Latest Housing Report Explained By Me!

November 29, 2007

So What’s the skinny in the Los Angeles area?

This is the low-down for the San Fernando Valley including Burbank and Calabasas, but not including Santa Clarita etc. Single-family home sales throughout the San Fernando Valley during October dropped 54.1 percent compared to the prior year, the Southland Regional Association of Realtors reported on Wednesday, Nov. 28^th.    “WOW” you might say! But let’s break it down: This really means that buying/selling activity has been reduced by slightly less than half of the volume we saw during the end of the “bull market”.  However, the lower volume of transactions is not necessarily translating to the same degree in lower prices here.  While many buyers think prices should be down dramatically, the reality is that resale prices are holding relatively steady in large measure because even with more properties listed for sale there still are not enough homes throughout the region to satisfy demand (see population data below).

Interestingly, the median price of single-family homes sold during October fell a modest 3.3 percent to $590,000, down $20,000 from a year ago when the median was $610,000. It was the first time in six months that the median fell below the $600,000 mark. The record high of $655,000 was set in June.  A total of 7,730 properties were listed for sale at the end of October. That was up only 13.8 percent from a year ago. Even with the increase, the current inventory is far below the record high of 14,976 active listings set in July 1992 when a recession swept the nation and Southern California’s economy was in the process of a total restructuring.  Since 1990, according to the U.S. Census, the population of Los Angeles County grew by 656,286 (or 7.4%). That's alot of additonal housing needed!

In the current market, homeowners who do not have to sell and purchased prior to the recent peak in the market will weather this cycle. Even if they had to sell now, they still would reap a handsome profit, although not as much as a year ago.  It is now considered a buyers market in many areas, though don’t expect the killer deals to be the best house on the block, which are still commanding full value.