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A couple of days ago I published stats on the Southern California housing market. An exec with research provider MDA DataQuick noted that median home price numbers are skewed because homes far away from the metro areas are selling at distressed, foreclosure prices. While homes in more expensive urban areas aren’t selling at all.
I’ve got some more specific numbers from HomeData Corp. that expand on and further illuminate what’s going. In Lancaster, Calif, 72 miles north of L.A., prices in February fell 59% to a median price of $118,000 in the 93535 zip code, based on 87 sales. In Beverly Hills’ famous 90210 zip code, prices fell only 4% in February to $1.9 million, based on just 6 sales.
Of course it’s not just commuting distance that impacts prices. In L.A.’s tony Brentwood neighborhood, home to Arnold Schwarzenegger and countless celebs, prices fell just 10% to $1.7 million, based on 3 home sales. In gritty Compton, an area famous for celebrities of a different sort—gangster rappers, prices fell 62% to $140,000, based on 19 sales.
So what’s happening is more homes in low-priced neighborhoods are getting foreclosed on and sold. I’m sure many people in those more rarified zip codes are up to their necks in debt and have seen their earnings pinched, but somehow if you’re able to borrow $1.7 million in the first place, you’re able to figure out a way to hang on to your home.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.