Thursday, November 29, 2007

Los Angeles County South Bay Beach Cities Real Estate $$$ Transacted for November 2007

When I started recording monthly real estate $$$ volume for selected Los Angeles County zip codes on this blog, I was hoping that the trends would serve as a decent predictor of home prices. I have come to believe that $$$ volume overall is a very good predictor. November is the sickest looking month I've seen yet in two years of blogging.

I realize November is not quite over in terms of sales reporting, but I will assume that Melissa Data starts reporting December next week. If my charts are too early, it is highly doubtful there will be that many extra sales added on and I will just correct the charts when I do the December charts.

Dollar volume in many zip codes isn't just heading over a cliff; dollar volume is headed into the abyss. Parts of Los Angeles are in freefall, in terms of real estate $$$ transacted. Beach cities are weakening. This is not just normal seasonal slowdown. The housepocalypse is creeping ever closer.

OFHEO has announced that the conforming loan limit will stay for the 3rd year in a row at $417,000, so there will be no increase that would allow Californians to get any more in over their heads. Of course CAR is upset about this. According to CAR's PR blather, the refusal to raise the conforming loan limit denies Californians the opportunity of homeownership. My suggestion to CAR would be to ensure that buyers buy within their means and not "qualify" with stupid loans. The way I interpret CAR's PR is that what will actually be denied are opportunities for real estate commissions should sales continue to deteriorate. CAR would rather blame OFHEO than admit that people have been paying too much for housing. Overpaying is as true here as in much of the rest of California.

Now on to this month's results. The only zip codes that show substantial sales volume increases YOY are: 90094 (Playa Vista); 90401, 90402, and 90405 (Santa Monica); and 90501 (Torrance). Volume is too small to be measured statistically well for one month, particularly in Santa Monica. The only zip codes that show noticeable $$$ volume increases YOY are: 90036 (Park La Brea); 90045 (Westchester); 90094 (Playa Vista); 90254 (Hermosa Beach); 90401 and 90402 (Santa Monica); and 90501 (Torrance). Mighty 90064 (Rancho Park), which has been running on steroids this year, has taken quite a hit this month.

Until I see what next spring delivers I don't want to say the housepocalypse has landed on our doorsteps. As I write this, federal and state officials are furiously at work to stem the tsunami of foreclosures. Although I don't believe it will ultimately work, the politicians just may succeed in kicking the can down the road and delay the inevitable a while longer. In the meantime, take a look at the data.

My data measurements in the lists below are experimental and can be hard to interpret. For example, both the YOY comparisons and the "Relative Strength" lists show the beach cities as having suffered both recent and long-term pain in terms of dollar volume, but we know that prices appear to be more resilient than, say, prices in South Central Los Angeles. Yet some zip codes of South Central show that they've suffered much less in terms of chronic pain. So why does 90047 show more Relative Stength than the beach cities? If you look at the charts for 90047, you'll see a relatively recent steep plunge in the dollar volume chart, with lots of fat area well above 0% on the YOY chart, with not a whole lot of area yet below 0%. But if you look at the beach cities charts below, you'll see some thinner spiky areas above 0% on the YOY chart, and a few places the YOY line actually touched 0% before things started to fall apart. And, even though there have been insane appreciation rates in the beach cities in recent years, the truth is that sales volume has been declining for years, even before the housing bust, whereas sales volumes were increasing in places like South Central. These factors make for somewhat different outcomes in measuring that Relative Strength.

By the time this debacle is over, little of this will make much difference. Does it matter much if you die by a million paper cuts or by 2 million paper cuts?

YOY comparisons

Remember, the YOY numbers are not taken on the raw numbers, they are taken on the doubly smooth 3 month moving average. They lag the raw data somewhat.

Realtors fat and happy...
90094         66.0% Playa Vista
90293         24.5% Playa del Rey
90064         20.0% Rancho Park/Cheviot Hills
90254         15.0% Hermosa Beach

Not to shabby, considering...
90291          3.4% Venice
90277          3.0% Redondo Beach (south)
90045          2.8% Westchester

Hanging in there...
90505          0.5% Torrance

Losing a grip...
90275         -4.6% Palos Verdes Estates
90277-90278   -6.2% Redondo Beach combined
90008         -7.1% Baldwin Hills / Leimart Park

Slip sliding away...
beach cities -10.2% 4 Beach Cities combined
90278        -12.7% Redondo Beach (north)
90732        -17.6% San Pedro/Rancho PV
90266        -17.6% Manhattan Beach
90401-90405  -19.6% Santa Monica combined
90066        -19.8% Mar Vista
90503        -23.7% Torrance
SW county    -25.2% Southwest L.A. County
90035        -25.6% West Fairfax
90036        -25.8% Park La Brea
90019        -25.8% Country Club Park/Mid City
90230        -26.7% Culver City
90501        -29.8% Torrance

Sliding over a cliff...
90501-90505  -31.6% Torrance Combined
90034        -32.7% Palms
90292        -33.3% Marina del Rey
90232        -33.7% Culver City
90717        -36.5% Lomita
90245        -37.3% El Segundo
90056        -39.0% Ladera Heights
90007        -39.1% South Central
90250        -39.8% Hawthorne
90504        -41.9% Torrance

Off the cliff, Thelma and Louise style...
90016        -55.2% West Adams
90304        -57.2% Lennox
90301        -58.2% Inglewood
90047        -59.2% South Central
90745        -60.2% Carson
90302        -63.8% Inglewood
90043        -64.3% Hyde Park, Windsor Hills
90062        -64.5% South Central
90044        -65.4% Athens
90260        -66.0% Lawndale
90301-90305  -66.5% Inglewood/Lennox combined
90746        -66.9% Carson
90502        -67.0% Torrance
90303        -68.9% Inglewood
90249        -71.1% Gardena
90018        -72.1% Jefferson Park
90305        -74.0% Inglewood
90037        -76.9% South Central
90744       -224.1% Wilmington

"Relative Strength"

This is a longer-term view of the strength of dollar volume, for this month with 4.7 being the strongest (suffering the least amount of chronic pain) and 0.0 being the weakest (suffering the most chronic pain). Think of it is as the area above 0 on the YOY graph with the area below 0 of the YOY graph subtracted out.

90094           4.7 Playa Vista
90305           3.0 Inglewood
90044           2.0 Athens
90034           1.8 Palms
90746           1.7 Carson
90292           1.6 Marina del Rey
90047           1.3 South Central
90062           1.2 South Central
90301-90305     1.2 Inglewood/Lennox combined
90502           1.1 Torrance
90304           1.1 Lennox
90018           1.1 Jefferson Park
90007           1.1 South Central
90303           1.0 Inglewood
90745           1.0 Carson
90016           1.0 West Adams
90302           1.0 Inglewood
90301           1.0 Inglewood
90250           0.9 Hawthorne
90037           0.9 South Central
90732           0.8 San Pedro/Rancho PV
90043           0.8 Hyde Park, Windsor Hills
90293           0.8 Playa del Rey
90019           0.7 Country Club Park/Mid City
90501           0.7 Torrance
90249           0.7 Gardena
90008           0.6 Baldwin Hills / Leimart Park
90230           0.6 Culver City
SW county       0.6 Southwest L.A. County
90503           0.6 Torrance
90260           0.6 Lawndale
90064           0.6 Rancho Park/Cheviot Hills
90291           0.6 Venice
90254           0.5 Hermosa Beach
90036           0.5 Park La Brea
90501-90505     0.5 Torrance Combined
90045           0.5 Westchester
90278           0.4 Redondo Beach (north)
90232           0.4 Culver City
90245           0.4 El Segundo
90066           0.4 Mar Vista
90035           0.3 West Fairfax
90277-90278     0.3 Redondo Beach combined
90056           0.3 Ladera Heights
90505           0.3 Torrance
90401-90405     0.3 Santa Monica combined
90717           0.3 Lomita
beach cities    0.3 4 Beach Cities combined
90266           0.2 Manhattan Beach
90277           0.2 Redondo Beach (south)
90504           0.2 Torrance
90275           0.1 Palos Verdes Estates
90744           0.0 Wilmington

For details on individual zip codes, visit my regional tracker, or my Google map tool of most of the same data. I cover most zip codes south of the 10 freeway and west of the 10. For zip code comparisons (the two lists above), I include some surrounding areas such as Carson, Park La Brea, Fairfax district, etc.


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