DQNews: Los Angeles Beach Cities Resale Activity for August 2008

Thanks to some of you for your emails asking where the heck I am. I have been so busy at work that not only have I not been keeping up the blog but we had to cancel our vacation. Trust me, I'd rather be insanely busy than not have a job at all. Technically, I am a California *state* employee working in the UCLA School of Medicine. But the fiscal and economic future of California is not looking good so I don't know what that says about my future. My position is normally funded by NIH grants, not state budget, so that offers me a bit of protection at least for now.

I am doing a rush job here trying to catch up on data. Once I get through a big finance meeting at work at the end of October, I'll be a bit more relaxed and can devote some time to this again.

It's been easy to let this blog slide as it's been like watching a boring little tugboat sink whereas the spectacle we are witnessing in the global financial markets is like watching the Titanic sink and the Lusitania get torpedoed.

In addition to what I've been going through, my contact at Shorewood Realtors who normally updates the Shorewood website with monthly data has been seriously ill, which I pray is not terminal. I've contacted Shorewood and they are doing their best to fill the gaps, but between losing their data man and witnessing the price action in these markets it's been difficult maintaining their data at the moment.

I've been talking about mass psychology on this blog almost since I started it in late 2005. What's happening to peoples' 401k accounts and stock investments is going to have a profound impact on their desire to speculate in the housing market. I'll try to talk about this more in detail later after I get caught up.

Anyway, here's the August home sale story.

Here's the Southland data for August. Sales volume remains generally up over a year ago although the L.A. Business Journal story suggests that volume is starting to slide a bit again.

                  Sales Volume              Median Price
All homes      Jul-07     Jul-08     %Chng      Jul-07     Jul-08      %Chng
Los Angeles    6,809      6,592      -3.2%    $547,500   $400,000     -26.90%
Orange         2,391      2,799      17.1%    $640,000   $461,000     -28.00%
Riverside      2,769      4,116      48.6%    $399,000   $260,000     -34.80%
San Bernardino 2,008      2,521      25.5%    $355,000   $230,000     -35.20%
San Diego      3,106      3,431      10.5%    $489,000   $364,000     -25.60%
Ventura          784        870      11.0%    $582,500   $420,000     -27.90%
SoCal         17,867     20,329      13.8%    $505,000   $348,000     -31.10%

Here are the detailed RESALE statistics for the beach cities and some of the surrounding zip codes (prices are in 1000's):

                         SFR   MEDIAN    %YOY    CONDO  MEDIAN   %YOY  
COMMUNITY         ZIP    SALES   SFR      CHG    SALES  CONDO     CHG
LA/Westchester    90045   20    $700     -6.5%     1     $413   +16.3%
El Segundo        90245    4    $795    -13.8%     5     $450   -27.3%
Hawthorne         90250   23    $375    -28.2%     1     $425   -11.3%  
Hermosa Beach     90254    8    $920    -24.0%     6   $1,095    -6.4%  
Lawndale          90260    8    $365    -33.6%     2     $405    -9.7%  
Manhattan Beach   90266   36  $1,163    -31.2%     9   $1,029   -40.2%  
Palos Verdes Pen. 90274   17  $1,275    -12.1%     5     $580     N/A  
Rancho P.V.       90275   17  $1,053    -10.0%     8     $350   -55.4%   
Redondo Beach     90277    8    $900    -18.2%    20     $615   -23.1%   
Redondo Beach     90278   18    $620    -22.3%    24     $673    -4.9%

L.A. Business Journal: Median Home Prices Persist in Steady Decline (August)

According to a September 8 story by Charles Proctor in the Los Angeles Business Journal, home sales in Los Angeles County started sliding again in August after enjoying a bit of a summer bounce. Sales volume was down -23% YOY, and prices are down -30%. The county's median home price in August was $404,000, the lowest since April 2004. And the median condo price fell to $380,000, -17% YOY.

In the north end of the county (Lancaster and Palmdale) falling Ginzu knife investors continued to scoop up "bargains" (with cash) because prices have fallen to around $100,000. Investors are plunking down $1 million on 10 homes and planning to rent them out until prices reach $150,000.

Cash isn't just limited to lower-priced areas. Agents are reporting bigger cash down payments. A $525,000 home in Long Beach that got three offers finally went to a buyer with a $200,000 down payment. Paul Habibi at UCLA Anderson School says that banks are being far too conservative in their financing. Buyers qualified to put 5% down on properties saw rates jump to 20% while in escrow, thus killing the deals. The loan market appears to be continuing its contraction.

-------------------------- SFR --------------------------------
COMMUNITY          ZIP    Aug     %YOY         Aug    %YOY
                         Sales   Change      Price   Change
L.A County              3,134      -24%    $404,000  -30% 
El Segundo       90245      4      -43%    $728,000  -42%
Hermosa Beach    90254      8      -50%    $832,000  -36%  
Manhattan Beach  90266     14      -62%  $1,452,000  -10%  
Redondo Beach    90277      2      -87%    $926,000  -24%
Redondo Beach    90278     12      -45%    $728,000   -9%

------------------------ CONDO --------------------------------
COMMUNITY          ZIP    Aug     %YOY      Aug       %YOY
                          Sales   Change    Price     Change
L.A. County              1,171      +0%    $380,000   -17%
El Segundo       90245       3    +200%    $720,000    +4%
Hermosa Beach    90254       5      67%  $1,105,000   -37%
Manhattan Beach  90266       6     500%    $999,000   +15% 
Redondo Beach    90277      12     -14%    $481,000   -30%
Redondo Beach    90278      24     -11%    $751,000   +12% 

The most expensive homes (SFRs) in August were in Santa Monica 90402 (+197% YOY); Calabasas 91302 (+68%); Malibu 90265 (+197%); Playa del Rey 90293 (+27%); Bel-Air 90077 (-4%); Pacific Palisades 90272 (-8%); Pasadena 91105 (+72%); Beverly Hills 90211 (-53%); Palos Verdes Estates 90274 (+9%); Manhattan Beach 90266 (-10%).

The most expensive condos in August were in Bel-Air 90077 (no change - median price $1,400,000); Pacific Palisades 90272 (+102%); Venice 90291 (+32%); Manhattan Beach 90266 (-37%); Palos Verdes Estates 90274 (no change - median price $1,038,000); Hermosa Beach 90254 (+97%); Brentwood 90049 (+35%); Santa Monica 90403 (-10%); Redondo Beach 90278 (+12%); El Segundo 90245 (+4%).

The areas suffering the greatest SFR price losses in August are Westwood 90024 (-73%); Little Rock 93543 (-59%); Beverly Hills 90211 (-53%); Palmdale 93591 (-53%); Hawaiian Gardens 90716 (-53%); Pomona 91768 (-52%); Pasadena 91103 (-52%); Lancaster 93534 (-52%); Inglewood 90302 (-51%); and Compton 90220 (-51%).

The areas suffering the greatest condo price losses in August are Tarzana 91356 (-47%); Panorama City 91402 (-46%); North Hills 91343 (-42%); Van Nuys 91405 (-41%); Sherman Oaks 91403 (-40%); Long Beach 90813 (-40%); Marina del Rey 90292 (-40%); West Hollywood 90069 (-36%); Torrance 90501 (-36%); Mid-City 90019 (-32%).

Keep in mind that most of these figures are tallied on very low sales, so I would take huge spikes or extreme collapses with a grain of salt.