Thursday, February 16, 2006

LA's Supposed 'Soft Landing' In Full Effect

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The Los Angeles Times has a bylined story today by business writer Annette Haddad, who regularly follows housing market issues for the business section. Today's piece looks at new sales numbers in the Los Angeles area that prove momentum is slowing.

The numbers for the Times story came out of DataQuick Information Systems yesterday (See their chart at right). The DataQuick data showed that the total homes (both new and resale) that sold in LA, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month represented a drop of 30.6 percent from December 2005, and a dip of 7.4 percent from January of 2005.

Note that Ventura County's sales dipped 21.3 percent, which is a pretty sizeable speed bump.

Of course, many agents have been blaming it all on the Superbowl, spouting the claim that nobody buys homes until after the big winter weekend. If that's true, then we better see some improvement in the February numbers. They're running out of excuses. Of course, the next one will be something about how nobody buys homes until the summer.

Here's an excerpt from the LA Times story this morning:
Six months of gains in Southern California's median home price were wiped out in January while sales activity dropped sharply, further signs that the region's once-hot real estate market continues to lose steam.

The statistics, released Wednesday by DataQuick Information Systems, a La Jolla-based real estate research firm, suggest that the market is making a "soft landing" of flattening prices and fewer sales after sizzling gains during the six-year boom, analysts said.

Many homeowners, who were quick to put their homes up for sale a few months ago in hopes of scoring swift and easy profits, are seeing more price resistance now. Buyers are taking more time to shop around, and are making more-modest offers.

"We're starting to sense a shift from a strong sellers' market to more of an equilibrium," said Rich Roberts, vice president of marketing for ZipRealty Inc., a national brokerage based in Emeryville, Calif.

"But it's a slow-moving transition, which is good," he added. "We're not seeing a bubble bursting."

— The Boy in the Big Housing Bubble