10 worst areas of LA County to own a home

December 28, 7:38 AMLA Real Estate ExaminerTony Covey

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November is usually a slower month for home sales, but last month set some records in Los Angeles as the median home price in the county dropped an average of 35.7 percent from the same month last year.  Some areas experienced declines as high as 82.5 percent, based on the latest numbers from Dataquick.

While declines in areas like Watts and Boyle Heights may not be a surprise to many, Pasadena, Capistrano Beach and the Newport Coast also experienced some preciptious drops.  Here are the LA County areas experiencing the worst median price declines since November of 2007:
  

The typical mortgage payment in California that home buyers committed themselves to paying in November was $1,198, down from $1,310 in October, and down from $1,951 for November a year ago. Adjusted for inflation, mortgage payments are back to where they were in spring 1999. They are 40.3 percent below the spring 1989 peak of the prior real estate cycle. They are 51.8 percent below the current cycle's peak in June 2006.

In the December 23, 2008 report from the National Association of Realtors, Lawrence Yun, NAR chief economist, said, “The quickly deteriorating conditions in the job market, stock market, and consumer confidence in October and November have knocked down home sales to another level. We hope the home sales impact from the stock market crash turns out to be short-lived, as was the case in 1987 and 2001,” he said.  “It is, therefore, imperative to provide incentives for homebuyers to get back into the market. It also depends on how effectively Congress and the new administration can help facilitate the short sales process and unclog the mortgage pipeline – impediments remain for some buyers with good credit,” Yun said.

Last week, Freddie Mac reported the 30-year rate fell to 5.19 percent – the lowest on record since the series began in 1971.  Obviously, lower interest rates were not enough to stimulate Los Angeles home sales in the light of an increasingly grim economy.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said it’s crucial to enact sufficient housing stimulus to spark an economic recovery. “We need more than low interest rates to encourage enough buyers to enter the market and meaningfully draw down inventory, which would stabilize home prices – that, in turn, would help the economy to recover,” he said.  “We should extend the first-time buyer tax credit to all homebuyers and eliminate the repayment feature, and make permanent the higher loan limits that are vital in high-cost markets – the faster we do this, the faster housing and the economy can recover,” McMillan said.