Orange County

[Goran_K]

The just released November numbers show that the CS Index dropped nearly 2 points between October 2011 and November 2011 (November 2010 - November 2011 is a 10 point drop YOY!!!). The SoCal index is now only 4 points above the supposed "2009 bottom".

I wonder what presents December, and January 2012 will bring. 

[BobPhillips-RE]

Pending sales have been up in November, December, and so far in January, which should extrapolate into YOY higher numbers, in both prices and number of sales, for January, February, and March.

The price per sq ft of Coto's sales in January is - so far - higher than those in November and December.

[TrabucoDom]

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Goran_K wrote:

The just released November numbers show that the CS Index dropped nearly 2 points between October 2011 and November 2011 (November 2010 - November 2011 is a 10 point drop YOY!!!). The SoCal index is now only 4 points above the supposed "2009 bottom".

I wonder what presents December, and January 2012 will bring. 

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10pts is a major hit...I haven't seen this yet...do you have a link? Is this for La/OC or for national stats?

[AlexSin]

http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cash...----

The 10- and 20-City Composites posted

annual returns of -3.6% and -3.7% versus November 2010, respectively

The 10- and 20-City Composites November/October -1.3%

Los Angeles November/October -1.0%

Los Angeles 1 year change  -5.4%

[Goran_K]

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TrabucoDom wrote:

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Goran_K wrote:

The just released November numbers show that the CS Index dropped nearly 2 points between October 2011 and November 2011 (November 2010 - November 2011 is a 10 point drop YOY!!!). The SoCal index is now only 4 points above the supposed "2009 bottom".

I wonder what presents December, and January 2012 will bring. 

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10pts is a major hit...I haven't seen this yet...do you have a link? Is this for La/OC or for national stats?

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This is the Case Shiller "Greater Los Angeles" index (L.A - Long Beach - Santa Ana). So it's a combination of L.A and OC.

Here are the numbers in questions:

May 2009: 159.18 (supposed 2009 bottom according to the RE bulls).

Here's the drop YOY from last year:

November 2010: 173.38

November 2011: 163.92 

You're right, 10 points is a major hit. It's the biggest YOY drop since the government tried to pump a trillion dollars into the economy to stop the sinking ship in 2009. 

Of course, if you only look at May 2009 as a single point, ignore everything in between until November 2011, then of course the market is "flat". Nothing to worry about.  

[TrabucoDom]

Thaks Goran....yes, an undisputable decline in the LA/OC market in the past year.

I checked out the link from AlexSin...

It looks like after Nov. 2010 prices continued to drift down for the next 4 months before the seasonal activity caused an uptick in May 2011 data for LA./OC.  Will history repeat itself....or will Bobstrodomus prove to be correct:

"Pending sales have been up in November, December, and so far in January, which should extrapolate into YOY higher numbers, in both prices and number of sales, for January, February, and March."

[Ed_in_SoCal]

My theory is that the prices are not going down as much now because of the little inventory on the market in the $600k to $900k end, which many bought at or HELOC'd to in 2004 thru 2007 and are now underwater and/or can't afford to sell to move and buy someplace else.  And/or they are waiting and hoping that the rebound that all the bulls suggest is just around the corner.  So what little inventory that is on the market commands a higher price by sheer demand.  When more and more realize there isn't going to be a turnaround and they either sell or  walk away, the increased inventory will cause a bigger push down on prices.

I'm not an RE or expert on real estate, so its just my opinion.  But all it takes is a Redfin search to see the slim inventory in the high end market, which is my concern.

[Goran_K]

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TrabucoDom wrote:

 Will history repeat itself....or will Bobstrodomus prove to be correct:

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I think history will repeat itself, and Bobstrodomus will be wrong for the 2nd year. This is not me being snarky, I'm actually being serious, Bob made pretty much the exact same post last year even though every one was basically saying there was no conceivable way prices would rise in 2011.

Bob's response to declining numbers have been the same for 2 years, it's all about seasonality for him. Prices drop in the winter, and rise in the spring.

Take this post from Bob for example during the same time in 2010:

11-22-2010 09:58 PM
BobPhillips-RE

HELLOOOOO!   California prices USUALLY "drift" downward - yes .04% is a drift - in the fall, and guess what?

They also usually drift upward in the spring - usually even faster than the SLOW drift downward in Oct/Nov/Dec.

Yawn.

The truth is prices fell faster in late 2010 than they rose in the Spring of 2011, and in fact never even returned to the November 2010 CS index level. 2011 had 10 down months out of 12. Prices "drifted" down by 10 points on the CS index (aka crushed) and never recovered, and LA/OC went on to have one of its worst years since the collapse began. 

I'm going to go ahead and guess 2012 will be more of the same, perhaps at a slower decline. But to say 2012 will be better than 2011 is like saying a broken wrist is better than a broken leg. 

Too much unemployment, not enough qualified buyers to soak up excess inventory, and not enough economic confidence to spur buying activity that might push prices up.

[BobPhillips-RE]

Goran said:  "Too much unemployment, not enough qualified buyers to soak up excess inventory, and not enough economic confidence to spur buying activity that might push prices up."

Let's break it down, shall we?

Too much unemployment.            The employment situation has steadily improved for the past year.

not enough qualified buyers.          Yet sales were up in November, December, and so far, in January.

to soak up excess inventory.            Local housing inventory is lower than last year

and not enough economic confidence to spur buying activity that might push prices up.      Lower inventory plus more buying activity does NOT equal lower prices - actually, it works just the opposite.

And STILL, the median price in Orange County, California, is higher than it was 36 months ago - even adjusting for inflation.

[Goran_K]

See my point TD?