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.