LA Times: Home prices keep plunging; L.A. sees some of the sharpest declines

[marmar]

Home prices keep plunging; L.A. sees some of the sharpest declines
Third-quarter figures show a 27.6% drop compared with a year ago. Phoenix, Las Vegas and San Francisco are also hard hit.

By Peter Y. Hong
8:23 AM PST, November 25, 2008


U.S. home prices continued to fall at a record-breaking pace in the third quarter, with the Los Angeles area posting among the sharpest declines, according to a prominent index released today.

The Standard & Poor's/Case-Shiller index of home prices was down 16.6% in the three months ending in September from the same period a year ago. Home prices in the Los Angeles area, which includes Orange County, were down 27.6% compared with the third quarter of 2007.

The third-quarter national decline was greater than the respective annual declines in the second and first quarters of the year, which were 15.1% and 14% respectively.

David M. Blitzer, chairman of the index committee at Standard & Poor's, said, "The turmoil in the financial markets is placing further downward pressure on a housing market already weakened by its own fundamentals."

Home prices for the U.S. National Index, which covers the entire nation and is compiled quarterly, dropped to 2004 levels. The national index is down 21% from its 2006 peak. .......(more)

The complete piece is at: http://www.latimes.com/business/la-fi-homes26-2008nov26,0,4207973.story

[Cleita]

1. I hate to say it but the Los Angeles real estate market has been way

over priced since Proposition 13 was passed. Even the most ordinary bungalow would cost more than mansions in other states. Ordinary working people could not hope to buy a home unless helped by family and windfalls of other sorts like inheritances. Maybe now homes will be more affordable to the people whose work keeps the city prosperous.

[Clovis Sangrail]

2. it didn't go ballistic until long after prop 13

and it's still not that bad

You can still get 3/2 in the valley for under $300k ... you'd be lucky to find the same in Santa Cruz for less than $600k

[Cleita]

4. It did very quickly because I was saving enough for a down payment for a modest

home that I could afford in the Culver City area and those homes tripled in value in just a few years pricing me out of the market. Also, my landlord tried to convert our apartment building to condos. Thats how bad the real estate boom was in those years for us working class types. Fortunately, there were some restrictions that he couldn't, but it didn't stop him from raising the rent until out of desperation we renters had to vote in rent control just to keep our apartments. Do you know how ridiculous it sounds to me for a house in the valley for $300? I could have gotten a house in the valley for $50,000 with a pool before Prop. 13. For $300 back then you could get a mansion overlooking the ocean in Malibu. Oh btw the average working class income did not go up commensurately. Some people today still make per hour what I did back then.

[Clovis Sangrail]

5. In 78 median household income was $15k

and the value of the house I was in at that time in the valley didn't triple in a few years.
In 78 it was worth maybe $50k.. it took about 17 years for it to double in value to $100 (mid 90s)
The meteoric rise came after that - quadrupling in value in less than 10 years.
It sold for $400k in 2003

btw:
that median household income of $15k in 78 was $44k in 2007 dollars
median household income in 2007 (in 2007 dollars) had increased to $50k
http://www.census.gov/hhes/www/income/histinc/h05.html

[Demobrat]

3. When they say San Francisco they mean the Bay Area

and that's just wrong. San Francisco prices are holding steady, dipping slightly and even going up. It's the surrounding areas that are hurting.