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Here's recent history of the Fed’s policy committee and its Fed Funds rate. Next Fed decision is June 24/25.
Early March O.C. home price 20% below ‘07 peak
March 21st, 2008, 9:10 am · 120 Comments · posted by Jon Lansner/ocregister.com
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
March 21st, 2008 at 9:35 am
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.
March 21st, 2008 at 9:38 am
No, no, no!! The median was supposed to rise this month…SighberDud told me so.
March 21st, 2008 at 9:43 am
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
March 21st, 2008 at 9:44 am
And this without benefit of the higher conforming loans.
March 21st, 2008 at 9:47 am
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.
March 21st, 2008 at 9:58 am
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.
March 21st, 2008 at 9:58 am
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.
March 21st, 2008 at 9:59 am
Some people are still in denial. Gee, I wonder who they are. Expect more downward prices in OC.
March 21st, 2008 at 10:05 am
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.
March 21st, 2008 at 10:09 am
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.
March 21st, 2008 at 10:21 am
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.
March 21st, 2008 at 10:26 am
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.
March 21st, 2008 at 10:27 am
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.
March 21st, 2008 at 10:28 am
“you heard it HERE first”!
March 21st, 2008 at 10:32 am
Thoughtful- How does somebody with an Interest Only 2/28 who could never afford the amortized payment escape foreclosure again?
March 21st, 2008 at 10:38 am
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.
March 21st, 2008 at 10:44 am
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.
March 21st, 2008 at 10:48 am
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.
March 21st, 2008 at 10:56 am
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.
March 21st, 2008 at 10:56 am
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.
March 21st, 2008 at 10:59 am
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.
March 21st, 2008 at 11:00 am
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.
March 21st, 2008 at 11:01 am
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.
March 21st, 2008 at 11:07 am
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?
March 21st, 2008 at 11:09 am
truthi is back.
this should make the forum more interesting.
March 21st, 2008 at 11:17 am
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!!!
March 21st, 2008 at 11:22 am
Chicken Little, if you mean me, you are wrong. Weren’t you posing as him/her for awhile?
March 21st, 2008 at 11:25 am
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.
March 21st, 2008 at 11:27 am
Looks like the village idiots (aka bulls) are at it again. Very entertaining I must say!
March 21st, 2008 at 11:30 am
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.
March 21st, 2008 at 11:31 am
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…
March 21st, 2008 at 11:39 am
I thought March had a bunch of properties in escrow?????
March 21st, 2008 at 11:39 am
“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.
March 21st, 2008 at 11:40 am
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.
March 21st, 2008 at 11:40 am
Median is down to $515,000.
How long until the OC median is below $500,000?
March 21st, 2008 at 11:41 am
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.
March 21st, 2008 at 11:44 am
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!
March 21st, 2008 at 11:46 am
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…
March 21st, 2008 at 11:47 am
“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?
March 21st, 2008 at 11:59 am
Thank you, Liar. Since you’re on the front lines, what are you seeing these days?
March 21st, 2008 at 12:10 pm
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.
March 21st, 2008 at 12:17 pm
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.
March 21st, 2008 at 12:20 pm
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?
March 21st, 2008 at 12:22 pm
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.
March 21st, 2008 at 12:24 pm
One bath? LOL!
March 21st, 2008 at 12:28 pm
Yes, those ARM resets to below-market rates are really going to sting.
March 21st, 2008 at 12:32 pm
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….
March 21st, 2008 at 12:38 pm
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?
March 21st, 2008 at 12:41 pm
Happy Easter, peace out.
March 21st, 2008 at 12:52 pm
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.
March 21st, 2008 at 12:54 pm
Nice talking to you Thoughtful. May you find all the eggs you desire this Sunday.
March 21st, 2008 at 1:05 pm
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 w