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LA
South Bay Real Estate Volume 7, issue 2 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 January 2010 Data The sales volume in January was down to 348 units sold in the LA South Bay below its 502 average monthly value. This is mostly due to seasonsal effects in January and February as shown in the sales volume graph below. January and February are traditional the slower months in terms of sales volume. December had better than average sales volume, the expected holiday seasonal slowing did not occur again this year(contrary to popular belief). We expect that February' will also show lower sales volume. The lower sales volume resulted in an increase in Unsold Index and a blip in inventory, but the increase in inventory was a result of the lower sales volume not due to an increase in new listings being put on the market. The Unsold Index for January was at 4.66 months up from Decembers value of 2.53. The Unsold Index moved closer to a buyers controlled market but is basically in the mid of the balanced control market with neither buyers or sellers in control. Meanwhile Median and Average home prices continued its short term price uptrend. March usually marks the beginning of a seasonal uptrend in activity and is on our watch list. Affordability fell in January even though Interest rates remained low due to the increase in the median home prices. The historically low interest rates will probably not be duplicated in future cycles in the foreseeable future, increases inaffordability due to low interest rates are somewhat limited at this pont. The rate of change momentum chart shows a peak in prices but is still high and is likely to go up in the next couple of months. The strength in this market is now of the same magnitude as the hot market 1996 - 2005. Price Momentum (middle momentum graph) remains relatively high increasing in a positive direction. The long term Median price trend is still down but the short term uptrend in prices is causing the long term trend to improve. Sentiment increased again and remains on an uptrend since November of 2007 this is a new high for this cycle. Gardena had the best Unsold Index numbers
again, a very hot market continues there. Gardena also had the highest Percentage Of
Homes in Escrow in the South Bay (PSR) over 100% at 138% indicating the number of
homes in escrow exceeded the available inventory (homes from the previous
month are still in escrow). The PSR for the entire LA South Bay was
above the 45% level at 54.12%. Six of eight South Bay cities had PSR's
over the45%
threshold indicating a sellers' in control market in those cities.
The $350,000 and below price range was the strongest market segment
, the 2.5 milillion to 5 million price range was the weakest price
segment. while the 2.5 to 5.0 Million price range was the weakest price segment
which is expected. Most indicators continue to show positive trends. The Media relies very heavily on Median Home Prices. Median Prices and Average prices are indicators we use to evaluate market strength they do not by themselves indicate whether properties are going up or down in value and by how much. They only show where the prices of where the public is buying. Comparative market analysis must still be used to determine value and price changes. 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 tend peaks. The following conditions are supporting a market bottom and are reasons to buy now. 1 - Low confidence in the national economy and increased unemployment locally may drive down prices and/or Mortgage rates. A double dip recession may be is a strong probability. 2 - Low number of sales may be an issue again, if that happens the U.I. (Unsold Index) will increase resulting in a large supply of homes on the market causing prices to go down provided inventory does not decrease. 3 - Interest rates may go down more improving affordability for more buyers. 4 - Interest rates may go up higher as the economy improves forcing prices down. The government has announced it is going to stop buying Treasury securities, that will cause all rates to go up and prices down. 5 - The Foreclosures charts are indicating the number of foreclosures in 2009 will surpass those of 2008 (final data is not available yet). Evidence of a peak in foreclosures has not arrived. the number of nationwide foreclosures filed are expected to increase in 2010 before peaking later in the year. 6- The Buyers Rebate program is a motivation to buy now and remains in effect.7- Foreclosures look like they have peaked in 2009 in LA County
Here are the reasons to wait: for a better buying time 1 - Low confidence in the national economy and increased unemployment locally may drive down prices and/or Mortgage rates. A double dip recession may be is a strong probability. 2 - Low number of sales may be an issue again, if that happens the U.I. (Unsold Index) will increase resulting in a large supply of homes on the market causing prices to go down provided inventory does not decrease. 3 - Interest rates may go down more improving affordability for more buyers. 4 - Interest rates may go up higher as econcomy improves forcing prices down. The government has announced it is going to stop buying Treasury securities, that will cause all rates to go up and prices down. 6- Removal of Government incentives may result in a lower number of home buyers. Remember to read the comments to the right of each chart below. Click on the graphs to enlarge. Forecast
The impact of he current national economy
situation and related credit issues will continue to put a negative drag
on prices and the recovery in the local real estate market. Application
Current Recommended Action - Low risk - Buy signal, Neither Buyers or Sellers in control
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| Graphs and Indicators | |
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Median and Average Home Prices - LA South Bay - January 2000 thru January 2010
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Average
SB Home Price - January 2010 = $638,590 Median SB Home Price - January 2010 = $465,000Average SB Home Price - December 2009 = $624,014 Median SB Home Price - December 2009 = $431,825
These are relative values, both average
and median proces are not direct measurements of home value. Condition - Average and Median Prices are on a Short term uptrend trend and a long term downtrend. |
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South Bay Sold Properties Price Distribution |
Sold Price Distribution
Median Price January 2010 = $465,000 Median Price December 2009 = $431,825
January 2010 Minimum Home Price = $15,900 January2010 Maximum Home Price = $15.9 Million |
Unsold Index LA South Bay
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Unsold Index January 2010 = 4.66 months December 2009 = 2.52 months
Legend: |
Total Inventory LA South Bay
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Total Inventory - The number home on the
market at the beginning of each month.
January 2010 = 1623 units December 2009 = 1419 units
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South Bay Home Affordability Comparison |
Local Home
Affordability
Annual
Household Income Required To
Purchase A Median Priced LA South Bay Home. (Based
on 80% financing) 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. |
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Price Momentum Charts |
Price Momentum
The Median Price Graph (June 2003 thru Jan 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 can see a consolidating of price momentum in the period from October 2008 to April 2009 (negative momentum 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 increasing in the positive direction and has peaked above the 2003 peak. Previous peaks indicated market turns. This is a measure of accelerating or deceleratig momentum The rate of momentum change(strength) has surpassed the levels of the previous strong sellers' market 1996 -2005. |
PSR Ratios
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Ratio Percentage Of Homes in Escrow
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Number of Foreclosures LA County LA County Foreclosures - Quarterly
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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.
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Buyer Sentiment - LA South Bay
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Buyer Sentiment January 2010 = 60.60 New cycle high December 2009 = 58.24
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Residential Sales Volume
January 2010 = 348 units December 2009 = 563 units
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Days On The
Market For A New Listing Distribution
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Average Days On The Market For A New Listing January 2010 - 73.5 days December 2009 - 72.6 days
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** 3 month average |
The Location Segments are used to determine the Relative strength of the Real Estate market |
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Price Segments are used to determine the relative strength of several price ranges. For January 2010 the strongest price segment was the range between $350,000- million segment. The weakest Price segment was in the $2.5 million to $5 million range. This is the first time on a long time that the lowest price segment was the strongest and the highest price segment was the weakest. |
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Interest rates Trends Comparison |
10 Year Treasury Note Yield vs. Mortgage rate. Thie top line in the chart show Treasury note yields in the open market. The bottom line shows corresponding mortgage rates for the past 6 months. Comparing the two lines, mortgage rates should actually be higher, this could be a result of government effort to artificially hold down rates.
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Selected South Bay City Median Price Trends -Townhomes And Houses
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Manhattan Beach - zipcode 90266 |
Torrance - zipcodes 90503, 90505 |
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Redondo Beach - zipcodes 90277, 90278 |
San Pedro - zipcode 90732 |
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Barry Brickel CA Real Estate Broker #
00947259 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 2002-2009
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| To go to the LA South Bay Real Estate Forecast Website edition click Here | |
