Easily explained; supply and demand.
I agree there is no housing recession in metro LA! Most of metro LA county is built out, very few new projects can be built, therefore new supply is somewhat restricted and the underlying demand supports the prices. Contrast this with San Diego where numerous large projects have been built adding to the supply. If buyers get spooked, prices can soften. Even then I read on this site that projects are selling and there are some price increases.
Look at Sacramento and other CA areas where builders are able to add lots of new product. These are the areas that are experiencing the price drops.
Foreclosure noise at the lowest end of the market has the bears excited. In LA, rate is still 50% of the peak of mid 90s. Nothing to worry about.
Median SFR price declines of 50% in LA (or even SD?) NOT GONNA’ HAPPEN. (**itty El Cajon apt conversions is another story)

Scruffydog is backtracking/retreating

What a big surprise ! Scruffy is conceding that the RE market is SD has problems.

Don’t be surprised if, by this time next year, he starts conceding that the metro LA market has problems too.

I can see it now. Scruffydog is slowly retreating with his tail between his legs 🙂

San Diego entered into the price increases well ahead of the LA/OC areas, and it also entered into the decline earlier. LA is lagging right now, but it’s all ultimately connected.

Proximity to employment in this area is relatively good (although not as good as Pasadena), so it will lag in comparison to the outlying areas. It’s all connected though, and unless this trend reverses it will eventuially come to town and this area will likewise see some price declines. It’s just a matter of time.

There are no havens or safe spots that will be immune from the regional pricing trends that are currently in motion. The differences will be measured by degree, with the better areas suffering less and the worse areas suffering the most. Lancaster and Victorville are going to get it worse than Santa Monica and Westwood.

Sorry Scruffy, but wrong again. Just see yesterday’s Times article.

Bel Aire saw 50% declines in the last housing boom/bust and that rise in prices pales in comparison. They’re still building in LA Metro too: senior apts, hi-rises converted to lofts, row houses, condos conversions, and massive tracts on the outskirts. They’re squeezing them in anywhere they can. I question the truth of a builder’s claim the homes are selling out.

I’ll concede no one really knows when and how much prices will drop, but the same things were said during the last cycle, and prices plummeted.

Nothing to worry about? As long as you have a mortgage you can afford that won’t go up, but I venture to say very few that bought in the last 3 years are so worry-free.

Glad to hear you’re coming around on SD though. LA will follow.

Everyone is aware SD median price has declined ~6% from its peak from ~18-24 months ago. That’s the whole point – it is such a small decline over an almost 2 year period. Such a tiny decline does not portend the huge declines you predict.
Expensive areas LED the price declines last time. LA Times article noted Bev Hills experienced a 40% decline from 1989 to 1993. If housing market is so bad as you say why such a tiny median decline this time (at least in SD…in LA median is STILL increasing).
You would expect to see something much larger than 6% after almost 2 years from the peak!
Not only are expensive areas not decreasing now they are still increasing and sales are robust. This is a major difference is this r/e cycle from the 90s. Plus the economy is still relatively strong and unemployment low. Doom and gloom 50% median price declines for typical sfrs in this r/e cycle in SoCal will NOT occur.
50% decline is not gonna’ happen in SoCal due to demand and limited supply. (In FL different story; we’ve already seen 50% decline in Ft Myers tract housing project)

We’re already halfway to 50% declines in some areas of Riverside County, and based on current volume levels it’ll be YEARS before the trend reverses. That trend will make it a lot further west than Chino Hills or San Dimas or Glendale before it reverses.

Don’t kid yourself – there is no safe haven in a region that is defined in terms of driving distance. If the same home costs twice as much in Santa Monica as it would in Pomona and the home in Pomona declines, the Santa Monica home isn’t going to stay the same just because Santa Monica is “special”.

BTW….

“It hasn’t happened yet” is not at all the same thing as “It’s not going to happen”. There were a lot of permabulls in SD who were making the hasn’t-happened-yet-argument who ended up eating crow when it did happen. You’re making the same mistake now.

Here’s for a little bit of a history lesson. When all is said and done we’ll see a lot of similarities with the 1990s RE slump. Too bad we can’t learn from our past mistakes.

http://www.elliottwave.com/features/default.aspx?cat=mw*aid=3171*time=pm&