FINALLY! - Southern Cal Home Prices Rise Slightly for May

As I'm sure many have already seen in the news today or in the LA Times, Southern California homes pricing finally went up last month - the FIRST time in over 11 months! Just wanted to send out a quick email with my few quick thoughts. Hope everyone is doing well. :)

For those of you, who haven't had a chance to read the article about the socal Home price increase yet, here are the articles that came out today, Enjoy:
From LA TIMES - LINK
From - BUSINESS WEEK - LINK
From WALL STREET JOURNAL - LINK
From LA OBSERVED - LINK

Well, as we all live here in LA, this is, first off, a good sign and promising for not only current homeowners, but the economy of the city in general. This does not, in my opinion, mean that the down market is over. In some price ranges, we are extremely close. However, in higher price ranges for instance, I believe their will likely be quite a bit of correction left.

I wanted to let you know that what I'm seeing out does concur with what many analysts are saying about this increase - That it is a result of "more action" finally in the $500k+ price range. Previously, sales were dominated by sub-400k sales that were, obviously, mostly foreclosures or in non-prime areas.

As I've stated and discussed with quite a few of you already, I've had 3 personal theories that I'd been testing:
1) For buyers looking under $700,000, the correction has been substantial. The market may fluctuate, as any market will, but I believe a large amount of the correction has happened. The lower the value of the home, the more of the correction, since lower value homes have largely been foreclosure-dominated, driving those prices down down down.

2) For buyers looking over $1million, not much correction has happened. I believe, if it were me who were looking, I would wait. I believe there still needs to be pretty substantial correction. I've heard that banks have held on jumbo loan foreclosures, but that they may be coming in the next 12 months in large volume. Prices in this price range have not come down enough IMO, and as a result there has been a "freeze out" in this price range (Here's a good article about that: http://www.laobserved.com/biz/2009/06/selling_1_million_ho.php)

3) Back in January, I anticipated that interest rates would bottom out at 4.5% around summer time at the latest. In fact, Interest rates did end up hitting 4.5% in April, they have slowly been increasing back towards normal since then. I do not believe rates will fall back to 4.5% again in the foreseeable future, but I do believe rates are still very favorable, and if you are thinking about buying, you should understand that time is of the essence regarding the current rates.



All the Best,
Jerry
310-228-8856

June 2009 - LA Median Home Sales Statistics - from LA Times.

Just wanted to pass along the 2 new Median Statistics charts for June 2009 from the MLS and Los Angeles Times. Enjoy!

June 7th - Median Sales Chart

June 14th - Median Sales Chart

-Jerry
310-228-8856