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January 04, 2006
What makes LA run?
All politics is local, as Tip O'Neil famously said. And so of course is all real estate. That thought was driven home to me recently by a research report that crossed my screen. A firm called Majestic Research tallied up the latest stats on new home sales around the country. Some markets are clearly in a downturn. Sales have fallen by double-digits in Chicago, Washington, D.C. and suburban New Jersey. San Diego and San Francisco are reporting declines. Average selling prices are also falling. But Los Angeles? Sales up 36%. The average asking price is up 6.9% month over month to $647,000. I know from speaking with friends that existing home sales in Los Angeles are taking longer. Gone are the bidding wars and premiums over the asking price. But how long can Los Angeles continue to buck national housing trends? Do readers have any thoughts on what's propping up the LA market?
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It's tough to say, particularly when declines are reportedly happening elsewhere in the state. I'd say right now we're heavily caught up in pre-spring posturing season and a lot more should become clearer come spring. At that time we may find LA running out of steam. If indeed many areas that ran up are starting to fall back to earth, LA can't be too far behind.
Also, I would ask how much more might LA's real estate market be influenced by foreign investment? It's a world class city with a delightful mediterranean climate and surely draws people in from the world over. Perhaps some of these buyers are a little slow in getting wind of the latest market trends.
Posted by: Jay at January 4, 2006 10:20 PM
Stupidity. If you are paying 1 mil for a fixer-upper in a bad part of town, you are stupid.
Posted by: Phelps Carnwright at January 12, 2006 01:02 AM
We just sold the Hollywood Hills house we bought three years ago. We paid 638k and sold it Friday for asking price at 1.45 -- suprising even in this market. But we didn't get multiple offers and two other houses on our block priced competitively are just sitting. We priced a bit lower and sold within a week of listing. What does that mean? We're looking at buying a house just reduced by 200k and it's only been on the market since december. Does feel like stagnation begining, soon to lead to desperation and big price drops.
Posted by: Santelli at January 19, 2006 11:35 AM