Standard & Poors: Los Angeles area median housing price down -24.5% for May 2008
The Case-Shiller Index was released for May 2008.
According to the index, the Los Angeles area median home price was down -24.5% from May 2007, and down -1.9% from April 2008.
The entire Composite-20 metropolitan index was down -15.8% YOY for May. To view the full report, visit Standard and Poors (PDF file). S&P's home price website is here.
The housing bulls will pin much hope on the fact that seven areas in the national index (Atlanta, Boston, Charlotte, Dallas, Denver, Minneapolis, Portland) were flat to slightly up from April. However, all areas are down YOY.
L.A. Land says that readers are arguing convincingly that the month to month decline is decelerating. Of course some permabulls believe this means that recovery is right around the corner in 2009. I've been listening to and reading Mr. Mortgage and personally I think we are just entering the eye of the hurricane and much more agony lies ahead, due to Neg-Am and Alt-A problems that have yet to fully impact our financial system.
By the way, U.S. Representative Jane Harman voted for the Foreclosure Prevention Act (the bailout bill) which gives the IRS powers to snoop into our credit card records. I most definitely will not be voting for her this fall.
posted by bearmaster at 7:21 PM
7 Comments:
“The singular feature of the great crash of 1929 was that the worst continued to worsen. What looked one day like the end proved on the next day to have been only the beginning. Nothing could have been more ingeniously designed to maximize the suffering, and also to ensure that as few as possible escaped the common misfortune.
The fortunate speculator who had funds to answer the first margin call presently got another and equally urgent one, and if he met that there would still be another. In the end all the money he had was extracted from him and lost.
The man with the smart money, who was safely out of the market when the first crash came, naturally went back in to pick up bargains. (Not only were a recorded 12,894,650 shares sold on 24 October; precisely the same number were bought.) The bargains then suffered a ruinous fall.
Even the man who waited out all of October and all of November, who saw the volume of trading return to normal and saw Wall Street become as placid as a produce market, and who then bought common stocks would see their value drop to a third or a fourth of the purchase price in the next twenty-four months.
The Coolidge bull market was a remarkable phenomenon. The ruthlessness of its liquidation was, in its own way, equally remarkable."
- Extracts from "The Great Crash: 1929", John Kenneth Galbraith
Here's a Florida realtor who also says we are passing through the eye of a hurricane. Read the article he wrote in 2006 and the second part he wrote in April of this year.
Mike Morgan
Hi Susan,
A reader feedback comment to that L.A. Times story posted by Jonathan had a link to some key data that has since been removed for some reason. It showed that during housing downturns, the negative percentages always taper off in summer and rise again in winter in accordance with the selling season. The fact that the numbers are still negative in the middle of summer is more indicative of where we are than the fact that they have leveled off during the selling season.
This is just an extension of the bull media propaganda tactic that suggests since there is an increase in home sales through March-April-May, it means the downturn is over, ignoring that the standard summer sales arc is much lower overall than in selling seasons past.
Mr. Mortgage may be right that a new batch of bad mortgages will cause numbers to drop, but the numbers cited in Pete's story are in accordance with downturn norms, and I don't think serve as evidence of some sort of plateau of the current downturn. If historical trends hold, the downturn will continue into the winter, and if Mr. Mortgage is right, then the drop-off will be even steeper than in past eras.
Wayne,
Oh it makes perfect sense that the numbers would moderate over the summer.
But what I think is more important than numbers is noting the herd's reaction to those numbers.
The herd thought process that seizes on that deceleration to say that recovery might be soon. The herd is too quick to declare a recovery is just around the corner next year.
I am waiting for the media and industry observers to GIVE UP calling a bottom and declare itself wary of any uptick.
Right now the financial entities holding troubled properties have only thrown out the bathwater. They have yet to toss out the baby, the bathroom, the kitchen, and quite literally the whole house.
And the government is doing all it can to delay any more pain.
So that capitulation won't happen for quite a while yet.
I guess the real question is what would make the normally level-headed Peter Viles add the bullish spin to his own post and not the obvious response to it. I see the Times canceled their Real Estate weekender and dumped a bunch of employees in on L.A. Land, plus are implementing new restrictions on the comment policy--maybe that's not the only editorial change and the addresses of the readers who swayed his mind end in @latimes.com.
Mainstream media outlets think that everything is open for debate, they democratize an issue as if both sides had equal valid weight.
That just isn't always the case.
The media is only as good as the citizens it reflects. On a national cultural scale we are probably still in massive denial about our economic situation and clinging to any straws we can grasp for hope.
But you're right Wayne, I'm sure the L.A. Times is biting the housing industry hands that feed them which has been complaining about all the negative press. So the Times has to cool it.
Thank God for the Internet.
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