Orange County’s central core is being pounded by the housing slowdown. DataQuick figures for the 22 business days ended Sept. 21 show a 60 percent drop in home sales in a year for a mid-county region including Santa Ana, Orange, Westminster, Garden Grove and Anaheim, minus the 92808 ZIP of Anaheim Hills. The rest of the county saw a 28 percent drop in sales.
This region, which holds some of the county’s most affordable housing, was 25 percent of home sales in the year ago period. Currently, the county core’s share is just 15 percent. Sales in this region were previously boosted by subprime and other unorthodox lenders who lent to riskier borrowers. Such loans are nearly impossible to obtain today.
Price have suffered, too, as 20 of the 23 ZIPs in the core have seen year-to-year price drops. All told, weighing the yearly price changes by sales volume, the typical price drop in this region was 13 percent from September ‘06.
Here’s a look at the sales drop, with city regions defined by ZIP code (not city boundries,) for the period ended Sept. 21 …
| Region | Sales | Vs. ‘06 |
|---|---|---|
| Santa Ana | 79 | -76% |
| Orange | 20 | -60% |
| Westminster | 25 | -54% |
| *Anaheim (x-Hills) | 116 | -48% |
| Garden Grove | 73 | -47% |
| OC Core | 313 | -60% |
| Rest of OC | 1,747 | -28% |
*-Without 92808 Zip of Anaheim Hills
Very spooky, this is just starting it hasn’t even gotten going yet and these numbers coming out are pretty bad. To think that we are looking at a 5 year turn around should it hold fast with previous bubble dynamics….and that was with the dot.com bubble pulling us out in the late 90’s. I don’t see a new bubble to save us, and these numbers are just starting to come out in the initial slide, wow this is going to be ugly. In the immortal words of Mr. T - I predict PAIN!
The expensive homes and people with a lot of equity are all that is holding the housing market together in this county. Soon that too will take a hit when people realize they can buy three condos for the price one house.
Okay, Lansner you have gone and done it !
A red arrow pointing down.
OUCH ! That was a painful slide. But indicative of the troubling times ahead. Where’s all those bulls to try put the spin on this ?
Yeah. That’s what I thought.
Still renting. Eating my popcorn.
Maybe I will jump in at Christmastime.
Christmastime 2010. I’m not stupid.
The credit crisis seems to cool down but getting ready for the roof to fall. The housing market in Orange County and California have a long way to go. Too few buyers facing too many homes and house price continues to fall.
Many house buyers are finding out that their homes are NOT worth what they thought they were very soon. A false appraisal to inflate house value and housing market speculation in the past 6 years is a financial cluster bomb waiting to explode.
More ARM loan resets will kick mortgage payments much higher for homebuyers, which will push foreclosure rates even higher as people simply walk away from houses they can not afford.
The worst has yet to come. If you thought that it could not get any worse, think again. The market may appear to be stabilising, but there is a plethora of bad loans yet to emerge.
Who said OC is shield from this slow down? Hahaha!
Many of these are concluding a 30+ day escrow, which makes this largely a trailing indicator. I would bet the pending sale data (at least the ones that will fund) are even worse.
I bought back in early 2000. Financed under a 30 year fixed. Have lot’s of equity and did not get a HELOC to buy nifty toys.
Why? Because my house is a place where my family lives and not something to gamble with. I do not look at it as a short or mid term investment or as a piggy bank. Unfortunately, many others did and are now feeling the pain.
Did I lose some equit already, absolutely. Does it bother me? Not at all. I actually want the values to go down so some of my other family members can buy a home and live near us and I want to buy a ‘rental’ property on the cheap. That second property will be my investment, NEVER my home.
Headlines are getting colorful. I’d like to suggest the next two: “Home sales experience a devastating defeat” or “North County eviscerated by credit crunch.”
No worry, the government will bail me out, because I’m rich.
Break out the razor blades!!!
Where is Johson? Can someone check the emergency room?
Pat V-
How is that “taco stand” doing? The TIC is going down. :)
There’s never been a better time to buy or sell a home.
The stock market is over 14,000 today and our stock is just above 20.
Who’s complaining?
Countrywide is here for you.
All the talking heads on television agree with us.
A 6 point drop in the median price means nothing.
All we are doing is meeting market demand.
Don’t pay any attention to people who realize that all the investment propping up the stock market seems to be in foreign countries.
This can only mean good things for you, and your investment with Countrywide. (Even though it’s in America.)
Invest in Countrywide now and we may be able to help you invest in foreign countries. Through some fund we create on the DOW that looks like it’s only investing in America. It’s all just numbers and digits anyways, right?
And, like we’ve said before, you can’t lose with Countrywide.
Anything you lose will be taken, by Barney Frank and Chris Dodd, from the American Taxpayer, with NO MORAL HAZARD.
Countrywide can help.
The credit crisis seems to cool down but getting ready for the roof to fall. The housing market in Orange County and California have a long way to go. Orange County and California markets are projected to post the biggest price drops in the coming years.
Countrywide, Lenders, and Investors continues to suffer a record number of foreclosures as early 2008. They have to take a huge writedowns before the end of 2007 and estimate to spread out the rest for the following 3 years.
Hey Nvest I have a lot of loose money and am interested in putting some money into foreign currency funds but have never done so.
Can you offer a rookie some advice?
Feel free to email me at savinginla@yahoo.com
Busy as ever since I got a job with a “real” lender. Working in the South Central area now. No longer working independent. There is no money in it, unless you are willing to commit fraud.
If you guys think its bad here, take a look at So. Central and North Long beach. They are getting crushed! When will it end?
I stand firm on my prediction that all areas of So. Cal will reach a bottom when they hit mid 2003 prices. Give or take 10% on either end. For those waiting on the sidelines, good news!
You can buy a 2 bedroom Dana Point condo for 319k today. Its an REO from 2006 when it sold for 460k. You can also buy an SFR is Mission Viejo for 472k. Thats also an REO. It sold in the 6’s not long ago. Inventory is real high and there are no borrowers who qualify under the new rules. This thing gets MUCH worse before it gets better.
Yea, it does pay to look at fundamentals and not chase a bunch of broke dopes who took out “fantasy” loans.
Look at it this way. If I give you $100 to buy a candy bar, and all you have to do is pay me 10 cents a day for many years, does that make the candy bar worth $100? The answer is NO. But thats what people thought was the case with housing. Poor saps. They do not understand the concept of utility and cost. To their detriment.
Hey Jon, I’ve been writing on this blog since the beginning. Give me a crystal ball and put me on a pedistal:
I predict prices will botton at mid 2003 levels in the next 3 years. Will stay flat for 3-5 after that. And then they may rise again, just over 2-4% above inflation. At least until the next bull run brought about by something we cannot yet fathom. Maybe it will be free money falling from the sky. This country is so dependent on the idiot consumer, anything goes.
have been watching this blog over since early this year.
since orange county is ground zero for subprime companies and i had visited the area several times since 2003 , i felt like this site would be a good predictor of national trends (good or bad) in real estate.
based on what i was reading on this site as early as march of this year, i warned my clients to sell, sell, sell as soon as possible since things may get worse.
sure enough, my predictions have come true. some condos in nearby myrtle beach, south carolina are currently selling for 50% of their sales price in 2005.
keep up the good work!
[...] from DataQuick, which shows that for 22 business days ended Sept. 21 the mid-couty region endured a 60 percent drop in home sales. That’s a region including Santa Ana, Orange, Westminster, Garden Grove and Anaheim — [...]
OC Appraiser, if you look at the long term growth in home prices, mid-2003 levels are way above trend. Based on this, I think prices have plenty of room to drop well below 2003 levels. We’ll see.
OC APPRAISER- great post dont stay away so long
I agree that mid 2003 prices are pretty close to a good value. Or at least good enough for a primary residence. They’re probably not low enough for investors, but 160-200x rent is good enough for me since I’m not going to rent it out. My personal entry point is pretty close to those kinds of numbers.
eprobert,
I am curious: “2003 prices” is not exactly something that is easily defined. Neither is “market rent”, since rents vary widely.
What do you suppose a fair price per sq. ft. on a suitable property would be for you - and how big of a property would that be?
Please don’t be offended by the question, I’d just like to get an idea of what this means to you.
I had to buy in North OC in 2000.Nothing in South county SFR was under 300kat the time. I bought a house I could barely afford then, but we had a fixed rate mortgage.
Luckily we got out in early 2006 when the market was stalling out. We now have 2 houses in Eastern WA.
We couldn’t afford to move to a better neighborhood in South county. But we didn’t refi and take money out so I could drive a BMW or a Porshche.
Houses aren’t at pre 2000 levels or I would come back and live in San Clemente. The condo I rented in SanClemente had an ocean view and are still sitting in the 500k-600k range. They were way under 200k in 1998.
How can you feel bad because people didn’t read their mortgage docs? They’re driving around 40-50k cars and saying poor me, Someone else is responsible for their poor decisions? I think not.
Poor people make poor choices. Just in Orange County, they’re driving nicer cars and living in apartments after the bank puts the note on their door.
By the way, the people that bought our house for 625k had 110% financing, had an adjustable first and a 7% adjustable second. They also are driving a BMW with a $500 monthly payment. They are also losing the house already. Taxes are 9k a year and they’re not even on the good side of town. Who can afford that?