After December, The Avalanche?

Louis XIV of France, styled the Sun King, famously opined, “Apres moi, le deluge.”  After me, the flood. He was right, of course, for his excesses so infuriated the people that his successor was guillotined and his monarchy overthrown in the French Revolution.

SoCal Plunge In Foreclosure Filings

Something similar seems to be brewing in Southern California and maybe even nationwide as lenders ratchet up their foreclosure filings after the “robo-signing” lull. Though foreclosures dropped dramatically in SoCal this fall, so, too, did all home sales. The reasons seem to be many: the end of the home buyer tax credit, stubbornly high unemployment and the generally still-moribund economy. In fact, sales are down a full 16% from November of 2009. This at the same time foreclosure filings fell 14% from the previous November after a 22% decline in October for a two-month total 36% decline. Nationwide, the filings fell 21%.

December is traditionally a slow month in real estate as consumers focus on retail buying, parties and holiday travel plans. Typically, though, also in December  smart investors are out there snapping up last-minute bargains of the now-extremely motivated sellers still on the market. Competition is almost always much less, to put it mildly, and sellers are determined to close out their books for year’s end.  This year seems to be different as even investors are holding back.

That may be because the huge drop in  foreclosure filings this fall has ominous repercussions for home prices in the new year. With the foreclosure freeze over, informed observers now expect to see the banks ratchet up their foreclosures with a vengeance, restarting filings begun in October and November and barreling ahead with new ones in January. Executives from RealtyTrac, a real estate data collection firm, speculate that the housing recovery could be set back three months, if not more, as the foreclosures pile up. In fact, we can expect ” an avalanche” of foreclosures shortly.

SoCal Home Prices

The most immediate effect of an avalanche of foreclosed properties on the market will be to further depress prices in Southern California which had started a slight upward movement. Los Angeles County home prices had dropped 1.2% over November 2009 to a median of $325,000. Riverside and San Bernardino Counties, the hardest hit by the bursting of the real estate bubble, lost 2.5% and 5.0% respectively to medians of $195,000 and $152,000. But, that is a huge improvement over the 30% and 40% drops of previous years. Other SoCal counties actually gained in value. Orange County eked out a .6% improvement for a $435,000 median home price. San Diego topped the charts with a 3.1% improvement over last year to a median of  $335,000 with Ventura County just behind at 2.7% uptick to a median of $375,000.

Future: More Underwater Homes

These hard-earned gains will soon be lost as the promised avalanche of foreclosures hits the market. Perhaps sales will pick up as buyers and investors are lured back into the game. But, bargain-hunting fun aside,  another price drop for already distressed homeowners will plunge yet more homeowners underwater.  That, in turn, spirals down into more foreclosures and more equity loss in future.

Like Louis XIV, banks see this as well as anyone, yet still refuse to modify loans in any serious way. Like Louis, they see, but, obviously, don’t give a damn as long as they get their bonuses. Short-term is the only term.

Housing Snapshot October 2010: SoCal Counties

Here’s the latest housing values news for many Southern California counties. Compare to one month ago.

2009 End-of-Year Roundup: L.A. County Home Values

Image via Wikipedia

Say it ain’t so!! Sorry, but all those  rumors that home values are finally rising again are just silly rumors. Values are slipping less than before, but, countrywide, values continue to decline by about 1/2% per month.  As always, location is terrifically important. It matters greatly where your home is located or where you want to buy. Some areas are tanking while others are increasing slightly.

So, which is which? Do we want the good news or the bad news first? Let’s mix it up a bit. S0me local areas that continue to sink in value include Pomona down around 10% in all ZIPs to around a median of $200,000. El Monte took a pretty big hit dropping about 18% to a median of around $250,000 in all ZIPs. Remember the Station fire? Buyers apparently do as La Canada Flintridge values are down 27% to a median of $876,000. La Puente which has already lost huge value has sunk to a median of about $250,000 across all ZIPs. Trendy during the boom, both Highland Park, Eagle Rock are down substantially [18% and 32% respectively, to medians of $286,000 and $365,000].

So, is there any good news? Well, yes, some local areas are doing quite well, thank you very much. Glendora has slipped less than the county average to a median of $378,000 in 91740 down 2% while 91741 is down almost 7% to $470,000. LaVerne is down 4%, less than the county average to a median of  $420,000, though San Dimas has sunk 25% to a median of $378,000. Covina dropped by about the county average across its ZIPs to about $330,000.

But, there are a few standouts. Altadena has posted a healthy 23% gain over last year to a median of $517,000. Alhambra in 91801 and Monrovia are  up by about 1% to a median of $549,000 and $490,000 respectively. Alhambra’s other  ZIP is down about 1% to $426,000. But, buyers are also flocking to Arcadia, up 8.5% to $807,000 and up 17% to $970000 in 91007.

 

Then, there’s Pasadena also a winner overall. This is where buyers seem to want to live and they are driving up the prices. 91103 is up 5% to $405000, 91104 and 91107 are  up by whopping 23% and 26% to  medians of  $550,000 and $670,000, 91106 is up 1% to a median of about $1.1 mil–not bad! 91105 is the only Pasadena loser, down by a substantial 28% to $675,000.

What about trends? Any new trends across the county? It’s a bit early to say, but it looks as though more pricey areas, especially at the beach are starting to lose value. Palos Verdes is down 44% to a median $1.17 mil along with Rancho Palos Verde down 20% to $850,000. Manhattan Beach is down slightly to a median $1.139 mil. Malibu is down 36% to a median of $1.363 mil. 

Why might this be happening? Rich folks may be different from you and me, but they can count pretty well. Being underwater by $200,000, $300,000 orn $400,000 just doesn’t make economic sense even if you can afford the payments. Better to just walk on by, and that’s what many wealthy home owners are now doing. My big prediction? More will do the same in 2010 as prices continue to decline.  Buyers today, rich or moderate income, are all interested in only one thing: value for their money. Pasadena appears to offer that–at least for the time being–while Malibu does not.

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L.A.County Home Prices: April 2009

:en:Category:Images of Pasadena, California
Image via Wikipedia

Well, the beat goes on and on…Home prices are still falling, marginally, and the spring/summer sale mood has definitely kicked on. Some, highly desireable, areas, such as Pasadena, are experiencing fast sales and multiple offers, but mainly in the starter homes which in the Rose City means $300,000-$400,000.

For the county as a whole, median values are now $295,000 which, as mentioned frequently here, lacks much meaning for those living in the so-called “desirable” areas since that depressed figure is largely generated from massive losses in a localities-Palmdale [down in one ZIP 57% to an incredible $53,000 median home price], Watts [down 50% in one year to median $130,000], Littlerock [down 52% to $100,000 median] or Compton [down 60% to about $140,000]. In other words, the main pain is being felt either in outlying areas of the county or in traditionally lower-priced sections. These massive drops in value are forcing the median of the whole county down.

So, where are the “desirable” areas which have suffered less? Well, La Verne, for one, is down only 4.6% since last April with a median of a healthy $475,000. Claremont is down only 2% with a median of $545,000. Arcadia is down 7.4% to a median $766,000 in 91006 and UP 11% to a median $929,000 in 91007! Temple City is UP 3.9% to a median of $530,000. Other cities in L.A. County, too, are either showing positive gains over last year or only modest losses–Alhambra is up a tick to median $520,000; Sherman Oaks is up 3.2% to a median of $813,000; Van Nuys is up 4.4% to a median of $473,000 in ZIP 91411, though, admittedly its other ZIPs are all showing losses between 25% to 30%.

Other “desirable” area are quite predictable. Most beach cities are up: Malibu, up 5% to a median $2,000,000; Manhattan Beach up 6% to $1,500,000 median; Redondo, up about 10.5% to a median $990,000 in ZIP 90277 and $708,000 in Zip 90278; Marina Del Rey, up 21% to $955,000, Palos Verdes Peninsula is up 16% over last year to $1,825,000. Only Hermosa Beach has declined a smidge [-5%] to a paltry $1,785,000, based on very few sales. Must be tough!

See the trend? Southern California property is still hot, just not all of it. People are running like mad to buy beach city properties which haven’t been this low-priced in awhile. In fact, there’s a bit of a buying fever in these areas which is also reflected in other affluent cities, such as San Marino [down only 3% to $1.4 million median], parts of Pasadena [91106 up over 60% to a median $800,000, based on very few sales] and certainly Glendale which over its seven ZIPs ranges from up 10% [91202 median $692,000] to down 33% [91204 median $399,000 based on too few sales] to down 4.5% [91205,91206 with medians $528,000 and $578,000] . All of these cities are making respectable showings with hefty median prices, especially when compared to the rest of the country. We are still prohibitively expensive for transferees from other states.

Other parts of the county are down, just moderately…Glendora is down in its two ZIPs about 20% to a median of about $400,000, and sales are numerous and brisk. San Dimas is a great bargain–down 35% to a median $350,000, again with brisk sales. West Covina is down in its three ZIPs about 20% to a median of around $350,000 also with brisk sales. Covina is down a tick below 20% to a median of about $360,000 across its three ZIPs, again with eager buyers recognizing a bargain when they see one.

The worst-hit areas in the eastern part of the county are traditionally working-class where unemployment has hit the hardest–Azusa, down 25% to a median of $250,000. Baldwin Park down 29% to $255,000. El Monte, down about 25% to about $265,000, Duarte down 41% to $260,000. As we have noted over the past year, Pomona leads the way downward with huge drops across its three ZIPs [91768 down 28%, 91767 down 32%, 91766 down 42%] giving medians of $175,000.$205,000 and $159,000–some of the lowest values in the entire county…

The pain is not over, though we can see tiny points of light here and there. Homeowners who are not “upside down” or owing more than the value of their home are well advised to sit tight. Living in a hard-hit area, though, many homeowners have seen their down payments and equity vanish as if by magic. For these homeowners, loan modification or short sale are probably the best bets. Homes that the first to decline and which decline the most are usually the last to recover…unfortunate, but true….

Thanks to The L.A. Times and MDA Dataquick for the data.

L.A. County Home Prices: February 2009

South Pasadena City Hall
Image via Wikipedia

The news is still grim and grimmer for February 2009. L.A. County median home value has now sunk to an almost unbelievable $295,000. This represents a 37% drop over the previous year, but that’s only part of the story as prices had already sunk more than 10% by that date. Remember prices started to slide in September, October 2007.

Part of the reason for the precipitous drop in home values, as mentioned here repeatedly, is the wipe-out occurring in outlying areas, such as Lancaster [over 50% decline] and Littlerock [64% decline] which were offering many new homes to commuters. These homes are now almost worthless and dropping all the time due to adjustable mortgages, sub-prime loans and repossessions, in short the panoply of ills we have all learned about in the last year as our economy has tanked. Other areas of massive decline in L.A. County include Watts [61% down], Firestone Park [-52%], Eagle Rock [-51%] and Boyle Heights [-55%].

In the San Gabriel Valley, the eastern part of the L.A. County, the situation is not so bad, though, as always, working-class areas are hardest hit. In fact, only Pomona in the San Gabriel Valley comes close to the dire drops of northern L.A. County. Across its three ZIPs, Pomona has lost 40% to a median of $200,000 in 91766, 37% to a median of $195,000 in 91767 and in 91767 anothrer 37% drop to a median of $185,000.  Marching these declines are only Azusa at 47% drop to $235,000, followed by South El Monte at negative 38%.

The biggest surprise has to be  La Verne down 38% to a median of $369,000. If this trend holds, in fact, this would make LaVerne the biggest bargain east of the 605 because it has housing stock that is for the most part very well maintained along with a very good school system and plenty of infrastructure support.

For the rest of the east, Baldwin Park is down 31% to a median of $255,000,  Covina is down about 20% to a median of about $350,000 except in the South Hills where it’s down barely 2% to a median of $478,000 with just a couple of sales. Sales are weak  in Glendora 91740 where the median has dropped 25% to  $350,000; even more anemic sales in 91741 show a rise of 36% to a median of $660,000. Neither figure is reliable as sales are too scanty to know what is going on there.

Rounding out the east, Claremont has essentially held its own for the year with a median of  $570,000. Diamond Bar has dropped 11% to a median of $451,000. San Dimas has gained 10% over last year with a median of $543,000. Over its three ZIPs, West Covina has lost over 25% of its home values falling to a median of about $410,000.

On the west side of the 605 Sierra Madre has gained 2% to a median of $745,000. San Marino has gained 36%, but that is based on only 4 sales and so means little. South Pasadena has remained stable with a median of $725,000, again based on only a couple of sales. Arcadia has taken quite a dip-42% in 91006 to $485,000 and 14% negative in 91007 to $750,000. Some of these medians may seem high,but when you’ve paid more than a million dollars for your property, it’s no picnic watching it plumment to even $750,000.

Duarte is down 27% to $295,000 while Monrovia is down 30% to a median $400,000–both based on quite a few sales. Altadena is down 19% to a median of $443,000. Our major city, Pasadena, as always shows mixed results. In prestigious 91106 the median value is still over $1,000,000, a slight increase, again based on a negligible number of sales. 91107 shows a drop of 10% to $630,000, 91105 a 16% drop to $773,000, 91104 13% negative to $557,000 and 91103 a 34% drop to $310,000 median.

The situation does not appear to be improving significantly, but I can say that many of the stats were based on so few sales as to make them meaningless.  Few sales is also a negative in itself, of course, but  the coming of Spring to the Southland also opens the homehunting season for buyers who this year have an amazing array of help available to them in tax credits, higher FHA loan limits, and various city and county grants.

On the positive side,  perhaps Obama’s Plan will help some of these underwater homeowners. I am always available for discussion at 626-641-0346 or email at drdbroker@yahoo.com. The new administration has presented some plans to help those suffering from the precipitous drop in home values.

Figures are courtesy of MDA DataQuick in LaJolla, supplied by L.A. Times.

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Southern California Home Values: More Bad News

As noted here, L. A. County home values have now dropped 36% in one year.

But, that time period does not show the depth of the plunge. Southern California median home values have dropped 50.4% from the peak of the housing bubble. This is partly a statistical anomaly: few top-of-the-line or new homes were selling. This 50% figure is an aggregate of all SoCal counties. Some counties have it far worse and we know which they are. Riverside prices have plunged 55% from $432,000 median to $195,000. San Bernardino had it worse: median values are down from their height of $380,00 57.4% to $162,000.

Adding to the general misery is the news that about 20% of all mortgage holders in the U.S. are underwater or owe more than their homes are worth. California’s rate of negative equity is 30% of mortgage holders placing it on a par with Florida–in 5th place. It’s not quite so bad in L.A. County even with the statistical drag of  the Antelope Valley and the High Desert areas. In L.A. County about 23% of homeowners are in negative territory.

Of course, owing more than the home is worth is a difficult situation for homeowners. It hardly seems worth the struggle to make the payment. In fact, many don’t. They may have made a” business decision” [does it make sense to pay on a $400,000 mortgage when the house is worth $300,000?]  More likely,  they can no longer afford the payment due to job loss, job cutbacks or readjusting mortgages. Across the country,  4% of mortgage holders were at least 60 days late in the last quarter of 2008. A year earlier, the figure was 3%.

How’s California doing? Not so good, as we might expect, given the rising unemployment statistics. Of California home owners 6.9%  were categorized as delinquent in Q4 08. This compares to Florida, highest in the nation with 9.5% rate. We are still behind also Nevada and Arizona.

4-horsemen

But, these four populous states really are like the Four Horsemen of the Apocalypse. Their condition does presage disaster for the rest of the country. We four are huge markets for the rest of the country and the world. California alone has something like the 10th largest economy in the world. If our economic engine is stilled, what will happen to our trading partners and our fellow citizens in other states?

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L.A. County: December 2008 Home Values

Seal prior to 2004 lawsuit threat
Image via Wikipedia

You guessed it–home values are still going down. December home sales for L.A. County show a median home value of $320,000, down from the $340,000 of november and 36% lower than November of 2007. Of course, neighboring counties are doing worse, some by a wide margin, but that is hardly cause for joy. There’s no doubt we’re all in this together.

As always, some areas are in worse shape than others. By now, we expect to see huge price drops in North L.A. County and we surely do: Lancaster shows medians of $115,000 and $116,000 [93534,93535], representing drops of 50% and 38% respectively over last year, while 93536 shows a median of $199,000, 35% less than last year. This is grim news as it most certainly means foreclosures and short sales for many. Those that remain must somehow deal with a loss of up to 50% of their home’s value over last year. Sadder still is the story in Palmdale where one ZIP[93591] has lost a spectacular 74% of its median home value in one year to arrive at a crushing $65,000.  Other Palmdale areas show losses of 46% to a median of $116,000 [93550]and 35% to a median of $225,000 [93551].

Other areas hard hit by the home value drop include many areas in Los Angeles City, including Hawthorne, Watts and Compton along with others. In our own area, Pomona continues to lead the way down with a 50% drop in 91768 to a median of $173,000, 41% in 91766 to a median of $223,000 and 38% in 91767 to $216,000. Other large drops occurred in Baldwin Park [42% to $235,000], South El Monte [41% to $270,000], Whittier 90602 [47% to $318,000], but, for the most part, the San Gabriel Valley‘s median home values are higher than the county median and have dropped less.

San Dimas, for instance, shows a 14% drop over last year to $465,000, though that is based on very few sales, itself a poor harbinger for the future. Arcadia dropped about 24% to a median of about $750,000 across its two ZIP codes. Monrovia is down 11% to $478,000, again well about the County median.  Covina has lost around 20% to a median in the high $300,000s.  Walnut has actually gained value to a median of $634,000. Guess you’re doing something right, Walnut. Glendora is down a bit over 20% in both 91740 and 91741 to medians of $343,000 and $419,000 respectively. La Verne is down 6% to $465,000 which represents very good value. Buy in LaVerne. Claremont is down a measly 2% to a median of $525,000.

Many of these medians are based on very few sales, so we can expect them to change, possibly radically, inthe near future. South Pasadena, for instance, now is up 11% to a median of $1,200,000, but that is  based on only 3 sales for the whole month. Condo sales have been abysmal, as expected, and many median values are based on 1 or 2 sales. The median condo price in L. A. County is $290, 000, down 25% over November 207. Sales, though, are way off.

It’s clear that the pace of decline is slowing and the median for L. A. County is dragged down by horrendous numbers in some parts of the City of L. A. as well as Palmdale, Lancaster and the high desert areas  like  Littlerock [down 51% to a median of $140,000]. Established suburbs, such as those in the San Gabriel Valley, with good schools, well-managed city governments and alreay-built and paid-for infrastructure are doing much better than outlying districts. It is also true, though, that if our Current Recession deepens cities will be less able to maintain these infrastructure amenities in the face of shrinking  tax base  from closing auto malls, lost retail outlets and rising unemployment.

Statistics provided by MDA DataQuick and are printed in the L.A. Times.

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