Is the Housing Market in this Los Angeles Suburb Still Overpriced?
Those who are familiar with this city know that it is one of the nicer foothill communities in Los Angeles County; however unlike it’s cousins (La Canada, Montrose, and Pasadena) it appears to still be in a downward trend, with regards to its housing market.
We can sit around all day and speculate as to why this market still seems to be in “rut”, but I believe the more pressing issue is to first confirm that it is in fact still declining. Let’s examine the evidence.
In the graph above you can see that the number of homes on the market has been steadily decreasing over the past year, while the pending sales are at a YTD high, and the sold numbers are slightly higher than the average. If this were the only data we had on hand I would say that the market appears to be rebounding and that demand will be moving back shortly as the supply of properties has decreased by half over the past year; however it is not the only piece of data at our disposal.
Strangely enough this is the first time that our results and recommendation differ from the general statement made by the graph above (when looking at our past “Examined” articles). But there is a first time for everything!
In the table below we can see just how deceiving the information related to us in the graph above really is!
This table is showing us most of the key performance indicators for La Crescenta, over the past 11 years. Right off the bat my eyes are drawn to the avg. price sold & median price sections as this is one of the most classic bell curves I have seen before. If you look at the prices in 2007, generally accepted as the highest point of the market before the crash hit, we see in fact that this year experienced the highest prices in the past 11 years. Following the prices from 2007 down to current you will see a nice smooth decline (right side of the bell). Commensurate with the decline in prices post 2007 is the decline in number of properties for sale, as is a result of the market clearing out as properties reach there appropriate price.
Normally I would say that now would be a good time to buy because it appears prices have reached a point that buyers are ok with, but I don’t think this is a safe bet just yet. The reason I am skeptical about this market being at a bottom is two fold. First, the Days on Market KPI worries me. If the prices of La Crescenta properties are accurate at this time why have we not seen the number of days it takes to sell an average property come down drastically? The second reason is in the data table below V
In this table we are looking at the same Key Performance Indicators as we were in the previous table, except this is a past 14 months’ snapshot. Take a look at the high days on market, and the volatile median price and average prices month to month.
So, in summation I simply think it is to much of a risk to say that this market has found it’s bottom, and frankly I wouldn’t be surprised to see it come down another $50,000 before it was truly at a definitive bottom.
Please feel free to email me or leave a comment for more information.