L.A. Business Journal: L.A. County Home Sales Fall by Nearly Half in September

This story by Howard Fine in the October 8-14 issue of the L.A. Business Journal concedes thatthe mortgage credit crunch continues to impact the market. The median price in L.A. County is $580,000, up 5% YOY, and $5K away from its high. Sales of high-end homes remain relatively brisk. However, sales of average and lower-end homes have plunged.

County sales of new and existing SFRs and condos was 3287, -46.6% from September 2006 and -21% from August.

The journal notes that in YOY comparisons, sometimes five weeks of data are compared to four weeks. (They're just now figuring this out!?!) So the sales numbers for August were exaggerated when compared to 2006 because of this problem.

75% of county zip codes experienced double digit percentage drops. For many zip codes the drops were at least 50%. Condominiums are holding up better than SFRs, because many condos can be bought with a conforming loan, below the $417,000 Fannie Mae limit.

One agent said, "Buyers are still waiting: they think the bottom might fall out. Sellers don't want to come down on their prices. It's a real standoff."

A lot of buyers can forget about getting financing for a starter home. But the high end of the market continues to experience almost insatiable demand. This market experienced only tiny hiccups in August, according to one observer. One agent at Westside Estate Agency says he's got 10 buyers that want to spend $20 million and the homes just aren't there. As the dollar has dropped, well-heeled foreign investors have descended on places such as Beverly Hills to snatch up what they can. (Where's the benefit of a lower dollar if you're still buying an inflated price?!?)

A broker in San Marino has seen some slowdown in sales, but some buyers who were thwarted by the credit crunch have since lined up financing, and some properties are getting multiple offers. This broker expects sales to improve in November and December because "new home loan products are coming onto the market...It will make it easier for some people to get loans, especially those who are qualified." (Uh-oh!)

-------------------------- SFR ----------------------------------
COMMUNITY          ZIP    Sept    %YOY        Sept    %YOY
                          Sales   Change      Price   Change
El Segundo       90245      9     +28.6%    $845,000   -0.6%
Hermosa Beach    90254     16      +6.7%  $1,375,000  +17.5%  
Manhattan Beach  90266     36     -16.3%  $1,704,000  +14.4%  
Redondo Beach    90277     16      +6.7%    $998,000  +15.2%
Redondo Beach    90278     25     -16.7%    $740,000   +0.6%

------------------------ CONDO ----------------------------------
COMMUNITY          ZIP    Sept    %YOY        Sept    %YOY
                          Sales   Change      Price   Change
El Segundo       90245       2    -66.7%    $686,000  +29.9%
Hermosa Beach    90254       2    -50.0%    $660,000  -22.5%
Manhattan Beach  90266       0     N/A        N/A      N/A   $650K in 2006
Redondo Beach    90277      16   +100.0%    $886,000  +31.5%
Redondo Beach    90278      22     +15.8%   $807,000   +6.9%

(Isn't it amazing how these statistics obscure how low-end inventory is mounting up in places like Redondo?)

The article does not break out SFRs from condos in the following price statistics. The most expensive homes in Los Angeles County are in Bel-Air 90077 (+104.9% YOY); West Hollywood 90069 (+83.3%); Beverly Hills 90210 (+8.2%); Pasadena 91105 (+158.9%); Manhattan Beach 90266 (+14.4%); Malibu 90265 (+2.6%); San Marino 91108 (+21.6%); Palos Verdes Estates 90274 (+9.5%); Pacific Palisades 90272 (-18.8%).

The zip codes with the biggest price losses are in Long Beach 90802 (-44.5%); South Los Angeles 90248 (-34.3%); Topanga 90290 (-31.9%); West Hollywood 90038 (-28.2%); North Hollywood 91601 (-28.2%); Westlake Village 91362 (-27.1%); Inglewood 90303 (-26.8%); Long Beach 90806 (-26.4%); Castaic 91384 (-23.5%); and Watts 90002 (-22.7%).