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March home price ($506,000) is a 4-year low
April 15th, 2008, 9:34 am · 65 Comments · posted by Jon Lansner
DataQuick’s final count of Orange County home-buying activity last month shows the median selling price for all residences at $506,000 — the lowest since March ‘04 and off 19.6% from a year ago. Buyers grabbed 1,663 homes last month down 46.9% from a year ago. It’s the 30th consecutive month where total sales failed to beat the year-ago level. (ZIPS: How did your town do? CLICK HERE!)
It’s been a dramatic market reversal. Look at how far median prices in key categories fell from their respective peaks …
• Single-family home prices: -20.8% since April ‘07.
• Condos: -20.2% since March ‘06.
• Newly built: -40.2% since February ‘05.
• Overall market: -21.6% since June ‘07.
And here’s a wrap-up up of last month’s activity …
| Slice | Price | Vs. ‘07 | Sales | Vs. ‘07 |
|---|---|---|---|---|
| Single-family | $570,000 | -18.0% | 1,072 | -42.8% |
| Condo | $375,000 | -18.5% | 408 | -51.3% |
| New | $516,500 | -17.4% | 183 | -56.2% |
| All O.C. | $506,000 | -19.6% | 1,663 | -46.9% |
COMPARE: See how 6 other home-price indexes value O.C. homes by CLICKING HERE
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sell now, or be priced in forever !
Per DataQuick, Single Family Median Home Price:
2007
06/26= $735,000
06/30= $734,000
07/12= $725,000
07/17= $725,000
07/25= $720,000
07/31= $718,000
08/07= $719,000
08/15= $712,750
08/22= $710,000
08/30= $710,000
09/11= $700,000
09/14= $689,000
09/21= $675,000
09/26= $670,000
09/30= $655,000
10/12= $655,000
10/16= $660,000
10/23= $655,000
10/31= $650,000
11/08= $645,000
11/14= $645,000
11/20= $645,250
11/27= $649,000
11/30= $655,000
12/10= $640,000
12/14= $634,000
12/27= $610,000
12/31= $600,000
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
03/14= $575,000
03/20= $567,000
03/26= $570,000
03/31= $570,000
And the slow train wreck forges ahead.
LOL! Good one!
sell now, or be priced in forever !
I wonder what Gary “in the bag” Watts thinks about that!
From the last couple weeks of very confident sounding talk of SOME OF the resident realtors on this site, I was half expecting a perceivable spring bump in median prices. We’ve been hearing that drum of ‘be prepared to be surprised’. I admit that I don’t have a tap on the market health like many Realtors would/should … so I at least entertain the possibility of a healthy spring market. The fact is, there is no indication of such a reversal. THIS report says pretty loudly “be prepared to be shocked by the lack of a spring bump, followed by utterly dismal summer sales and further price sliding at a rapid pace”.
I’m starting to agree with the more dire predictions … the ‘brace yourself’ variety. These perspectives are certainly closer to reality than “the worst is over” nonsense. The doom and gloom perspective is getting proven in the daily stream of data …
bloodinthestreets,
when i first came to this blog, i found the doom and gloomers funny, but i did not really believe it
then i started educating myself on our local housing market and was shocked by the ugly facts:
+ mortgage equity withdrawal was rampant and supporting our economy
+ Option ARM / Neg Am usage (same thing) was rampant in the OC
+ Zero or less than 5% down payments were the norm
+ roughly 20% of the OC economy was based on the housing market
+ Debt to income requirements were thrown out the window
it became clear to me that the OC was doomed and that housing prices would drop at least 40% peak to trough to get back to fundamental debt to income ratios….. I am shocked that we have already seen a 20% drop in less than a year. I wonder how long the additional 20% drop is going to take?
Actually Option ARM usage at its PEAK was less than 14%, and a good portion of those have already refinanced. And remember: ARM indices have PLUMMETED BY OVER 3 POINTS. And zero down or less than 5% down was the norm? Complete and utter bullsh!t. As all the informed people, including Steve Thomas, say: you will see the current activity in May and June. More old “news”.
Hey, the buyers didn’t “gobble up” the homes, they grabbed them. What is the reason for this change? Yet another sign of housing weakness.
But Thoughtless keeps insisting that home sales are increasing … blah, blah blah … or spin, spin, spin.
What he doesn’t say, is when home sales are adjusted for seasonality, they couldn’t be much worse than they presently are.
If you factor in inflation, the median is 35-40% below the peak if we are at ‘04 nominal prices, so how much lower can it go, I personally do not expect more than another 10-15% and the prices may stagnate after that and let inflation take care of any imbalances. I am thinking of looking for a good condo in the Irvine area after August. What do you guys think?
I think it’s gonna keep droppin like a rock. Wait until 2008 is over, 2009 is probably gonna be another year of severe declines.
These are just beautiful numbers from DataQuick.
SoCal sales down 41.4% year-over-year. Prices for SoCal down 23.8%.
The BEST performers? Riverside sales down 26.9%. Los Angeles median down 18.5%.
Mortgage brokers, realtors and speculators: Did you save for a rainy day?
you want to trust your family’s future to the insight of these fruit loops?
Hey everyone,
I just got a call from Sighbordude and he’s anxious to come in here and post comments about how the arcane statistic of a slight uptick in the number of escrows means we should hit the streets with our favorite realtor but he has important business to attend to.
As soon as he’s done cancelling the escrows on his recent purchases he’ll be right in.
Thoughful
I read what Steve Thomas and his fussy math said back in Dec of 2007. Also Jan and Feb of 2008. I take it to believe that you have drawn a line in the sand and May and June will tell all about Steve Thoms and his predictions. I guess that escrows must take a very long time now or Data Quick figures would already start showing that Steve Thomas was correct. Now remember it doesn’t mean anything if May is better than April or March because it always is YoY.
I find it fascinating that every time I post COLD HARD FACTS that are RELEVANT TO ORANGE COUNTY all I hear is silence.
Thougtful,
Don’t you dismiss the OC Data as well because Santa Ana, Garden Grove are also part of OC since they distort your rosy picture?
Unfortunately your “numbers” have proven to be cooked.
Re: Home Equity
The utilization stat is misleading. Los Angeles, for example leads the nation in having 70% of all purchases with a piggyback 2nd, for example. However, due to the wild home value appreciation, their draws from the home equity ATM as a percentage of total equity is low.
Can anybody tell me what happens when the equity you borrowed against isn’t in the home anymore due to a market crash?
“Can anybody tell me what happens when the equity you borrowed against isn’t in the home anymore due to a market crash?”
Yes. One becomes “Thoughtful” and spends endless hours venting and trying to pump the market, hoping to recoup the losses suffered as a result of not foreseeing this downturn.
“However, due to the wild home value appreciation, their draws from the home equity ATM as a percentage of total equity is low.”
Nonsense. Equity lines do not track “appreciation”. They use the value at the time of origination. Talk about “cooking”.
“Unfortunately your “numbers” have proven to be cooked.”
Please provide facts to support this wild claim.
Oh yeah, NOD’s and foreclosures are both down again! Hmmm….. maybe it’s due to the PLUMMETING OF ARM RESET RATES?
Too soon to call a bottom….
This december is going to be blood in the streets for CA RE……
If you have property……HOLD FAST..dont sell.
Yo MAV:
Good one…
Sell now or be priced in forever….!!!!!!
I agree with Lee….that was a classic — ism.
That might be my only option for big bear lake…..
If the ship does not get a new motor….
I will be dumping the vacation home over the side…
The ship is on the rocks….
She can hold out another 30 days……
Then the weight of the vessle will break her in two accross the reef.
I will be left swimming with the sharks == chum.
New Job == engine
Or
Chum
Captain Scott says:
Time to hold fast…..Time to hold fast…!!
Thoughtful,
Way to ignore my debunking of your claim that IO ARMs “peaked at 14%”. Also, nice red herring pretending that I was claiming that HELOC limits rise with appreciation–the appreciation I was referring to was that which was already baked in at the time of appraisal. I.e. the equity that has evaporated since origination.
Keep on trolling.
Yeah, Jon, RealtorDaveE is spot on.
What’s with the bearish spin?!
There are a number of positives. Sales were only down 46.9%. Put another way, 1,663 homes sold last month. 1,663 commissions were paid to realtors. Sure, it would be nice if 3,130 homes sold, like in March 2007, but it wasn’t zero!
And the median price only dropped 19.6%. Again, it didn’t drop 100%! A commission paid on a $506,000 house isn’t as good as one paid on a $629,000 house, but it helps my buds and me.
If it weren’t for you nay-sayers, real estate prices and sales could rocket up again, which would be great for everyone (you know, where the word “everyone” refers to realtors and brokers).
Raltor Dave.
What about your March 24th prediction?
–
“We’ve been predicting the increase since we saw sales picking up in our market in January, & we also think March will reflect an additional increase in sales and possibly at least some firming of prices, maybe increases.”
“You read it here first–which is our goal, bringing you Los Angeles and Orange County real estate news from the front lines– not the ivory towers!”
–
From RealtorDave’s blog”
“As predicted in our earlier post (below), DQ’s March numbers showed an increase in sales which was modest by seasonal standards, and also a modest firming in prices.”
Increase in sales? If by increase you mean a drop of 41.4% for SoCal.
Firming in prices? Yes, that would be true if by “firming” you meant going down 23.8%.
Is it stupidity, Dave, or is it just flat out lying?
One or the other, pal, one or the other.
pdu,
“You read it here first–which is our goal, bringing you Los Angeles and Orange County real estate news from the front lines– not the ivory towers!”
this is sort of like the SS henchmen telling hitler everything is A.O.K as western europe / u.s. of a. marches through berlin
sometimes the news you get from the front lines ain’t so reliable
Ah, but the trends are all favorable. Sales are indeed gaining, escrows are gaining BIG TIME and NOD’s and foreclosures are indeed lower.
LOL, thoughtful, you sure are a peculiar dood
the trends ain’t yo’ bro
i take no pleasure in your demise
I’ll take that as your denial.
“Any particular reason that you chose to use their “negam” statistics and ignore the table right next to it that clearly shows that 40-50% of loans in major CA metros were interest-only (IO) ie Option ARMs? I’ll chalk it up to “oversight”.
Buy Houses Now!, an interest-only loan is not the same thing as a negative amortization loan. An interest-only loan is a loan with a feature that allows an interest-only payment. You will see that number increase to 100% of loans in the future. It is a common loan feature and means ZERO to this discussion. Now, aren’t you the least bit embarrassed that you don’t know what you’re talking about?
LOL, interest only loans are ticking time bomb
as LTV goes above 100% good luck
>You will see that number increase to 100% of loans in the future.
You can’t be serious–in the Thoughtful future, nobody will pay down their mortgage balance.
IO loans negatively amortize whenever the borrower “opts” to pay less than the fully amortized payment.
And what happens when those who make minimum payments (the vast majority from the stats I have seen) when they reach 115%-125% of the original loan balance? It’s called a recast. Kaboom.
Since you didn’t fess up to your original misrepresentation that “Option ARMs peaked at 14%” in CA, I now realize that you post here for comic relief to see how many people you can get to call your BS. I will feed you no longer.
Thanks for the Credit Suisse report. Lot’s of data there. For instance:
Alt A (includes Neg am) share of purchase market in 2006 = 20%
Option Arm share of Alt A purchases in 2006 = 26.4%
Therefore, Option Arm share of purchase market in 2006 = 5.28%
And:
Neg am share of subprime purchase market 2006 = .4%
Could you please point me to the place where it says:
“It is well-known that Option ARMs were 40-50% of CA loan volume from 2002-2006.” ?
“IO loans negatively amortize whenever the borrower “opts” to pay less than the fully amortized payment.”
Wrong!
RealtorDaveE,
You said: “What I predicted was that DQ would show that March closings would be up from February closings”
Has there ever been a March that had fewer closings than February?
“Since you didn’t fess up to your original misrepresentation that “Option ARMs peaked at 14%” in CA”
Wow, uneducated AND obnoxious (a lethal combination)! I take it data (with link) from Loan Performance supporting my stats isn’t sufficient to you? Hmmm.
Help me, help you!
“IO loans negatively amortize whenever the borrower “opts” to pay less than the fully amortized payment.”
Maybe you mean:
“OPTION ARM loans negatively amortize whenever the borrower “opts” to pay less than the CURRENT INTEREST COST”
You’re welcome!
Good god! Do I care about Detroit or Orange County?
This is a direct quote from the article. Detroit isn’t even mentioned.
California had the second-highest foreclosure rate in the country. One in every 204 California households received a foreclosure-related notice. The state had 64,711 properties facing foreclosure, the most of any state and more than double last year’s total.
Been too busy to post lately but I see the realtors(R) are at it again - I guess if you’ve only had your job for a year you can’t notice seasonal trends :)
To be fair, though Dave seems like a pretty smart guy. He knows what he’s doing - maintaining enough of a “bearish” slant to appear realistic without discouraging anyone from thinking that a huge rebound is right around the corner.
In other news, I predict that the sun will rise tomorrow morning.
BTD, I am speaking of Orange County, not “California” and not “the US”. Are you blind?
That Credit Suisse report (although dated) has some great info. I am so GLAD to settle the “Great Option ARM debate” once and for all (yeah I know, good luck and all).
Prime Conforming Purchase Mortgages 2006 (Forty Five percent of the enchilada)
NegAm = 3.4% (OF FORTY FIVE PERCENT)
ALT-A Purchase Mortgages 2006 (Twenty percent of the enchilada)
NegAm = 26.4% (OF TWENTY PERCENT)
Jumbo Purchase Mortgages 2006 (Twelve percent of the enchilada)
NegAm = 0% (Moved to ALT-A category)
Subprime Purchase Mortgages 2006 (Twenty percent of the enchilada)
NegAm = .4% (OF TWENTY PERCENT)
For California Counties (no data for our beloved Orange County) the COMBINED INTEREST ONLY PLUS OPTION ARMs):
“Interest-Only and Negative Amortization Share of Mortgage Originations by Market, 2006”
Los Angeles: 39%
San Diego: 42%
Inland Empire: 35%
So, not only is the “40%-50%” Option ARM number EMBARASSINGLY overstated, it overstates even the COMBINED interest only and Option ARM number.
So, are the filthy liars who promote these bogus facts simply ignorant or is it something far more self serving and nefarious?
LOL now you’re switching back to national statistics when the CA statistics clearly show you’re wrong.
I pointed out earlier where you misread the Loan Performance data that clearly showed IO at 40%+ of originations and am not going to repeat myself.
Very few IO borrowers make the full int payment and therefore negatively amortize; most breakdowns put IO and negams in the same bucket.
Read page 37 of the Credit Suisse report that clearly shows the large market share (40%+) of IO and Negam loans in CA.
Remember that 2006 was the start of the decline of the IO/negam/option arm products; their market share was higher in 2003-2005.
Are you saying you were right all along talking about how the market was only 14% or .4% or whatever you’re saying vs. 40% that you’re now granting per the Credit Suisse report? Whatever.
I am getting more embarassed for you by the minute. You STILL don’t even understand what you are saying.
“Very few IO borrowers make the full int payment and therefore negatively amortize….”
Uh…..false again. I don’t throw around the word “idiot” much, but it’s the only thing I can think of to say to you. For the last time:
Option ARMS and Interest Only loans are TWO COMPLETELY DIFFERENT ANIMALS. And INTEREST ONLY LOANS DO NOT NEGATIVELY AMORTIZE.
Be gone until you learn what the hell you are talking about!
RealtorDave,
So you don’t follow industry best practice of comparing sales and prices to year ago figures in order to control for seasonality?
You compare the 28 or 29 days of February to the 31 days of March? You disregard the fact that March home sales are ALWAYS higher than February home sales?
Nice.
Brain power tour de force!
I see I have left you sputtering, having demolished your other nonsense about Negam/IO/etc being an insignificant component of this decade’s CA loan market.
You caught me. I meant Option ARMs rather than IOs–i.e. most Option ARM borrowers negatively amortize. IO loans keep the principal balance the same. I acknowledge the error.
However, IO loans in CA share the feature with Option ARMs that they are underwater equity wise if they were done in the past few years. The difference between them is only a matter of water depth.
Thanks for your insulting condescension, I’m sure it helps you with your clients.
“However, IO loans in CA share the feature with Option ARMs that they are underwater equity wise if they were done in the past few years.”
Wrong again. Any loan, from Prime Conforming to Option ARM, can have equity or not. It is NOT a function of loan type, but of down payment (or lack thereof). YOU tried to paint Option ARMs as a large factor here, and I proved that they are not. I will assume you are merely “ignorant” and not “self serving”. The worst part is, no one stepped in to save you from making a complete fool of yourself.
Buy Houses Now!, when you said I was condescending to you did you forget that you started it with this:
“I now realize that you post here for comic relief to see how many people you can get to call your BS”.
You’re confused about so many things it’s hard to keep track.
thoughtless: You are a gary-watts-ish greaseball, despite endless bad news about this imploding market, our resident troll never stops touting real estate. All because his resets loom, so he needs a greater fool to step up and become the bagholder. A huckster, what a slimy hustler.
Wow, never saw that Credit Suisse chart before. Look at all the people who just got a free refi!
More good news from a lender friend of mine:
For Immediate Release - April 17, 2008
FREDDIE MAC TO BUY CONFORMING JUMBO MORTGAGES IN HIGH COST MARKETS FROM WELLS FARGO, CHASE, CITIMORTGAGE, WAMU
Temporary Stimulus Act Authority May Add $10-$15 Billion in Mortgage Sales This Year
McLean, VA – Freddie Mac (NYSE: FRE) has agreed to purchase billions of dollars of new conforming jumbo mortgages with original loan amounts up to $729,750 from Wells Fargo Home Mortgage, Chase, CitiMortgage and WaMu. Freddie Mac conforming jumbo mortgages can be used to finance properties in hundreds of high cost markets designated in the Economic Stimulus Act of 2008 President Bush signed on February 13.
Today’s announcement marks the first large-scale effort to jump-start the stalled jumbo mortgage market under the Economic Stimulus Act, which temporarily raised Freddie Mac’s conforming loan limit from $417,000 to as much as $729,750 through December 31, 2008. Freddie Mac’s purchase of conforming jumbo mortgages is restricted to 224 high cost markets where median home prices exceed Freddie Mac’s $417,000 loan limit.
As a result, qualified borrowers can now apply for an array of fixed-rate or adjustable rate conforming jumbo mortgages that will be less expensive than non-conforming jumbo loans in high cost markets. Borrowers can use Freddie Mac conforming jumbo mortgages to finance up to 90% of a property’s value.
Because Freddie Mac is buying the new conforming jumbo mortgages for its portfolio, Wells Fargo, Chase, CitiMortgage and WaMu will have instant liquidity and can offer a stable jumbo market rate to qualified borrowers. By working with Wells Fargo, Chase, CitiMortgage, WaMu and other national lenders, Freddie Mac expects to finance between $10 and $15 billion in new jumbo mortgages in 2008.
“Purchasing conforming jumbo mortgages for our portfolio shows how we can bring new liquidity to markets other investors have all but abandoned and make full use of the new tools Congress gave us to help restore stability during the current housing crisis,” said Freddie Mac Chairman and CEO Richard Syron. “We initially expect conforming jumbo mortgages to have rates that are as much as half a percentage point below the jumbo market rate in many of these high cost markets.”
“I want to thank Wells Fargo, Chase, CitiMortgage and WaMu for working with us and enabling us, in a new way, to fulfill our public mission to America’s lenders and borrowers,” Syron added.
“CitiMortgage applauds Freddie Mac for agreeing to buy loans for these qualifying borrowers, and we are looking forward to working with Freddie and borrowers to improve housing affordability in these higher cost markets,” said Bill Beckmann, CitiMortgage president.
“These new conforming jumbo mortgages will reduce homeownership costs for families in high-cost areas,” said Dave Lowman, CEO of Chase Home Lending. “Freddie Mac’s involvement will help increase availability.”
“We value our relationship with Freddie Mac which enables us to collectively do great things for consumers,” said Mike Heid, co-president of Wells Fargo Home Mortgage. “While Wells Fargo has offered jumbo loans directly to consumers throughout the current market correction, this important agreement provides a reliable investor for loans in high-cost areas which, in turn, further broadens our ability to serve these customers.”
While specific product availability may vary by lender, Freddie Mac has said it will buy 15-, 20-, 30- and 40-year fixed-rate, fully amortizing conforming jumbo mortgages; 30-year fixed-rate mortgages with 10-year interest-only periods; fully amortizing 5/1 adjustable-rate mortgages (ARMs) and 5/1 ARMs with 10-year interest-only periods. Qualified borrowers can also obtain cash-out refinance conforming jumbo mortgages that provide a maximum cash-out of $100,000.
For more information on Freddie Mac conforming jumbo mortgage products, visit http://www.freddiemac.com/singlefamily/increased_limits.html.
Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to support homeownership and rental housing. Freddie Mac purchases single-family and multifamily residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage-related securities and debt instruments in the capital markets. Over the years, Freddie Mac has made home possible more than 50 million times, ensuring financing for one in six homebuyers and more than four million renters.
Sorry NationalBubble - not ALL the news this week has been your usual spew of doom & gloom.
A thread over in the mortgage blog had this to say: “Gimein is referring to the hundreds of billions worth of option ARM loans that were marketed to people in California with good credit. With home prices plunging and possibly headed for a 40 to 60 percent drop, many of these folks will be mighty tempted to walk away once their loans start resetting next year”
There are two components to the above statement to be concerned about. One, “loans that were marketed to people in California with good credit” should speak for itself. As Thoughtful has OVERWHELMINGLY documented in posts above, the majority of these loans were made with a very conservative LTV, as opposed to the problem loans of this past 6 months, which were mostly at 100% LTV at their origination - a recipe for disaster.
The option ARM loans were, for the most part, made to people who are going to continue to make the payments on their obligations.
The second part of that statement, “With home prices plunging and possibly headed for a 40 to 60 percent drop” is the type of preposterous bear droppings that spew untethered over this blog, and most of the “bubble blogs” conveniently posted in the “Blogroll” above, and even more so on Lansner’s threads.
Depending on which source you cite, there has thus far been somewhere between a 10% and a 20% drop in prices, over the past 2 years, in Orange County. A report that I will be posting within a day or two ( Steven Thomas’s latest O.C. market report, that I have advance knowledge of.) will be convincingly showing 3 things.
First, that at the worst, from this point to the end of this year, there will be no more than an 8% further drop in house prices in O.C.. PERIOD!
Second, that by no later than June ( my earlier layperson’s prediction was May.) the YOY median prices for O.C. will be heading up, instead of continuing down. ( For obvious reasons that I have described numerous times in the past 2 months.)
Third, that the ABSOLUTE bottom of this current real estate cycle will be NO LATER than January of 09.
As a result, the predictions of a 40-60% drop in prices is pie in the sky speculation, ( Or, from the glass in half empty bear crowd, “doom & gloom” prognostications.) of someone with NO knowledge of the conditions in O.C..
I’ll be back with GOOD news in the next day or two.