You may have seen an article in the Los Angeles Daily News today entitled Home Prices Tumbling.
I personally received several calls today from clients asking about the article and where I thought the real estate market was headed in the coming months.
First and foremost, if you know me, you know that I don’t really care for the news media (unless they’re writing a good story about me!). They generally sensationalize everything, only report on negative news (that’s what sells, isn’t it?) and are typically behind the reality of the market.
In this case, the important thing to note is that real estate is local. The L.A. market generally, and the west side specifically, typically does not precisely follow national averages and figures.
“L.A. is made up of a series of micro-markets,” said John P. Gould, Associate Manager of our Rodeo Realty Beverly Hills office. The answer to the question of where the real estate market is headed therefore needs to be closely examined for the specific micro-market in question (e.g., Beverly Hills, Santa Monica, etc.).
This article interestingly references several statistics to back up this point. While prices were down 5.1% nationally over last year, prices in the L.A. metro area slipped only 0.3% in the first quarter of 2011. For the last year, prices in L.A. are down only 1.7%.
Not exactly the “tumble” indicated by the title of the article, or a “double-dip” for Los Angeles, is it?
Further, according to the Valley Economic Research Center at California State University, Northridge, the median home price was actually up 4% over the previous month.
I love when the title of an article printed in a Los Angeles local newspaper is “Home Prices Tumbling,” yet the statistics in that same article reflect something completely different.
Another key point for Los Angeles home buyers who are on the fence about buying is that interest rates are again at historic lows and financing is actually in a great place right now. There are fantastic programs and rates in both the conforming and jumbo segments of the market. ”Smart money is buying now, and they’re buying in bulk,” said Gould.
Ultimately, it’s impossible to time the bottom of the market. One thing is for certain. When the Daily News publishes an article saying “It’s Time To Buy Real Estate,” you’ll know that you missed the bottom of the market. At that point, everyone will jump in (driving prices higher), interest rates will likely be higher than they are today, and you’ll end up paying more (either in purchase price or financing costs) than you would if you bought today.
For a complimentary, confidential real estate consultation, whether you are considering buying or selling, give me a call at 310-623-8711 or e-mail me.
– Danny
About Danny Batsalkin
