L.A. Times story: Southern California home prices fall

[Ex-SD]

In a downturn, prices also tend to fall relatively slowly in more affluent areas. Homeowners there are less likely to be threatened by foreclosure and can delay selling their homes.

The number of January home sales in Bel-Air, Beverly Hills, Santa Monica, Laguna Beach and Newport Beach were all below average or at record lows, DataQuick reported, noting that “such areas have so far seen relatively small price declines and haven’t benefited from the wave of bargain hunting that’s boosted inland sales for months.”

That’s why Aarchan Joshi, a 40-year-old ophthalmologist who lives in north Redondo Beach, is putting off a move to Manhattan Beach. He could afford to move now but thinks “there’s a big disconnect. The more affluent areas are really just beginning” their price declines, he said.

A bit of an armchair economist, Joshi said he figured Manhattan Beach’s median home price is 13 times its median household income. “It’s completely unsustainable,” he said.

“My range would be when it gets to seven times or eight times income, that would trigger me to seriously look at buying a home,” he said. His guess is that will occur around 2012.

Complete story here: http://www.latimes.com/business/la-fi-homesales20-2009feb20,0,7584906.story

[ralphfurley]

I read this article the other day and thought it was crap.

How do they figure that home values are below historical income ratios? I thought the median income today is on par with 2001 levels. And home prices in LA are far and beyond 2001 levels right now.

Maybe I don’t understand the data. I don’t know how the median house price in the LA area is $250K. Show me a detached house for $250K in the LA area, and I’ll show you an area I would not want to live in.

Maybe I misunderstood the article and it spoke of the homes that are actually selling. Which are the low priced crap shacks. So the super junkers are a great value now. That’s nice.

[ralphfurley]

I read this article the other day and thought it was crap.

How do they figure that home values are below historical income ratios? I thought the median income today is on par with 2001 levels. And home prices in LA are far and beyond 2001 levels right now.

Maybe I don’t understand the data. I don’t know how the median house price in the LA area is $250K. Show me a detached house for $250K in the LA area, and I’ll show you an area I would not want to live in.

Maybe I misunderstood the article and it spoke of the homes that are actually selling. Which are the low priced crap shacks. So the super junkers are a great value now. That’s nice.

[ralphfurley]

I read this article the other day and thought it was crap.

How do they figure that home values are below historical income ratios? I thought the median income today is on par with 2001 levels. And home prices in LA are far and beyond 2001 levels right now.

Maybe I don’t understand the data. I don’t know how the median house price in the LA area is $250K. Show me a detached house for $250K in the LA area, and I’ll show you an area I would not want to live in.

Maybe I misunderstood the article and it spoke of the homes that are actually selling. Which are the low priced crap shacks. So the super junkers are a great value now. That’s nice.

[ralphfurley]

I read this article the other day and thought it was crap.

How do they figure that home values are below historical income ratios? I thought the median income today is on par with 2001 levels. And home prices in LA are far and beyond 2001 levels right now.

Maybe I don’t understand the data. I don’t know how the median house price in the LA area is $250K. Show me a detached house for $250K in the LA area, and I’ll show you an area I would not want to live in.

Maybe I misunderstood the article and it spoke of the homes that are actually selling. Which are the low priced crap shacks. So the super junkers are a great value now. That’s nice.

[ralphfurley]

I read this article the other day and thought it was crap.

How do they figure that home values are below historical income ratios? I thought the median income today is on par with 2001 levels. And home prices in LA are far and beyond 2001 levels right now.

Maybe I don’t understand the data. I don’t know how the median house price in the LA area is $250K. Show me a detached house for $250K in the LA area, and I’ll show you an area I would not want to live in.

Maybe I misunderstood the article and it spoke of the homes that are actually selling. Which are the low priced crap shacks. So the super junkers are a great value now. That’s nice.

[cr]

I believe Thornberg is speaking for all of CA when he says income ratios are below normal. Though I question income rising at all since 2006 until housing bottoms in 2010 at the earliest.

LA county numbers are deceiving with nice affluent areas like Bel Air, Encino, Malibu, etc, then Palmdale, Lancaster, and pretty much all of south central and east Los Angeles.

Those areas drag the average down, but were hit earlier in the correction. Damage to the higher end looks like it’s just warming up, and we’ve all seen the Credit Suisse reset chart where Alt-A and Option ARM resets peak in 2011.

So you’re right, a $250k house in LA is a dump. For now. But, contrary to what the article indicates the correction isn’t over. High priced homes aren’t selling and should start becoming REOs. That’s also why the median price is dropping, and why it’s a useless number.

Once high end REOs start selling we’ll probably see a jump in median price. However, if a $1,000,000 home at the peak sells for $500,000 at an aution it may bump the median up, but I wouldn’t call that a recovering RE market.

[cr]

I believe Thornberg is speaking for all of CA when he says income ratios are below normal. Though I question income rising at all since 2006 until housing bottoms in 2010 at the earliest.

LA county numbers are deceiving with nice affluent areas like Bel Air, Encino, Malibu, etc, then Palmdale, Lancaster, and pretty much all of south central and east Los Angeles.

Those areas drag the average down, but were hit earlier in the correction. Damage to the higher end looks like it’s just warming up, and we’ve all seen the Credit Suisse reset chart where Alt-A and Option ARM resets peak in 2011.

So you’re right, a $250k house in LA is a dump. For now. But, contrary to what the article indicates the correction isn’t over. High priced homes aren’t selling and should start becoming REOs. That’s also why the median price is dropping, and why it’s a useless number.

Once high end REOs start selling we’ll probably see a jump in median price. However, if a $1,000,000 home at the peak sells for $500,000 at an aution it may bump the median up, but I wouldn’t call that a recovering RE market.

[cr]

I believe Thornberg is speaking for all of CA when he says income ratios are below normal. Though I question income rising at all since 2006 until housing bottoms in 2010 at the earliest.

LA county numbers are deceiving with nice affluent areas like Bel Air, Encino, Malibu, etc, then Palmdale, Lancaster, and pretty much all of south central and east Los Angeles.

Those areas drag the average down, but were hit earlier in the correction. Damage to the higher end looks like it’s just warming up, and we’ve all seen the Credit Suisse reset chart where Alt-A and Option ARM resets peak in 2011.

So you’re right, a $250k house in LA is a dump. For now. But, contrary to what the article indicates the correction isn’t over. High priced homes aren’t selling and should start becoming REOs. That’s also why the median price is dropping, and why it’s a useless number.

Once high end REOs start selling we’ll probably see a jump in median price. However, if a $1,000,000 home at the peak sells for $500,000 at an aution it may bump the median up, but I wouldn’t call that a recovering RE market.

[cr]

I believe Thornberg is speaking for all of CA when he says income ratios are below normal. Though I question income rising at all since 2006 until housing bottoms in 2010 at the earliest.

LA county numbers are deceiving with nice affluent areas like Bel Air, Encino, Malibu, etc, then Palmdale, Lancaster, and pretty much all of south central and east Los Angeles.

Those areas drag the average down, but were hit earlier in the correction. Damage to the higher end looks like it’s just warming up, and we’ve all seen the Credit Suisse reset chart where Alt-A and Option ARM resets peak in 2011.

So you’re right, a $250k house in LA is a dump. For now. But, contrary to what the article indicates the correction isn’t over. High priced homes aren’t selling and should start becoming REOs. That’s also why the median price is dropping, and why it’s a useless number.

Once high end REOs start selling we’ll probably see a jump in median price. However, if a $1,000,000 home at the peak sells for $500,000 at an aution it may bump the median up, but I wouldn’t call that a recovering RE market.

[cr]

I believe Thornberg is speaking for all of CA when he says income ratios are below normal. Though I question income rising at all since 2006 until housing bottoms in 2010 at the earliest.

LA county numbers are deceiving with nice affluent areas like Bel Air, Encino, Malibu, etc, then Palmdale, Lancaster, and pretty much all of south central and east Los Angeles.

Those areas drag the average down, but were hit earlier in the correction. Damage to the higher end looks like it’s just warming up, and we’ve all seen the Credit Suisse reset chart where Alt-A and Option ARM resets peak in 2011.

So you’re right, a $250k house in LA is a dump. For now. But, contrary to what the article indicates the correction isn’t over. High priced homes aren’t selling and should start becoming REOs. That’s also why the median price is dropping, and why it’s a useless number.

Once high end REOs start selling we’ll probably see a jump in median price. However, if a $1,000,000 home at the peak sells for $500,000 at an aution it may bump the median up, but I wouldn’t call that a recovering RE market.

[Author]

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