June 18, 2008

Southern California Housing Wipeout: Prices Plunge 27% or $135,000 in the past 12 months



For those of you keeping score at home, THAT'S $370 PER DAY OR $11,250 A MONTH!

Should have rented... Should have listened to HP, and not a realtor on commission..

Thank you Lawrence Yun.

Thank you David Lereah.

Thank you Leslie Appleton-Young.

Thank you Connie DeGroot.

Thank you Mike Norman.

Thank you Tom Adkins.

Thank you to the lying, deceitful, self-serving, ignorant and now ramen-eating and forever discredited army of six percenters.

You can all go home now (if you still have a home). Your services are no longer needed.

SoCal Home Prices Plunge 27% in May

Housing prices across Southern California plunged a record 27% in May, signaling that more trouble lies ahead for builders and lenders exposed to the region.

Sales volume in the market fell 15% from a year ago, marking the slowest May in more than 20 years, according to DataQuick Information Systems.

The median price fell to $370,000 from $505,000 in the counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura.

34 comments:

Anonymous said...

10% is in the bag

Anonymous said...

That number is currently skewed. If you look at places like Watts and Compton, you can find houses at 50-70% off the last (cough) purchase price in 2006.

If you look at the nicer neighborhoods, only the nicest homes are selling and many that have been owned for many years are being purchased by flippers and being remodeled and resold.

Yes...believe it or not, there are still flipper/realtors in the game in L.A. that are making BANK. Not many, but they are out there. The successful ones only buy houses with "good bones" and character and gut and remodel them to A+ shape.

So, bubbleheads...these guys are going to be your competition on the way down but don't worry...we all know about the Alt-A tsunami coming ashore and that's the one that will take the better neighborhoods down.

P.S.

Keith...question for you.

Were there "Prime" option ARM's and Stated Income loans? What kind of funny money toxic "Prime" loans are floating out there?

An 800+ FICO means Jack-S#it in my book.

Anonymous said...

Don't tell me Fabio the flipper is back.

Anonymous said...

Do you have to have hair like that to live in LA?

Noodles 2 said...

What is it with the hair on these guys? They got into real estate after being rejected by Twisted Sister.

hardy har har said...

This will blow over. May isn't usually a big month for house sales.

Anonymous said...

anon 9:20 is correct. Try getting anything in a good neighborhood under $700K in L.A. not gonna happen. And at $700K you get nothing special either. Despite all the talk of a housing crash, reality is for the middle to high end market, not much has changed in the past 2-3 years.

LAWRENCE PUN said...

UNDA MAYA KURAN PREDICKASHINS, DEA SEKUND HALFA 2008 WHEELA SEA BIGGA GAINSA FOR DEA SUDERN KALIFORNIA MARKETA...

YU-UN SHOULDA BUYA NOWEY TWO GETA YOURA BESTAY DEAL QUICKEY!

Anonymous said...

Mike Norman is a prick.

Guilty said...

Hunt down the two pictured and punish the Guilty.

Make an example...

guy n. cognito said...

Adkins looks like someone crossed Connie De Groot w/ Mike Norman and then pee'd on it.

Reality said...

Price cutting on the mid-to-high end has already started. One of the houses that I was interested had initially been listed for $2.3mil, reduced to its tax-assessed value $1.5mil last year, then sold for $1.05mil in Feb . . . 30% below then assessed value. Houses in the $700k+ are starting to be listed below assessed value if the owner wants to sell; the rest of them just sit there. There are numerous listings that have no snowballs' chance in hell of being sold at the ask price. The owner and realtor know it, and are "open to offers." IMHO, it's the realtors organizing a scam for "comparables" when banks demand assessment referencing nearby listings. That scam too shall fail. The flippers will be toast when people can't get loans.

tobias said...

Living in SoCa is great. Owning a home in SoCa blows. Can still rent for a 1/4 of the mortgage payment.

David in SD said...

and it is only going to get much much worse.....
I am in North Coastal San Diego and I am expecting to see a massive wave of folks running to Vegas and Arizona soon.

We have a long way to go until bottom.

Anonymous said...

.

Problem is, you may find a nice, quiet neighborhood but that can all change with just one good neighbor moving away.

Then here comes Pedro with his pregnant wife and 9 kids, grandparents, brothers and sisters and cousins well in tow.

So much for your peace quiet and sanity.


.

Anonymous said...

Michael Bolton, I celebrate his whole collection.

k.w. - Southern Ca. said...

Picked up the paper (OC Register) yesterday, and it reports that "we much be close to approaching a bottom in residential housing".

What spin - what lies - never the truth.

The psychology here is that telling the truth causes more panic among strapped sellers to sell quickly and for much less,
which is happening now anyways despite what the paper reports.

We've turned housing into such an ugly monster now, and it's now telling us in plain terms that ... "heck, we have a long way to fall here yet".

As a home owner, I'm appalled at not only the over speculation that occurred during these past few years, but the terrible quality of the majority these newer (OC and LA county) homes as well.
Imagine, fascia being made out of foam! - I have no remorse for the home builders whose stock has now tanked, and only sympathy for the owners of these rapidly depreciating (as well ad deteriorating) dwellings.

At some point we'll have to get real about housing, that it is simply a place to live, and rest your head at night - and to then price it appropriately.

Until then, we'll continue to see prices plummet as the media reports "things aren't so bad, and we're nearing a bottom".

Anonymous said...

It's still supply/demand. I wanted to move to SOCAL in the late 60's because of the high salaries compared to the rest of the country. Aerospace and hi tech industries were all over the place. This in turn justified affordability of the high cost housing. The runup of 2003-06 were artificial as we all know. The difference today is California has lost it's high paying wages to other States and Asia. The price crash will continue until the affordability is the same as other parts of the US - a major drop for California. Sustainability based on lifestyle is a wish that has vaporized.

DaveO said...

10% is in the bag

Thank you, Gary Watts.

Also, Thank you "bubbles are for bathtubs" Kendra Todd.

Of course Lawrence Yun will say that we'll all look back at this So. Cal. decline as a "blip on the radar screen".

keyser soze said...

LOL....great hair jokes everyone!
Whenever I see that Adkins joker, I think of the old proverb 'Whom the Gods would destroy, they first make vain.'

Anonymous said...

Wasn't Greg Swann recommending Socal real estate too?

Anonymous said...

i remember reading about some brilliant real estate investor buying 42 homes in Compton a couple of years ago (top).

I hope he gets shot trying to collect that rent.

k.w. - Southern Ca. said...

I'll have to agree with you to some extent, but housing prices, (even when our moronic CEO's didn't outsource most of the well paying high-tech positions offshore) have not been inline with salaries for far too long.

It makes no sense that a house be worth 5-10 times someone's salary.
It only made "sense" when people could flip their properties after only staying in it 1-2 years - that's over now though for most, and the hard reality of actually being stuck in over-priced houses is hitting home hard with alot of people out there.

Prices were intentionally inflated high for many self-serving reasons as well, and one was to make sure certain "undesirables" couldn't have a chance to live in the neighborhood (HB Ca. being a big supporter of pricing out people.)
Being a supporter of fair and equal housing doesn't win you too many friends within the neighborhood, but I do what I can to support what makes sense and is fair for the greater whole.

Where you hit-the-nail on the head though is where you mentioned the plain and simple fact that most of our IT work is no longer here - BIG, BIG MISTAKE.

Let's face-it, without people who have the ability to *create* products, we are not a very strong country at all.


Anonymous said...
It's still supply/demand. I wanted to move to SOCAL in the late 60's because of the high salaries compared to the rest of the country. Aerospace and hi tech industries were all over the place. This in turn justified affordability of the high cost housing. The runup of 2003-06 were artificial as we all know. The difference today is California has lost it's high paying wages to other States and Asia. The price crash will continue until the affordability is the same as other parts of the US - a major drop for California. Sustainability based on lifestyle is a wish that has vaporized.

BMW driving sex machine said...

How many men or threesomes has Connie been with just because it would close a deal or boost her commission.

I bet at least 20+.

desmo said...

Imagine, fascia being made out of foam!

Can't imagine that, but I can imagine a pair of silicon boobs.

investorinpa said...

Maybe the most accurate comment of all time... "I think of the old proverb 'Whom the Gods would destroy, they first make vain.'"

ICEMAN said...

Hey Keith,

Just thought I would let a major cat out of the bag on the O.C. real estate market. Up until now, the O.C. has not been depreciating as much as other counties in California. The tide has now turned, check out listings on MLS of various cities which include Anaheim, Santa Ana, and La Habra etc. Homes can be found in the $200,000 range and even found one at $100,000. Sure there are many in some tough areas but this will have some devestating effects on the Inland Empire pricing if the word gets out. So please everybody do not say a word to anybody. It still makes financial sense to buy a home for $290,000 in the I.E. and drive on the 91 fwy to work everyday. (ha..ha..ha..ha.....}


ICEMAN

Anonymous said...

Anon said: "Yes...believe it or not, there are still flipper/realtors in the game in L.A."


Jeff Lewis?

LauraVella said...

Anon said:"So, bubbleheads...these guys are going to be your competition on the way down but don't worry...we all know about the Alt-A tsunami coming ashore and that's the one that will take the better neighborhoods down."


You forgot one thing....flipping only works when the markets hot. They can't remain solvent long enough with more homes coming up for sale, and more having to reduce prices; it a lot of competition for a flipper who just wants to get out fast.

The flippers will vanish just as mortgage brokers, realtors, contractors, kitchen designers and stagers have.

i've had it said...

well, connie degroot could always become a cheap porn star; so she could probably afford burgers once in a while to supplement the ramen.

Shakster said...

.......and as HPrs warned of the disasterous effects of the Ponzi Scam taken way too far with help from the central banks,and US government the Dingbats continued to flip homes ,and accuse any naysayers of a "really bad tude".
Pass The Popcorn wasn't meant to be funny as much as as it was really just a way of saying,"we have passed the point of no return",and all we really can do is prepare,be ready,and just watch the story unfold.
This is sad in So Cal.Many are struggling now,and retirees,even the ones with their nest eggs still intact are feeling the pinch.
Not funny ,many regrets,and good freaken LUCK.It gets worse.Lack of money isn't the problem.Lacking the right mental toughness,and at the same time having the US Citizens massive sense of entitlement will leave alot of men ,and women in the lurch.

Anonymous said...

Anonymous:

I wouldn't say that there hasn't been any movement in the mid to high end market. I know a fellow who had his house reappraised and it has depreciated by 30% since they bought it 2 years ago for over a million.

belchorama said...

I find it stunning that there are still idiots here trying to say that black is white. In the face of these kind of numbers, it's effing amazing. Yeah, people are still making bank flipping, and yeah, buying that average house in L.A. for 700k was not a bad idea. Also, there is WMD in Iraq. We'll find it yet. We're correct, by golly, and we're not about to let facts get in the way of our correctness.

k.w. - Southern Ca. said...

It was never actually worth a million, and now, the price is
just normalizing back to what the
real value is.

Anonymous said...
Anonymous:

I wouldn't say that there hasn't been any movement in the mid to high end market. I know a fellow who had his house reappraised and it has depreciated by 30% since they bought it 2 years ago for over a million.