The Biggest Winner (per county)
| County | City | Median Mar-07 | Median Mar-08 | Median % +/- | Sales |
| Los Angeles | Diamond Bar | $594,000 | $568,000 | -4.6% | 28 |
| Orange | Laguna Niguel | 883,500 | $950,000 | +7.0% | 25 |
| Riverside | La Quinta | 554,800 | $545,000 | -1.8% | 84 |
| San Bernardino | Lake Arrowhead | $410,000 | $410,000 | -0.0% | 23 |
| San Diego | Rancho Bernardo | 580,650 | $553,000 | -5.0% | 29 |
| Ventura | Simi Valley | 593,850 | $535,000 | -11.0% | 39 |
Disclaimer: Cities with less than 23 sells within the period measured were omitted. The percentages for larger cities are for specific postal codes and may not be reflective of the entire city.Conclusion
No matter how bad the market seems, there will always be those who manage to make money, and the current Housing Crisis is no exception. As you may have noticed above, that at least one city had a price increase when comparing the median price from March 2007 to March 2008.
Now is the time to pay close attention to the cities that are fairing well in the current economy, because these may be the cities that do extremely well when the market rebounds.
4 comments:
Do you think that cities that show the most price depreciation will have most likley bottomed out( or very close to it), thus have a better chance of recovering quicker, or do you think those cities that have depreciated the most, still have more to go, as opposed to cities that have only fallen by 7-10%.
In other words: If a county has 10 cities and 2 have depreciated by 25%, while the others by 10%, then during the course of the following year the cities that have depriciated the least catch up to the other cities or depreciate further, while the hardest hit cities stabelize, then looking at a county as a whole the depriciation would increase, while in reality its that the cities that had not depreciated as much have caught up.
Is that a long enough question for you?
I think the cities that have depreciated the most, did so because of one or more of these factors:
1. There were a high number of foreclosures or short sales within the city.
2. Supply outstrips demand so much that sellers are willing to let the homes go for a fraction of their former market value, in order to sell.
3. Buyers don't see as much value in the city as other more desirable cities have become more affordable.
4. Buyers simply feel the city is still overpriced.
There are no doubt many other factors that play into it. As far as the cities that have depreciated the most decreasing in depreciation while others that haven't fallen as much increasing in depreciation... That's tough to say; however, my "knows" (nose) says no.
What one must consider here is that during the boom, there were many areas (e.g. Palmdale as you pointed out on your blog) that weren't very expensive, but because of the buy now or be forever priced out of the market mentality, buyers over paid. Now you're seeing the trend work in reverse, as buyers are not willing to pay the much higher prices of post 2000 for those areas.
Great Answer,
Now supposed you were to make a purchase NOW in a heavily deppreciated city like Oxnard, or Palmdale, considering the conventional wisdom that prices might go down up to 20% further in the next year or so, wouldnt it be wise to make on offer 15-20% below current asking levels in order to ensure you do not loose money.
If you were to do that and the offer was accepted, do you think this strategey would act to buffer against further price depreciation?
Conventional wisdom does say that prices in So-Cal may fall an additional 20% (or more) next year; however, you must keep in mind that this figure is an average, and some areas will fall by more or less than that figure.
Thus, in Oxnard for example, if you made an offer on a $400K home at 20% less than the asking price ($320K), you may find that by next year, the market there may have fallen by closer to 30% ($280K).
So, my question to you is this: Do you plan to be in the home long term? If so, then eventually you will be in an equitable position again. The real issue is, if you need to sell it for any reason over the next couple of years, you may lose considerably.
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