Home prices might have hit plateau.If history is any guide, the Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. housing market could be peaking. During the late-'80s boom, the high-end areas that had seen the steepest run-ups were the first to cool as the up-cycle began to give way. Similarly, data released last week by the California Association of Realtors shows that median home prices in high-ticket areas fell significantly in June compared with May. Beverly Hills Beverly Hills, city (1990 pop. 31,971), Los Angeles co., S Calif., completely surrounded by the city of Los Angeles; inc. 1914. The largely residential city is home to many motion-picture and television personalities. was off 16.7 percent, Pacific Palisades Palisades, cliffs along the west bank of the Hudson River, NE N.J. and SE N.Y., extending from N of Jersey City, N.J., to the vicinity of Piermont, N.Y., with a general altitude of from 350 ft to 550 ft (107–168 m). 9.9 percent, Santa Monica Santa Monica (săn`tə mŏn`ĭkə), city (1990 pop. 86,905), Los Angeles co., S Calif., on Santa Monica Bay; inc. 1886. Tourism and retailing are important, and the city has motion-picture, biotechnology, and software industries. 9.6 percent and San Marino San Marino, city, United States San Marino (săn mərē`nō), residential city (1990 pop. 12,959), Los Angeles co., S Calif.; inc. 1913. Of interest is the Huntington Library, Art Collections, and Botanical Gardens. 16.4 percent. "I think generally what you can deduce de·duce tr.v. de·duced, de·duc·ing, de·duc·es 1. To reach (a conclusion) by reasoning. 2. To infer from a general principle; reason deductively: from the numbers is that perhaps these are early signs that the market is cooling off in areas that have appreciated above the norm for the market over the past two or three years," said Nima Nattaugh of Experian, a real estate research firm. While Nattaugh and others cautioned that median home prices are only one indicator of market conditions, and that month-to-month data can be misleading, many agreed that high-priced areas of L.A., especially those on the Westside, are often leading indicators Leading Indicator A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators are used to predict changes in the economy, but are not always accurate. of what's in store for the rest of Sourthern California. The Westside led the upswing Upswing An upward turn in a security's price after a period of falling prices. of the late '80s and the decline of the '90s, and the upswing again of the past couple of years, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. G.U. Krueger, deputy chief economist The Chief Economist is a single position job class having primary responsibility for the development, coordination, and production of economic and financial analysis. It is distinguished from the other economist positions by the broader scope of responsibility encompassing the lot the California Association of Realtors. "My feeling is that the Westside may be plateauing. It doesn't mean home prices are not increasing, but they may not be rising as fast as they used to," Krueger said. "The big super-appreciation period appears to be getting past." The median home price on the Westside was $664.000 in June, virtually unchanged from $663.750 a year ago. Krueger cautions against people panicking about year-over-year flatness, or a month-to-month drop. "We are not on the verge On the Verge (or The Geography of Yearning) is a play written by Eric Overmyer. It makes extensive use of esoteric language and pop culture references from the late nineteenth century to 1955. on a collapse," he said. "We're more on the verge of a beginning of significant affordability migrations. The appreciation rate is coming down, and that's normal. There's nothing bad about that." By "affordability migrations," Krueger referred to the tendency among homebuyers to steer clear of the highest-priced markets that have appreciated sharply, like Beverly Hills and Santa Monica, in favor of more affordable areas. The numbers seem to support that theory. Agoura's median price of $337,250 is up 28.7 percent from May; Northridge's median of $303,000 is up 16.5 percent; and Westchester's median of $367,500 is up 10.4 percent. "It's more in the San Fernando Valley San Fernando Valley Valley, southern California, U.S. Northwest of central Los Angeles, the valley is bounded by the San Gabriel, Santa Susana, and Santa Monica mountains and the Simi Hills. and San Gabriel Valley The San Gabriel Valley is one of the principal valleys of southern California. It lies to the east of the city of Los Angeles, to the north of the Puente Hills, to the south of the San Gabriel Mountains, and to the west of the Inland Empire. ," Krueger said. "Now we're seeing double-digit home price (increases) in those areas." That strength, combined with continuing growth in lower-priced areas, were sufficient to overcome the pullback Pullback A falling back of a price from its peak. This type of price movement might be seen as a brief reversal of the prevailing upward trend, signaling a slight pause in upward momentum. in high-priced homes. As a result, L.A. County's overall median home price of $187,500 in June was 3.0 percent above the May level, according to the CAR. Even in lower-priced markets, sellers who list their home above the going market price find that the bidding contests of a few months ago are not nearly as frequent or as frenzied, said several brokers.
L.A. Housing Market May Be Peaking
. . . The median price in several areas of Los Angeles dropped in
June.
Change Change
Area June 1999 from May '99 from June '98
Agoura $337,250 +28.7% +20.2%
Bell Gardens 125,000 +25.0 -24.2
Beverly Hills 729,000 -16.7 +7.2
Canoga Park 145,750 +3.7 +11.0
Cerritos 269,500 +6.0 +12.8
Chatsworth 215,000 -6.1 +0.2
Compton 115,000 +6.0 +7.5
Glendale 275,455 +2.4 +8.0
Manhattan Beach 612,500 +6.5 +6.5
Monterey Park 196,000 +12.6 +12.3
Pacific Palisades 697,000 -9.9 +0.3
Pasadena 269,500 -3.3 +4.0
Rancho Palos Verdes $460,000 -15.5 +4.5
Reseda 152,500 4.1 +12.3
San Dimas 225,000 +1.4 +1.1
San Marino 639,000 -16.4 -2.4
San Pedro 204,000 -9.3 -1.2
Santa Clarita 180,000 7.2 -0.1
Santa Monica 452,000 -9.6 +12.7
South Los Angeles 120,000 -4.0 +4.3
Studio City 341,500 +2.7 -3.0
Torrance 289,000 +5.9 +17.0
West Los Angeles 335,000 +0.4 +12.0
Los Angeles Country 187,500 +3.0 +4.2
Source: California Association of Realtors
"We have been seeing some properties that have been... sitting longer," said Andy Layman LAYMAN, eccl. law. One who is not an ecclesiastic nor a clergyman. , a broker with Layman Financial in Santa Monica. "I would say we have seen a stabilizing of values, probably in the last three or four months. They're holding at this point. But it's still a seller's market." Last year, many sellers were getting multiple offers in excess of their asking price. But in today's market, sellers anticipating such scenarios, and pricing their homes at 20 percent above comparable sales in the area, will be lucky to get a nibble Half a byte (four bits). (data) nibble - /nib'l/ (US "nybble", by analogy with "bite" -> "byte") Half a byte. Since a byte is nearly always eight bits, a nibble is nearly always four bits (and can therefore be represented by one hex digit). , brokers said. In addition to values appreciating at a slower rate, the volume of L.A. County homes sold in June was down 4.7 percent from the year-earlier period. "I would expect it would continue to be the same thing for the remainder of the year," said Linda Berg, executive vice president with Coldwell Banker Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, . "There will continue to be more inventory, and prices will rise a little, and the number of transactions will soften. Only so many people in a marketplace will move up." The natural result of more inventory is that prices will soften, or even decline a little, she said. Alan Long, president of the Beverly Hills Greater Los Angeles Association of Realtors, said that good-quality houses are still appreciating. "If it's the right type of house, it will have multiple offers," Long said. He expects prices to appreciate on the Westside by 2 percent in July, while Los Feliz should go up 10 percent. But he said even in those places, there seems to be a more "calm, educated approach" on the part of buyers today than during past upswings. Why the newfound new·found adj. Recently discovered: a newfound pastime. Adj. 1. newfound - newly discovered; "his newfound aggressiveness"; "Hudson pointed his ship down the coast of the newfound sea" caution? No one is quite sure, but it's definitely apparent. "People are extremely comfortable, but being reasonable," Layman said. "They're not willing to pay an extra 10-20 percent just because they want it." Part of the reason may have to do with rising interest rates. Mortgage rates have jumped more than half a percentage point in the past 90 days, adding $2,100 to the annual payment on a $500.000 mortgage. Also, many move-up buyers have already bought new homes by now. John Karevoll, an analyst with Acxiom/DataQuick Information Systems. said that L.A. home prices, unlike the state as a whole, have not vet exceeded their prior peak. That may happen later this year, or early next. "Right now, the way the market's expanding, there's still plenty of room," Karevoll said. |
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