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LA
South Bay Real Estate Volume 8, 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 number loans in Foreclosure was down again in the first quarter of 2011 from the same quarter a year ago. The number of delinquent homes was 13,957 compared to 15,797 or down 11.6%. This indicator is one of the most reliable of our indicators predicting future conditions. We can expect that there will always be foreclosures in the future even in a market with appreciation but the continuing trend is a very big positive. The trend indicates that the inventory will be greatly diminished affecting iUnsold Index and prices directly. The sales volume came in with sales over the mean level. Median Home Prices and Average Home Prices were both up for the month at $430,000 and $611,098 respectively. Homes prices remain in basically a flat consolidation trend which has existed since January 2009. The Unsold Index remains in the balanced market zone where neither buyers nor sellers are in control. The 4.574 months of unsold inventory is an indication of a very healthy market. A strong market will exist if the unsold index moves down to 3.0 months. the unsold index for the South Bay has been consistently better than the state average and came in at 5.4 months. We usually do better than the state average by approximately one month. Our other indicators have improved in April slightly. The home affordability indicator remains near recent highs. The price segments graphs shows That the strongest price segment was the $500,000 to 1 million dollar price range. 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 so did the corresponding home size, in other words 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 LA County 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 and more prevalent in the lower price ranges. The number af annual foreclosures have peaked. 2 -The Affordability chart shows that the affordability in March 2011 was at the highest (best) since June 2003. From August 2007 to March 2011 affordability has increased more than 50 %. 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. Interest rates are now in an uptrend. 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, Government buying of Treasury securities is forcing interest rates artificially down again, when the Federal Reserve's action ends rates or the economy starts to improve rates will be going up. Interest rates are now on the way 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. The Federal reserve has made the decision to print more money which may result in possibly runaway inflation 6- Most economists agree that the national recession is over buying confidence should increase fueling the buying crowd. Home Buyer confidence is currently trending down. Here are the reasons to wait: for a better
buying time
Application
Current Recommended Action - Medium Risk, Buyers' in control market exists in most South Bay Cities. The Risk level is now at 3/10, (based on 10 of the indicators)10 is the highest risk,1 is the lowest risk.
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| Graphs and Indicators | |
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Average SB Home Price- April. 2011=$611,098Median SB Home Price- April. 2011= $430,000 Average
SB Home Price - Mar. 2011 = $603,179
**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 home prices are on a flat consolidation pattern.
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South Bay Sold Properties Price Distribution (click Chart to enlarge) |
Sold Price Distribution
April. 2011 Minimum Home Price = $65,500 April. 2011 Maximum Home Price = 10.9 Million
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Unsold Index LA South Bay
(click chart to enlarge)
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Unsold Index April 2011 = 4.6 months March 2011 = 4.3 months
April 2011 CA state Unsold Index = 5.4 months
Current Condition - Balanced market |
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Total Inventory LA South Bay (click chart to enlarge)
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Total Inventory - The number home on the
market at the beginning of each month.
April 2011 = 2346 units March 2011 = 2301 units
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South Bay Housing Income Affordability Comparison (click chart to enlarge)
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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. |
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Price Momentum Charts (click chart to enlarge)
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Price Momentum
The Median Price Graph (June 2003 thru April 2011.) 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. Zero indicates no price momentum in either direction. Above the zero line indicates positive price momentum, below the line, negative price momentum. In April 2011 we see price momentum below the zero line indicating negative price momentum, price momentum is accelerating slightly but in the negative direction Rate Of Change In Price Momentum Strength Indicator (12 month simple moving average. ) This is the 12 month simple moving average of the price rate of change chart above. Value near the zero line indicates that there is very little energy in price momentum or prices are are stalled, Father away from the zero line indicates relative the strength of momentum. |
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PSR Ratios (click chart to enlarge)
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Ratio Percentage Of Homes in Escrow
The Citiys of Gardena was the strongest segments in the South Bay for April
2011 with a PSR's over 68%.
25-45% = Balanced Market
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Number Of Foreclosures LA County (click chart to enlarge)
LA County Foreclosures - Last 16 Quarters (click chart to enlarge) South Bay Foreclosure Vs. All Sales (click chart to enlarge) |
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.
The number of foreclosures is defined as the number of Notice Of Defaults (NOD's) filed for loans, not the number of individual homes in foreclosure, for example, one home can have several notices of default filed if there are multiple loans on that home that are in
default. The bottom chart shows the relationships between represents distressed property sales consisting of properties in the foreclosure process and bank owned properties and standard sales. The top curve represents standard sales. Distressed sales have been stable at approximately 20% of total sales. April foreclosures was 21.6 % of total sales slightly higher than usual. |
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Buyer Sentiment - LA South Bay (click chart to enlarge)
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Buyer Sentiment April 2011 = 35.08 March. 2011 = 34.76
Market peak value = 94.14 July 2005
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Sales Volume History LA South Bay (click chart to enlarge) |
Residential Sales Volume April 2011= 513 units March 2011 = 530 units
Mean value of monthly sales - 502 Units
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Days On The Market For A New Listing Distribution (click chart to enlarge) |
Average Days On The Market For A New Listing April 2011 - 83.47 days March 2011 - 83.65 days
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** 3 month average Location Segments (click chart to enlarge)
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The Location Segments are used to determine the Relative strength of the Real Estate market
For April 2011 the strongest markets was found in the city of
Manhattan Beach and Hawthorne. The weakest area was found in the cith of
Hermosa Beach.
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Price Segments (click chart to enlarge) |
Price Segments are used to determine the relative strength of several price ranges. For April 2011 the strongest price segments were the 500,000 to 1.0 Million segment, The weakest price segment was in the 2.50 million to 5.0 million range
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Interest Rates Trends Comparison (click chart to enlarge) |
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 (click chart to enlarge) |
Torrance - zipcodes 90503, 90505 SFR and Townhomes (click chart to enlarge) |
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Redondo Beach - zipcodes 90277, 90278 SFR and Townhomes (click chart to enlarge) |
San Pedro - zipcode 90732 All Property Types (click chart to enlarge) |
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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 2002-2011
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| To go to the LA South Bay Real Estate Forecast Website edition click Here | |
