So Cal Real Estate News

Today’s Los Angeles Times has DataQuick’s February closing statistics for the 7 county Southern California Region, & it’s exactly what we predicted: Sales up from January, prices down.

Unfortunately, what writer Peter Hong never seems to mention in the article is that this is old news, for 3 reasons: First, today’s March 14, & DataQuick’s reporting average closings during February, making the average sale date a month ago today. Second, that’s the date the sale closed, so those homes mostly went into escrow in late December and early January! Third, lots has happened just this week to address the underlying problems, most notably the Fed’s new program to increase liquidity.

The article does have a fair amount of quotes from a variety of experts, most saying this means things are a bit worse than they thought. Well, things were pretty bad in December, but they did pick up in January and especially February, so we still expect better news a month from now, when DataQuick reports March closings–which mostly opened escrow in January. And we’ll guarantee sales volume will be up. It’s really not that hard to predict what’s coming in on this month’s freighter if you talk to the guy who loaded it up!

We still think there’ll be a significant increase in closings through this spring, and quite possibly a modest increase in prices, but we also anticipate continued price declines as we move through fall and winter. The real bottom may still be a couple years away, but, as we pointed out here in our November piece, “How Low Will Prices Go?”, this is the most unpredictable downturn we’ve seen, and nobody really knows where it will end.

As Hong’s article eventually points out, DataQuick’s numbers are overly negative due to the preponderance of low end sales, where most of the foreclosures are. We’ve got lots more to say about this, and hopefully we’ll get more posted tonight. For now, I’ve got to get on the road and check on some units that burned last night. Now that’s a real “overnight” decline in value!