Long Beach inventory is down 16.3% between February and January, and down 37.9% from this time last year.
In Belmont Shore, it's even worse. Inventory is down 41.7% month-to-month, and an astounding 61.1% versus last year. Mind you, we're well into the Super Spring Selling Season so this doesn't bode well for summer's prospects.
However, the good news for everyone but buyers is this scant inventory is doing wonders for the stability of home prices. The median sold price of $582,000 is up 0.4% versus last year.
Basically, if you want to live in the Shore, and are allergic to short sale shenanigans, you're screwed. The handful of equity sellers out there are definitely in the driver's seat.
It's frustrating, I know. But this is our future.
Hey El, do buyers have to worry about REOs that are not available yet in Long Beach? How do we know that the banks are not distorted the supplies to prop up prices?
ReplyDeleteEllie, the banks are absolutely distorting supply thanks to mark-to-market being suspended. There is no reason for banks to foreclose, because that would mean booking the actual value (and resulting loss) on the balance sheet -- rather than the pie-in-the-sky bubble values currently on the books. So countless deadbeats get to live rent free as a result.
ReplyDeleteIt is well known a sudden flood of supply would decimate home prices since there is tepid demand from qualified buyers. Hence, why that flood WILL NEVER ARRIVE. The basic tenets of supply and demand are real, and the government and banks know it and are resolute in distorting the housing landscape so those free-market principles are not allowed to wreak havoc.
Frankly, I think flooding the market with supply is what it will take to finally reach bottom and remove the poisonous uncertainty from the market. But, crashing the market would put millions more underwater, leading to more defaults...so I understand why banks and politicians are reluctant.
So, do buyers have to worry about bank-owned shadow inventory? Not in my opinion. The .gov will allow them to keep those properties off the market for years and years, trickling them out slowly but surely to match demand.
And not foreclosing on the squatters who stay in them!
ReplyDeleteMy stepson's best buddy and his family *finally* got the boot from their home in Cal Heights after over THIRTY MONTHS of not paying!
And I'll bet if they would have made a token payment or three along the way, they'd still be there.....
Wow....
ReplyDeleteOn a different note, I was wondering El Bee, if you'd care to lend your opinion of the downtown area of Long Beach, and it's future? I'd really love to get your opinion. As a new home-owner in the area, I see this in two ways -
#1 Seaside cities to the north and south are FAR more expensive to live in. Home prices and rents are MUCH more than ours. If LBC ever got it's act together fully (a question posed for over a dozen years), I think the home values would skyrocket - I'm certainly hoping so!!!
Not only are we close to the ocean, but the port, cruise-ships, MTA boats that go across the harbor, Queen Mary, Convention Center, Pine restaurants, The Pike and Shoreline. And we're also right next to the freeway, as well as the Blue Line.
As someone who works in downtown Santa Monica, this downtown is very similar, and actually has the potential to blow theirs out of the water.
#2 This is a "ghetto city" with a lot of cracker-box housing. The only way into the downtown is via a "big rig freeway" that is anything BUT glamorous. The restaurants at the Pike are all generic and boring. Retail businesses struggle for their lives here.
I bought my 800 and some square feet condo on Ocean blvd for 202K. My hope is that within 10 years, it will be worth triple that, or more. I know this almost completely depends on how the city of LB is developed. What are your thoughts on all of this, and have you yourself considered purchasing down here? I think it's an awesome oppty for a lot of potential increase in home value, but of course there is no guarantee.
Mike,
ReplyDeleteI have high hopes for downtown. I was happy to see the development during the bubble, but obviously once everything crashed, so did the money being pumped into the downtown economy.
My biggest concern with buying downtown would be the HOAs. With the number of foreclosures and deadbeats not paying their bills, I would think many are pretty cash-strapped (especially the newer ones with insane monthly fees of $700 or more).
However, even factoring in the HOA fees I have seen a lot of properties at or below rental parity. Anyone currently renting in downtown should seriously consider buying (once you've vetted the HOAs books, of course).
As far as appreciation in downtown, who knows? Tripling in value? They would have to remove the breakwater, completely gentrify the surrounding area ("the ghetto") and bring in some big-hitting companies to downtown.
In the meantime, I'm always rooting for Long Beach.
Agree. The only way for dramatic unforeseen appreciation downtown in the next 10 years is if the breakwater is reconfigured AND they do something to prevent the LA rivers trash from polluting the newly returned waves. If the breakwater is reconfigured, gentrification will speed up even more. As a surfer and LB property owner I certainly hopes this happens.
DeleteBreakwater aside, I think current rent-to-own ratios in downtown and Alamitos Beach (below 4th at least) make these areas a solid investment. Plus the area seems to be attracting less and less rif-raf every year.
Any opinions on which direction you think things are likely gonna go?
ReplyDeleteAlso, just read in the LB Post today that they are attempting to tear down the 103 fwy. IDIOTS! As if the 710 wasn't bad enough, they plan to tear down a route that is on the edge of the city, to move that existing big rig truck traffic to the middle of the downtown. Aye carrumba.
I think we'll go sideways for a looooooooooooong time. The amount of inventory yet to pass through the python will prevent any major increases in value, but the painfully slow drip, drip, drip of bank inventory will prevent prices from bottoming.
ReplyDeleteSo, stagnation.
If rates spike, who knows. If boomers sell en mass to fund retirement, who knows. If an entire generation of young adults saddled with student loan debt are unable to purchase, who knows. But nobody can predict that stuff. Which is why I encourage anyone who is buying to simply crunch the numbers and if you're pretty close to rental parity, just do it and don't worry about appreciation. If the place you want is still way more expensive to own than rent, keep waiting.
But don't stress out about things that nobody can know.
I mean, let's say rates DO spike and prices come down to compensate (there is mixed data on whether this cause-and-effect relationship exists -- common sense says it does, but I have seen exceptions in prime areas). Cool, you get a cheap house with lower property tax and a sky-high rate that you can refinance lower later on. But it could be 10+ years before prices come down to reflect rates! And another decade before rates decline far enough to make refinancing worth it. Life's too short.
FYI in my neck of the woods up here on the other side of the 405 in Long Beach, foreclosures and desperate sellers have caused prices to plummet over the last couple of years. I have a feeling Belmont Shores is just going sideways due to artificially low inventory for some long period of time, since there is still price deflation going on everywhere inland...
ReplyDeleteThank you for the feedback people...
ReplyDeleteMike in LBC, there are a lot of unknowables out there, but the best thing you can do is help lead the charge against the Breakwater and the crackerboxes. Those two things coming down, or even being lessened somewhat would be the best thing that can happen to help improve things in LB. And yes, fight the Freeway thing, that makes NO sense at all to me, BUT the port is very powerful and requires a lot of pushback.
ReplyDeleteDave, as I've just become a home-owner, I am now in the process of becoming familiar with the details on a lot of these issues, and then becoming involved. I contacted council person Garcia's office, as well as our beloved Suja, and didn't even get a response....
ReplyDeleteLeft or right, I think a big problem is that people are getting played and manipulated, and are falling for the classic ploys that are used by politicians. For example, the "sympathy" card.. if you want to get rid of the cracker-boxes, you're obviously some rich, white racist who doesn't care about the poor people who need affordable housing.
Well if it were just politicians themselves saying these sorts of things, it wouldn't hold much weight - however a good percentage of people buy into this crap! YOU see it over on LBPost, these people go round and round... they bitch about crime and not having enough police, but yet they don't want to realize that the REASON we don't have enough police, and the REASON we have so much crime, is because we are enabling lowlifes.
The amount of tax dollars that goes into supporting able-bodied lowlifes is astounding to me, yet many of the working people would attack you and me, hardworking/honest citizens, instead of attacking the able-bodied people free-loading off of welfare and other handouts.
The downtown area has come a long way, but there are still a ton of problems, and work to be done, and some MAJOR things that need to be fixed.
And whom do we vote for in our district? I don't see any worthy challenger to Suja, queen of all photo-ops Lowenthal.
At least we have identified some of the major issues -
#1 eliminate the breakwater
#2 get rid of big rigs on 710
#3 get rid of cracker-boxes
#4 bring back REAL Pike attractions, and get rid of the generic restaurant row
#5 stop the elimination of roads/highways, which increases traffic
etc....
Why do people want to get rid of the breakwater?
ReplyDeleteJim, getting rid of the breakwater would bring waves back to our beach, and subsequently increase tourist flow.
ReplyDeleteNow I think it wouldn't be so simple to do, because beyond removing the breakwater, there is still a huge pollution issue to be dealt with...
and even after that, there are issues like parking, because with the HORRIBLE way our city is developed, with cracker-boxes everywhere, we don't have any parking. So could we even accommodate a huge tourist flow of people, would be the next question.
But at least with ideas like that, people are thinking in the right direction. I'll take that any day, versus the people who seem to want to coddle low-lifes, and allow them to live off of Section 8 and welfare in cracker-boxes, and ensure that this city remains dangerous and miserable.
The Breakwater was designed to protect Navy ships during wartime and was obsolete almost from the moment it was built. The Navy left Long Beach but they left their giant wall behind. Oh, and this is not the Breakwater that protects the port. THAT breakwater isn't going anywhere and no one wants it to. This is the superfluous breakwater which parallels the entire "long beach" and reduces waves.
ReplyDeleteIt contributes to the terrible water quality, but the other thing that would help is redirecting the mouth of the LA River back to the port where it went originally.
Oh, and about the crackerboxes, Long Beach is awash in affordable housing. If you got rid of all of them you'd start to get reasonable rents in the other units.
I have found Robert Garcia to be reasonably good at returning e-mails and/or phone calls. Suja on the other hand is worthless in that regard (and all others frankly).
Dave, thanks for educating me on the breakwater. It sounds like a no-brainer.. so that begs the question of what is the current status of it? I know that Garcia is in favor of it.
ReplyDeleteFunny too, because I DID get a response from Garcia's office, but not Suja. I'm wondering why Suja is favored, since darn near everyone I hear from seems to not like her.
So you mean the "inner" breakwater, more correctly referred to as the "Navy Mole"?
ReplyDeleteI assume you mean Robert Garcia is in favor of removing or reducing the breakwater, not in keeping it? Most everyone wants it to go but it costs mega bucks to remove it, and they have to do studies, etc. Just a really bad time to be looking into this. I think eventually it will get removed in part. Certain sections lowered to allow waves, etc. Less costly.
ReplyDeleteI cannot for the life of me explain Suja. Everyone dislikes her. She's embarrassed herself many times. Is it the name? Maybe an opponent should change their name to Clinton, or Disney or something.
Too funny. I have no clue as to what many people are thinking, when it comes to how they vote. I just got done listening to a 25 year old in my office tell me that he doesn't think the taxes in California are high enough, and that we should allow more illegals in because they are an asset to our economy - and yes, he seriously believes that, and he also believes he is "well informed".
ReplyDeleteCall me crazy, but the last time I checked, CA was VERY bankrupt, and businesses were leaving in droves, because we have the highest taxes in the nation (well second to NY).
I don't get what people are thinking, but one day they are all mad as hell, yelling and screaming about how bad things are, and then the next, they are shrugging things off, and telling others that things are not so bad, and that we need to keep spending and taxing.
It would be interesting to see the updated inventory figures for 2013
ReplyDelete