Welcome to our Real Estate $$$ Transaction Tracker for the south bay area around LAX and surrounding areas. These charts try to cover the area west of the 110 freeway and south of the 10 freeway.
Instead of tracking real estate by average sale price, we like to multiply out the average sale price by the number of sales for each month. We believe the total real estate dollars transacted says a little more about the state of the local markets than just the average sale price, which can be totally meaningless. Three homes selling at $100K and one home selling at $500K means that the average price was $200K which makes 3 out of the 4 homes in this example sound twice as expensive as they really are. On the other hand, $$$ transacted as a measure of local market activity at least filters out average sale price as a misleading statistic. Think of $$$ transacted as a measure of how much money is being made by the real estate industry, which takes a percentage of $$$ transacted in commissions.
The data for most zip codes starts in August 2001, but our charts start in 2002 (with moving averages for early 2002 calculated from raw data in late 2001).
We no longer use the bar chart format. The first chart is a line chart of both the raw and doubly smoothed 3 month moving average of the total real estate dollar volume transacted in a particular zip code. The total dollar volume is calculated by the number of sales per month by the average sales price for that month. For most areas, the calculation starts in January 2002.
The problem with purely raw data is that sales can be unevenly distributed when, say, comparing April to April. If, for example, Easter weekend were a big open house weekend, then sometimes it falls in March and sometimes it falls in April. Comparing April to April then won't be a "fair" comparison because it won't be comparing the sales for those times that Easter weekend falls in March. For that reason, we also show the moving average listed for a zip code, which is a doubly smoothed 3 month moving average of the data represented by the raw line. A three month moving average of the raw data is calculated, then a 3 month moving average of that data is calculated. This helps (somewhat) to smooth out the immediate impact of a surge in sales and also a dramatic decline in sales. So a moving average will "spread the wealth" but also "share the pain". The "wealth" or the "pain" gets pushed forward. Moving averages are lagging indicators and they say nothing about what lies ahead. They only clarify what an existing trend is doing. The moving average helps smooth over the differences between years.
The second chart is the %YOY (year over year) gain/loss on the 3 month MA data from the first chart. It helps to visualize the strength and direction of dollar volume. On some of these charts you will see that the change in dollar volume in times past may have dipped down below 0% only to rocket back up again. So by itself a dip below 0% is not a reliable signal of a strengthening downtrend. It is certainly possible for an area to have a substantial number of new housing projects come online and get aggressively sold. That will push the $$$ figures way up. Then the next year there may not be new product and the sales pace will settle back down, so the YOY chart might show a negative trend. As you can see, this does not necessarily mean the housing market is deteriorating. The chart is just showing the aftermath of the one-time integration of additional housing.
In places where there have been strong gains in $$$ transaction volume due to massive construction and super-aggressive selling, 20% down YOY from such a pace is still a good sales pace! So keep the context in mind when you look at these charts.
The rankings show two numbers. The first number is "immediate pain", which simply sorts the %YOY gain/loss that you see on chart 2. The second number, an experimental measure, is "chronic pain", which is a way of approximating the mathematical area under the %YOY gain/loss curve. The lower this number is, the more chronic pain a zip code has felt. The higher this number is, the less pain a zip code has felt. Lately, this number has run between 0.0 and 4.4, and the range is subject to shift.
If you see a zip code with a high positive %YOY gain (immediate pain/gain), but a low chronic pain score (e.g., lots of longer-term pain), that means that the %YOY line has spent a considerable amount of time below 0% in negative territory, but that particular zip code could currently be enjoying a bounce. If you see a zip code with a low, negative %YOY loss (immediate pain/gain), but a high chronic pain score (e.g., little longer-term pain), that means that the %YOY has for the large part been above 0%, but only very recently could be feeling a drop - possibly due to the subprime implosion. For some of the lower-income zip codes, that appears to be true.
"Beach Cities" refers to zip codes 90245, 90254, 90266, 90277, and 90278 as tabulated by Melissa Data. These zip code areas may not exactly match what you see drawn on our Google Map tool, which presents another way to pull up these charts.
Our coverage NO LONGER excludes 90247, 90710, and 90274. If the charts are wacky, they are wacky.
Melissa Data is our source of information. The firm gets its data from Home Data.