We have frequently been asked how the Westside market is doing as compared with last year, and some have wondered if there are any noticeable differences between home sales and condominium sales. In the process of analyzing sales records to answer these questions, we also found some interesting differences in the local leasing market. As the accompanying chart shows, the number of condominium sales has fallen much more significantly than have local home sales for the first nine months of this year versus 2008. However, there has been a dramatic increase in the number of leases for the same period.
One reason why condominium sales are off more than home sales is that the current economic and lending challenges probably impact first-time buyers more. On the other hand, the explanation for the substantial increase in leases is more complex. A fair amount of Westside home sales are more discretionary than driven by economic necessity. Consequently, many homeowners who find that the market will not yield a certain price level for their home decide to make it available for lease instead, with the idea in mind of selling it when the market recovers.
On the flip side, as a result of the tremendous changes that have occurred in the lending industry over the last year, many prospective buyers have found it too difficult to obtain financing and have opted to lease instead of buy for the time being. These combined factors have led to a very large increase in the number of properties for lease as well as the numbers being leased.
As one might expect, median prices are down in all of these categories. It may be surprising to many that the rate of price decreases has slowed to 12-13% for homes, condos and leases.
It may be of interest to note that the high-end of all three types of transactions has been impacted more than the average price level transactions. For example, while the number of homes sold has decreased by nine percent from last year, there has been a 62% decrease above the $10-million level in the same time. Likewise, the number of high-end condominium sales is down 40% from last year.
Judging from statistical comparisons over the past several months, it appears that the market is showing signs of stabilizing, and one might expect to see sales figures begin to level off in the next few months.
Changes 1st 8-Months 2008 to 1st 8-Months 2009
HOMES / CONDOS LEASES
MEDIAN SALE PRICE
# OF HIGH-END SALES (homes = $10M+, Condos = $1M+, Leases = $10K+)
Michael Edlen, an agent with Coldwell Banker in Pacific Palisades, can be reached at 310.230.7373 or Michael@MichaelEdlen.com.