Realistically, people can expect their properties to stay on the market four months, minimum. And by the way, that max DOM at 493 days I think is new construction. Gee, it must be nice to be a builder who can just let property sit and collect cobwebs and not have to worry about carrying and holding costs!

If there have been so few price reductions, then we can expect that current asking prices haven't changed much from original asking prices. Furthermore, current asking prices have edged up only a little since I last calculated them around the beginning of the year. Homes are still priced on the assumption that prices are going to do nothing but zoom up. Here are the statistics:

           ORIG       CURRENT
           ASK        ASK
           PRICE      PRICE
MEDIAN     875000     855000
AVERAGE   1012248     986222
MIN        365000     357500
MAX       4990000     4990000

Inventory seems to be centered around the $800,000 area:

42.6% of this inventory lies in the range up to $800,000, and 52.7% of the inventory lies in the range $800,000 and above.

When all May sales are in, I'll try running the same inventory distribution to determine how sales compare to inventory.

Beware the housing scalpers

When we have tools such as Zillow that enable us to look up a property's price history, ignorance is no excuse for overpaying for a property. Nevertheless, I suspect that there are scalpers out there who are praying that you don't use such tools to your advantage.

Here's an example of what I mean. 4142 Noslen #A was listed December 18 for sale at $820,000. A sale record is posted for January 18 at $686,219. I do not entirely understand the transaction chain here, but the property is now lender owned. (Since I don't know much about foreclosures, I don't know exactly what the $686,219 represents - my wild guess is the default amount.)

The lender slapped on new carpet and paint, and is now listing the place for $759,900.

This property was sold to the defaulting homeowner in October 2003 for $614,000. I think a sale at $686,000 would be like winning the lottery and even a sale at $614,000 would be very fortunate, but as this spring has proven, there are impatient buyers out there who want their house NOW and are willing to pay to get it. We'll watch this one and see how it goes.

L.A. Times: Flood of Foreclosures could drive home prices lower

From my initial interpretation of May data, it looked to me like the party is rapidly drawing to a close. We hit the iceberg a while back, and our hosts said there was a bit of flooding in the recent homebuyer room and the damage was confined, so everybody continued to party. But now the engineers have fled because more compartments have flooded. First it was the subprime compartments. Now our economic ship is lurching oddly, and it really looks like it's time to get those lifeboats ready - this could be serious.

This June 8 article by Annette Haddad reports that the lenders looking to unload properties aren't slashing prices just yet, but that could all change.

Right now about 3% of homes in California are owned by lenders, compared with less than 1% a year ago. So far, lenders have not felt too much heat yet from carrying non-performing assets on their books. Lenders say they are "concerned" about "flooding" communities with "below-market" priced homes and contributing to further deterioration of a neighborhood.

Southern California foreclosures increased 18% just from March to April. In one study cited, owners will take 20% or more off their asking prices when foreclosures make up 8% or more of sales. Well, if the batch of Redondo Beach data I collected last week is any indication (keeping in mind that one week of data is not definitive), Redondo Beach may be steaming into that port soon.

We've already seen 25% come off of peak asking prices on homes listed during the Great Trend Change (end of 2005 - beginning of 2006). But we haven't yet seen 20%+ reductions en masse. You know, panic slashing. I'm waiting for that.

About a year ago, 10 homes of all the homes up for sale in the five-county region of Southern California were owned by lenders. Today, that number is about 3,000 out of 120,000.

Countrywide's nationwide list of foreclosed homes is up 60% since January.

---

So when did lenders get so altruistic? Weren't they concerned about changing the character and affordability of a neighborhood when they approved all those bubbleminium and dot condo and Taj Majal construction loans? Weren't they concerned that applicants had to stretch too far to make payments and that the applicants were going down the road to financial ruin?

The lenders with REOs are caught between a rock and a hard place. The end result will be the same. They can decide to slash prices now or market conditions will force them to slash prices later. Either way prices will come down.

If the lenders don't start cutting prices now, would-be buyers will remain fed up and may consider looking out of the region. When buyers get pissed off and leave, what's that going to do? When companies can't recruit workers from out of state because of high housing costs and the company decides to move elsewhere, what's that going to do to this market?

If the lenders cut prices now, maybe prices will start down sooner and maybe we can get the pain over with a year or two sooner, rather than dragging the pain out further.

Lenders this year are counting on a rebound. They are literally betting the house on it. We've seen this movie playing before, in the early 90's, and it wasn't pretty.

I'm sitting in my apartment pondering the sorry state of this housing market, and a Shorewood realtor rings my doorbell...

inviting me to an open house for a place down on Curtis. Wow. A hand-delivered flyer and an invitation delivered in person!

Earlier this year, unlike last year, I did not get the flyers and calendars left on our doorstep from local realtors. Now I've gotten a personal invitation to an open house.

Guess that terrific spring selling season is over! Hmm, do they know they're inviting a beach city bubble blogger to these events?

When the woman said she was from Shorewood my heart almost sank - I thought I was getting busted for something. She did not seem cheery and very very friendly the way you'd expect a realtor to be. In fact, she seemed just a tad tense.

Anyway, she introduced herself and invited me to this open house, handing me the flyer shown below. I've lived in this neighborhood steadily since 1995 (and spottily before then) and know this house well. I happen to like it a lot - it has that cute eye appeal and definitely stands out nicely in a neighborhood full of recently built bloatominiums.

Recognizing the house, I took the flyer, but told her we weren't really interested. She said OK, well if you know somebody who needs a realtor, please give them my name.

Well, if I'm going to egg on the demise of this market (which may destroy the livelihoods of many realtors and God knows how many other people and businesses), the least I can do is post this flyer for this lady. I'm distributing it in a way she's probably never imagined. She's looking for business, so if you want to sell your place, here is her info (I'm not even bothering to blot out the address of the open house):

Real Estate $$$ transacted through May 2007

I hope realtors have been enjoying their fat and happy spring. May was a pretty good month here in the south bay and westside, but I have reason to believe that sales momentum is dying. If so, realtors are going to need to put up the storm shutters.

Places like Inglewood and parts of South Central are continuing to take blows, probably from the subprime fallout. The westside has been on a wondrous joyride. Even Santa Monica looks like it has faintly perked up a little. Torrance has been crawling back overall, but Lomita seems to be in the dumpster. Lawndale is not looking particularly good and Hawthorne looks a bit limp.

In many zip codes, sales volume is down substantially from last year. Places like south Redondo (90277), which pole-vaulted over last year's sales volume, are the exceptions, not the rule. El Segundo (90245) exactly matched the May 2006 sales volume; 90254 (Hermosa) climbed over last year's sales volume by about 10%; 90266 (Manhattan) didn't quite match last May's sales volume; North Redondo (90278) was about 10% short of last May's sales volume. This is a different picture than we saw in March and April, and it is one reason why I think the good times are wrapping up, in addition to the rest of southwest L.A. county looking blah.

Another reason I think the good times are wrapping up for the year is because sales data is curiously lagging again. This week is the first week in 3 that the Easy Reader has published weekly sales data again. The previous two weeks the sales notices were absent. Easy Reader has been unfailingly publishing weekly sales data throughout the spring, but the paper stuttered at the end of May. We'll see if that really means anything.

I entered the sales from this week's paper into my database. Out of 31 sales, 5 are definitely short sales and a number more are still sold at a loss, when you consider the cost of selling the property. Some of these "bargain" sales had suspiciously ultra-short DOMs, which leads me to wonder if they were auctioned. This is a third reason why I think all is not well. One property was bought in the late summer of 2004 and has been sold at a price at which it is fairly certain there is a loss. Unless the seller has had the property for many years, it's getting very difficult to sell without getting burnt.

A fourth reason why I think the good times are wrapping up is because the gap between inventory and sales is narrowing quite a bit. Trust me, I have not been neglecting this blog, I have been spending my time carefully logging inventory and sales records. I have accumulated over 1100 records since late September, and some 38% have sales recorded for them, while 62% still don't have a sale recorded. This ratio has been fairly constant now for well about two months. New inventory that came online in May came close to overtaking sales, and in June it just might happen. This is important because when new inventory comes on at a rate that exceeds the rate at which homes are sold, it gets more and more difficult to sell off that longstanding overhang.

And here are the %YOY rankings on the doubly smooth 3 month moving average of $$$ volume. Remember that the second number is a measure of pain. The lower the number (closer to 0) the more time the %YOY number has been below 0 and the more pain that zip code has experienced. The higher the number, the less time that zip code's market has spent with %YOY dollar volume below 0 and the less pain that zip code has experienced. If you see a high %YOY ranking and a pain ranking close to 0, that means there has been a recent strong rebound. If you see a very low %YOY ranking and a strong positive pain ranking, that means that market weakness is a relatively recent problem. This month, the pain range is from 0.1 (high pain) to 4.3 (low pain).

Realtors fat and happy
90064           36.4%  0.3  Rancho Park/Cheviot Hills
90503           19.6%  0.6  Torrance
90278           15.0%  0.5  Redondo Beach (north)
90066           13.8%  0.4  Mar Vista
90293           13.6%  0.6  Playa del Rey

Doing very well
90277-90278      9.6%  0.3  Redondo Beach combined
90250            8.6%  1.1  Hawthorne
90275            8.3%  0.1  Palos Verdes Estates
90732            7.5%  0.8  San Pedro/Rancho PV

Hanging in there
90277            2.3%  0.1  Redondo Beach (south)
beach cities     0.9%  0.3  4 Beach Cities combined
90505            0.6%  0.3  Torrance
90245           -2.2%  0.6  El Segundo
90254           -2.3%  0.3  Hermosa Beach
90501           -2.9%  0.9  Torrance
90045           -4.6%  0.5  Westchester
90266           -5.4%  0.3  Manhattan Beach
90230           -6.6%  0.8  Culver City
90717           -7.1%  0.5  Lomita
90501-90505     -8.9%  0.6  Torrance Combined
90034          -12.6%  1.9  Palms

Slip sliding away
90304          -15.9%  1.3  Lennox
90036          -18.3%  0.5  Park La Brea
90291          -19.5%  0.5  Venice
90249          -20.4%  0.9  Gardena
90401-90405    -21.3%  0.4  Santa Monica combined
90056          -21.7%  0.6  Ladera Heights

About to head over a cliff?
90232          -25.0%  0.6  Culver City
90043          -27.0%  1.1  Hyde Park, Windsor Hills
90047          -27.0%  1.5  South Central
90504          -28.1%  0.4  Torrance
90094          -29.1%  4.3  Playa Vista
90301          -29.5%  1.3  Inglewood
90303          -31.9%  1.3  Inglewood
90746          -32.8%  2.0  Carson
90035          -32.9%  0.5  West Fairfax
90019          -34.7%  0.9  Country Club Park/Mid City
90044          -34.9%  2.2  Athens
90062          -36.0%  1.5  South Central
90018          -36.8%  1.4  Jefferson Park
90016          -39.3%  1.2  West Adams
90260          -39.6%  0.9  Lawndale
90037          -40.4%  1.2  South Central
90008          -40.7%  0.7  Baldwin Hills / Leimart Park
90007          -41.9%  1.3  South Central
90292          -42.6%  1.7  Marina del Rey
90745          -44.1%  1.3  Carson

Thelma and Louise style, over the cliff
90301-90305    -50.0%  1.6  Inglewood/Lennox combined
90502          -50.6%  1.5  Torrance
90302          -56.4%  1.3  Inglewood
90305          -71.4%  3.5  Inglewood
90744          -78.8%  0.6  Wilmington

Speaking of Hawthorne, just as Centex Fusion has progressed to the early problem loan or flipping stage, what should come on the scene but the new development at Aviation and El Segundo Boulevard. Lyon Homes has broken ground on their 360 at South Bay project and appear determined to pour even more traffic onto Aviation. The project is a few months away from anybody moving in but work is progressing.

On a discouraging note, people sick and tired of bloatominium development were working like dogs to get the Land Use Initiative on the Redondo ballot but they weren't able to get enough signatures on time. I wonder if it has anything to do with how the local city government is in bed with realtors and builders. And I wonder if "people get the government they deserve" will extend to "people will get the housing consequences they deserve."

View individual zip code data at the Beartopia tracker.

They want $1.2 million for this

This property at 4122 Naatab is a block away from me. It has been remodeled. I cannot tell how long the current owners have had the property.

The house is somewhat over 1500 square feet, but sits on a (what is considered) a large lot that would fit 2 bloatominiums. So maybe the owners are really trying to attract a potential builder even though the place has been remodeled.

The house was listed about April 10 for $1,275,000. It was *reduced* down to $1,199,000 on June 4.

Somebody is trying to flip a Fusion condo - or is in trouble

I found this little gem today on Craigslist:

$682000 New 2 br/ 2.5 bath condo in Manhattan Beach / Hawthorne - Not on MLS!

Brand-New condo in Manhattan Beach / Hawthorne
$682,000


2 Br / 2.5 Bath
1418 SqFt Townhome

Complex is off of Aviation between Rosecrans and marine, on the east side of aviation.

This is a brand new gorgeous Town home unit in the new Fusion Complex. This 
particular unit is in one of the best locations in the complex, being close to the 
pool, and away from the street. Very private and quiet. 12 foot ceilings in the 
living make this unit have a very spacious look.

This unit boasts REAL hardwood floors downstairs throughout the living, dining and 
kitchen areas. Stainless steel appliances, all top of the line Kitchen Aid brand, 
upgraded lighting fixtures throughout, recessed lighting, upgraded bathroom and 
kitchen fixtures, mosaic tiling in the downstairs half bath, the two large bedrooms 
upstairs each have their own full bathroom, with marble flooring and marble counter 
tops. Dual paned windows throughout.

This unit includes upgrades the builder will not include, such as the 42 inch 1080p 
LCD screen in the living room, pre-wired surround sound in the living room, counter 
depth kitchen aid refrigerator, and a Maytag washer and dryer. Everything bought 
brand new. This unit comes with $50,000 worth of builder upgrades. Also, don't miss 
the massive storage area which is underneath the home with direct access from the 
garage. There is keyless entry through the garage in case you forget your keys.

This unit has it all in an awesome location!

Not the property your looking for? I am a buyers agent, so if you have any questions 
on this property or any others, please feel free to contact me anytime at 
xxx-xxx-xxxx, or visit my website at www.xxxxxxxxxx.com

xxxxx xxxxxxx

Century 21 Union Realty
xxx-xxx-xxxx

I'll post the original link here, but Craigslist links do expire.

I heard somewhere the units are currently about half sold out, so somebody is either in trouble already or trying to flip. Judging from the info here, the property sounds like an E residence, which starts at $661,500. With all the extra stuff the current owner is including, it doesn't sound like a flip, it sounds like a problem loan to me.

6082 Niabcm Avenue

I want to mention this house because it is located in (what I consider) the best part of north Redondo - the TRW tract.

Once upon a time, in the midst of the last Great Real Estate Slump of Southern California, this property sold for $189,000 in July, 1994. Those buyers were the lucky ones. They bought near the bottom, and sold around the top in October 2005 for $709,000. Not bad at all!

Apparently those who bought at $709,000 were stretched too far. The house was listed for sale at an initial asking price of $747,000 in October 2006. (A year from purchase - it doesn't take long to get into trouble.) That was knocked down to $739,000 in early November, then $699,000 in mid-November. Then $689,000 around New Year's.

I got word of preforeclosure on March 5. Well something must have happened, because the property is now for sale at $655,000, which was the default amount in the preforeclosure notice.