2008 Median Price Wrapup

Posted by Dave Fratello on Wednesday, January 7th, 2009 at 6:30am.

It is widely understood that higher-end RE markets are coping better, to date, amid the home price crashes that make the daily news with the steadiness of a drumbeat.

Now that 2008 has passed: How much better did MB do than our region?

The first data we have for the year comes from the MLS via a frequent commenter. (It's polite when receiving gifts to say, "Thank you," and we do – thanks!)

Looking at SFRs only, we see that MB, as a whole, saw a year-over-year decline in median prices of 6.9%. (Dec. 2007 to Dec. 2008.) Not too bad, really.

There was a little increase in the median in Spring, with a low in November, giving us a peak-to-trough drop within the year of 9.4%.

These median figures are steadier than some of the month-to-month figures MBC has reported previously (see "How're Median Prices Doing?" for the most recent).

Here's why: The data show median prices for the full 12-month periods ending in a given month.

Previously, MBC has used 6-month moving averages of the monthly median prices reported by Kaye Thomas on her blog.

Our 6-month averages have run pretty close to the actual 12-month medians shown here, but we consider these new data to be better overall.

Looking at the same data for SFRs west of Sepulveda only (MBC's coverage area), prices are a bit higher, and the declines are a little bit bigger. We're down 7.4% year over year, and 10.4% within the year from peak to trough.

(Nerdy note: We have created charts that show the declines more vividly by starting the scale at $1.550m and labeling them as "exaggerated views.")

These 7-10% declines matter, but they're a far cry from the carnage in the Los Angeles region in 2008.

For instance, DataQuick figures show a decline in median prices in Los Angeles county of 32% over just one year, Nov. 2007-Nov. 2008.

The Case-Shiller index (tied to same-house sales) for the Los Angeles area declined 28% over a similar time period, Oct. 2007-Oct. 2008. (Latest data available.)

Those were falling-off-a-cliff numbers, and we've heard no reports of people falling off of cliffs in MB.

Median prices, of course, are what they are – a terribly imperfect measure of what's really going on in the market, but just about the only one that everyone can agree has some relevance to understanding trends. In other words, your results may differ.

By maintaining some greater overall price stability, MB is bucking one trend.

On another front, sales pace, MB is lagging. 2008 will be the worst year in living memory in terms of sales volume. Meanwhile, many hard-hit areas all over California are seeing sharp increases in the pace of home sales – driven by foreclosures, REOs and dropping prices.

It's clear that MB is different in many ways from the broader LA region. If we can keep our RE price impacts at 1/3rd the severity of the surrounding region, there will be plenty of very happy people in town.
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