Thursday, June 07, 2007

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.


Blogger Joe said...

How do you know Centex Fusion is having problems? I'm curious cause I think its a horrible location for a housing complex.

9:24 PM, June 07, 2007  
Blogger bearmaster said...

Hi Joe,

Did you see my recent post about Centex?

I hate that location too. Aviation has enough traffic. It's my own personal opinion but I don't like their outside looks at all - too drab and too tenement-style. While I would agree that the layout and floorplans of Centex are far better than the ancient rusted up condo closets in my north Redondo neighborhood, Centex is still waaaay overpriced IMO.

11:07 AM, June 08, 2007  
Blogger DeanJones14000 said...

Like many people who are window shopping, I have seen the development many times... and at one time actually considered Plan 'D' seriously (In October 2006 with a $10k deposit and then retracted). I do not agree that the layout and floorplans of Centex are far better than many, including "the ancient rusted up condo closets in my north Redondo neighborhood". For a 2 BDRM/2 BA, the second bedroom in that Plan 'D' unit was the real deal breaker for me. You cannot fit more than a single bed with some left over space to walk around the room, nor a "home office" and blow up mattress for guests - As I told my wife, it would serve better as a walk-in closet for the adjacent master bedroom. Great blog and community by the way!

7:52 PM, June 26, 2007  
Blogger bearmaster said...

Hmm, that's interesting. Having never seen the Fusion floorplans I gave them the benefit of a doubt and assumed they'd be better than the closet condos two doors down from here in North Redondo. Yes, "rusted up" is an apt description.

One blog reader got quite upset at my description of Fusion. When I get comments like these I assume somebody's trying to rationalize a bad decision.

8:53 PM, June 26, 2007  

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