The Daliy News talks about the San Fernando Valley:The median price of a previously owned single-family house fell an annual 6.3percent, or $37,500, to $557,500, said the Southland Regional Association of Realtors. It's the lowest median in 32 months, or the start of the 2005 second quarter.
Old news for us but I just have to pull this quote:
"You have people frightened to death that there will be more price declines."
Fear, you can smell it. This fits with one of my predictions for 2008. There is a chance for herd mentality to take over and we could see a "gap down" in housing wishing prices.
5 comments:
First clockwork spider I ever saw!.
"Gap down" ? What is that?
Rob:
Undeniably, it's a down market, both in volume and in price, but it might not be as dire as folks think:
"The median price of a previously owned single-family house fell an annual 6.3percent, or $37,500, to $557,500, said the Southland Regional Association of Realtors. It's the lowest median in 32 months, or the start of the 2005 second quarter.
Sales plunged an annual 53 percent, to 355 transactions, just one more than the record low set in October."
If this statistic is compiled monthly, then WTF? October is always a slowdown month anyway, since the school year starts in September,(most places).
A sample of only 355 transactions in one month yielding a median 6.3%
price drop, could, frankly, be caused by two dozen waaay overpriced McMansions being drugs on the market and being jettisoned at a loss, yes?
I'm not saying that we aren't in a slowdown, but let's remember that irrational exuberance is what got us here.
Unreasoning despair isn't the cure.
Stories like this one, without much depth to show exactly which transactions were the "deadweight tonnage", aren't very helpful.
Gap Down is my prediction of the black swan event of 2008. The last three months have seen an acceleration of negative trend. This spring the listing season will start early and be very aggressive. Normally in a desperate market 5% below comps is a sell quickly number. The psychology has changed and the desperation is increasing. People are realizing they cannot afford their houses. Not the usual ride it out and take years to break even like the early 90s but flat out cannot afford. So sometime like the end of March '08 we'll see a lot of must sell listings at least 10% below comps and those comps that have sat all winter will join them.
Bilgeman,
The 355 sales are not the data, it is the tens of thousands on market which is a very large sample size.
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