Sunday, December 23, 2007

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

Shorewood caught me off-guard and published November sales numbers quite early. No, I did not miss the median price graphs from the L.A. Times DataQuick table - it hasn't been published yet.

According to Shorewood, November DOM for the four beach cities has come down to 49, down from 60 in November 2006. There is no resemblance whatsoever between their official beach city DOM statistic and what I calculate. My last calculation for November for just Redondo Beach was a median DOM of 104 days and an average of 128 days - though my definition of "time spent hustling a property" stretches out a bit more than what realtors use.

Now on to Supply Stength (Demand Weakness). This is a measure of my own making but I use Shorewood's official homes for sale and homes sold numbers. Notice that I-S/S bottomed around the late spring of 2005, when this market was probably at its peak of optimism, and life just couldn't get any better. This ratio now continues to hit new highs, which I interpret as bearish. Whether it will continue to surge higher over the next few months, or whether the beach cities will instead work off some inventory over the winter, remains to be seen. Since sales volume is so low, I don't get the sense that inventory is being "worked off" - I think listings are expiring unsold.

Median price for the four beach cities has rebounded back to the September level of $950,000. At this point it is difficult to know if ultra-high-end home sales will keep that median elevated. If market conditions continue deteriorating, I would expect that the psychological impact will eventually make even well-heeled buyers think twice before plunking down millions in cash on a home - when there just might be a fire sale a few years down the road.


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