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LA
South Bay Real Estate Volume 7, issue 8 Written and Created by Barry Brickel J.D. Keller Williams Realty
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Best viewed with Microsoft Internet Explorer View the Graphs and Indicators
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Summary of July's Data Home prices based on July''s sold data for Median sales prices are back on its uptrend and Average prices remain on their uptrend. Monthly home prices fluctuate quite a bit for month to month - remember to follow the trend instead. After better than Average sales volume in June July's volume was below average. Total Inventory increased in July again, the trend there is moving back up which is of some concern. The Unsold Index rose to 4.71 months inching closer to a buyer's market but still in the balance market area The statewide Unsold Index for California was 4.8 in June. Most of our indicators are strongly positive but there is some additional weakness developing. Remember these values fluctuate widely from month to month so we must rely on the trend of our indicators before reaching any conclusion. Median Home price momentum has slowed as evidenced by our Momentum chart below,slightly negative not changing much from last months value. Price momentum is near the zero value indicating no price momentum or that prices have stalled. There is also very little energy in price momentum in either direction up or down, it is barely negative now. Median prices receive a lot of attention by the media, because of that it is an indicator to be concerned with. However it is not an indication that homes prices are going up or down only where the public is buying. It is preferable that the Median price is going up as a measure on market health. In other words the public buying more expensive homes in general is a good sign. For a more detail study see the discussion of Median price vs. Average price, The Average LA South Bay Home price is fairing much better than the Median Home prices and remains significantly higher than its January 2009 value. I consider this measure of home price more significant as discussed in the discussion above. The current market remains in a very healthy "balanced market", neither a Buyer's or Sellers' market and remains as an ideal market for Buyers, Sellers, Investors and Agents, but inching toward a Buyer's market. Most of our indicators are positive at the present time. Home Affordability remains very high due to the combination of low interest rates and low median prices. The March 2009 buy signal given here still remains the best time to have purchased in the current up cycle but we may get a similar opportunity soon. The Affordability Indicator is a best indicator to watch if you are trying to time the market than home prices if you are planning to finance your purchase. Sentiment Increased in July and is approaching its uptrend line again from November of 2007, This is an indicator remains high even though we are still below the trendline. City Price trends For Torrance, Redondo Beach, Manhattan Beach and San Pedro are shown at the bottom of this report with their deviations from the long term price trends. The data For Torrance and Manhattan Beach includes corresponding median home sizes which must be evaluated against the Median price. In some months the median house prices went down but sold did the corresponding home size. in otherwords home prices were down because people were buying smaller houses. The following conditions are supporting a market bottom and are reasons to buy now. 1 - The Foreclosures charts are indicating a peak in foreclosures a very reliable indicator, if sustained it will provide additional confirmation of the bottom of the market. The number of new foreclosure properties currently listed for sale in the entire South Bay as of today is relatively low. 2 -The Affordability chart shows the affordability in January 2009 was at the highest (best) since June 2003. From August 2007 to July 2010 affordability has increased approximately 50.5 % . This indicator is the most important indicator if you are looking to get in to the market because it is a measure of how much you can buy for your money. 3 - Properties are being absorbed in the outside areas at discounted prices as conditions are continuing to improve, see the chart below (see Murrietta) 4 - Interest rates are at all time lows, Goverment buying of Treasury securites is forcing interest rates artifically down again, when the Federal Reserve's action ends rates will be going up. 5 - High Inflation is very likely to occur within the next 2 years (See the 10 year Treasury Yield curve below), All asset classes such as real estate will increase when that occurs. 6- Most economists agree that the national recession is over, buying confidence should increase. Here are the reasons to wait: for a better
buying time
Application
Current Recommended Action - Moderate risk - Buy signal, Balanced market with bias toward a buyers'- in control market in most South Bay Cities. The Risk evel 4/10, 10 = most risk (based on 10 of the indicators)
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| Graphs and Indicators | |
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Average
SB Home Price - July 2010 = $660,228 Median SB Home Price - July 2010 = $454,500 Average
SB Home Price - June
2010 = $602,303
**Average (Sum of the Sold prices divided by These are relative values, both average
and median proces are not direct measurements of home value. Condition - Average prices are on a Short term uptrend trend and a long term downtrend. Median Prices are up slightly since January 2009 |
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South Bay Sold Properties Price Distribution |
Sold Price Distribution
Median Price July 2010 = $454,500
July 2010 Minimum Home Price = $85,000 July 2010 Maximum Home Price = 5.25 Million(2)
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Unsold Index LA South Bay
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Unsold Index July 2010 = 4.71 months June 2010 = 3.55 months
Current Condition - Balanced with Buyerr bias Legend: |
Total Inventory LA South Bay
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Total Inventory - The number home on the
market at the beginning of each month.
July 2010 = 2294 units June 2010 = 2i58 units
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South Bay Housing Income Affordability Comparison
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Housing
Income Affordability
Annual Household Income Required To Purchase A Median Priced LA South Bay Home. (Based on 80% financing) Higher
values on the chart to the left corresponds to lower requred income to
purrchase the median priced home. This Graph is important for extremes and trends and not the actual data values you may use because your financing is most likely different, however the affordability comparisons are the same. |
| Price Momentum Charts
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Price Momentum
The Median Price Graph (June 2003 thru July 2010.) is shown with the same date range as the momentum charts below it. Note the price peaks in the summers of 2005 and 2007. Price Momentum (12 month simple moving average) is a measure of the rate of change of prices. Above the zero line indicates positive price momentum, below the line, negative price momentum. The farther away from the zero line the stronger the price momentum. A zero value indicates no price momentum(acceleration or deceleration in prices). We now see price momentum near the zero line indicating at least for the moment median price momentum has stalled. Rate Of Change In Price Momentum (12 month simple moving Average) This is the 12 month simple moving average of the price rate of change chart above. This chart is showing price rate of change is still increasing in the positive direction but at a slower rate than the past few months An unconfirmed peak occured in Nov.2009 alerting a possible price trend change to a downtrend. Previous peaks indicated market turns. This is a measure of accelerating or decelerating momentum The rate of momentum. At this pont in time the change in the rate of momentum has also stalled, the direction or power behind the momentum is weak at least as far as median prices are concerned. |
PSR Ratios
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Ratio Percentage Of Homes in Escrow
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Number Of Foreclosures LA County
LA County Foreclosures - Last 9 Quarters
South Bay Foreclosure Vs. All Sales |
LA County Foreclosures In July of 2008, A new law went into effect; 30 days notice had to be given to a homeowner warning the homeowner that his mortgage was in trouble before the NOD could be filed. LA South Bay MLS Foreclosures VS. All Solds Comparison The bottom curve in the chart represents distressed property sales consisting of properties in the foreclosure process and bank owned properties. The top curve represents standard sales. Distressed sales are stable at less that 20% of total sales. |
Buyer Sentiment - LA South Bay
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Buyer Sentiment July 2010 = 53.2
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Sales Volume History LA South Bay
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Residential Sales Volume July 2010 = 487 units
Mean value of monthly sales - 502 Units
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Days On The
Market For A New Listing Distribution |
Average Days On The Market For A New Listing July 2010 - 69.38 days
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** 3 month average Location Segments |
The Location Segments are used to determine the Relative strength of the Real Estate market
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Price Segments |
Price Segments are used to determine the relative strength of several price ranges. For July 2010 the strongest price segments were the $500,000 or less segment, The weakest price segment was in the 2.5 million to 5.0 million range however that segment ideteroated from Junes's value |
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Interest Rates Trends Comparison |
10 Year Treasury Note Yield vs. Mortgage rate. Thie bottom line in the chart show Treasury note yields in the open market. The top line shows corresponding mortgage rates for the past 6 months. The spread is suggesting rates can still come down.
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Selected South Bay City Median Price -Townhomes And Houses
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Manhattan Beach - zipcode 90266 SFR and Townhomes |
Torrance - zipcodes 90503, 90505 SFR and Townhomes |
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Redondo Beach - zipcodes 90277, 90278 SFR and Townhomes |
San Pedro - zipcode 90732 All Property ypes |
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Barry Brickel J.D. Click
Here Resources The data used for LA South Bay Real Estate is obtained from the Greator South Bay MLS areas 101-193, (North Inglewood to San Pedro), Clarus Market Metrics, LA Business Journal, LA County Assessors Records, Dataquick Information Services, US Census Bureau, and the National Association of Realtors. Copyrighted
Material 2002-2010
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| To go to the LA South Bay Real Estate Forecast Website edition click Here | |
