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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Wyätt Gwyön who wrote (28195)3/16/2005 12:37:50 AM
From: Elroy JetsonRead Replies (2) of 306849
 
The RERC, which does an index of same-home appraisals every six months has the most accurate information on Southern California, but the data is for members with a fairly expensive fee. You'll notice that there is a several year delay in reporting the numbers, as their work is rather meticulous.

Members: csupomona.edu

Home Survey: csupomona.edu

Home Page: csupomona.edu

While the over-all data looks very similar to the numbers Calculated Risk has cited, you will find there is a dramatic variation from one neighborhood to another. Not surprisingly, those neighborhoods which experienced the greatest appreciation on the way up tend to experience the largest declines on the way down.

Some West Los Angeles neighborhoods, like Brentwood, saw home prices decline by 50 to 55%, an example from $1.2 million to $520k.

Likewise, condo prices declined significantly and this was far more widespread and severe. Very desirable condos purchased for $515k later sold for $242k.

Some condo complexes developed problems due to lack of maintenance as owners were loath to spend much when the market price of their unit was less than their mortgage. One condo complex in West Hollywood had studios which sold for $205 at the peak and later sold by the banks at $62k with a subsidized loan and one year's Home Owners Dues prepaid. The one bedrooms had sold for $345k and later sold by the banks at $126k. The banks had been unable to sell these units at all until the delayed work had been completed. Easily 25% of the units in that complex went into foreclosure.

By contrast many homes in nondescript areas of Los Angeles appreciated little and declined little. The difference this time is there is little or no bubble in large commercial (office/retail) and multi-tenant properties. But the bubble is far more exaggerated in home prices and small commercial and multi-tenant properties.
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