Tuesday, March 25, 2008

Daily Breeze: Home prices continue slide

Here's the link to the original article at the Daily Breeze, but the newspaper expires its links, so you can find it below.

Take note of what the realtor quoted in the article, Rose Pasqual, says. Then compare it to what you read on Shorewood's website. I think you'll find her assessment of the situation more dire.

Notice that when too few sales occur in a city it gets dropped from citation when aggregating statistics. That might explain the declines we saw in February for the beach cities.

Another realtor notes the shift in composition in housing units sold and how it can affect statistics. That's true, but there is some rationalization at work here, trying to blame a potential drop in median on the high number of new lower-priced senior condo units coming on the market. "But it won't affect my home value." Were they saying that when all these bubblicious dot condos and bloataminiums were being built and sold during the boom?

By Muhammed El-Hasan, Staff Writer
Article Launched: 03/24/2008 09:39:04 PM PDT

The South Bay housing market continued its slide in February, with some communities 
seeing a double-digit drop in home prices, according to a report released Monday.

Excluding the Palos Verdes Peninsula, the South Bay saw its median home price decline 
7 percent last month, compared to a year earlier, said the report by the Los 
Angeles-based California Association of Realtors.

That brought the area's median - the middle figure where half of homes sold for more 
and half sold for less - to $600,000 for February's median price.

The decline erased the area's January increase of 0.4 percent as fewer houses were 
selling and fewer buyers were looking.

"We have too much inventory," said Rose Pasquel, who co-owns Coldwell Banker Harbor 
Coast Brokers in Carson.

She noted that "the entire state of California is considered a declining market."

Still, the South Bay generally fared better than Los Angeles County. Its median price 
fell 12.7 percent to $460,000.

The Palos Verdes Peninsula saw a drop in median price of 0.4 percent to $1,150,000. 
But so few homes sold on The Hill that none of its four cities were individually 

A city or community must sell at least 30 homes during the month to be cited.

Manhattan Beach, one of the highest-priced cities in California, also was left off 
the list of communities. That was the case with Hermosa Beach, El Segundo and inland 
areas such as Lawndale, Lomita, Carson and Gardena.

Gardena's absence from the February report was unusual since the city usually meets 
the 30-home threshold.

Gardena and Carson will see tough times as many homeowners with adjustable-rate 
mortgages can expect loans to reset higher, Pasquel said.

"I think this is just a first wave of problems," Pasquel said. "This is just the 
first wave of mortgages to reset. So we have '09 and '10 to deal with. So I really 
hope that the government can do some sort of freeze on mortgages that are about to 
reset. That would really help."

Pasquel noted that the housing markets in inland cities such as Carson and Gardena 
differ significantly from the more affluent beach cities. Inland cities often draw 
first-time home buyers, who needed adjustable-rate mortgages and zero-down payment 
programs to afford homes during the real estate boom.

For February, Redondo Beach saw a price drop of 12.7 percent to $655,000. San Pedro 
was down 12.4 percent to $438,000. Hawthorne fell 10.9 percent to $482,750.

Torrance's drop was in the single digits, at 5.3 percent to $539,250.

Yet the beach cities as a whole - including El Segundo, Hermosa Beach, Manhattan 
Beach, Redondo Beach and Playa del Rey - saw the median price rise 22.5 percent. That 
rise is consistent with a similar increase in January as some newer, more expensive 
homes have been selling.

Realtor John Parsons warned that the monthly median prices can vary widely, depending 
on homes sold.

For example, a 191-unit senior housing project near the South Bay Galleria could 
lower Redondo Beach's median home price, he said.

"It's at the low end of the market," said Parsons of Horrell Realtors in Redondo 
Beach. "The average unit is probably in the (mid-$400,000) range. So these things are 
quite a bit below the median. If enough of these pass escrow, it could cause the 
median in Redondo to hit the floor. But it won't affect my home value."

Parsons, a Redondo Beach planning commissioner and former councilman, said that home 
sellers are becoming more realistic as the housing market continues to decline.



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