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LA
South Bay Real Estate Volume 7, issue 5 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 April's Data The Federal Home-buyer rebate Incentive program ended at the end of April. The question that now remains on everyone's mind is can the current up trend continue absent this additional assist. April's sales volume came in slightly above average with the benefit of these incentives. The answer to the question of sustainability of the the present uptrend will start to arrive in next month's newsletter. Most experts nationally believe that the program's influence was very significant, however with our higher home prices locally there may not be a significant impact on our market conditions. Our indicators at the moment remain positive, Home prices have been rising overall since January 2009 though there is considerable resistance to moving up due to the lack of consumer confidence in the US economy. The demand for LA South Bay Real Estate remains strong, the Unsold Index remains favorably low, we are not in a Buyers market except at the 1.5 million and above price ranges contrary to indication in the Media. Inventory In the New Construction Segment for the Beach Cities is now critically low with very little product available. Six Of Eight South Bay cities are indicating a strong month is ahead for May. The current market remains as an ideal market for Buyers, Sellers, Investors and Agents. The increase in sales volume resulted in a drop in the Unsold Index even though inventory was up slightly in April. Most economists now believe the recession is over, with an economic recovery in progress we will benefit with a reduction in risk to our current low risk buy signal issued in March 2009. In light of poor projections of growth in personal income, double digit annual home appreciation in LA South Bay Real Estate is unlikely in the foreseeable future. Most of our indicators are positive at the present time. Last month's drop in the Median Home price and the increase in mortgage rates has resulted in lower home affordability or as I describe it, your dollar will be buying a smaller house in May as compared to April using this data. The Affordability Indicator is a better indicator to watch if you are trying to time the market. The media relies very heavily on Median and Average Home prices. These price indicators used to evaluate market strength do not by themselves indicate whether properties are going up or down in value and by how much. They only show the prices at which the public is currently buying. Comparative market analysis must still be performed to determine value and price changes for individual properties. Actual Median and Average LA South Bay Home prices bottomed in January 2009 and are on a new uptrend. Median and Average Home prices increased in March snapping back to the short term uptrend line from the previous monthly drop in February. The Unsold Index is low at 3.55 months improving last month's value slightly an indication of a very strong market. The statewide value is approximately 5.6 months)in comparison(March 2010). The Total inventory was up slightly in April. Total Inventory is critically low in the South Bay and is on a downtrend, even an average number of sales will will result in a critical conditions where prices are going to have to move up at a higher rate.
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 following conditions are supporting a market bottom and are reasons to buy now. 1 - Our Sentiment indicator remains on an uptrend. 2 - The Foreclosures charts are indicating a peak in foreclosures, 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 low. 3 -The Affordability chart shows the affordability in January 2009 was at the highest since June 2003. From August 2007 to April 2010 affordability has increased approximately 45% . 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. 4 - Properties are being absorbed in the outside areas at discounted prices as conditions are continuing to improve, see the chart below (see Murrietta) 5 - Interest rates have very little room on the downside probabilities to the upside are highly likely. 6 - 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. Here are the reasons to wait: for a better
buying time
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, Sellers in control market is near in most South Bay Cities.
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| Graphs and Indicators | |
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Median and Average Home Prices - LA South Bay - January 2000 thru April 2010
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Average
SB Home Price -
April
2010 = $614,857 Median SB Home Price - April 2010 = $470,500 Average
SB Home Price - March 2010 = $630,860
**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 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 April 2010 = $470,500
April 2010 Minimum Home Price = $49,000 April 2010 Maximum Home Price = $3.05 Million
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Unsold Index LA South Bay
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Unsold Index April 2010 = 3.55 months March 2010 = 3.50 months
Current Condition - Balanced with strong Seller 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.
April 2010 = 1841 units March 2010 = 1829 units
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South Bay Home Affordability Comparison
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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. |
Price Momentum Charts
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Price Momentum
The Median Price Graph (June 2003 thru April 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 now is reaching the highest level since 2003. 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. An unconfirmed peak occured in Nov.2009 alerting a possible price trend change to a downtrend. |
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 April 2010 = 57.52 March 2010 = 54.78
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Sales Volume History LA South Bay
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Residential Sales Volume
March 2010 = 522 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 April 2010 - 60.48 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 April 2010 the strongest price segments was the range between $350,000 to $500,00 segment, $500,000- 1 Million was also very strong, The weakest price segment was in the $2.5 million to $5.0 million range. |
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.
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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 | |
