Occat, Home Buyer in Fort Lauderdale, FL

opinions: will los angeles home prices continue to fall, and for how long?

Asked by Occat, Fort Lauderdale, FL Tue Jul 1, 2008

Help the community by answering this question:


We all wish we knew the answer to your question. It appears that there are probably more foreclosures coming our way and that can definitely contribute to falling prices.

I am an optimist so I do not think it will be as horrendous as some of the doomsayers on this board are predicting but I must admit I am not quite as optimistic as I was 4-6 months ago.
Web Reference: http://www.DotChance.com
2 votes Thank Flag Link Tue Jul 1, 2008
Hello Occat! As with stocks, it is almost impossible to forecast the real estate market but I can tell you based on my experience in the LA market, it depends on the area. The higher end areas have about 12% in value over the past year and in the mid to lower end markets, their values have dropped somewhere around 20-25% from the highs of 2005. In the outer areas of LA County, like Palmdale, the values have fallen even sharper. Are you relocating to LA? If you are, let me know if I can be of assistance in any way.
2 votes Thank Flag Link Tue Jul 1, 2008
Yes, they will continue to fall. There is too much inventory and sales are down. You don't need a crystal ball to figure that out. How long will it take? One can guess, I will guess 2010 for a bottom and then 1-2% yoy decreases for the next few decades. In other words don't expect to buy a house and make a profit.
0 votes Thank Flag Link Wed Jul 9, 2008
No one has a crystal ball. There are some areas that the trend shows are falling, and other areas that are rising. Rents are under pressure in the LA area and are on the rise, and interest rates are also on the rise -- so a rent vs purchase analysis (after tax) is best advised regardless of the direction of prices. Your best advice is to do your own due diligence based upon statistics of the specific location you are interested in purchasing.
0 votes Thank Flag Link Sun Jul 6, 2008
Three points:
1. It was interesting to move here from the East Coast. When I moved here, the media was making so much about declining housing prices while prices were still accelerating in parts of LA. E.g., Boston started seeing a decline in 2005, while we were seeing continued acceleration on the West side of L.A. until late 2007. So now parts of the East Coast are leveling out (and some areas are recovering) while L.A. is still playing catchup.

2. Because L.A. has experienced such a bigger run-up in prices over the past 7-8 years than other parts of the country, it will take longer for our market to achieve stability.

3. L.A. is so large that it is like a microcosm of the rest of the US. That is, some parts of L.A. are much harder hit than others. E.g., in-land areas which are further away from L.A are going to suffer more than areas near the ocean.
0 votes Thank Flag Link Sat Jul 5, 2008
Hello Occat! I believe prices will continue to fall for at least the next 6 months and maybe longer. The prices in LA are being depressed by foreclosure and short sale properties which normally sell below market. Once this stock is depleted, which should be in the next year or two at most, housing in LA will more than likely begin to appreciate again. We have a steady stream of people moving to LA, I believe it's like 80,000/year due to our unique location and weather. But LA is unique, at the least the City and suburbs close to downtown going all the way to the beach, as there is no more land to build any large subdivisions so the demand on housing will at some point in the near future will overcome the supply. At the moment we have an 11 month supply. The areas suffering a real downturn in pricing are areas with new housing developments, i.e., Lancaster/Palmdale, Riverside/San Bernardino, etc. where the new subdivisions are competing with existing home stock. I would venture to guess that it will take these areas at least a couple of years to balance out and sell all their available stock. Unfortunately, the media reports are myopic and misleading and tend to lump all of LA into one basket but different areas are being affected differently by the housing and subprime crisis. In Pasadena, where I work, the housing market has actually appreciated some 2.7% in the past year and I would bet the same is true in other sought after areas of LA. I hope this gives you some perspective.
0 votes Thank Flag Link Thu Jul 3, 2008
That's the Million Dollar Question..and no one knows the answer for sure. My opinion is that the Fed will bail out the Mortagage Industry and the Banks will lower their expectations on these short-sales and make some deals happen. That will level off the current problems. Slowly thereafter, the marke will recover...how long it takes..is anyone's guess.
0 votes Thank Flag Link Wed Jul 2, 2008

John will be hopping in here in a moment to tell you that he has the inside track on the future. He will tell you that the 2nd greatest depression is coming.

As an agent that doesn't work in the area, I don't have an opinion on the matter. I would also caution you to be leary of the advice you get here. The reality is that nobody knows. Markets are too dynamic for any person to be able to make anything more than a guess.

Cameron Piper
Web Reference: http://www.campiper.com
0 votes Thank Flag Link Tue Jul 1, 2008
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer