Archive for July, 2009
July 28, 2009
It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). For the full source data behind this post, plus seasonally adjusted and tiered price data, hit the S&P/Case-Shiller website. For an explanation of how the Case-Shiller data is calculated, check out their methodology pdf. Also remember that the data released on the last Tuesday of a given month is for the period two months prior (i.e. – May data is released in July).
Before we dig into the data, I’d like to make a brief mention of an excellent post over at the economics website Calculated Risk: A Few Comments on Housing Reports. Quoting from his post:
…the Case-Shiller report today really bothered me. To be more accurate, the reporting on the Case-Shiller report bothers me. As I mentioned earlier today, there is a strong seasonal component to house prices, and although the seasonally adjusted Case-Shiller index was down (Case-Shiller was reported as up by the media) – I don’t think the seasonal factor accurately captures the recent swings in the NSA data.
Keep in mind that the Case-Shiller data that most of the media (including this blog) are reporting on is usually the raw index data. As CR mentioned, the housing market is a very seasonal beast, so it’s difficult to draw any meaningful conclusions from month-to-month changes, unless they are far outside the norm for that time of year. This is why we consistently report the year-to-year change in our summary.
Now that we’ve got that out of the way, here are the basic Case-Shiller stats for the Los Angeles area (which Case-Shiller defines as LA and Orange Counties) as of May:
May 2009
Month to Month: Down 0.1% (raw)
Month to Month Down 0.9% (seasonally adjusted)
Year to Year: Down 19.8%
Change from Peak: Down 41.9% in 32 months
The following chart shows the Los Angeles HPI scaled such that the September 2006 peak is 100% on the y-axis. Data on the x-axis is scaled to display the last time (pre-peak) the Los Angeles HPI was at or lower than it was in the latest data (July 2003).
(All of the charts below are based on the non-seasonally-adjusted Case-Shiller HPI data.)
Home prices in Los Angeles continued to decrease in May, just barely. Of course, spring is usually a period of relatively strong home price gains. That said, the rate of YOY declines has been dropping since November’s data, so we’re definitely continuing on a trend of moderating declines.
Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves, so you can compare Los Angeles’ performance to other areas across the country:
And here’s our final chart, in which we line up the peak Case-Shiller HPI value for each of Redfin’s markets, so we can see how long each market has been declining, and how much it has dropped from the peak.
It’s also worth keeping in mind that in addition to being from a usually-strong time of year, these numbers represent home sales that closed during the frenzy of interest rates in the fours and the debut of the $8,000 first-time homebuyer tax credit. In my opinion, we won’t really know if home price declines are mostly over until we see the data from October / November. And that advice is worth exactly what you paid for it ;^)
July 23, 2009
Let’s check in on our stats once again and find out where buyers are currently getting the biggest discounts off asking price. If you are a potential buyer, this will help you to know which neighborhoods may be softer in terms of sale price discounts off list price, and help you know where to look for potential bargains.
In the charts below, we have taken all sales data from last month in Los Angeles County and sorted it by city/town. We calculated the overall difference between the sale price and the list price. Note that this reflects the final list price, after all price drops in the listing. Any areas with fewer than ten sales are excluded from the top and bottom ten rankings, but interested readers may download the full data summary in Excel format (xls).
Here are the top ten areas with the largest overall discount:
The overall discount rate dipped slightly from May to June, moving from 3.6% to 3.2%. Beverly Hills moved up from #2 to #1 this month, while last month’s #1-ranked Malibu dropped to #3.
Here are the ten areas with the smallest discounts:
Of the 110 areas we ranked, thirty-three came in in with an average sale price above the average list price.
Here’s an added bonus. The following chart shows the top ten areas with the largest overall discount from the original list price, instead of the final list price:
Beverly Hills and Malibu switch places in discounts off the original list price. Across the entire LA area, buyers are getting a 9% discount on average off the original list price.
Is the area you’re shopping not on either the top 10 or bottom 10? No problem, just download the full rankings in Excel format and hit the “FullSummary” sheet.
Of the 5,360 sales we tracked in the 1-month period, 434 homes (8%) sold for 10% or more off the asking price, while 835 homes sold for 5% or more above the asking price.
July 22, 2009
Great news for folks in the great Palm Desert area: Redfin just partnered with local agents in East Coachella Valley and West Coachella Valley to help our customers buy and sell homes. Check out our coverage area below. West Coachella is in yellow, East Coachella in blue.
In areas beyond the reach of Redfin agents in Southern California, Redfin partners with experienced, local agents whom we have carefully chosen to uphold our standards of customer service, transparency and experience. If you buy or sell a home with a Redfin partner, he or she will provide you with a 15% commission credit at closing, usually worth $1,000.
Meet Our Coachella Valley Agents
We put our partner agent applicants through the ringer to ensure that our customers will get great service:
- Interviewed in-person by a Redfin market manager
- Completed at least 15 transactions as an agent
- Offered at least three customer references
- Agreed to survey every new client and publish every review
- Paid based on customer satisfaction; removed from the program for bad reviews
Apply to be a Redfin Partner
Are you a real estate agent with a commitment to customer service and transparency? We’d love to meet you. Become a Redfin partner.
July 21, 2009
In June, our Southern California agents presented 140 offers to listing agents and 80 of those, or 57%, were on homes with at least one other offer, down from 65% in May.
Joyti Goundar, one of our all-star agents in Southern California worked on 39 offers in June and 30 of them were on listings with multiple offers. “Things are so competitive right now, many listings are getting 5 – 10 offers so you have to put your best foot forward and make a strong offer,” says Joyti.
One of Joyti’s clients recently bought a home in Pasadena that had 16 other offers. To show they were serious about buying the home, her clients’ offer included a 40% down payment, 3% earnest money, no appraisal contingency and an inspection contingency reduced from 17 to 10 days.
However, sometimes putting their best foot forward isn’t enough. Another one of Joyti’s clients made an offer over listing price, with a 25% down payment and an inspection contingency reduced from 17 to 10 days. The sellers rejected the offer. There were 18 offers and the sellers were countering with the top nine.
A lot of this competition is due to families with school-aged kids trying to buy in between school years. “The summer market is always busy because parents want to buy and get settled before the school year begins,” says Joyti.
Where are you seeing listings with multiple offers?
July 21, 2009
In June, it took our Southern California clients an average of 40 days to close on their homes, 5 days longer than it did in May. The good news for our clients is that even though it may take a while to close, only three of our Southern California clients’ deals failed to get financing since February.
The main reason closing is taking longer is because on May 1st, the Federal Housing Finance Agency’s Home Valuation Code of Conduct (HVCC) took effect. The HVCC is designed to make home appraisals more reliable by restricting the interaction between mortgage lenders appraisers. Since May 1st, lenders can’t deal directly with appraisers. Instead, lenders schedule appraisals through third-party management companies. This adds a buffer between the lender and appraiser, but it also adds time to the process. You can get all the details in the official statement from the Federal Housing Finance Agency (25K PDF).
“The HVCC is supposed to improve the accuracy of appraisals, but we’re seeing just the opposite,” says Anna Nevares, one of our agents in Southern California. “Many of the appraisers aren’t familiar with the local market and they often appraise home well-below market value. Right now, we’re spending a lot of time disputing appraisals based on bad comparable homes.”
For more numbers, download the spreadsheet with the data on what happened in June at Redfin.
July 2, 2009
We have a new listing at 2528 Graysby Ave in South Shores in San Pedro that’s hosting an open house this weekend and next. It’s a 3 bedroom, 2 bath, 1,852 square foot home priced at $747,500.
Open House Date & Times
Sunday, July 5th, 1 p.m. – 5 p.m.
Saturday, July 11th, 1 p.m. – 5 p.m.
What The Seller Has To Say
Favorite Restaurants
Neal’s – offers exceptional Italian cuisine prepared by the chef and owner in a cozy bistro setting.
Papa Dakas – is a lively restaurant offering traditional Greek Food and belly dancing. It’s fun for the whole family.
Favorite Places to Go
Point Fermin Park – This lovely 37 acre park provides spectacular views and rugged bluffs afford a breathtaking views of Santa Catalina Island. It’s a perfect site for picnics or a leisurely stroll. There are picnic areas, a playground a light house, and a small amphitheater. Point Fermin Park is one of the few places on the peninsula where Monarch butterflies spend their winters.
The Korean Bell – Resting peacefully on the knoll overlooking the sea gate from which U.S. troops sailed into the Pacific, the bell site affords an unsurpassed view of the Los Angeles harbor, the Catalina Channel and the sea terraces of San Pedro hill. The bell is rung only four times each year: the Fourth of July, August 15 (Korean Independence Day) and New Year’s Eve, and every September to coincide with bell ringing around the country to celebrate Constitution week.
Favorite Room in the House
The family room it’s cozy, warm and always filled with natural sunlight.
Best Features
The wall French doors with beveled glass which lead out to the private backyard. We have enjoyed many days and nights entertaining friends and family on the patio, and playing on the lush green lawn. The nice tropical feel of the backyard also makes it an ideal place for afternoon siestas on our outdoor daybed.
Most Romantic Spot in the Neighborhood
Sagebrush Hiking Trail – it walking distance from our home the trail begins in San Pedro and goes all the way to Palos Verdes. The trail is an invigorating walk with coastal views of the Catalina’s, and green plants, and local wild life (squirrels, bunny rabbits, an occasional lizard). Take the trail till it ends at Trump National Golf Course, then sit and have a picnic on the manicured lawn, or venture down a side path to a quite rocky beach with tide pools. You don’t have to be a fit hiker to enjoy a stop along the trails many lookout points which offer romantic views of the sunset, or sunrise for you early birds.
What They’ll Miss The Most
We love living in the quite coastal community of the South Shores Area of San Pedro. There is so much history in this small area, and it’s in close proximity to so many beautiful parks, and beaches, yet we are just a stones throw away from Long Beach, Downtown LA, Manhattan Beach, Redondo Beach, and Torrance.
