April’s Consumer Price Index showed a continued slide in the SoCal rental market, with rents rising 4.2% from April 2007, the lowest annual increase since September 2000, according to the numbers crunchers at the U.S. Bureau of Labor Statistics. A year ago, rents were going up at a 6.4% pace.
Landlords in the Los Angeles-Orange County-Riverside area, however, still were raising rents. In 1995, at the height of the last big recession, rents declined at a 0.4% annual rate.
Annual rent increases for homeowners renting out their house were 3.6% higher in April than in April 2007. Last year, the so-called owners’ equivalent rent of a primary residence grew at a 6% pace in April. The price overall to keep a roof over your head (minus purchase costs) rose 2.5% over the last year, the slowest rate since March 2004 when it was 2%.
Other local consumer housing price news:
- Fuels and utilities overall jumped 7.2% in the last 12 months
- Residents using natural gas saw prices surge 27.8% annually
- Household furnishings, hit by the housing downturn, continue to be a bargain, with prices down 3.4% in the last year.
LA-OC-Riverside CPI rent changes
| 2007 | 2008 | |
|---|---|---|
| Jan. | 6.2% | 5.9% |
| Feb. | 6.7% | 5.3% |
| March | 6.9% | 4.4% |
| April | 6.4% | 4.2% |
| May | 6.1% | |
| June | 5.9% | |
| July | 5.8% | |
| Aug. | 6.0% | |
| Sept. | 5.9% | |
| Oct. | 6.0% | |
| Nov. | 6.0% | |
| Dec. | 6.1% | |
| Annual average | 6.1% |
CLICK HERE for other local April consumer price info. CLICK HERE for Fast Food Maven’s take on grocery prices. For the full CPI press release, CLICK HERE.
Other recent rental news:
- House/condo renters latest victims of foreclosures
- Newer O.C. apartments suffer more vacancies
- Insider Q&A hears of tough times for landlords
- Home/condo rentals not hurting apartment rentals
- What niche will be real estate’s star?
- Could foreclosures help increase affordable rental stock?
- Bad O.C. economy hits 1-bedroom apartments
- Foreclosure refugees head for O.C. apartments
Oh no, will the bad news for renters ever end? First gas, now higher rents. This really breaks my heart. I feel so sorry for these renters.
Uh, Thoughtful, this is a story about rental prices slowing their traditional price increases.
Don’t forget gang, 1,500 new rental units coming online later this summer at four new complexes in Anaheim’s Platinum Triangle. Plus an extra 350 condo units coming this summer too, in addition to the 200+ units still unsold at Stadium Lofts after 18 months on the market.
Or, if you want, try calling the telephone numbers listed on the hand made “FOR SALE OR LEASE” signs hanging from some of the balconies at Stadium Lofts.
Then there’s Harbor Lofts up Harbor Blvd. that still have a couple hundred units for sale, with nary a buyer in sight. The hostesses at that sales center look more and more bored everytime I drive by there. Poor dears.
# Thoughtful Says: “Oh no, will the bad news for renters ever end? First gas, now higher rents. This really breaks my heart. I feel so sorry for these renters.”
No, I think you should feel sorry for the landlords like Granpa Sighburdood. They can’t unload the overpriced houses they bought in 2005 and now, rent increases are not even keeping up with inflation so their only way out is foreclosure.
On top of that, all these morons bought SUVs during the housing boom taking equity out of their houses and they can’t even sell their SUVs anymore because nobody wants them with these high gas prices.
Sure.
Like I have said before my rent has gone up less than 10% in the last 4 years, so maybe 2-3% a year. The place I was in before that I believe my rent went up about 10-12% over 8 years, so less than 2% a year.
My last increase was $25, but not buying for the last 4 years, I haved saved tens of thousands of dollars. My little $25 increase seems like Klenex in comparison.
So with the exception of my tiny increases, all the other increases are effect homeowners and renters alike.
Mav,
It looks like the worst is yet to come. Folks, fasten your seat belts!!
Mr. Mortgage is still an idiot whose “California” data has ABSOLUTELY NOTHING do to with Orange County. And he is every bit the greasy mortgage broker he looks like in his homemade, cell phone video. Shyster then, shyster now. Mav, aren’t you embarrassed that his central thesis - that solid borrowers will abandon their homes - doesn’t apply here because of the fact that our ALT-A borrowers brought far more equity into the equation?
I’m guessing the reality is that many of the OC Alt-A were cash-out refis and the equity is long gone.
The mortgage business in OC was all about the cashouts….40-60K in CC debt, big car loans….cash out, payoff the cards and cars and continue the lifestyle supported by the three income family.
Three incomes? 1) H, 2) W, 3) HELOC and/or Refi.
Serial Re-Fiers were common.
The lifestyle continued — now prices are down, the equity is gone, the CCs maxing and a new age group is getting a much needed education.
Two trillion dollars of equity blown!! Now income must meet expenses, or Chapter 13 awaits.
We have lived through one of the most extraordinary and ridiculous episodes in all of human history!
Freddie mac moves 120 billion in asset backed securities to “Level 3″ (i.e. we can ignore the market price), “because the prices didn’t make any sense.”
Sorry folks, no one wants that toxic waste except at pennies on the dollar. Just how large are the losses if the toxic waste is marked to market? One can only imagine. 30 billion, 60 billion, 90 billion?
Freddie - going, going, gone!!!
“I’m guessing the reality is that many of the OC Alt-A were cash-out refis and the equity is long gone.”
Well, you would be WRONG. According to the New York Fed, 46% of 2005-2007 Orange County ALT-A loans were cashout, with an average combined loan to value of 68.33%
OK, 46% were cash out and with the 35% correction in home prices, since 06 ALL THE EQUITY IS NOW GONE. That is, the half that are underwater balance out the half that still have any equity left. Net equity for the Alt-A’s 05-07 would be close to zero.
Some of these people probably neg-am’ed as well or took out seconds or have HELOC’s so the equity is probably below zero. And the Alt-A market is huge in OC.
Ha! I showed two days ago that 3 and 4 bedroom homes in good neighborhoods are down 12%-14%. How the hell did that become 35%, barring the use of hard drugs?
Go thoughtful!!
I love when facts kick the azz of wild, “this is what I want it to be, but have no real idea” claims!!
Thoughtful:
Seems you are now contradicting yourself from yesterday when you proclaimed that you only see prices going up, not down.
Yup, I may be throwing away my monthly rent check, but it sure beats the landlord’s burn rate.
“Seems you are now contradicting yourself from yesterday when you proclaimed that you only see prices going up, not down.”
Socal, I already corrected you. I had said “I only see RENTS going up, not down” (if you recall the topic was in fact rents).
Thanks VOR, I had thought you slammed me earlier, but wasn’t sure.
This got cut off:
52,800. Of those, 15,500 were full doc…..
It had read “Orange County has (or at least HAD) a total ALT-A loan population of 52,800.”
Mav - Thanks for the link. Great video, clear and concise.
Thoughtful Says:
May 14th, 2008 at 3:13 pm
“Mr. Mortgage’s… central thesis - that solid borrowers will abandon their homes - doesn’t apply here because of the fact that our ALT-A borrowers brought far more equity into the equation…”
Thoughtful, the whole point of the video was that the data shows Alt A borrowers only had approx 89% ltv, that’s maybe 10% down, so even if we accept your “12-14% drop” figures, they are ALREADY upside down.
Scarier than that is the fact that 80% of these Alt A’s were Liar Loans where they don’t need to document income, (only about 50%of the subprimes were stated income and - look what a disaster that is) AND your “rich” borrowers cashed out equity at pretty much the SAME RATE as the subprime folk. In other words, they were just as cash strapped as the subprime folks!
In addition, alot more of these Alt A loans were for non-owner occupied (investment) homes. We all know the big gap between rental income and mortgage payments. When these reset the property will be a big negative cash drain — if it wasn’t already.
As for your oft repeated only “12-14% drop in nicer neighborhoods” hypothesis, if you’ve been househuntng and watching the markets in solidly middle class towns like HB, FV, Irvine, and Fullerton like I have you’d see that sales are happening at 20-30% off peak prices already and still dropping monthly.
househunting, the tape showed all of California statistics. Our own numbers are dramatically better than those. The link is above - click on ALT-A and County for the numbers. Let me know what you think then. I also think it’s complete garbage that people will uproot their families over simply being upside down for a time. Forget what you heard, walkers WILL NOT OWN AGAIN in the next decade unless they commit fraud before the walk by buying a second property. If they were willing to wait a decade, and have to buy when prices are high again, why would they not stay put? It defies logic.
Here we go again that thoughtful and Mulli are the same…you boys and girls are wrong about that…but it is comical in two separate households on this side.
I love how when any article is posted about rents going up, the typical retort has to do with all these units in Anaheim coming on the market. I wonder aloud for all to hear: WHAT IF YOU DO NOT WANT TO LIVE IN ANAHEIM? What if you want one of the following:
Pick any Laguna: no new apartments
Newport: no new apartments
Mission: no new apartments
Ladera: no new apartments
Dana Point: no new apartments
San Clemente: not sure, but have not hear of any new ones there
Rancho: no new apartments
Trabuco/coto: no new apartments
Aliso Viejo: no new apartments to my knowledge
So basically, it looks to me that if you are renting in north county, enjoy as you might have some luck bargaining in Anaslime. If you like south county, you can rent an apartment or scour craigslist for that “deal” of a home…like homes in my neighborhood are renting for $2700-3800. Yes, this no more land thing sure is bogus.
Thoughful,
You usually back up your claims with either good logic or references. On the other hand, many bears make wild, exaggerated assumptions based on pure agenda. I meant no slam on you.
Mulliganville,
I’m not sure how many names thoughtful has, but one thing we all know for sure is that thoughtful does not have a job and sits at home on this blog from sun up till sun down.
Since it can do nothing but cheerlead real estate, it doesn’t take a genius to figure out it’s either a laid off realtor or subprime broker.
It is also a fact that it does not have any other skills or it would have found a job by now.
It is also a fact that it had to move the relatives in to make the mortgage payments.
But as far as how many voices it is in here….well that one we may never know.
I own two companies, Mr. Bill. You are a strange bird.
Whatever thoughtful does for a living allows him the time to come in here and support his cause and pov. i see mav and rants in here a good bit too. i have days where i post alot. it is just a polarized blog which will have zero effect on the market…but the debates are entertaining to say the least.
I mention Platinum Triangle only because I drive through there a few times a week. I live in Orange County and I drive through there a lot. The Platinum Triangle is going to be a great story to follow up on in six months when all of these new units come online.
The Lennar property in the Platinum Triangle is becoming its own little ecological zone. The fully prepared streets and infrastructure is disappearing beneath the tumbleweeds now. There so much brush and little critters inhabiting the Lennar A-Town land now that the Sierra Club is going to scream bloody muder when they do finally build housing on that land around 2015.
If there really are no vacant apartments south of Irvine, then there’s nothing to worry about. Something tells me though that the statistics that started this thread don’t only apply to “Orange County North of Jamboree”.
“I own two companies’
O.K. I stopped laughing.
Ummm….you must be very busy.
You must not have any spare time to do other things…chuckle…chuckle
Troy,
The comment was “all of these units coming online,” not occupancy. There are no new apartments coming online in any of the area mentioned above that I am aware of. My guess is most complexes south of irvine are running between 92-94%.
Thoughtful: “walkers WILL NOT OWN AGAIN in the next decade”
That should be the case - but precedent has it that is not true. However, I do believe this turn around has burned the lenders to the point that they will be quite careful for at least 5 years. There is simply money to be had and with the OC mantra of buying for the sake of buyng - then I’m sure they’ll be back in homes within 7.
I just overheard an agent while viewing a property this past weekend state, “if you find the house you love, then just buy it - forget about price.” I laughed so hard, the agent never said another word.
And people are actually surprised what has happened here?
Thoughtful-
I know no one says the median means anything, but Dataquick has a median top in OC in June ‘07 of $645 (for all types of housing: SFR, Condos, New), and now has a median of $509+/-.
This equates to a 21% drop. So I’m not sure where you are getting your 12%-14% number. Even on SFR the drop, at least on a median basis, has been in excess of 15% from peak to now.
Is your number purely Y-O-Y or total downturn?
Thanks.
Marcia, my own personal community is seeing about a 15% adjustment to the downside…primarily homes of 1800-3300s.f. $300 per foot seems to get the deal done on many of these around here…some lower, and some higher.
Marcia, here is my original post. I also added Fountain Valley for the poster above. The data are from a tool on Truila.com I believe the overall median is skewed by both product size and location. The product size part seems clear from the data. These are medians by product by locale. Of course some properties lay outside these numbers, and that is what is often shown here, but these represent the total picture.
“Here is some data I found on price per square foot in four middle class cities. It’s very interesting to see that the largest percentage declines in these cities are in the 1 bedroom (especially) and 2 bedroom products. The 3 and 4 bedroom products are not seeing the same level of drop. Most of these larger products saw drops YOY in the low to mid teens, percentage-wise. There’s also a comparison to 2003. Enjoy!
Irvine
Beds / Apr-08 / Apr-07 / Apr-03 / $PSF-YOY / $PSF-03
1 / $314 / $427 / $276 / -26% / 14%
2 / $377 / $436 / $276 / -14% / 37%
3 / $366 / $419 / $271 / -13% / 35%
4 / $348 / $397 / $257 / -12% / 35%
Laguna Niguel
Beds / Apr-08 / Apr-07 / Apr-03 / $PSF-YOY / $PSF-03
1 / $277 / $440 / $284 / -37% / -2%
2 / $352 / $418 / $268 / -16% / 31%
3 / $354 / $409 / $280 / -13% / 26%
4 / $344 / $391 / $263 / -12% / 31%
Huntington Beach
Beds / Apr-08 / Apr-07 / Apr-03 / $PSF-YOY / $PSF-03
1 / $607 / $547 / $356 / 11% / 71%
2 / $426 / $496 / $307 / -14% / 39%
3 / $432 / $465 / $305 / -7% / 42%
4 / $373 / $461 / $293 / -19% / 27%
Rancho Santa Margarita
Beds / Apr-08 / Apr-07 / Apr-03 / $PSF-YOY / $PSF-03
1 / $284 / $384 / $257 / -26% / 11%
2 / $303 / $418 / $265 / -28% / 14%
3 / $292 / $353 / $255 / -17% / 15%
4 / $312 / $361 / $220 / -14% / 42%
Fountain Valley
Beds / Apr-08 / Apr-07 / Apr-03 / $PSF-YOY / $PSF-03
1 / $NA / $396 / $243 / NA% / NA%
2 / $290 / $376 / $241 / -22.8% / +20.0%
3 / $329 / $397 / $247 / -17.1% / +33.1%
4 / $304 / $361 / $242 / % / -15.7% / +25.6%
Since we know the median home has 3+ bedrooms, taking a decline of 14% on these products, assuming a $600,000 median, yields a theoretical dollar drop of $84,000. Not chump change, but also not the wildly exaggerated $200,000 that Bill often cites.”
Marcia
I live in Orange. It is basically a stable, conservative town. There are no foreclosures on my street or in my neighborhood. The adjustment has been 15-17%. The price declines are a “medium” for all. Every area is different. That is the trouble with a discussion of this on this blog. You can talk about over-all trends, but it will not apply to everyone, or even a majority.
Thoughtful median price of a 3 BR in the cities you list is closer to 900K - not 600K so the true drop is probably 125 K or so and not eh 84K you listed.
Anyone else have 125K to throw away.
Saving, possibly, but Bill throws around $200k as the norm period. The facts are what they are, I just like to be clear about WHAT they are! I also noticed on the site that both the average sales prices and median sales prices are very unreliable. For instance Laguna Niguel’s average sales price drop on a 4 bedroom is close to $200,000, even though the price per square foot on that product is off by 12%. Conversely, the average sales price of an Irvine 1 bedroom is off by only $18,000 when the price per square foot is off by a whopping 26%. I firmly believe that price per square foot is the best metric.
Anybody know what the inventory numbers are?
The DENIAL continues on. The peak of the market was not April 07, but rather October 05 in most areas. Your data excludes the peak of the bubble. It is as if you want to start the collapse of the Nasdaq at 4000 rather than 5000 where it really started.
Look at the foreclosures that are listed for sale. The majority of them are listed at 35% off the peak prices of 05 and 06. We are there already. Your 15% decline stats are in fantasy-land. We are headed for 50% off and honestly 75% off is in the cards if the Fed does not start printing money really soon.
(Buying toxic waste with T-bills as they are doing isn’t printing although it isn’t clear what they will do with the toxic waste.)
I don’t know why I didn’t do this earlier! Here are the numbers for three foreclosure cities. What’s fascinating is that even though the YOY price per square foot drops were huge, the price per square foot is still quite high. If these cities really sold at last year’s price per square foot, it is nothing short of insanity! These numbers could have gotten you a much better city. I do think they may have smaller products overall, but still.
Santa Ana
Beds / Apr-08 / Apr-07 / Apr-03 / $PSF-YOY / $PSF-03
1 / $322 / $748 / $360 / -56.9% / -10.5%
2 / $322 / $491 / $272 / -34.4% / +18.3%
3 / $304 / $445 / $247 / -31.6% / +23%
4 / $284 / $394 / $233 / -27.9% / +21.8%
Anaheim
Beds / Apr-08 / Apr-07 / Apr-03 / $PSF-YOY / $PSF-03
1 / $321 / $359 / $325 / -10.5% / -.01%
2 / $304 / $368 / $234 / -17.3% / +29.9%
3 / $300 / $425 / $236 / -29.4% / +27.1%
4 / $275 / $369 / $214 / -25.4% / +28.5%
Garden Grove
Beds / Apr-08 / Apr-07 / Apr-03 / $PSF-YOY / $PSF-03
1 / $596 / $344 / $300 / +73.2% /+98%
2 / $341 / $393 / $247 / -13.2% / +38%
3 / $326 / $403 / $247 / -19.1% / +31.9%
4 / $284 / $412 / $230 / -31.0% / +23.4%
thoughtfull posts on this blog 24/7 but
she owns two companies llooll sure
ya do– hey thoughtless most of us were
born at night we werent born last night
llooll @ribsplitter permafools have stooped
to lies and deceit typical for realterds lloolll
Money, go pound sand.
Thank you Thoughtful. Regardless of the spin, the numbers are always a great addition to this blog.
It certainly serves to quiet the masses.
thoughtless who posts non stop 24/7
owns two companies in other
news neighbors in a costa mesa
neighborhood reported seeing pigs flying
over their houses one witness
stated the pigs appeared to be floating
effortlessly lloolll @ribsplitter
I guess the moral of this story is to own a 1Bdrm in Huntington Beach!
No problem, Marcia! I’m glad to have something to go on, regardless of some flaws.
And money pit, your claim that foreclosures can be found at 35% off peak? NO SH!T SHERLOCK! But, the statistical median was still very high in 2007. Most sane people here, will be able to grasp the differences BETWEEN CITIES AND AMONG PRODUCT TYPES. I guess you are not among them.
For all the talk about a housing collapse, I sure haven’t seen it in the prices all that much.
My husband and I moved to NorCal (career move for me) in Aug 05. So we sold our Anaheim Hills home back then.
If you think SoCal was nuts, NorCal was like RE Hell!
We bid on 5 places back then. One place had 19 offers, the other 34! The one with 34 was listed at $950K and sold for $1.35MM…$400K over asking!
Anyway, while there are no more multiple offers, prices have yet to come down much. They have a bit…maybe $50K-$75K. But on $1MM, that’s not much of a dent.
Still, with little to no down payment, no one can afford the payments, fully indexed.
That is why I still think there is still some downdraft left to go. But time will tell.
We are actively looking at REOs, since they are selling at up to 35% off. Even if we have to spend $20K-$50K to fix them up, at least we get what we want for the fix-up, and not someone else’s idea of an upgrade.
There is honestly very little difference between cities and product types. Virtually everywhere you look the prices of the homes that are priced to sell are down 35% or more.
I have no idea where that trash data you are serving up came from but I would love to see the one bedroom in Garden Grove that sold for $596 p.s.f. in April 08. The stuff that is priced to sell is at $250.
And 75% off the peak median of $730K for the typical OC stucco box is still $182,500 and that is way too much money for 1300 s.f., not saying we will get there, but it is definitely “in the cards” given our 800 billion current account deficit and the increase in interest rates that might be needed to finance that deficit. Welcome to a world of $125 oil and one thirsty debtor nation.
10% mortgage rates will crush RE. Right now, everything is in the hands of the Chinese and Saudi central bankers. If they bolt, the dollar is toast.
Sayonara baby!!
Mortgage rates were 18% in the 80’s…Outside of oil, the dollar is irrelevant as a currency. And, my thoughts are that 1300s.f. is too small for the median home here…might want to increase your s.f. parameters a bit for that $175,000 priced home…keeping in mind that would be the MIDPOINT of sales activity…so your 1300 s.f. box is going for less than that…i dont think that is going to happen.
Whatever, moneypit, the data show important differences in rates of YOY decline between cities and product types. I don’t care what you say.
Marcia, best of luck to you. You sound savvy and open-minded. That will help you tremendously.
I think I’ll take a day off!
DENIAL, jeees, I thought we were past this stage already!! I guess not. Well, that means we still have a ways to go.
Remember, there’s denial, anger, bargaining, depression, and acceptance.
Given the tone here we may be into the anger phase, especially with Truthi or Thoughtful or whoever she is.
I’ve definitely been noticing some anger out there on the streets. Really looking forward to the bargaining.
Ultimately, we’re all gonna be ok.
I don’t think it will happen either, just said it was in the cards. The difference between the 80’s and now is that now we are debtor nation with zero savings. Home buyers need to borrow dollars from foreigners who may not want to lend dollars, or who may charge a premium to do so.
We have a 800 billion dollar current account deficit to finance and there is no telling what will happen. If the dollar collapses, gas goes to $8 and the economy really goes down the tubes. $182,500 is within the realm of possibility even if the median s.f. is 1500 or whatever it is. In really hard times, prices go far below construction cost, as low as 50%.
Current account deficits of 6%of GDP and higher have typically resulted in calamity for the debtor nation involved. We aren’t going to be any different, in all likelihood.
“California” data has ABSOLUTELY NOTHING do to with Orange County.
Of course.
that solid borrowers will abandon their homes - doesn’t apply here because of the fact that our ALT-A borrowers brought far more equity into the equation?
An 84% increase in OC foreclosures, 40% of total sales, and 5000+ NODs in April say you’re wrong.
The bottom line is the majority of your foreclosure numbers are in GG, Anaheim, and SA. If you take those 3 “lovely” locations out of the mix, you are left with an increase in foreclosure activity, but nowhere near the numbers being thrown around in the county as a whole.
If you are a fan of the aforementioned 3 locales, you might have some deals in the mix for your consideration. Just be ready for the “experience” of short sale purchases…you will not hear from the bank for 2-3 months AFTER you submit your offer. Most buyers do not have the patience to go through the short experience. It is very typical for shorts to have 10+ offers on them, yet they are still “listed” on the MLS. So nobody really knows how active these properties truly are.
Not quite:
“Also, OC’s LTV numbers are not “dramatically better” than the rest of California, with Alt-A loans at 87% average LTV (compared to 89% for Calfornia as a whole)’
(Incorrect, the CLTV was 76.19 per column 21)
“38% of the Alt-A borrowers in OC needed to cash out and tap their equity according to the Fed chart”
(Need? They had a CLTV of 68.33% - that’s not exactly tragic)
Thoughtful,
Actually, Column 21 on the Alt-A chart is for “loans with prepayment penalty still in force” for owner occupied property which was about 1/3 of the loans. You must be looking at Column 22 which is only the LTV for owner occupied homes.
If you keep following the chart, I was quoting column 73 which I read to be the COMBINED LTV of ALL the purchase loans, not just the owner occupied units.
I repeat, 87% is the average LTV of purchases in this total group. NOT 76.19. Sorry.
And as a general rule, in OC and everywhere else, people tend NOT to incur debt unless they don’t have the cash for something. So yes, I do think 38% of people tapping into their equity is a serious issue. What will happen the next time they need money? The 32%-ish equity they once had is dwindling fast. Plus the easy liar loans are gone, and borrowers nowadays generally have to QUALIFY based on income. Did you notice that 70% of these loans were made on stated income?
[...] apartments/rent news Tenants often innocent victims of foreclosureOC/LA rent increases near 8-year lowNewer O.C. apartments suffer more vacanciesInsider Q&A hears of tough times for [...]