Analysis of DataQuick’s February report shows the county’s beach-close communities see slightly less pain from the current housing slump. That doesn’t mean it’s smooth seas by the ocean, housing-wise.
DataQuick identified 275 homes selling in beach cities’ ZIP codes last month, a 34% drop from a year ago. In these 17 ZIPs, last month’s median price change was down 5.8% vs. a year ago.
Compare that to other O.C. regions …
• South inland ZIPs had 391 sales, a drop of 40% from a year ago. In these 19 ZIPs, last month’s median price change was was a drop of 4.3% vs. a year ago.
• North inland ZIPs had 363 sales, a drop of 44% from a year ago. In these 23 ZIPs, last month’s median price change was was a drop of 16.9% vs. a year ago.
• Mid-county ZIPs had 329 sales, a drop of 42% from a year ago. In these 24 ZIPs, last month’s median price change was a drop of 23.3% vs. a year ago.
All told, countywide sales for February were off 40% vs. a year ago, as the O.C. median selling price fell in the past year by 16%. (To see ZIP-by-ZIP results, CLICK HERE!)
this must be a mistake- dimmy has already told
us that the “beach cities” wont go down in price
this is yet another good reason to raise rents
The OC Beach Cities will be hit almost as hard as the other areas of the market. The Coastal area of the market experienced overbought status and reached too high of prices just like the rest of the area. Much has to do with the combination of speculation, easy credit, low interest rates. The higher end market also benefited from the appreciation of the lower and mid tier Real Estate market.
NOD’s and NTS for the Coastal communities are still low but there are more than a few homeowners in those Beach Cities that are starting to struggle financially. One could classify many of the newer coastal homeowners that are now feeling the financial pain as “temporary high earners”; as a good amount of people very much profited from the bull phase of this credit bubble. The Real Estate sector boomed and as a direct consequence of the influx of much credit so did many other areas of our consumer economy.
The future will bring a substantial increase in NOD and NTS to the Coastal areas and prices further decline as there is no end in sight. We will most likely also experience less SFR & Condo building permits being issued. More listings will hit the market and sales volume will continue to be very low so that the median price statistic can continue to “sugarcoat” this downturn.
try to avoid acronyms - what is a NOD and NTS?
Let us try to be straight and simple here.
The American economy is getting hammered. The cause is the fact that we in America are spending more than we make. It is a debt problem. The debt problem was caused by a tax structure and a trade policy. And all of this was heightened by a blind eye to shadey practices of Wall Street and the real estate industry with a weak and sometimes shadey press.
There is a summary of the problem.
Now this blog could do something to discuss the problem in a clear fashion or it could do what it is doing now. A highly disorganized and slightly shadey operation.
Look my claiming that one person is using many names for his many unknown purposes is not a grand conspiracy. One person does not a conspiracy make.
But there is a mountain of evidence that one person is using well over thirty names. That is not a conspiracy of thirty people. That is one person with a lot of email ids.
If you check the record and compare styles and wording and post times you have ample evidence of this occuring.
Everyone sees it but Mr. Lanser. Now if Mr. Lanser were in someway helping him for the purpose unknown and the register was helping Mr Lanser then that would be a conspiracy. That is something for which there is well almost zero evidence.
The only “evidence” is the evidence in thousands of posts that one person is using many names. And I only assume that Mr. Lasner is no fool. Thus I conclude that Mr. Lanser approves of this and that when he says there is no evidence of a conspiracy he is in a strange way giving evidence. The conspiracy is that one person posts with many names and Mr. Lanser likes it to make his blog look more popular. Wow what a deep conspiracy of one.
What is the DTI (debt to income) ratio that is now being accepted by the banks for people with good credit. Isn’t .45? Maybe I am wrong.
Someone please inform me and then tell me what salary you need to qualify for a million dollar loan which would be the loan on say 80%LTV(loan to value) of say a 1.3 million dollar house which is a not so grand beach home. Also assume a couple Beamers in the drive way and maybe student loans and god forbid credit card debt.
Add chickenlittle to the group.
Pathetic — attempting to emulate the speech patterns of an ethnic group in such a childish way, to create a “new” poster. Wrong to allow this.
A little evidence of the deception (not conspiracy Mr. Lanser). It is about 10:30. And though there have been 30 names on the suspected list and they are all getting their beauty sleep. You see it is just a coincidence that none of the thirty to fifty is up at this late hour. But when one wakes up mysteriously (not conspirioulsy) they will all come out. Now I could explain this as there being one person but that is too easy. No I think it is that bears are very worried by the Nikkei dropping lower than the Dow but that bulls sleep well getting ready to greet the day with a healthy happy attitude.
Brian, sound them out guy.
NOD = notice of default. NTS = notice of trustee sale.
I agree - some of these Internet shortcuts take a little getting used to, or figuring out. WIUWT? ( what is up with that? LOL.)
HSCYG, LAS. GAL
There are some price drops in beach areas, but there is also a larger population of people who would like to live in coastal regions who see even modest price drops as a great opportunity, providing stronger support for prices.
too much debt , that sums it up. Can’t afford it, buy it anyway.
OC & LA BEACH ZIPS HIT LEAST:
Reason:
No Huge developments of new unit housing…..Bottom line.
O…… wait…… San Clemente…TELEGA…..and just look at that mess !!!
Note to self:
Never stand in line… or…. get in a bidding war…. for a new OC house…
Wait til that spec owner goes belly up == BK….. and buy it for 40% off !!
As always, median or even mean/average price doesn’t tell the whole story. Check out these MLS numbers for resales Laguna Beach, Newport Beach, Newport Coast and Corona Del Mar for the Jan. 1 through Feb 28/29 time period:
For properties priced up to $5,000,000 (94% of homes sold):
1/1/08 to 2/29/08 $1,843,375 avg / 96 sales / $802 avg per sf
1/1/07 t o 2/28/07 $1,740,533 avg / 163 sales /$943 avg per sf
Avg price per sf down 15% vs. 2007 ; volume down 43%
For all properties(including those over $5,000,000):
1/1/08 to 2/29/08 $2,306,811 / 102 sales / $926 avg per sf
1/1/07 to 2/28/07 $2,029449 / 169 sales / $1,038 avg per sf
Avg price per sf down 11% vs 2007; volume down 40%
Median price may not be down much, but it looks like avg price per sf is down a little.
And check out above what just a few sales do to the averages. During Jan-Feb 2008 6 sales out of 102 total increased the avg price per sf about 13%.
But you better not be in a hurry to sell in the beach areas. Right now there are about 1,186 residential properties for sale in the MLS and approx. 50 to 60 per month are selling which means that there is an approx. 20 to 23 month supply of homes available for sale.
OC / LA BEACH CITIES TAKE 5% HIT:
I got a song for all you in blog land…it is called the INFLATION song…..
You all will love to hate it….
RANTS:
INFLATION Vs DEFLATION IN 2008
So far inflation is kicking deflations as@@
EXAMPLE:
$4.00 Gas
$1,000.00 Gold
$21.00 Silver
Commodities sky rocketing
Rents rising.
So here it goes one more time…
RAISING RENTS WE will GO
RAISING RENTS WE will GO
HI HO A MARRY O
THE DOLLAR AT AN ALL TIME LOW
THE DOLLAR AT AN ALL TIME LOW
THE DOLLAR AT AN ALL TIME LOW
HI HO A MARRY O
TRADE THE DOLLAR IN FOR THE PESO !!
ahahahahhahahahahahahahahahahahahahahahahahahahahhaha
Ribspliter
NationalBubble, you’re sort of a nutjob. Nobody thinks a crazy lady burning down her Michigan home is going to become a trend here in Orange County. Aren’t you embarassed? You look foolish again.
It’s funny how some of the high money makers in the county this this economy slowdown and real estate crash won’t affect them. Even if you are a wealthy business owner, if your clients can no longer afford to buy as much of your product or service, guess what, you make less money. If the middle class and poor people are being hammered by high gas and food prices, they have less money to spend everywhere else in the economy. Just about every company and business is being affected. I assume this will trickly down to the beach communities some day. There are plenty of rich people who can really afford to live there and there were a lot of people who made enough only because of the boom of the past few years. When their savings runs out, I’m assuming that they’ll have to sell and values will come down a bit at the beach too.
It’s all old news. DataSlow reports on March 13 CLOSINGS for February–the median closing date’s already a month old, but that median date probably opened escrow about 45 days before that, so we’re back to the first of the year.
At least our beloved Register Real Estate writers do a better job of pointing that out than the big boys up the 5.
We’ve seen marked increases in sales and what may be increases in price over the last 45 days, which will start showing up a month from now in DataSlow’s numbers. I still think we won’t be through this for several years, but we do see this spring as an opportunity for those who really need to sell.
More details on our blog, SoCalRealEstateNews.wordpress.com.
RealtorDaveE, your name says it all. Do you actually believe what you say? Do you think anyone here believes you when you spurt out that sales increased and possibly prices too. You are why realtors, as of late, have been getting a bad name. Don’t make those type of statements unless you provide data to back up what we all KNOW is totally BS.
Thanks for the update, RealtorDaveE. Good luck to you!
I don’t know about RealtorDaves predictions, but he is right about the curiously named DataQuick. The data is always at least 45 days old. They take their records from closings (docs recorded). That is the last event in a 30 to 60 day process. So that part of it is absolutely correct. I’ve explained this process here before, but suffice to say that the data/info we receive is not always accurate or timely.
RealtorDave:
I could not agree with this comment more:
“I still think we won’t be through this for several years, but we do see this spring as an opportunity for those who really need to sell.”
Now is definitely the time to sale…. it’s a great opportunity to give the bag to a knife catcher and get out with 20% more equity than you will have 2 years from now.
Given the headline of this article and that it was posted yesterday, I was positive there would be a posting from Jimmy by now.
Realtordave says:
“We’ve seen marked increases in sales”
I have to admit, I do believe him. I have a couple of friends who actually have bought (up) in homes recently! granted, neither of them have sold the previous home yet- and I know of 3 homes coming onto the market within the next 3 months. It’s always “we are fixing up the house to sell- we HAVE to make this amount of money on it….” and they actually believe they will get this price.
When you ask them why they are buying right now, it’s always the same thing: “Homes in NB,CDM don’t ever get this low” “this is a great deal” but the reality is that they will go lower.
so, although the market has maybe picked up in these areas, it just can’t be prolonged. Most people don’t make the money to qualify for these homes, even the ones selling their homes in the near future.
These people are in total denial that the forcefield around NB area hasn’t been penetrated. It just takes longer for these people to run their savings down.
This just in according to Bushy-”The Check is in the mail”.
To see where the market is just take a look at any real estate web site.
Like ziprealty or redfin.
Now maybe it is isolated to certain markets, but for the area and type of home I am looking at prices are down and keep going down.
Sales are important, but I think the price per square foot of the homes that are actually for sale would be much more important.
Actually I think the data is slow….so if this info is mostly for home that sold in Jan. than the median will be even lower.
I think I have only seen one price increase on ziprealty since I have been watching it for almost a year. That home is still waiting to be sold.
The economy is getting worse and worse on a daily basis. More people are using their credit card to pay their bills. When that cash flow runs out…watch out.
Realtors were telling me the same types of things last year that the market was picking up and don’t miss out! I know it usually comes back in the spring, but I’m not sure this spring will be much better. Definitely better than the winter, but I’m doubtful it will be better than last spring.
The data will tell us for sure!
Say I’m a bank and I make loans for buying houses…lately, the loans on my books have been going bad (i.e. not paying) and since I borrow against those loans I can’t keep up my bond rating…now, joe schmo comes into my office saying he wants to buy a 3-2 in Irvine for 700K, he has only 10K for a DP and makes a little over 100K gross as a financial planner (he’s young mid-30s) and needs to sell his 2/2 condo which he bought in 03 for asking price of 500K to cover the debt (refi’d for upgrades and two new cars and a vacation). Do you think this is a good loan to give out? Should a bank that already has risky loans take on another loan with collateral that is declining? This is just an example of what I think banks are thinking…and the housing market won’t turn until the banks think the collateral (house) will be worth more than the loan hence the higher DPs needed. It’s rocket science.
That should read NOT rocket science.
CPI is down in February
Wages did not keep up with inflation last year.
Bear Stearns needing a bailout this morning.
Sure doesn’t seem like inflation.
gas is not 4 dollars it is 3.50
I predict a lower median and I have a hunch I will be right.
Ninety-five percent of all loans are not in default.
you are right thoughtful, the banks feel no pain now, bankers all of the world can attest to that……
what’s another 80/20 loan……… come on banks, start booking some more of those !
let’s get the party started again ! no pain no gain !
Gas $4.00 for my car == 91 with Techron
Gas $3.50 for 85 Ugo == 87 with Arco
ScottA,
what do you think about the 60% LTV requirements for 2nd properties? you never answered me
pdu jake.
get the hell out of this blog.
you two paranoid are degrading this blog right now.
Mav’ster:
Check out my answer to that on the other board…
Chicken Little:
They think we are the same person !! lol
Did you see my question to you on the other board regarding the PMC?
Affordability is bad along the Coast, just like it is in other areas. I fully understand that the Coast, due to limited supply, comes at a cost, but that cost also has its limits. Just like the advantages of living near the cost have their limits.
It’s easy said that we are now at the bottom or that we should see the Coastal home prices bottoming out with another 10% maximum of further deprecation. We can easily become brainwashed from the prices we had seen in the period from 2004-2007. It’s “normal” from a financial psychological perspective to believe that something that gained value cannot depreciate by a substantial amount, especially after a bull market. But let’s get back to affordability.
A $700,000 Loan fixed at 30 years @ 5.5% = $3,975
A $700,000 Loan fixed at 30 years @ 6.0% = $4,197
A $700,000 Loan fixed at 30 years @ 7.0% = $4,657
A $700,000 Loan fixed at 30 years @ 8.0% = $5,136
A $700,000 Loan fixed at 30 years @ 8.5% = $5,382
With our Country at a negative savings rate (= average person has more debt than savings), how many people have a secure enough job in today’s economy to commit to those monthly home payments? We don’t need to remind anybody that our economy is going through major changes as we finally have to feel the consequences of the credit bubble that was made possible by creating money out of thin air by the Fed…
How many can not only afford those payments at the given interest rates but on top of that have a low enough “Debt to Income Ratio” to qualify for the loan products that are available today.
And how many of those that are left have the min 10% down payment required to make the purchase possible.
Now I’m not saying that those people aren’t around as I know they do exist. But those that value their money, live within their means and are responsible and committed enough to save a portion of their earnings are more likely understand the fundamentals of what is required to build a “nest egg”.
It’s a wild educated guess here but I’d say that that this category of qualified future homeowners will not settle for a decent overpriced stucco box that is overpriced. I further guess that many that fall within that category understand that by buying near the top of the Real Estate (bubble) market they would not only grossly overpay and limit the amount of Real Estate they could have purchased just year(s) down the road; but by doing so they would also “bail out” and help the seller that not only wants to sell their overpriced property but with it would also receive a “wild card” out of the financial commitment they put themselves into when they purchased the home at too high of a value in 2004-2007. Or when they sucked out the equity through several refinances…
And for the Jimmy’s that say to buy now because of inflation and because rates are low. With an increase in rates, home prices will come down.
RealtorDave is right about Data”Quick”, slow and useless from a practical view. The median is a worthless figure, except for statistical purposes. The only way to get the most up to date data is the MLS for agents. Prices are stablizing in the most foreclosed area i.e. Garden Grove, Anaheim. Foreclosures in general are being gobbled, with a few exceptions. Short sales skew the list price and make it worst to see the real picture. Bank’s REO would be listed at bottom prices to have it bid up by multiple offers, i.e from 373k to 405k closing sale. In summary, if you dont have MLS, you re just feeling arround in the dark.
I would argue that prices are in fact not stablizing as homes continue to stay on the market. We just had the largest number of foreclosures in history in Q4 and those house are headed for the market. So don’t count you chickens. All the RE BS in the world ain’t stopping this train reck. Oh, btw the RE disaster is front page news today so there is no hiding it.
The foreclosures coming onto the market could be priced HIGHER than their recent list prices. I am sure many, if not most, of these homes were already listed, possibly at imaginary short sale prices which will soon be raised to what the banks are really looking for. See, both sides can speculate. It’s easy!
allright ! a good old fashioned mexican standoff !
I wonder how the banks stock prices and liquidity positions factor in
nothing like a good bluff, that’ll be fun to watch
A recession is good for the housing market. The Fed and Washington hands will be forced to deal directly with the housing issue..i.e. bailoutS! yes, the plural form.
OC BEACH ZIPS HIT LEAST BY SLUMP:
Invest80:
Good post…
I agree with you regarding the relationship between rates & prices
Rates go up..
Prices come down
CDM Mom:
Yes prices will come down some in the next couple of years however..
People who have owned by the beach have been their since the dawn of time.
Example:
When I bought into the Belmont shore area
I started meeting all my neighbors and I was the youngest by 20 years !
These people were older than dirt…& most did not work any more…
Many of them had wised up to the CA income property game=retal income
My one neighbor has a 50 ft yacht “amazing graze” in the harbor
Spends his days drinking wine and sailing around the bay
My other neighbor has the same kind of car as James dean died in !!
1956 Porsche Spyder picked it up 20 years ago for 250K in bad condition
Now fully restored ( and paid for ) appraised at $1,200,000.00
You angry bears are kidding your selves that these peoples saving..
Or “Well” is going to run dry…..
That is new money in Ladera Ranch or Telega
nvest,
Most of the people who would be buyung a $700-$800k property are move up buyers with 50% or more down and good incomes. There are plenty of those around. The real question is how many first timers can afford a $300k starter home or condo. With 5% dn, the payment on 285k @ 6% is 1709. Plus tx, ins, possible Assoc dues we’re in the $2300 a month range. I think there are such condos and such people. Call me crazy, but that’s what I base my non-armageddon stance on. Plenty of move upers and plenty of first timers. They’re all just waiting for thing to stablize.
So thruthi, you’re telling me that as strategy the banks will price higher than the comps to move houses in a time of historically low sales pace? So, what you saying is, the banks would rather have the homes on their books for months while the prices fall only to take a bigger loss? I guess your not in banking then.
Ah…the old fence sitters and stabilization angle…if the prices hold at unaffordable levels then how prey tell do people pay their mortgages? Has it occured to you, VOR, that the reason sales are way off is really about fully indexed mortgages and downpayments? Also, in light of move up equity, how much of that equity has vanished now that we are back to 04 prices? Your theory of “there are plenty of buyers” “waiting for stability” is eroded by facts…prices falling, lending tightening, rates reseting, foreclosures high, bank REO/short sales increasingly taking up market share..Or does none of that matter. Oh, then there’s the problem of job stability.
# Thoughtful Says:
“The foreclosures coming onto the market could be priced HIGHER than their recent list prices. I am sure many, if not most, of these homes were already listed, possibly at imaginary short sale prices which will soon be raised to what the banks are really looking for.”
–
You can’t be serious.
Got to assume that you know banks aren’t in the RE business, and assume you understand if those properties didn’t sell at at their “recent list prices” that most folks aren’t standing by waiting to buy them at their new, higher listed price.
Even the banks know this.
My guess?
You couldn’t be that foolish, so you post to create controversy.
Why?
Some here have theories, but we’ll probably never know.
Eat It,
I think you have fallen prey to the press. Yes, all those things are true to one extent or another. But there are many more people who are long time owners and still have substantial equity. Just because there are 10 times as many foreclosures as there were 2 years ago doesn’t mean most property is in foreclosure. I don’t know what the OC percentage is, but I’d guess less than 20%. Prices falling, rate resetting, short sales, etc. Those events will come back down to reasonable levels at some point. Stablization. There will be a lot of demand. Owning a home is still most peoples dream. It’s a fairly strong force on the market.
pdu, your inexperience shows.
Yes, but owning a knife or a bag is not one of my dreams…affordability here we come whether you like it or not. (I’m betting not.)
Oh, and should we then have two separate comps for neighborhoods..ones that include forclosures and ones that don’t so that as a seller, who is not in distress, I can say..but that comp was a foreclosure sale and doesn’t count toward me.
Get Real,
Get real.
Maybe an appraiser in the group can answer that one. I don’t know. There may be some provision for that in the “appraisers code”.
Scott A:
The house we rent was bought in 95 for 230,000. It was built in 70’s, and was not bulldozed and built new. In fact, little has been done in restoration. Zillow (I know…taken with a grain of salt) says it is worth 2,900,000. There is no way these homes have gone up in value that much. It is not realistic. It isn’t worth half that much. Wait and see. Most of the people I know that live in the newer neighborhoods near us (bonita canyon and 1 ford road) aren’t old and haven’t owned for that long. It’s just not realistic.
pdu, au contraire! Those (shortsale) listings ARE getting plenty of offers - offers that the banks are refusing! If you take a close look at comps, many sales are happening at $700,000, $800,000, $900,000, $1,00000 and so on……. Your characterization of what’s closing is out of touch with reality. I guess you think you can just make up crap on the spot and we’ll all go along for the ride?
Get Real says: “In summary, if you dont have MLS, you re just feeling arround in the dark.”
That may have been true in the old days, but anyone can use http://www.redfin.com to see MLS listings now, and it’s free. They recently added a feature allowing you to view every price reduction since the original list price. Also, they import data from http://www.Zillow.com regarding sales history so you can deduct the situation of the current owner, such as length of ownership and equity they presumably have.
I’m not affiliated with them, but believe in the purpose of their company which is empowering buyers and sidestepping the RE Industrial Complex. I’ll use their service as a buyer in 2010 when I make my move.
CDM Mom:
I am sure you can always find “young people” in beach areas….
Not realy NOT the point….
Say the CDM rental 70’s prop… was bought
1995 for $230,000
2008 for $1,250,000
So that is a $1,500,000 off that Zillow…..to make you feel good.
If that owner did not use the prop for an ATM
If that owner put the prop on Bi-Weekly Equity Eccellerator Program
He only owes about $100,000. on that old 70’s prop
He is cash flow positive off your rental income and does not have to remodle.
Heres my point:
My Belmont Props == Structures are only worth $150k !!
My Belmont Props == LAND is worth $1,000,000.00
New owner’s come in… Buy’s that house….will Bulldoze it and rebuild.
ADD a 2nd Story === Sq Ft age & now it is worth $3,000,000.00
It happens everyday at the beach areas.
You should have seen all the bins out in front of my street in the hayday
I was one of them
I guess “many” could be 3 or 4 sales by thruthi’s definition. My characterization of what’s going on is that I have seen very large prices reduction.. 50K at time somestime biweekly. This is AV mind you so not BP or SA or somewhere where home prices “don’t matter” according to the bulls. Don’t believe me…go look for yourself.
# Thoughtful Says:
pdu, au contraire! Those (shortsale) listings ARE getting plenty of offers - offers that the banks are refusing! If you take a close look at comps, many sales are happening at $700,000, $800,000, $900,000, $1,00000 and so on……. Your characterization of what’s closing is out of touch with reality. I guess you think you can just make up crap on the spot and we’ll all go along for the ride?
—
You are borderline demented …. and the borderline is questionable.
I made NO comment or NO implication as to “what’s closing” so the only one “out of touch with reality” is YOU.
So go find a mirror and take a look at who is making up crap.
You need help.
VoiceofReason Says:
March 14th, 2008 at 1:23 pm
nvest,
Most of the people who would be buyung a $700-$800k property are move up buyers with 50% or more down and good incomes. There are plenty of those around. The real question is how many first timers can afford a $300k starter home or condo. With 5% dn, the payment on 285k @ 6% is 1709. Plus tx, ins, possible Assoc dues we’re in the $2300 a month range. I think there are such condos and such people. Call me crazy, but that’s what I base my non-armageddon stance on. Plenty of move upers and plenty of first timers. They’re all just waiting for thing to stablize.
VOR, The bears only use examples that have a “Median income” family not being able to buy a “Median home”. They don’t like to deal with realistic examples like the one you presented.
This continues to be an amazing story. The homes in wealthy beach communities, which went up the most by far, have dropped very little. In my CdM area, which is a stone throw from the beach, it is difficult to detect any price drop in single family homes. Globalization has enrichened the well educated and has left everyone else in big trouble. Your only solution is advanced education. I encourage all to get into a PhD program ASAP.
Fair enough, pdu, I’ll explain. You imply that buyers balked at low short sale prices. I say those prices were not approved by the banks (yes some dogs didn’t even get offers). So, what has closed would, by definition, be higher than some of these short sale scenarios. Maybe I confused you with someone else, but I thought you were saying that recent comps would dictate yet lower prices for these former short sale properties. Since I think what’s closing include some higher priced properties therein lies the disconnect. Sorry.
voiceofreason,
“Most of the people who would be buyung a $700-$800k property are move up buyers with 50% or more down and good incomes.”
I agree that will have a more difficult time getting into “entry level” type of housing. But what will this, in combination with foreclosures, a dessesion, high inflation, etc. do to those home values? I have access to plenty of data and I don’t agree with you on the point that many have 50% or more down payment for those $750,000+ homes through home equity of their current home.
It’s sad how irresponsible many homeowners were and it amazes me how individuals could suck out so much equity in order to live beyond their means. I see plenty of data where $250,000 was sucked out of the home atm and they now face foreclosure or can no longer “move up” as a consequence..
only time will tell…
Let me qualify that last post. I’m not saying it’s time to buy for speculative reasons, and I certainly wouldn’t be trying to “flip” right now unless I got an extraordinarily good buy (and that does happen in market’s like this). I’m certainly not saying we’ve hit bottom.
I’m saying nobody really knows, because we’ve never seen anything like this. Best example–I think the Fed caught just about everybody by surprise this week with their creative moves to enhance liquidity. I don’t think anybody saw that coming.
If some lenders were smart, they’d just shave $100,000 off the loan if needed to avoid foreclosure. They’d certainly drop interest rates or eliminate the obscene resets they have coming. (Of course, if they were smart, they wouldn’t have made 100% loans to subprime borrowers without income verifications when the market was obviously peaking, but maybe they can learn. . . .)
I’m saying nobody knows. So if you’ve always dreamed of a home on a lake in Lake Forest & find one that works for you with 30 year fixed financing, & if you’ve got a stable job & aren’t moving, why not make an offer & start living your dream? If it works, maybe you should let your life determine decisions, not speculation. Here’s a novel thought: think of it as a home, not a piggy bank!
Ditto to sellers. Forget what your neighbor got 2 years ago. Prices on your next home are down too, and so are interest rates. Maybe you can’t get the triple garage, but maybe you never would. If everything else works, give it a shot. You’re not getting any younger!
I don’t say this because I want to make a sale–you’re not even my client! I say this because I’ve watched the market and buyers and sellers for 30 years, and I see some unique opportunities right now that may not last. And I see too many people making decisions based on ego or gambling in stead of getting on with their lives.
nvest80…..
when this all said and done…..
the only thing we will have to show for it is:
the TV show the Real Housewives of Orange County…….
wow, what a waste.
one of the guys from that show is already in foreclosure
the fed has just taken mortgages- that no one else
will touch with a ten foot pole- as collateral- in exchange for
treasuries- to keep the entire credit system from imploding
truthi- so real estate in orange county always goes up
but freddie and fannies situation is bleak-to say the least-
their stocks have lost over 30% of their value in less than
6 months-
truthi- so real estate in orange county is different everyone
wants to live here
the governement told us that the “sub-prime” problem was
contained- yet 6 months later the fed is drastically slashing
interest rates in a manner that theyve never done before-
in the face of skyrocketing inflation in oil gas food and
uttilities- in a panic driven attempt to stop the housing
market from totally imploding
truthi- so orange county will be immune from any downturn
one of our largest and most influential investment banks-
bear stearns- is on the verge of bankruptcy- from its
vast exposure to sub-prime loans
truthi- so why should I care about that I live
in orange county and theyre clear back in new york city
but citi-bank- another one of the biggest investment
banks in the world- needed billions in cash
infusions from foreign “sovereign funds” to avoid
going bankrupt
truthi- why do you keep bringing up these irrelevant facts-
none of which have anything top do with my condo
thanks oh real men of genius now I know
how we got into this mess
Eric,
I have a feeling you will not like what we are waiting for when it arrives.
Rants ( related to B-Rant? ) asked Sighburbirdbrain ( whoever THAT is.) Does he ever read or watch anything that happens outside of OC?
While I do, I don’t give that National or Worldly news as much credence as some people on this blog. ( Does the name NationalBubble ring a familiar note? )
Here are some excellent reasons why I don’t: ( Courtesy of the U.S. Bureau of Labor, California Employment Development Department, U.S. 2006 Census, DataQuick, Realfacts, California Department of Finance, Southern California Governments, Forbes.)
“Defaults and Foreclosures:
The media is great at announcing record foreclosures but, as the year ( 2007.) came to an end, the average monthly defaults were at 1,149; lenders only foreclosed on 347 of those homes. Homeowners in default emerge successfully 70% of the time by either refinancing their home or successfully selling it. Approximately 69% of the foreclosures were under $500,000 and almost 94% are under $750,000. The numbers may seem large but, when you realize that Orange County has 634,000 homeowners, the percentages become very, very small.
Incomes and Wealth:
Orange County has a median income of approximately $75,000, which is the 6th highest in the State. This is amazing when you consider how many workers earned less than $36,000 last year. The median income is really much higher, because more than 12% comes from investments, interest and capital gains - not wages and salary!
Merrill Lynch has 6 offices in Orange County with $24.2 billion under management. There are 42,120 families with $1 million to invest (excluding primary residences), and 11% of households have a net worth exceeding $1 million dollars. Orange County is home to 8 billionaires; ranks #3 in the U.S. with 116,517 millionaires; 67,729 earn more than $200,000; and 30% of households earn in excess of $100,000. In Orange County, 14% of our market is 2nd homes or income properties, and 22% of our properties have no loans!
Population and Employment:
Orange County’s population only grew by 23,000 in the past 12 months, but still ranks 2nd in the state with a total population of 3,098,000. This county is a net in-migration county; 16% of immigrants are Asian and 33% are Hispanic. The California Department of Finance predicts our population will grow to 4 million by 2050.
The counties work force has 1.57 million workers and ranks 5th in the NATION in the total number of jobs. The county’s unemployment rate is 4.3%, ranking it the 3rd lowest in the State. Income growth for ‘07 was 4.5%.
Housing and Rents:
Orange County is one of the most densely populated counties in the United States. Builders are phasing out the single family detached home, with very few being built after 2010. Planners are developing more clustered housing and vertical unit developments. This dynamic county ranks 3rd in the U.S. for apartments (due to the high median price of homes) and retail growth (solid economic prospects). OC ranks 4th in the U.S. in rental rate increases at 6.4%, due to strong demand verified by the high occupancy rate of 95.5%.
Source: U.S. Bureau of Labor, California Employment Development Department, U.S. 2006 Census, DataQuick, Realfacts, California Department of Finance, Southern California Governments, Forbes”
After living here for 40 years, I have come to know OC as God’s Country, a totally unique area, that people have continued to flock to, just like me, and that phenomenon is NOT going to change anytime soon. You want to talk about Detroit, you’re talking to the wrong person. I’ll opt for relevance every time.
SavingIn LA had these price per square foot ( PPSF ) statistics from DQ ( DataQuick.):
2006 $/SqFt
Jun 444
Jul 433
Sep 435
Nov 420
2007
Jan 427
Feb 420
Mar 418
April 424
May 415
Jun 419
Jul 413
Aug 404
Sep 379
Oct 381
Nov 369
Dec 353
2008
Jan 345
Feb 335
So looks like prices have dropped from $444 to $335 per sqft - which calculates out to a 25% drop in prices since June 2006.
Thanks for corroborating my median price theory.
In another thread I have given a plausible reason as to why the median price dropped substantially all of a sudden. Your PPSF post above illustrates my point quite dramatically. Until Feb. of 07, PPSF prices declined ever so slightly. In Mar. 07 the sub-prime mess hit and caused a brief lull in RE activity. Even so, for the next 5 months, your PPSF prices still only nudged down slightly.
It wasn’t until Sept. 07, when the jumbo loans debacle hit, that RE activity in the higher price ranges - $500k and up, practically died for a couple of months. From Sept. through Dec. 07, the vast majority of houses closing escrow ( thereby being reported by DQ.) were lower priced, ergo the deceptive, lower median AND PPSF figures.
The jumbo loan situation has been worked through now, with MANY more higher priced sales. The startling result ( startling to the touchdown dancing bears, celebrating the lower “illusionary” figures.) is going to be new higher median prices AND PPSF over the next month or two, resulting from a more balanced picture of overall sales.
It will be interesting to see the new HIGHER DQ figures come the first week of April and even more in the first week of May. I can’t wait to rub some bearish snout in the figures.