Almost on a daily basis, I hear someone say that the market is going down, or the bubble is going to burst, or prices have dropped, or some doomsday outlook on real estate. I think it is important that we get our facts straight, and realize that there really has not been a significant drop in most Westside communities, and in fact, there has been appreciation across the area.
Recently I attended a Coldwell Banker joint office meeting, where Pat Veling from Real Data Strategies spoke about the state of the market. I was able to grab some of his slides that indicate the market in Los Angeles is not doing so bad after all. This first image shows the average price that properties were selling for across all of Los Angeles that were calculated for each quarter (in yellow). In red/pink, the number of listings sold each quarter is plotted. There are 9 quarters that span over 2 years worth of data, and the 2 year average price trend is up 14%, and 2.4% over the past year. Bottom line: PRICES HAVE GONE UP ON THE AVERAGE !!!!!!!!!! So has anything dropped over the past two years? Yes. Sales activity is down 15.4 % over the past year. Ultimately, this means that fewer properties have been selling, but those that have been selling have sold for more than they did in the previous year.
Let's take a closer look at some of the Westside communities. Santa Monica has done GREAT! While it holds true that the number of units selling has gone down over the past couple of years, the price trend is UP UP UP!!!! The two year average price trend is up 44.7 % and the one year average price trend is up 17.4 %. Although Santa Monica has done great, Brentwood did not have as strong a year in 2006 as in 2005. The one year average price trend was down 17% but the two year average price trend was up 3%. All in all, not a bad situation.
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