DataQuick’s freshest housing stats show a continued painfully slow O.C. market with weak pricing. For the 22 business days ended March 7, sales totaled 1,530 — a hint that March could be the seventh-straight month with less than 2,000 homes purchased. Before last August, when the credit crunch put a clamp on the market, only three months since 1988 had such slow homebuying in O.C. (Chart HERE!)
Lower house pricing doesn’t seem to be inspiring buyers yet. (ZIP-by-ZIP results HERE!) The most current countywide median ($515,000) is 20% below the peak hit in June ‘07 and April ’04’s pricing. Here’s a look at the market in the 22 business days ended March 7, by key slices …
| Slice | Price | Vs. ‘07 | Sales | Vs. ‘07 |
|---|---|---|---|---|
| House | $580,000 | -14.1% | 991 | -41.8% |
| Condo | $360,000 | -21.7% | 366 | -54.1% |
| New | $545,500 | -13.4% | 173 | -50.3% |
| All | $515,000 | -16.9% | 1,530 | -46.3% |
COMPARE: See how other O.C. home-price indexes have fared by CLICKING HERE
Jon
When you compare the R.E. market to 2007 things don’t look all that bad but wasn’t 2007 the worst year in a couple of decades. I am very glad that I didn’t listen to the R.E. propaganda machine.
No, no, no!! The median was supposed to rise this month…SighberDud told me so.
Sigh, even this backward looking data supports your theory. Median price for an SFR is indeed up, as are sales, from last month.
2008
01/07= $600,000
01/15= $595,000
01/23= $595,000
01/31= $583,250
02/07= $585,000
02/13= $575,000
02/22= $575,000
02/29= $575.000
03/07= $580,000
And this without benefit of the higher conforming loans.
I’m in the market to buy a home right now and have been searching for the last year and a half. This last month has been the biggest drop in asking prices since I’ve started looking. SFRs are finally starting in the 400Ks in the Orange/Placentia area. I’m not saying now is a good time to buy, but if you can get a great deal and can afford the payments without really stretching yourself.. then do it. Lets be honest here, OC is never going to be a cheap place to live anymore so if you are looking to buy a home, be reasonable about it. It’s a home to live in and that’s how you have to see it as. If you’re looking to make big gains, I don’t think RE is going to recover anytime soon, investment wise.
I’m working on a story for the L.A. Times on the use of California Props. 60 and 90, which allow homeowners over age 55 a one-time opportunity to transfer their existing property tax base to a new property of the same or lesser value, and I’m looking for people to interview.
In the case of Prop. 60, the law covers property within the same county. In the case of Prop. 90, although the law in theory allows homeowners to transfer their existing tax base to another California county, since each county gets to choose if they want to participate, only a few actually do so (including several in Southern California).
But for those who want to use this law to move to the counties of Riverside (i.e., Palm Springs) or San Bernardino (i.e., the High Desert) or most of the Bay Area and Central California, they’re out of luck. Consequently, I’m looking for people who would consider moving to these areas but haven’t because they don’t want their property taxes to rise exponentially.
Finally, Prop. 110 is similar to Prop. 60 but allows severely disabled people of any age to use this one-time opportunity to transfer their existing tax base within the same county, and I’ll also be including that in the story.
If you’d like to get an idea of my writing style and how I cover subjects, click here for a story I wrote on reverse mortgages last month.
Please send any potential interview subjects to me directly at psduffy@sbcglobal.net.
I agree Lakerboy, if you find a place you really like and can afford it. It might not be a bad idea to go for it.
If you can wait and have a good sense that there are a lof of places you could live. I would wait.
There is no data supporting rising prices.
I also agree that OC wont be a cheap place to live, well in some areas it should be….but it doesnt mean that it shouldnt be affordable to MOST!
I just think many here forget that OC is made up of a lot of different income levels and classes of people.
I think the end of summer is looking like the time to buy.
Some people are still in denial. Gee, I wonder who they are. Expect more downward prices in OC.
There is only a few was for the median price to rise above 515K.
1. Prices rise (not happening right now)
2. More homes sell that are valued over 515K (Very possible, with less than 1,000 existing SFR homes it is very easy for a few million priced homes to skew the #’s upward.)
3. Fewer homes sell that are under 515K.
So the main reason you wont see a rise in median is that prices are still coming down or are at least flat.
Thoughtful- How do your numbers support SighberDud’s theory? On 02/07 the median was 585k, and now exactly one month later it’s 580k. That does not support anything but a downward trend.
NationalBubble, you must work extra hard to come up with these examples of fraud. Does anyone really believe that a 30 year old beater in Fountain Valley was ever sold legitimately for $1,200,000?
Just in case any of you are sharp enough to note that my other post concering the PLUNGE in LIBOR doesn’t affect most Option ARMs, here are the projections for 2008 for the backward-looking, rolling average, MTA (the main Option ARM index):
Feb 2007 5.0267
Feb 2008 4.076
Mar 2008 3.790
Apr 2008 3.506
May 2008 3.229
Jun 2008 2.951
Jul 2008 2.672
Aug 2008 2.432
Sep 2008 2.223
Oct 2008 2.022
Nov 2008 1.873
Dec 2008 1.749
That’s right: 5.0267% will become 1.749%. This is a HUGE drop. This spells the end of the foreclosure problem. You heard it hear first.
Who was it that called out David on his self-serving vascillations? Anyway, here he goes again. He’ll change his tune soon enough. Probably next week, after he goes house hunting this weekend. I find that stuff comical too.
Like, Lakerboy, I’ve been looking for an SFR for the last 6 months. I too have seen drastic reductions in the asking prices of homes in Tustin, West Garden Grove, and Huntington Beach. I’m looking in the low $500K range and in the past, they’ve all been fixers. Now there are decent homes that only need some paint and carpet in that same price range.
You won’t see these reductions in price in any of the indices until they actually sell. If prices are cut aggressively enough though, the bottoming out could be closer than we think.
Condos and homes in bad neighborhoods could have further to go, but if you can get into a SFR in a nice neighborhood for under $500K with a managable payment with a 30 year fixed loan, I don’t think it’s a bad time to buy at all.
“you heard it HERE first”!
Thoughtful- How does somebody with an Interest Only 2/28 who could never afford the amortized payment escape foreclosure again?
Hey Thoughtful…
Yes, Bubbleboy loves to find the trash on Redfin which was overvalued to begin with and then call it appalling as the price has dropped dramatically over the last two years. As the tide goes out, it always comes back in. Every owner of RE in the area has experienced a loss of equity. The transparency of Bubbles comments regarding this tragedy for some is quite evident. Karma is a tough teacher and those who exude joy at the misfortune of others are just sad, sad people.
Why were they not in here last weekend basking in the glory of the Bear Sterns collapse? Oh…that is right…no self-serving interest. Just like the democrats.
Liar, you have drunk from the gullible cup once too often. The percentage of people who fit the description you just gave are MINISCULE. And, they have most certainly already been foreclosed upon. If you can’t see the impact of a three point decline in people’s existing mortgage rates is HUGE, you are beyond help. Don’t take it as a snipe, because I find you somewhat reasonable, but you don’t know what you’re talking about.
I guess I don’t understand these tables very well. The headline says prices are down 20%. The chart shows 16.9. Also was the peak really June ‘07? April ‘04?? In any case, looking at the Saturday classified and Redfin, the percentages look about right. Existing homes are down between 14-18% and condos have taken a bigger hit. It seems like new homes have dropped more than the chart to me. Looks like some really good deals there. Developers have more leeway than private parties. Summer will be interesting.
Thoughtless, you once again show your ignorance. I’m not looking for homes in OC. I’ve said that many time. In the area I’m looking at, values have already come down 40+% and that’s why I’m buying there. I would never ever buy in OC right now and anyone who does proves that they have no idea what’s going on in the real estate market right now. I said don’t buy in OC because prices have been, are, and will continue coming down in OC. Sorry you’re in denial.
Voice, I read it as being 20% from the peak but 16.7% from the price exactly 1 year ago. I’m not sure when he says the peak was, but I assume sometime last summer. I think he mentioned the exact date before, but I forget when the precise time was.
I understand the impact of lower mortgage rates full well. This is my business after all. Lower rates help distressed borrowers, but not to the extent of saving the housing market.
The percentage of people fitting the IO 2/28 description is more than MINISCULE however. I have no reason to try and overstate the problem, but the problem is big and will take time to work through the system. The IO 3/27’s are starting amortize on top of the IO 2/28’s that are either already in foreclosure, or soon will be. I don’t have to be gullible, as I work with the data every day.
When you see the news articles about borrowers whose payments jumped 50-60% over the teaser rate, what the writers fail to mention is that this is usually due to the scenario I described above. Usually the journalists are ignorant of mortgages and don’t understand this, and many times the borrowers themselves don’t seem to understand. All they understand is payment amount.
Thoughtful and Sighbordood, I have to hand it to you. Although on a daily basis nearly everything points to downward pressure on the OC housing market, you both come in here and twist the truth. The fundamentals are still way out of whack and prices will continue downward. Other than complementing each other, neither of you produce any proof of overall RE improvements.
NationalBubble provided a good example of a home sold for $1,200,000 in Dec, 2006. Now in Dec 2007, someone who bought into the advice that you so freely give “stole” this house for $837,000. Now its back on the market for $799,000 and wont get near that.
David, we’re all familiar with your game plan. You will learn your lesson in due time. Unless, of course, Murrietta becomes a population, cultural and job center in the next 5 years. I happen to like parts of Riverside County, but I am not under the false impression that they are more than half as valuable as Orange County. You need to learn from your own mistakes. The guaranteed appreciation you assured us you are walking into is a fantasy.
WG, that’s because you are looking to the past and we are not. Why don’t you explain your theory of what will support endless carnage?
truthi is back.
this should make the forum more interesting.
Jonas- You are correct about the percentages. The peak median was in June 07 at $645,000, which means the median is down 20% in 9 months!!!
Chicken Little, if you mean me, you are wrong. Weren’t you posing as him/her for awhile?
Don’t count your chickens! The median can shoot up faster than you think. Sigh is 100% correct about it being artificially low. Come to think of it, that is exactly why we see so many people hedging on the subject. Because they know this is the case.
Looks like the village idiots (aka bulls) are at it again. Very entertaining I must say!
Thoughtful, I didnt say it would be endless. Obviously there will be a bottom at which prices stabalize. My theory as to why its no where close is based on several factors that are very evident to most. Our economy is slipping further into a recession, the credit market is in uncharted territory, we had a RE run-up that was based on liar loans and unqualified borrowers, foreclosures are rising, unemployment is rising, inflation is rising, and RE prices are in a nosedive. There are many other factors but those are just a few. Now are you ignoring these facts to make this blog interesting? Or are you desperately trying to put lipstick on this pig for personal reasons.
Eat it…every single home you or Bubbs has posted from Redfin is a complete dog..howling and full of rabies, and needs to be taken out of its misery. Built in 1971 or 1976 or sometime before Regan was president! Yes, how desirable that must be to own. I will stick with areas people actually want to live in…MV, Ladera, Laguna Niguel, SC, the Alisos, etc.
I hear rents are down in East LA too…Maybe I will post a link from that dogpile to support my cause. Show some desirable homes please…
I thought March had a bunch of properties in escrow?????
“Sigh, even this backward looking data supports your theory. Median price for an SFR is indeed up, as are sales, from last month.”
only in OC would somebody try to uphold the false belief that a median price declining $15000 and then gaining back $5000 equals a net gain. incredible
I must say that the difference is statistically insignificant also. unless people actually cling to the false belief that a sub-1% (+0.8%) change in home prices is statistically significant. which anyone with half a brain knows is not true. the median alone has enough bias to outweigh any tiny fluctuations, not to mention any other variations or error.
It’s a home to live in and that’s how you have to see it as. If you’re looking to make big gains, I don’t think RE is going to recover anytime soon, investment wise.
Lakerboy, Your new to this blog so you probably don’t know that many of the more vocal posters here are speculators and they attack anyone who wants to buy a home right now to live in for a long time.
Median is down to $515,000.
How long until the OC median is below $500,000?
Right all dogs…but are those dogs worth $639K? I guess when you cut you asking by almost 200K in less than two months…then the answer is a verifiable NO. As with the other areas you mentioned, they too are way over priced and will no doubt be following the decline. I can go nearly any home that has listing price of longer than 45 days and there a reductions in asking price.
I only pointed this one as an extreme example of how stupid people got and how they will continue to be stupid if they pay for the fraud equity that is astongishingly evaporating from the RE market. As they say…what goes up must come down.
Eat it….I’m not of the bull opinon here, but seriously, can you come up with a crappier house? 4 bedrooms (one of which is converted, I bet it’s real nice too!) , I (one?!) BATH, backs up to an apartment complex, no central air, and within shouting distance of the 5 freeway.
Nice!
New poster so I got to ask a question. Is “thoughtful” serious? He honestly thinks the median could just as quickly “shoot up”. Is he “shooting up” because his arguments are illogical. Please tell me this is just someone playing devil’s adovocate for kicks and giggles.
Otherwise, I think “thoughtful” should visit a rehab center to try and stop “shooting up” so much of the RE Industry meth…
“This is The OC. It’s different here”
same ol’ spin from the same ol’ crock of … well, ya know. when will it ever end?
Thank you, Liar. Since you’re on the front lines, what are you seeing these days?
I am telling you, the permabulls on this blog are gonna get carpal tunnel syndrome trying to spin this tsunami of real estate market bad news. Type, type, type away and the facts remain: no end in sight for the continuing depression in real estate values.
and as I pointed out before, when you post actual links to listing price holocaust in OC, our resident blog clowns will try to dismiss them as “must have been fraud” or “previous buyer paid too much.” But I guarantee the same idiotic permabulls would have been cheering on the previous buyers at their time of purchase about their sage investment.
Eat,
I agree with you to the extent that both of these properties were sold for what seem like incredible prices a couple of years ago. But, it was a raging bull market then. The same thing happens with stocks, or classic cars (seen the price of a fully restored ‘66 big block Corvette lately-$110k+) or cabbage patch dolls. I wouldn’t call it a scheme, or a scam or a conspiracy. Just an open market. Timing is everything.
All the negatives that you all love to dredge up are already factored in. You are trying to double, triple and quadruple dip.
Lansner, are you going to cover the massive three point plunge in ARM indices? You have a national spotlight on you, so you are in a unique position to help people. You can be guarenteed that if mortgage rates were UP three points it would be front page news. So, instead of sensationalizing the mythical 20% drop from the mythical median, you could show some balance and cover this HUGE development.
And Samson, a sale at $516,000 has the exact same potential to affect the median as one at $5,160,000. Haven’t we been over this enough?
Jonas,
My take on things is there’s no reason to buy until the glut of foreclosures works their way through the system. Right now, the number of foreclosures is not slowing, but accelerating almost everywhere. These are going to reset the values in neighborhoods across Orange County, as well as nationwide. Sellers will have no choice but to price accordingly.
2008 will be UGLY due to the number ARM resets, stated income IO loans, Option ARM loans, job losses, etc. The foreclosure process is a slow process due to the courts, which means a typical foreclosed property could take a full year to sell from the date of FC filing. I expect the worst of it to be over by fall 2009 and that’s when I would start looking to buy.
One bath? LOL!
Yes, those ARM resets to below-market rates are really going to sting.
Thoughtful- The three point plunge in the index only helps borrowers when the loan resets, which is typically every 6 months. What happens when the rates go up again? Higher resets….
Um, it helps recurring resets every six months and new resets daily. Your government has shown it will continue to do what’s necessary to stop this mania, so I’m confident rates will be good for some time to come. Are you saying it’s meaningful now?
Happy Easter, peace out.
If you never qualified for the fully amortized payment, as many Interest Only and Option ARM borrowers didn’t, lower rates don’t mean squat. There are a glut of borrowers behind on payments BEFORE their loan even resets. The government can’t help them.
For those relying on the lower rate to keep their home, what happens when the rate goes back up at some point over the remaining 28 years of their loan? It’s a temporary delay in pain, unless they somehow refi or get a raise.
Nice talking to you Thoughtful. May you find all the eggs you desire this Sunday.
Thoughtful or anyone: What is the longest fixed term for today’s ARM loans that are available? I don’t know - I’ve just been hearing it is not as long as many make it out to be - the shorter the term the higher the risk - especially in this market. Go ahead and get a 2/28 - and see where rates will be at and home value when you need to refi.
Does anyone know why the rates have plunged? Tax payers are funding the liquidity. How long do you think that will last? To the tune of $2 Trillion per year is needed to sustain current liquidity nationally. This extra funding by taxpers is over in December. Those limits return afterwards.
If you are expecting it to be permament without getting it in writing and gambling on that fact - and you lack any other contingency - you might as well put your name on the list for the Darwin award. You’ll be wanting to kill yourself when its all said and done.
OC is now designated by mortgage insurers as distressed and high risk. Not too many areas geographically that made that list throughout the nation. Most finance professionals (almost all but two or three publicly) are not so positive about the future of OC RE as two folks here have attempted to make it out to be.
I DON’T WANT TO BE PAYING FOR YOUR MISTAKES!!! IF YOU BUY - YOU HAD BETTER KNOW THE RISKS!!! What I pay in taxes each year alone is more than what 80% of the people in this county make annually. IT IS PISSING ME OFF!!
You sign - YOU PAY!!! I DON’T CARE WHY OR HOW - YOU HAD BETTER PAY UP!!! My home gets hit, my taxes get hit, and this is sickening.
Give this a year with 70% of the buyers using ARMs (short term fixed rates) and watch what happens. We need investors buying into these securities again. Period. No ifs, ands or butts. All of this is another delay in the inevitable. What does it take to add liquidity to the markets? Foreign investment primarily. And what does that take? HIGHER RATES!! HIGHER RETURNS!!! COLLATERAL THAT IS CORRECTLY VALUED!!!
The lack of fundamentals on this blog is sickening. OC is one place where people make fairly high income - but it wins in the number of people begging for bailouts. You make the decision - you had better live with it.
Sometimes I wish the mob ran the collections for the lenders. Would be nice to see someone deciding to bail on a home when Luca Brotsi rolls up to the front door to collect. I DON’T CARE - PAY ME!!
Frickin’ worms.
From broker house:
1. Rate is going down. money is cheaper (compared to couple months ago).
2. Terms of qualification is border line of insane, and getting worse. It’s getting more strict EVERYDAY. Not a day go by without a new guideline, tighten the loop. Bank & lender on go for the highest quality borrower.
3. If you’re up for refinancing, whether out of ARM or Opt-ARM, or simply to get better rate, unless you are have at least 70-75LTV, good trade-line, good FICO, full doc on income, you can forget about it. For anyone who’s doing SIVA, unless your LTV is really good and you have significant asset, kiss it goodbye too. Of course, if anyone can qualify for loan now, rate is quite attractive. All loans in CA, NV, FL go through desk appraisal by lender again. They use their own proprietary software system to value the property, and if it’s off too much, they either reject or cut appraisal significantly.
4. Whether you’re signing up for ARM, Opt-ARM, or full 30 or 15, full amortization qualification is mandatory. Only Wachovia is still doing Opt-ARM, but require full doc, good LTV, and they still cut appraisal anyway !!. Their typical appraisal cut is 20% !!!.
5. Some bank/lender refuse to touch anything with less than 12 months seasoning.
With that going, look like if anyone who’ve bought house in the last few years, and up for refin, it’ll be tough. And only the highest quality buyer can qualify for new purchase now. Those who can qualify for loan now (especially in high cost place like OC, SF, or NY) aren’t likely as retard/naive as those who chase after housing as in last couple years. The pool of qualify buyer is quite small.
6. Pre-approval ? Doesn’t mean a thing if it’s by broker or small lender. Only pre-approve by W.F, C.W, BoA, and some other large bank, carry any weight now. And there’re plenty of of pre-approval fail loan, by the same bank that did the pre-approval, go figure !!!.
So look like on paper, thing look good: cheaper rate, another 200B freed up for Fanni and Feddi, government initiates to help. The reality is it is harder to get a loan to go through, and both Fanni & Feddi tighten their guideline to satisfy investor demands.
Joke among the broker world is that eventually, you might need to have 359 months reserve to qualify for 30 years loan. That’s a joke, but there’s a point for it ….
Anyone want to challenge this ? Two of my friends own broker shop that do more than $50mil/year, and these came from them
Sorry for the typo, “those”
THE OVERZEALOUS LENDING PRACTICES OF THE PAST HAVE BEEN REPLACED WITH IRRATIONAL FEAR.
It is a fact, indisputable, and the current culprit of this situation. If lenders were to lend on avg. again, very much like life insurance policies adjust as you get older, this would all work itself out in the long run. While 33% of the homes on the market are receiving offers for short sales, they only account for 7% of the homes on the market in its entirety.
The $770k Coto house is the exception to the rule. When lenders wish to make money again, and they stop the panic attack like a 50 year old stockbroker who bought Bear Sterns on Wednesday of last week, sanity may once again enter the marketplace. Until then, we can all come in here daily and spout our opinions as to this and that.
Liar Loan, Thanks for the information. That is what I had heard too about the resets and foreclosures. In fact, more foreclosures have started to pop up around me, so I know it’s no joke.
Mulligan — I notice that nice house you linked to on Redfin has been “holding its ground” for 113 days and counting.
Thoughtless, you’re wrong once again. No surprise there. I don’t think you’ve ever been correct with anything you’ve said on this blog. You still think OC real estate is a good investment today, that’s enough said. Anyone credible in the industry who hears/sees someone says that is just plain laughing on the floor.
So you have no credibility at all. Especially since you can’t do basic math. The place I’m getting is about $150,000 and would be $450,000 easily in Irvine. So it’s 3x as much, not twice as much. Not only that, but I’m getting a new condo and the one in Irvine for $450,000 would be 20 years old. If it doesn’t appreciate right away, I don’t really care. I don’t need it to. I’m buying it as a place to live and don’t intent to use it as an ATM machine like most of OC does to afford their Mercedes.
just watch ’til the lenders’ REO divisions start massively selling their inventory to meet their margin requirement. For anybody that says that lenders are over-reacting and making guidelines too tough…the glut of REO properties that will hit the market will drastically affect the comps.
I’ve been surprised with how the many REO & short sale departments have been very inefficient at dealing with this “crisis”. They’ve been way behind the curve at liquidating their accumulations of properties and were too greedy by being not flexible enough when dealing with liquidating their inventory. As a result of their greed, many have lost more money than was necessary and I think we’ll see big changes with the way those departments deal with their inventory.
By the way, I talked to someone in Bank of America yesterday and she had no idea when the new conforming limits are going to be implemented so jumbos are still anything above 417K
Thomas,
You will also notice that they bought for $200K ish back in 1994. Why would they move too much?
Poggi,
Define investment. If you are talking about “flipping,” the precise mentality which got us to this point, then yes, not a good idea. If you are talking about acquisition and renting it others, then I would say those investor types will begin to pounce on select inventory around the desirable parts of the OC. Not Tustin or Anaheim or Santa Ana etc…NICE parts.
POGGO stick, if you loved Murrieta so much you wouldn’t come in here every day and tell everyone what a bad investment OC is. its obvious your saying “OC sucks, im outa here so should all of you” Nice try but we see right through you.
nvest- I think the problem is the REO depts are understaffed due to the amount of inventory being acquired. This would be a good field for RE agents to get into that need a steadier income.
Liar Loan,
I agree, those departments certainly need to “re-invent” the wheel because they weren’t used much or were completely absent during the past ten years.
What will most likely need to happen is that short sale depts will need to start working together with their REO divisions to limit their losses and liquidate more efficiently. That will result in more transactions at below current market values.
Those institutions are definitely in a difficult position. On one hand they need to liquidate their current (and future) REO holdings; on the other hand this will cause a further depreciation of home values in the area, resulting in loans that previously were considered “good” to become “bad” as a direct consequence of further changes in values / LTV.
We haven’t seen the bottom yet, by far. Same holds true for the USD (even though there is a short rally every now and then…). And just watch out for the stock market after the earnings come out on the 31st…interesting times…
Eat-you are the redfin monster! We never know exactly what the neighborhood is like, especially in a densely packed area like MV, but that’s a pretty nice looking home that has 2100 sq ft. I’m a little surprised it’s even that low. If that was my house, I wouldn’t drop any further unless I was in deep trouble. I’d wait it out. I think your ‘03 price target is low in general.
I think it’s interesting how it’s a short sale even though the asking price is about $65,000 above the last sale price (did they re-fi or something?). It seems greedy to me that they were first trying to get $679,000 for it at first. Maybe that’s how much they needed to have it not be a short sale? In that case, I don’t blame them.
If someone was willing to pay that much, then that would have been the fair market value!
There is a difference between the neighborhood you posted from and the one where my link came from. Same if you go across la paz…obviously a distressed sale as evidenced by 5 closings since January 1 in same community from my link around the same s.f. for $730-750K…ARE YOU PAYING ATTENTION NOW?
Around the corner is not necessarily a comp. Otherwise, there would have never been differences in values over the course of history.
Mulli, you are so trying to spin this…oh, I suppose now we can say a house ON THE SAME street isn’t necessarily a comp. Give me a break…those differences SHOULD BE small if you look at the history of a neighborhood…we shouldn’t be seeing 100K+ differences in houses like we do today if there wasn’t something seriously wrong with the asking prices.
VoiceofReason Says:
“……… but that’s a pretty nice looking home that has 2100 sq ft. I’m a little surprised it’s even that low. If that was my house, I wouldn’t drop any further unless I was in deep trouble. I’d wait it out.”
There in a nutshell is why one can’t reason with “Voice of Reason”…….it believes prices will soon be back where they “belong”.
Shockg aka Thoughtless aka bored aka signburdood
I never said I hated OC. I am, however, sick of the snobby rich people who act like their sh@t doesn’t stink. A few such people post daily here on the blog. I said I’m bored of the county, because there’s not much to do here for young single people. My whole area of Irvine is composed of right-wing conservative Christian families with 3 little kids each. I don’t exactly fit in. I have old ladies yelling at me if I drive my car more than 15 MPH down the street. There has been a mass exodus of young people from OC going on for the past decade and it’s continuing because of the lack of affordable real estate. That means less young talented recruits for OC businesses. It will eventually hurt the county’s businesses if it’s not already.
I’m going to move out there to get an awesome place for 30% of the price of something comparable in Irvine. So yes I’m much more confident that I’ll be able to rent it out someday when I trade up for 100% of my mortgage payment. And I think that there’s a good chance for appreciation within the next year or two, even if it’s a slow increase. And since the prices have already crashed so much, there little chance of a further large decrease in value. OC on the other hand, still has farther to drop for most areas. I’m sorry if you still refuse to see reality. Even today the numbers backup my predictions and they will continue to do so. I’ve been correct for about a year straight now and I don’t see that changing anytime soon. So I’m sorry for those of you that bought overpriced OC real estate at the height of the market. Go ahead and keep insulting me. I guess you’re just jealous that you made a really bad decision while I was smart enough to wait. Even if I could afford to buy a house in OC right now on just my income, I would still not buy. Who wants to lose their whole down payment in their first year or two of ownership and then have to sit in the home for 5-10 more years just to get it back. Good luck being a slave to your home. I’m happy that I won’t be house poor like so many others.
Eat…no spin here…you just do not understand valuations between communities. There are stark differences between say one community where the bulk of homes were built in the early to mid 80’s and another where the bulk was built a decade later. Also, it is why Ladera typically prices above each of these examples. Newer construction has higher cost factors associated with it. If you would like to challenge me on this, please feel free to go build today versus 10 years ago. Hmmm, yes it would be more expensive to build THE EXACT SAME HOUSE today versus a decade ago…agreed?
Oh, and one more thing King of Bears, when have I ever said, “a comp on the same street is not a valid comp.” I have never made that statement…….ever.
Comps today are almost worthless. There’s so few homes selling in OC and values are falling 1-2% a month at least. So what sold a couple months ago isn’t going to predict what it would sell for today. Rates are changing all the time and people have to actually qualify for loans now, so the differences in the market on a monthly basis are much more than they used to be.
Thoughtless earlier evaluation of LIBOR rates ignores the most important part of an adjustable rate loan. Prime loans add 2-3 percent margin to LIBOR, subprime add 4-6 percent to the margin. So while LIBOR is down below 2% the actual interest to the borrower is well above 5% on prime loans and approx 7% on subprime borrowers. These loans and properties are still underwater.
I liked that Tustin home better than the McMansion. Desirable communities? Your kidding right, living next to pretentious people in not very desirable.
Nice post Thoughtful….very nice. Yes, I am sure there are some nice values in Lake Elsinore as well…ugh. I will stick with South OC. You can have anything inland you wish. Rancho Santa Margarita is as inland as I would go. But, that is why developers work in many areas. Beauty is in the eye of the beholder.
Samson…an appraiser cannot use a townhome to compare SFR. And vice versa. Oh, and if you are not aware…those townhomes, they sit in a bowl below Oso and Felipe. They are worth WAAAAAAAAY less. But, if you would rather the TH, then take it down.
i have a tiny bayshores house in newport. i want a better house two blocks away. i can’t come up with the difference. in feb 2000 my house cost 700,000 and two blocks from my house was 1,000,000. in 2008 my house is 1,950,000 and two blocks away is 3,500,000. i made a huge error not borrowing the extra 300,000 in 2000. i wish prices would come down so i can fix my mistake. my house has a lot of traffic noise and no price drops here so i am stuck with traffic noise from the coast highway for life. i wish the nosebleed bayshores prices would drop so i can trade up.
People are finally getting a clue, I am seeing all the houses that were pulled off the market last fall starting to hit the MLS again.
But I’m still on strike.
Not buying yet.
Just taking a poll. How many of you think that the home you purchase today will not be worth more in five years? Five years of home ownership and tax write offs.
David Poggi:
I noticed in some of your posts, including one in this thread, that you are bored living in OC because there is nothing for younger adults to do. This isn’t a knock or slam or anything negative–I’m just intrigued. What additional entertainment opportunities for your age group do you expect to find in Murrieta that you can’t find in OC?
I do not understand why “Thoughtful” and similar are so pissed off on the people who do not want to buy or the people who wish prices to go down. Why won’t you be happy that prices going down and hope they will go down, after all you buy a house as a place to live and call it home. I think everyone should be happy and support the home price to go to as low as possible
# IamYou Says:
March 21st, 2008 at 10:06 pm
—I do not understand why “Thoughtful” and similar are so pissed off on the people who do not want to buy or the people who wish prices to go down. Why won’t you be happy that prices going down and hope they will go down, after all you buy a house as a place to live and call it home. I think everyone should be happy and support the home price to go to as low as possible—
Are you a renter?
Its funny that thoughtless is behaving self righteous. Can someone quote some of the idiotic things this person has said in previous postings.
Mulliganville, I am not a renter (full disclosure I own out right 4 properties). But I still would prefer prices of houses should go down as well as everything else, and I will be happy to see them going down. The house I live in I bought as place to call home, I do not care how much it used to worth, is worth or will be worth. Who buy as investment properties should be able take in consideration a risk like any type of investment you own. I prefer lower house prices so my kids can live next to me. I prefer lower house prices so larger portion of the income will available to invest in our kids education and for living. We live only once (you do not have pockets in the shroud)
Sorry for my English, I am tired and English is not my first language (no, I am not from Mexico and I am making in the high 6 fig). However I still support that house cost should not be as high as it was (and still is) compare to incomes here in OC or other places. Nothing can stop it; if people won’t buy prices will fall further. The potential buyers holds the keys, if they restrain themselves longer they will reward themselves and their children’s in the future and I think EVERYONE should promote lower house prices.
Rants,
(1) I do not mind to tell strangers that I own properties (they refer this as it is investor perspective and not just a homeowner).
(2) I never said where all my investment properties are, they not necessarily in OC
(3) I do not disclose the information to brag to anyone
(4) I do not disclose more information than needed to support the viewpoint of my statements.
We need lower house prices for us and for our kids
“Thoughtful- How does somebody with an Interest Only 2/28 who could never afford the amortized payment escape foreclosure again?” - Liar Loan
LL,
Amortization. Technicalities like that don’t matter in OC. Don’t you know anything.
Mulliganville, many redfin links have been posted to show dramatic price declines in the asking prices of homes sitting on the market. You posted a home that has been sitting on the market in excess of 100 days to prove what point. This house is obviously over priced and by the time the sellers realize this they will be chasing the market down. I’m confused as to why you think this would support your position. The sellers have every right to list a home at any price they wish. This doesn’t mean the market will entertain this price.
David Poggi…
Wow! You are a perfect example of self “rationalization” when it comes to this subject of real estate.
BTW. I am considering buying my first mercedes this year from past real estate profits.
Condos cost the same to build, whether in OC or Mari-lu-etta. They don’t appreciate in value in either place. They depreciate (age). Locations appreciate. It’s the value of the dirt they sit on.
I wonder why Mari-lu-etta is so cheap now?
to rants:
newport residents are watching the market. they have the most gains to protect. people by me only make about 200 or 300 per year. a couple 400. not to many above 400. we worked hard and have built a fortune. we worry that the register is to negative. many think in error that newport prices are falling. dead wrong. we post to correct the news. when will register talk about the good part of real estate. no short sales or vacant houses that i have seen. media myth.
People like IamYou are idiots, I’m sorry. You want to bankrupt 60% of the population so that the product of your seed can come in an buy properties? I hate to break it to you, but I don’t care a whit about your loser kids. The people who own have paid their dues and accomplished things in their lives. Your selfish solution is to wipe them out and replace them with your 19 year old spawn? Disgusting, absolutely DISGUSTING.
The numbers dont lie. The sale prices and total sale decreases in NPB are real. You can pretend they are not but that does no good.
Why is it that when people dont hear what they want to hear they say something is too negative?
What where you saying when prices where rising? Where people saying it was too positive?
I Iam you’s underlining theme. It is something I have said for a long time.
Prices are too high. They have a giant effect on the future of this county and country as a whole. High prices will really only hurt future generations. If the rampant unaffordability was too continue and more young people are priced out of the market you begin to kill the motivation to work hard.
If the ability to acheive the American dream becomes more and more impossible for the majority of the population than the desire to work hard decreases.
We already have problem with being competitive in the world…it will only get worse.
I know most of you bulls here will say, people can live elsewhere, move away, go to college etc…
That is not a realistic option….there are too many homes in the OC and just not enough money to support this philisophy.
I do think though that homes are becoming much more affordable. I would think that we will see about another 10% drop in the current median price, or another 40-50K.
Have a good weekend.
Thoughtful,
(1) You do not need to get upset. My kids are not 19 they are much younger. I do not say what I say just thinking of my kids and this is the problem you do NOT care for everyone, I do.
(2) People do not have to bankrupt unless they selling, and only those who bought recently (past few years) that will suffer the most IF they sell. If they stay in their house for the rest of their life or for many years then the value of the house does not matter.
(3) Currently we already paying the cost of the problem, lets get the house cost very low. It might hurt some a little longer and little harder but at the end of the process we will be in much better spot.
(4) My solution will help EVERYONE even those who sell today at a lost, they will need much less to buy again and have more money left out their paycheck to invest in their kid’s education and save for retirement.
Money is just a tool not a life. We need lower house price for our future
“People do not have to bankrupt unless they selling, and only those who bought recently (past few years) that will suffer the most IF they sell. If they stay in their house for the rest of their life or for many years then the value of the house does not matter.”
Moronic, just moronic.
All I say is to the potential buyer do not buy and prices will come done. Let’s take this opportunity to get the prices to where they should be. Most of the people who get upset from this idea are people that bought a house as investment assuming 0 risk investment.
Let’s make houses to be what they should be a place to live and raise a family.
IamYou, I think you should give your kids your own houses. Do you really need four, or are you holding them as an investment? If you don’t want to help your own kids, they should move to someplace more suitable to someone just starting out. I am so sick of these calls to reverse-engineer prices so that the bottom of the financial food chain can live in the location of their choosing.
(1) I am not calling for price reverse-engineer, I am calling for 0 sales for a period of time and prices will adjust.
(2) Just because you bought a house as investment assuming 0 risks, a drop in price is unacceptable.
(3) If you live in the house you bought for the rest of your life or many years you won’t care about the price. Further more people who bought 1998 and want to sell should not have a problem if prices went down 50% or more)
(4) What I do with my investments is my problems; in contradiction to you I do not promote higher house prices. I buy investment assuming risk and I do just fine.
(5) As for my kids they will get my house one day after I am gone. Till then I live in it. ITS HOME
Just think for your self who is the selfish here
I am you, you are me, we are one
Nail on the head there Thoughtful…nail on the head.
It doesn’t have anything to do with reverse-engineering. It seems what you are saying is that families should be forced further apart just to participate in the American Dream. That it is better to protect the wealth of the minority than to look towards a brighter future for us all.
As gas prices increase and the cost of living increases the economy as we know it will change. We will need to become more urbanized and rely more heavily on our close friends and neighbors. As this happens it will become even more important that families are able to stay close to each other.
The fact that we as a society are so myopic and only look to what wealth we have now as individuals, and not was is better for society as a whole is frightening. As more and more of the middle class are pushed down and out our ability to compete on the world stage diminishes. I know this is a bit of a stretch to tie the housing market to the future of society…but it points to our extreme greed and the desire to live far beyond our means.
Few truly care about their fellow man, but are only concerned of their own self interest. In this case to keep prices artificially high in order to support a lifestyle that affirms their existence.
Thoughtfull:
Re; Your hypothesis on the option ARM interest rate - To steal a quote “You are correct, but it is irrelevant.”
The problem most outstanding option ARM’s are having in Orange County is not the interest rate, It is the reset to a Principal plus Interest payment. Most people in trouble borrowed on the ability to pay the minimum payment, which in many cases was less that the full interest amount, let alone the principal plus interest. You could set the interest to zero, and they would still be in trouble, because they could never afford the Principal.
Unless the borrowers can afford that Interest plus Principal payment, the problem will still exist
“The problem most outstanding option ARM’s are having in Orange County is not the interest rate, It is the reset to a Principal plus Interest payment.”
cdm, do you have any concrete, verifiable facts to go along with your claims? Unless large numbers of people are coming up on their mandatory reset, they will be helped enormously by a three point decline in interest charges. I get tired of hearing how “nobody” can make their payments without any real evidence given.
wheres gramps with his ranting about bottoms in south cty
thought stuff was peachy keen
whaaaaaaaaaaat happened
Sol had this to ask: “wheres gramps with his ranting about bottoms in south cty”
Gramps said that he was waiting for the FULL month of March’s figures, due out by about 4/7.
Hold your exuberant horses, there, Whippersnapper!
If I had enough huevos to make a call for a certain thing to happen by a certain date, the least you can do is wait until that date before your feeble attempt to gloat.
By the way, Sol, I also added to my original prediction, ( and every similar post since.) that the effect of my prediction might not be seen until the following months figures, which would be around 5/7.
I’ll still be around by then.