First the Los Angeles real estate boom burst; then there was a rise in the number of Los Angeles foreclosure homes and now the luxury homes of up-market areas like Newport beach and Beverly Hills have started to witness a fall in home prices. In fact, according to the April’08 report, the median sale price in Beverly Hills fell by 13% while the prices in some of the areas of Newport Beach fell by 34%.

The exclusive neighborhoods of Los Angeles have taken a hit. According to Thomas Davidoff, UC Berkley Professor, it is difficult for one cheaper market to remain cheap for too long especially when there are other markets too.

Here is a perfect example of what Los Angeles foreclosure listings have done: Bruton Smith who is a famous personality and who is also considered to be a racetrack magnate put up his stately home on sale for $12 million in Beverly Hills 90210 Code almost a year back. In February 2008, he has cut $500,000 from the proposed price. Finally in March, he was able to sell the home for $9.995 million. One of the reasons is what real estate agents term as a psychological break point and the other reasons is the availability of Los Angeles cheap homes due to rising foreclosures.

The latest news suggests that the home prices in the Los Angeles County will remain low as America is facing economic problems. According to some of the real estate agents, the $1 million market is seeing a transformation. One of the biggest problems is foreclosures, which have moved from the middle class segment to the more affluent section of the society. The crème-de-la-crème of Los Angeles County has also been hit by foreclosures and now these stately homes have become a part of the list of Los Angeles bank owned homes.