Westside of Los Angeles Property Values, the real facts

By
Real Estate Broker/Owner with Teles Properties

The market is much more balanced than the headlines indicate.

 

One of the most influential variables driving our local real estate market is inventory. The number of properties on the market (active listings) is down 52% from a year ago. In 10 of the 19 micro markets that we track on the westside of Los Angeles, fewer listings came to market and listings withdrawn from the market and expired listings were unusually high. Prices are determined by supply and demand and right now the lack of supply is counteracting the decrease in sales volume.

Less than four months’ supply of homes creates a seller’s market. More than six months’ supply of homes creates a buyer’s market. Currently the market is neutral. What is most interesting is the listings that are still selling are selling quickly.

Of the 257 closings this month, 46% sold within the first 30 days of  being on the market. There is no disputing the evidence that good homes at a good price are still selling very quickly.

The following micro markets were up in sales activity June 08 vs. June 07: Beverly Hills, Westwood - Century City, Brentwood, Los Feliz, and Malibu Beach. In 10 of the 19 micro markets we track, sales activity was up in June 08 vs. May 08.

The median sales price across the 19 micro markets we tracked in June 08 vs. June 07 was down 10.8%, while the YTD numbers are up 4.9%. What is also very interesting is the sales price to list price ratios. On average, listings are selling at 6% off the original asking price and 4.4% off the list price at the time of sale. The following micro markets were up in terms of median sales price for the month of June 08 vs. June 07: Bel Air, Los Feliz, and Venice.

The following micro markets have experienced a YTD increase in median sales price: Beverly Hills P.O., Bel Air - Holmby Hills, Sunset Strip - Hollywood Hills West, Cheviot Hills - Rancho Park,  Venice, Santa Monica, and Hancock Park- Wilshire.

Our Conclusions:
In our local markets, many sellers have the financial ability to decide whether or not to sell their home in the current market environment. This fact contributes to the decrease in inventory in our market place.

Buyers continue to face lower inventory levels in most micro markets. There is actually a healthy competition for well-priced properties. The media headlines suggest inventory is swelling and buyers should be able to purchase a property from a  distressed seller or through foreclosure. These situations in our local markets are practically non-existent. The big anticipated price drop many buyers had expected has simply not occurred. For a buyer, sitting on the sidelines is not without risk. While interest rates are slowly trending upward, they continue to be the silver lining in the market. With loan programs changing every day, it is very difficult to say which programs will be available, and at what cost, going forward.

Sellers are faced with the reality that the media continues to create a perception of a buyer’s market. In fact, the current inventory levels favor neither buyer nor seller. Sellers can take heart in the  fact that buyers want to buy and multiple offers still take place for well-priced properties. Homes priced at “market value”, not feelings or false expectations, are still selling.

In summary…. Buyers and Sellers need to pay close attention to the real numbers, not just the headlines. The media’s coverage is largely based on macro trends, not on our local micro market data. Yes, we are in a different real estate environment when compared  with the market of two or three years ago. At the same time, the  market is much more balanced than the headlines indicate.

JUNE 2008 Micro Market Report

Comments (6)

Stefan Geyer
SOA Realty - Aurora, CO

Informative and well written post.  Welcome to Active Rain!

Aug 04, 2008 10:42 AM
Lori Franks
Real Estate Consultant - Brookings, OR
Brookings, Oregon

Hello Peter- I just wanted to welcome you to ActiveRain. And also to congratulate you on a very well written first post. Keep up the good work.

Aug 04, 2008 05:10 PM
Robert Monk
100% Realty, Inc. - Santa Rosa Beach, FL
Florida Real Estate

Welcome to ActiveRain.  It's a fun place to vent, to learn stuff, and to improve your search engine optimization.  Hope to see you around!

Aug 04, 2008 05:50 PM
Kirk Westervelt
Van West Realty - Greenville, SC Realtor -Short Sale Expert! - Greenville, SC
Kirk Westervelt, Broker In Charge, Van West Realty - CDPE - Short Sale Agent - Home for Sale - Greenville, Simpsonvil...

Hi, welcome to Active Rain! I hope to see more of your blogs in the future. Learn from others, share your knowledge and experiences and enjoy yourself! Take care! ---Kirk.

Aug 05, 2008 01:10 AM
Lorena Westervelt
Van West Realty - Greenville, SC
Co-Founder/Co-Owner

Hello, welcome to Active Rain! This seems like a wonderful environment to network as well as learn from others. I hope you enjoy yourself and participate often in the Active Rain environment!

Aug 06, 2008 09:48 AM
William E. Lewis, Jr.
William E. Lewis, Jr. & Associates - Vero Beach, FL

Welcome to the Active Rain network and congratulations on your first post!  Please do not hesitate to reach out and request assistance from the 102,000 plus members on YOUR network should the need arise.

Aug 06, 2008 10:29 PM