It’s Sinking, It’s Sinking. But Where Is The Bottom?
No doubt about it. In many areas (especially in the Valley), prices in real estate are still dropping. But when will it bounce back up? Back in June, I wrote a little blog referencing an article from Bloomberg.com. The article stated that we might not be at the bottom yet, but we may be seeing a shift in the real estate market in the near future.
Well now, the Daily News reports that due to the number of foreclosures in the San Fernando Valley (844 in July), home ownership has been changing hands at an increased rate from 2007. Below is an excerpt from the article:
It’s that kind of activity that resulted in 1,321 new and previously owned homes changing hands in July, up 5 percent from the 1,262 sales recorded a year earlier and 14 percent more than in June.
The July total is the first annual upswing since September 2005.
Daniel Blake, CSUN’s director at the San Fernando Valley Economic Research Center also had this to say:
“That march of increased sales means there is … mortgage market money to be had, and that’s an encouraging sign,” Blake said.
It may also indicate that the prices will bottom out later this year or early in 2009, he said.
Whoa! That fast? I’m rather skeptical. I do think prices will be bottoming out in the next few years, but as early as the end of this year or 2009? I will believe it when I see it. Take a look at the charts for Sherman Oaks, for instance. The sales prices show a steady downward decline, but no indication of leveling off yet. What do you all think? Please drop a line.
And now, I’ll leave you with a five properties under 500K in Sherman Oaks to consider.
14842 Hartsook St./2bd, 2bth/$460,000
14751 Killion St./3bd, 2bth/$470,000
4616 Norwich Ave./2bd, 1bth/$465,000
14335 Magnolia/2bd, 1.75bth/$490,500
4818 Noble Ave./2bd, 1bth/$499,000
Jon said:
I’ve been watching this market with keen interest for about 5 years now, and have been shopping redfin for the last year.
My guess is 2-3 more years of gradual decline as sellers adjust to the current realities. Watch out for tighter regulation on lenders, that could shrink the pool of buyers dramatically! Accounting for devaluation of the dollar, expect home prices to bottom close to their 2003/2004 prices.
August 29, 2008 12:11 AM
Christina Chan said:
Thanks for the comment, Jon. I’m assuming you’re talking about SFV in general? I’m with you there on the time frame of the market declining.
August 29, 2008 7:47 AM
Kent said:
Hi Christina,
Really enjoy your blog since it brings out the facts given all the opinions out there.
I wanted to get your take a few things after I looked 91307’s “stats and trends”:
1) Number of houses for sale is declining
2) House $ per square foot (houses) is moving up slightly
Do either of these point to a firming market in West Hills?
-Kent
September 9, 2008 2:41 PM
Christina Chan said:
Well, I started looking at the stats about a month ago. Now that I’m taking a closer look at what’s going on the market, homes that are well-priced are definitely still going fast as far as I’ve seen. I think the next few months will point to whether the market climate is really changing.
September 10, 2008 6:49 PM