Alhambra Real Estate
Alhambra Homes For Sale - Investing in Real Estates of Alhambra, CA

Have We Hit the Bottom Yet?
By Lee Lieberg

May 15, 2008

The news always gives the real estate statistics by comparing median prices of the past month with the same month in the previous year. Long after the prices had began to weaken, we were still getting reports of year over year increases.

Long after we hit the bottom, we will be getting reports of year over year decreases. This makes sense that they compare year over year to take out the variations of seasons, but don’t you ever wonder how this month simply compared to last month. I do.

I set out to rearrange the statistics to determine if they shed any light on trends, and more importantly, find out if we may have hit a bottom yet.

A recent editorial in the WALL STREET JOURNAL by Cyril Moulle-Berteaux on May 6th claims, “The Housing Crisis is Over”. He says that prices peaked nationally in 2005, and we are now bottoming out. I hope he is right, even though I know there is plenty more housing crisis out there.

Closer to home, we are having our piece of the crisis too, but maybe ours won’t be as prolonged.

As for my findings, first the easy part, the high water mark for the median price of both homes and condos in Alhambra was May of 2007. The median home price was $618,000, and for condos it reached $445,000.

Nine months later the condo median for February of 2008 hit $377,000, a decline of 15.3% from the 2007 peak. The following month the median home price in Alhambra for March dropped to $405,000, a decline of 34.5%.

Do these numbers sound like bottoms? Last month both median prices were higher than the lows, and if you consider the volume, there were only 7 transactions for February and 26 in April. Dare I say it is encouraging to have more homes selling at higher prices?

Comparing median prices is not foolproof because the middle priced home one month may not resemble the following month’s middle priced home in size, location or condition. Variation is more likely when the subject of the study is as small as Alhambra.

The lows of February and March were at the height of the liquidity crisis in the mortgage industry and prior to the Feds Stimulus Package which could have forced us into a quicker low than other parts of the country. If that wasn’t the bottom, I believe we are close.

The two greatest concerns now are interest rates and foreclosures. If rates go up that will make homes less affordable and foreclosures could increase the supply.

Cautiously optimistic is how I would sum up the future trend of the month-to-month prices and activity. On May 15th there were 142 listings of homes and condos which is high if you sell 7 a month as in February, but not if you sell 26 like April.

A decline of 34.5% in homes sounds more likely to be a bottom than a decline of 15.3% in the price of condos. If you would like a copy of my month-to-month statistics, please feel free to send me an e-mail.

Just don’t ask me when we’ll see the median at $618,000 again.

*Data was obtained from California MLS Alliance and deemed to be reliable. Lee Lieberg can be contacted at lee.lieberg@dilbeck.com.