Pasadena Buyer Agent Real Estate Thoughts

Ongoing thoughts about buying real estate and the real estate market in Pasadena, California and throughout greater Los Angeles by Terri Champlin.

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July 2006

Los Angeles County June Home Prices

Posted at 9:20 AM, Jul. 31, 2006

The June Los Angeles County median home price rose again against a backdrop of declineing sales. In Los Angeles County, the median home price was $575,800 according to the California Association of Realtors.

In June, 37% of homes sold within 30 days. When compared with a year ago this represents a 65% decrease of homes sold in 30 days or less. This is more evidence that the market is slowing. And this is a good. The price appreciation seen in the last 5 years was not sustainable over the long haul.

Even with the median County price increasing, some areas had price declines. Historically, price declines are not the same everywhere and last month was no exception. According to the Los Angeles Business Journal homes sold in the Pasadena 91105 zip code showed a 15.5% decline in price while homes sold in the Pasadena zip code 91106 showed a 25.9% increase in sales price.

The median price of a home in the 91106 area is $995,000 while the median price of a home in the 91105 area is $785,000. Last year, those median figures were $790,000 for the 91106 and $929,000 for the 91105. So what does it mean for home prices to see this kind of year over year volatility?

This post is getting long, so I will end here and address the volatility issue in another post.

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Hard and rough real estate market landing?

Posted at 2:25 PM, Jul. 30, 2006

Gregory J. Wilcox, staff writer for the Los Angeles Daily News wrote today, Sunday July 30, that some expect a harder than predicted landing for the LA real estate market. But then he quotes Ryan Ratcliff, an economist at the UCLA Anderson Forecast, who believes "that a worst-case scenario of the early 1990s all over again for California is unlikely." A market like the one that existed in the early 90's occurs only during recessions and depressions and no one is presently predicting a recession for Southern CA.

Also quoted in the article is Leslie Appleton-Young, the California Association of Realtor's vice president and chief economist saying "It's more like a return to normal with a bumpier landing in some areas than others," she said. "It's not a replay of the mid-1990s. The economy is growing. We're seeing not spectacular but certainly solid job growth."

So both sources in his article concur with the analysis present in my earlier posts. That is, as long as unemployment and wage growth are stable then housing is well supported.

Neither source predicted a rough landing for the California real estate market. The "rough landing expected for market" headline does however make a better headline than "return to normal market predicted".

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Normal Market

Posted at 10:21 AM, Jul. 30, 2006

As you may have heard or even experienced, homes are taking longer to sell now than this time last year. The California Association of Realtors compile an unsold inventory index. This index tracks the number of months it would take to sell all of the homes currently listed with Realtors. Last year at this time the index was at 2.2 months. Presently, the index is at 6.2 months. 6 months is considered a normal market.

It has been a long time since we have seen a normal market. So long in fact that this market seems slow to many. The last 5 years have been a very strong sellers market. In a sellers market, there is strong buyer interest and multiple offers made by buyers on homes in a very short period of time. In this last sellers market some homes were listed in the morning and sold in the afternoon at prices above the listing price.

Don't be fooled. The strong sellers market has become a normal market. Adjust and profit.

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Pasadena Unemployment

Posted at 3:34 PM, Jul. 29, 2006

Staff writer for the Pasadena Star News reported on 7/22/06 that Los Angeles County unemployment dropped to 4.6% in June 2006. As reported in the Pasadena Star News, according to Gary Kaplan, president of the executive search firm Gary Kaplan and Associates "the job market is even stronger than at the height of the technology boom prior to 2001".

Mr. Kaplan's comments is another indicator of how much the job market has strengthened since 2001. The strength in employment bodes well for continued strength in the Los Angeles County housing market.

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Current Trends - San Diego Price Decline

Posted at 11:15 AM, Jul. 28, 2006

The well publicized San Diego 1% price decline has many people asking me what will happen to Los Angeles housing prices. While I don't have a crystal ball, the current trend is small stable appreciation. The floor on prices is currently held in place, in part, by employment trends.

Staff writer Howard Find wrote in the July 17, 2006 Los Angeles Business Journal that Los Angeles County "should continue to see solid job growth" Employment in LA county is up 2.5% from a year ago, (May 2005 vs. May 2006) according to the July 17, 2006 Los Angeles Business Journal. Thus, baring a large dip in employment I don't presently see any significant fall in Los Angeles County home prices.

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