Los Angeles Home Sales up 82% Compared to Year Ago!

Driven by Foreclosures and homes sold by traditional sellers at favorable prices, sales of existing single family homes in the Los Angeles area during September jumped 82% compared to a year ago according to the most recent TIME Magazine. TIME went on to say how the market was improving in a major way as far as sales go, and that inventory of homes was being drastically reduced.

The real estate market is now almost in balance between buyers and sellers as inventory drops to a 6 Month supply, compared to a more than 16 month supply in January.

Let's examine the headlines behind the stats for declining MEDIAN home prices

Can we all remember that in 2006 it was reported that home prices advanced 6% in the Los Angeles area---while we ALL know that prices declined for a specific property?

How could that be? The answer is that there were more expensive homes being sold as first time home buyers dried up in response to the Federal Reserve driving up short term rates---which drove up the cost of adjustable rate mortgages and "teaser" introductory mortgages at very low rates.

Simply put---if ten $3 mill homes are sold, and one $200k condo---it looks like the median is almost $2.8 mill. However---what we are seeing now---almost 40% of the homes sold are foreclosures---and with the biggest discounts coming in at the LOW end---it looks like prices are still declining. If there is one $2 mill home sold for every nine $300k condos---then it looks like the median is $470k . There are MANY more lower end foreclosures being sold now as a ratio of homes SOLD---so it LOOKS like prices are declining, when they're NOT!

SO-----Is now the time to buy?

While we cannot predict with certainty when prices will begin to rise and recover, prices have ALWAYS recovered as it has always been easier for our government to print more dollars than it has been for them to create more land. We expect PRICES to advance soon as inventory drops down towards a 6 month supply---as it is obvious that the Federal Reserve, our Federal government, and ALL worldwide governments are doing EVERYTHING they can possibly do to save the global economy, and this should mean stabilizing and then recovering home prices.