Southern California: Housing Bubble-proof??? - GoFuckYourself.com

$5 submissions · 03-25-2006, 02:34 PM

SOURCE: http://www.latimes.com/classified/re...home-headlines

New-Home Sales Rise in Region
While the U.S. posts a 10.5% month-to-month fall, Southern California records a 9.5% gain.
By Annette Haddad
Times Staff Writer

March 25, 2006

In what's increasingly becoming a tale of widely divergent regional real estate markets, Southern California's new-home sector is holding up much better than other parts of the nation and even the rest of the state.

The latest evidence came Friday when the Commerce Department reported that the number of new single-family homes sold nationwide fell 10.5% last month from the month before, to an annual rate of 1.08 million units, marking the biggest drop in new-home sales in nearly nine years.

The drop pushed a gauge of the volume of unsold new homes to its highest level in more than a decade. In February, 548,000 new homes went unsold, representing a 6.3-month supply ? meaning it would take that long to sell them at current sales rates. In January, there was a 5.3-month supply.

In the West, which includes California, the sales plunge was even worse: down 29.4%, partly reflecting stalling sales in Sacramento and the Central Valley and in other Western states such as Arizona.

Yet in Southern California, sales of new single-family houses and condominiums saw their strongest February since 1988, according to statistics compiled by real estate research firm DataQuick Information Systems. Last month, sales rose 9.5% to 4,980 from January's 4,550, and were up 19% from the year before.

By comparison, new-home sales in the Sacramento area have been much weaker, DataQuick said. Although sales there were up 13% in February from the previous month, that was after January marked the worst month in six years. As many new homes were sold in December as in January and February combined, according to DataQuick. And sales plunged 45% in February from the year before.

What's more, the inventory of unsold new homes in Southern California, although rising, is below levels elsewhere in the West and in the nation.

In February, there was a 2.1-month supply of unsold new homes from Ventura County to the Mexican border, said Steve Johnson, director of the Southern California region for real estate consulting firm MetroStudy. Around Phoenix, there's three times the inventory available.

The reason for the difference: There has been less home building in much of Southern California, thanks largely to tight governmental regulations and a lack of available land.

"We just don't have much excess supply," Johnson said.

The Southland housing market also is holding up better because its economy is more diverse and job creation remains strong, thanks in part to growth in such sectors as tourism, trade and aerospace. The region also is proving to be less volatile because the presence of real estate speculators has been less than in other hot markets.

However, the Southland's February inventory of unsold homes was up 80% from a year earlier, Johnson said, suggesting that demand here was cooling nonetheless.

"Builders used to be able to take the 'Field of Dreams' approach ? built it and they will come," Johnson said. "Now they have to do their homework and evaluate the market more carefully."

One thing builders are finding is that rising home prices, coupled with rising mortgage rates, are tempering the ardor of prospective buyers, experts said.

Many Southland builders are working to adjust their strategies to accommodate the more-reticent attitude of buyers.

They are building smaller homes, such as condominiums and town homes, or converting existing apartment units into for-sale housing, which are usually priced lower than single-family houses.

Builders also have scaled back the number of homes released for sale at their new-home communities. "Builders will shift their mix of products to accommodate the market," said John Karevoll, chief analyst for DataQuick.

That has helped local builders avoid having to offer discounts or other concessions to stoke buyer demand. At certain new-home communities in Sacramento, for instance, builders slashed prices to close sales.

"The Sacramento market went up very quickly, perhaps too quickly," said Patrick Duffy, a market analyst for Hanley Wood Market Intelligence.

Builders in Southern California, he said, generally are reluctant to offer price cuts or free upgrades.

"It's like car dealers," Duffy said. "Once you start offering incentives, then everybody starts expecting them."

SuckOnThis · 03-25-2006, 02:35 PM

Not housing proof, nor earthquake proof.

$5 submissions · 03-25-2006, 02:40 PM

Quote:

Originally Posted by SuckOnThis

Not housing proof, nor earthquake proof.

Okay, let's take the earthquake scenario. Should such a natural disaster hit the Southland do you think this will necessarily depress prices? Or would we see a situation like in New Orleans after Katrina when hundreds of out of state speculators swarmed to N.O. to buy damaged properties?

Given Southern California's increasing population and its increasingly limited land area (I'm counting out the eastward expansion past San Bernardino/Riverside), do you agree that from a purely supply and demand side the Los Angeles basin stands to see indefinite real estate price rises?

Pornwolf · 03-25-2006, 03:13 PM

Bubble proof is an over optimistic term but it is, along with New York and Miami, more stable and much more of a premium market. People flock to those cities, and as long as that's the case then real estate will always be a safer buy than in other areas.

$5 submissions · 03-25-2006, 03:16 PM

Quote:

Originally Posted by Pornwolf

Bubble proof is an over optimistic term but it is, along with New York and Miami, more stable and much more of a premium market. People flock to those cities, and as long as that's the case then real estate will always be a safer buy than in other areas.

Best answer in this thread so far. Also, WITHIN these locations there are safer bets as well.

QualityMpegs · 03-25-2006, 05:19 PM

We just went looking for houses around Orlando...the most shit ass houses in crappy neighborhoods, under fucking powerlines were MINIMUM 250k. Christ.

KMR Stitch · 03-25-2006, 05:37 PM

Quote:

Originally Posted by QualityMpegs

We just went looking for houses around Orlando...the most shit ass houses in crappy neighborhoods, under fucking powerlines were MINIMUM 250k. Christ.

Yeah, but you are also looking at A+ public school systems

QualityMpegs · 03-25-2006, 05:39 PM

Quote:

Originally Posted by KMR Stitch

Yeah, but you are also looking at A+ public school systems

Not planning on kids, so no.

KMR Stitch · 03-25-2006, 05:41 PM

Quote:

Originally Posted by QualityMpegs

Not planning on kids, so no.

I live in Orlando. I am saying almost all the school areas are A+.

Except for a handfull.

QualityMpegs · 03-25-2006, 05:42 PM

Quote:

Originally Posted by KMR Stitch

Yeah, but you are also looking at A+ public school systems

and btw, I didn't know that we had any, because I though orlando was polled to have the stupidest fucking kids around recently.

Pornwolf · 03-25-2006, 05:53 PM

Quote:

Originally Posted by QualityMpegs

We just went looking for houses around Orlando...the most shit ass houses in crappy neighborhoods, under fucking powerlines were MINIMUM 250k. Christ.

I can't find a fucking 350 square foot studio for $250k where I live. Stop complaining.

Morgan · 03-25-2006, 05:58 PM

Not sure.... I bought my home here in Newport Beach (so cal) for $800,000.00 6 months ago and was just offered $1.1M for it.

I did dump $100K into it so far though.

Morgan · 03-25-2006, 06:00 PM

however, i just realized that recently San Diego (southern most california) was doing terribly. Maybe "The OC" is just housing bubble proof. hehh

SomeCreep · 03-25-2006, 06:05 PM

Quote:

Originally Posted by Morgan

Not sure.... I bought my home here in Newport Beach (so cal) for $800,000.00 6 months ago and was just offered $1.1M for it.

I did dump $100K into it so far though.

how many square feet is your home, about 2000?

Pornwolf · 03-25-2006, 06:10 PM

The OC might as well just be considered an LA suburb really. That's what it is if you think about it, it's only 30 minutes away from LA without traffic... which means travelling at about 3am.

SomeCreep · 03-25-2006, 06:14 PM

People who want to live in the Los Angeles area probably dont know how bad the traffic is everyday, or else they'd probably not want to live here.

Pornwolf · 03-25-2006, 06:16 PM

I used to get stuck on the 101 for hours trying to go to the beach on Sundays. Leaving from Studio City at 3pm is like playing roulette if you are trying to make it to the beach and catching some sun.

baddog · 03-25-2006, 06:22 PM

There is a reason why our housing costs keep on going up, and nothing short of a change of the earth's axis is going to change that.

$5 submissions · 03-25-2006, 06:56 PM

Quote:

Originally Posted by SomeCreep

People who want to live in the Los Angeles area probably dont know how bad the traffic is everyday, or else they'd probably not want to live here.

Which freeways do you live close to? Although all get clogged at some point during the day, some are more chronically congested than others.

DaddyHalbucks · 03-25-2006, 07:29 PM

Quote:

Originally Posted by Pornwolf

I used to get stuck on the 101 for hours trying to go to the beach on Sundays. Leaving from Studio City at 3pm is like playing roulette if you are trying to make it to the beach and catching some sun.

Sounds like a real drag.

SomeCreep · 03-25-2006, 07:34 PM

Quote:

Originally Posted by $5 submissions

Which freeways do you live close to? Although all get clogged at some point during the day, some are more chronically congested than others.

5, 10, 101, 710, and the 15 (The 10 and 101 are the worst).

$5 submissions · 03-25-2006, 08:16 PM

Quote:

Originally Posted by SomeCreep

5, 10, 101, 710, and the 15 (The 10 and 101 are the worst).

This would place you in the eastern part of LA basin (710 Long Beach Freeway cuts n/s to the east). Im sure the 10/101 situation is impacted due to the huge population of people community to bedroom communities to the east of LA. If it's any consolation, the 405 doubles as a parking lot (at least when I was living in LA) during both morning and evening rush hours. In fact, I've spent quite a few 10PM drives home stuck in traffic. Going on Sepulveda to try and beat the 405 clog doesn't help much a lot of the times

SomeCreep · 03-25-2006, 08:25 PM

Quote:

Originally Posted by $5 submissions

This would place you in the eastern part of LA basin (710 Long Beach Freeway cuts n/s to the east). Im sure the 10/101 situation is impacted due to the huge population of people community to bedroom communities to the east of LA. If it's any consolation, the 405 doubles as a parking lot (at least when I was living in LA) during both morning and evening rush hours. In fact, I've spent quite a few 10PM drives home stuck in traffic. Going on Sepulveda to try and beat the 405 clog doesn't help much a lot of the times

Yeah, the 405 can be terrible. That's the probalem with LA, during morning and evening rush hours, all the freeways become slow moving parking lots. I'm so sick of living in a place where it takes 1 hour to get somewhere that is only 15 minutes away because of traffic.

Morgan · 04-30-2006, 10:45 AM

Quote:

Originally Posted by SomeCreep

how many square feet is your home, about 2000?

not even...

1,500

KRL · 04-30-2006, 10:56 AM

Earthquakes fuck up your home values. Happened to me and took 10 years till the market came back up for the house to be sold for a nice profit.

Pornwolf · 04-30-2006, 11:34 AM

Quote:

Originally Posted by SomeCreep

Yeah, the 405 can be terrible. That's the probalem with LA, during morning and evening rush hours, all the freeways become slow moving parking lots. I'm so sick of living in a place where it takes 1 hour to get somewhere that is only 15 minutes away because of traffic.

I fucked off a new years eve in '97 because I was stuck in traffic. Everyone that was stuck got out of their cars and said a big "Happy New Years" when the clock struck 12. It was surreal... only in LA folks, only in LA.

baddog · 04-30-2006, 12:55 PM

Quote:

Originally Posted by KRL

Earthquakes fuck up your home values. Happened to me and took 10 years till the market came back up for the house to be sold for a nice profit.

If you run and put your house up for sale the day after the quake it may have some effect.

03-25-2006, 02:34 PM	#1
$5 submissions I help you SUCCEED Industry Role: Join Date: Nov 2003 Location: The Pearl of the Orient Seas Posts: 32,195	Southern California: Housing Bubble-proof??? SOURCE: http://www.latimes.com/classified/re...home-headlines New-Home Sales Rise in Region While the U.S. posts a 10.5% month-to-month fall, Southern California records a 9.5% gain. By Annette Haddad Times Staff Writer March 25, 2006 In what's increasingly becoming a tale of widely divergent regional real estate markets, Southern California's new-home sector is holding up much better than other parts of the nation and even the rest of the state. The latest evidence came Friday when the Commerce Department reported that the number of new single-family homes sold nationwide fell 10.5% last month from the month before, to an annual rate of 1.08 million units, marking the biggest drop in new-home sales in nearly nine years. The drop pushed a gauge of the volume of unsold new homes to its highest level in more than a decade. In February, 548,000 new homes went unsold, representing a 6.3-month supply ? meaning it would take that long to sell them at current sales rates. In January, there was a 5.3-month supply. In the West, which includes California, the sales plunge was even worse: down 29.4%, partly reflecting stalling sales in Sacramento and the Central Valley and in other Western states such as Arizona. Yet in Southern California, sales of new single-family houses and condominiums saw their strongest February since 1988, according to statistics compiled by real estate research firm DataQuick Information Systems. Last month, sales rose 9.5% to 4,980 from January's 4,550, and were up 19% from the year before. By comparison, new-home sales in the Sacramento area have been much weaker, DataQuick said. Although sales there were up 13% in February from the previous month, that was after January marked the worst month in six years. As many new homes were sold in December as in January and February combined, according to DataQuick. And sales plunged 45% in February from the year before. What's more, the inventory of unsold new homes in Southern California, although rising, is below levels elsewhere in the West and in the nation. In February, there was a 2.1-month supply of unsold new homes from Ventura County to the Mexican border, said Steve Johnson, director of the Southern California region for real estate consulting firm MetroStudy. Around Phoenix, there's three times the inventory available. The reason for the difference: There has been less home building in much of Southern California, thanks largely to tight governmental regulations and a lack of available land. "We just don't have much excess supply," Johnson said. The Southland housing market also is holding up better because its economy is more diverse and job creation remains strong, thanks in part to growth in such sectors as tourism, trade and aerospace. The region also is proving to be less volatile because the presence of real estate speculators has been less than in other hot markets. However, the Southland's February inventory of unsold homes was up 80% from a year earlier, Johnson said, suggesting that demand here was cooling nonetheless. "Builders used to be able to take the 'Field of Dreams' approach ? built it and they will come," Johnson said. "Now they have to do their homework and evaluate the market more carefully." One thing builders are finding is that rising home prices, coupled with rising mortgage rates, are tempering the ardor of prospective buyers, experts said. Many Southland builders are working to adjust their strategies to accommodate the more-reticent attitude of buyers. They are building smaller homes, such as condominiums and town homes, or converting existing apartment units into for-sale housing, which are usually priced lower than single-family houses. Builders also have scaled back the number of homes released for sale at their new-home communities. "Builders will shift their mix of products to accommodate the market," said John Karevoll, chief analyst for DataQuick. That has helped local builders avoid having to offer discounts or other concessions to stoke buyer demand. At certain new-home communities in Sacramento, for instance, builders slashed prices to close sales. "The Sacramento market went up very quickly, perhaps too quickly," said Patrick Duffy, a market analyst for Hanley Wood Market Intelligence. Builders in Southern California, he said, generally are reluctant to offer price cuts or free upgrades. "It's like car dealers," Duffy said. "Once you start offering incentives, then everybody starts expecting them." __________________ Need a NON-ADULT income stream? We build your YOUTUBE CHANNEL for only $20 per video! For Hire: $3/hour or $400 per month Marketing Specialist Virtual Assistants

03-25-2006, 03:13 PM	#4
Pornwolf Drunk and Unruly Join Date: Jan 2002 Location: Hollywood Posts: 22,712	Bubble proof is an over optimistic term but it is, along with New York and Miami, more stable and much more of a premium market. People flock to those cities, and as long as that's the case then real estate will always be a safer buy than in other areas. __________________ I've trusted my sites to them for over a decade... Webair, bitches.

03-25-2006, 05:19 PM	#6
QualityMpegs Confirmed User Join Date: Feb 2003 Location: Orlando, Florida Posts: 3,521	We just went looking for houses around Orlando...the most shit ass houses in crappy neighborhoods, under fucking powerlines were MINIMUM 250k. Christ. __________________ PAYSITES CATEGORIZED AND THUMBNAILED BY NICHE - 69767780

03-25-2006, 05:58 PM	#12
Morgan Too lazy to set a custom title Industry Role: Join Date: May 2002 Location: Corona Del Mar, CA Posts: 10,520	Not sure.... I bought my home here in Newport Beach (so cal) for $800,000.00 6 months ago and was just offered $1.1M for it. I did dump $100K into it so far though. __________________ PornstarPlatinum.com \| TransErotica.com

03-25-2006, 06:00 PM	#13
Morgan Too lazy to set a custom title Industry Role: Join Date: May 2002 Location: Corona Del Mar, CA Posts: 10,520	however, i just realized that recently San Diego (southern most california) was doing terribly. Maybe "The OC" is just housing bubble proof. hehh __________________ PornstarPlatinum.com \| TransErotica.com

03-25-2006, 02:35 PM	#2
SuckOnThis So Fucking Banned Join Date: Oct 2003 Location: In my head Posts: 6,844	Not housing proof, nor earthquake proof.

03-25-2006, 06:10 PM	#15
Pornwolf Drunk and Unruly Join Date: Jan 2002 Location: Hollywood Posts: 22,712	The OC might as well just be considered an LA suburb really. That's what it is if you think about it, it's only 30 minutes away from LA without traffic... which means travelling at about 3am. __________________ I've trusted my sites to them for over a decade... Webair, bitches.

03-25-2006, 06:14 PM	#16
SomeCreep :glugglug Join Date: Mar 2003 Location: Where the Wild Things Are Posts: 26,118	People who want to live in the Los Angeles area probably dont know how bad the traffic is everyday, or else they'd probably not want to live here. __________________ Webair Hosting I use and recommend Webair for hosting.

03-25-2006, 06:16 PM	#17
Pornwolf Drunk and Unruly Join Date: Jan 2002 Location: Hollywood Posts: 22,712	I used to get stuck on the 101 for hours trying to go to the beach on Sundays. Leaving from Studio City at 3pm is like playing roulette if you are trying to make it to the beach and catching some sun. __________________ I've trusted my sites to them for over a decade... Webair, bitches.

03-25-2006, 06:22 PM	#18
baddog So Fucking Banned Industry Role: Join Date: Apr 2001 Location: the beach, SoCal Posts: 107,089	There is a reason why our housing costs keep on going up, and nothing short of a change of the earth's axis is going to change that.

04-30-2006, 10:56 AM	#25
KRL Entrepreneur Join Date: Oct 2002 Location: USA Posts: 31,429	Earthquakes fuck up your home values. Happened to me and took 10 years till the market came back up for the house to be sold for a nice profit. __________________ If you would like to develop your domains, you can lease inexpensive foreign labor from the leaders in the field at iWebmasters.com TO LOWER YOUR COSTS AND INCREASE YOUR PRODUCTION! * * * * * * * * * * * * Domains Adult News KRL's Newsletter Biz Tips Just Listed Domains