Westside Crashing?Posted on Monday, February 2nd, 2009 at 5:01pm.
The LA Times reaches this conclusion thanks to a special data run by MDA DataQuick looking at specific ZIP codes. (Click chart, taken from the Times, to enlarge.)
No South Bay city, including MB, is part of the story. The meat of the analysis compares Q4 2008 medians to peak prices for a selection of areas, and finds median price declines of 11% to 30% in areas as diverse as Culver City, Pacific Palisades and Beverly Hills.
Low sales volume is a factor. The total number of sales in the 3 months of Q4 2008 in Beverly Hills was 38, almost half the pace of 2007, while Santa Monica had 47 sales in this period, down almost a third from a year earlier.
MBC readers know that we trust DataQuick more than most other sources because the service pulls sales data from all transactions, not only those listed on the MLS. However, we must say the folks at the fish-wrap are making a huge story out of fairly sparse data from this custom analysis.
Q4 2008 was awful, sure, with sales volumes dropping even further than normal for the end of the year after a slow first 9 months. Folks that sold during this very difficult period – anyone remember the economy crashing even harder in Q4? – often took big cuts to make a deal. But those factors could make Q4 2008 a poor point of comparison.
MBC will compile some comparable stats on MB and share those soon, with appropriate caveats. (We've already published a series on 2008 median prices based on MLS data and longer-term, 12-month medians, showing declines of 7 to 10% locally, depending on the way the numbers are sliced. See "2008 Median Price Wrapup" from early January.)
In the meantime, count us as skeptical, or, at least cautious, for the time being, when looking at the Times' conclusions. (And headlines.)
Sure, we believe major price corrections are coming and even under way in MB, but we'll shout that from the rooftops when the data are clear. No one knows yet whether Q4 2008 was an anomaly or the New Reality, and, as MBC's past analyses have shown, we prefer to have more to go on.
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