Check out the latest facts and trends from Credit Suisse regarding the Los Angeles/Orange County Real Estate Market… Does this sound familiar to you?

Los Angeles, CA – Attractive Affordability Continues
to Lure Buyers
(4,559 single-family permits in 2008, 21st largest market in the country)

Buyers still in the market following the tax credit extension. Buyer traffic remained
above agents’ expectations in November, as our buyer traffic index inched up to 59 from
57 in October (readings above 50 indicate traffic above expectations). Agents said there
was little change in traffic levels this month after the tax credit was extended early on, as
buyers continued to focus on the affordability created by low prices, low rates and the
credit. One agent noted, “The tax credit extension has put some people back in the market
who thought they couldn’t find what they wanted before. Most of the first-time buyers think
they should get a foreclosure or short sale for less than the asking price, but banks are
being firmer on prices.” Other agents said the extension of the credit also gave buyers
more confidence that they are getting in at or near the bottom of the market, especially as
inventory levels come down, although they do note buyers remain very value focused.
Lower inventories and solid demand lead to sequentially higher prices. Home prices
increased sequentially in November, as our home price index improved to 61 from 52 in
October (readings above 50 indicate higher prices over the past 30 days). Agents said
prices were helped by the strong demand trends, which led to a further drawdown in
inventories. Our home listings index improved to 84 in November from 71 in October, with
readings above 50 indicating lower inventory levels. We’re hopeful that these positive
trends can continue, but remain worried about the growing backlog of foreclosures that
have yet to hit the market.

Comments from real estate agents:
■ “There are too many cash buyers (investors) and real buyers are getting
frustrated.”
■ “Buyers are looking for bargains and trying to take advantage of the tax credit.”
KB Home, Standard Pacific and MDC have the most exposure. Approximately 3% of
sales for Hovnanian, KB Home and Standard Pacific come from L.A., the most among the
large builders.