Fresh Realtors statistics from 2008’s first quarter tell us this about a home-value benchmark I like to watch …
- In the last quarter, O.C. single-family homes sold at a median price of $597,900. That’s off 14% vs. the year-ago period.
- Meanwhile, U.S. single-family homes sold at a median price of $196,300, down 8% vs. the year-ago period.
- Thus, my “Orange County premium” — how many typical U.S. homes you can buy for the cost of one mid-priced O.C. residence — was 3.05 vs. 3.2 U.S. homes to O.C. homes in the previous quarter and 3.28 in the year-ago period.
If you look back over time, you see this premium parallels broad movements in the local real estate market. In the mid-1980s and mid-1990s, a bottom in the premium it seemed to hint that price rallies were possible. And twice in recent memory — 1989 and 2004 — the premium peaked just as those rallies were running out of steam. (Read read how this premium got me “in trouble,” CLICK HERE!) I’ve now broken the premium down by quarters dating to the first quarter of 2007. You see those quarters in orange in the accompanying chart. We find that the Orange premium at 3.05 for the first quarter was at its lowest since all of 2003. Still, that’s well above the 1982-2007 average of 2.33 U.S. homes for the cost of a single O.C. house.
You mean that there is a premium to live around these parts????? nooooo way.
Yes there is a premium to live here and it is not worth it. The crime, traffic, smog, primadonna attitudes, subpar educational system, high unemployment, and high cost of living just dont add up. I don’t get it.
I can get a nice 3/2 in Iowa for $150k and have none of the problems of OC. Who cares if it snows? My kids will have a backyard, better schools, and values are still rising in Iowa thanks to it’s low < 4% unemployment rate.
California is old school, played out and highly overrated.
Yeah, and the salaries around here are THREE times what they are everywhere else too!!
Well, it looks to me that we are moving back to the average of 2.33 U.S. homes for the cost of a single O.C. house.
I guess people are not paying such a premium price to live in the OC anymore. What is going on? They don’t like our polluted air and oceans, congested traffic, oil wells and rigs all around the coast, power plants, high taxes, underfunded schools?
What’s wrong with them? We are an international destination, everybody wants to live here.
Roll down the window put down the top
Crank up the Beach Boys baby
Don’t let the music stop
We’re gonna ride it till we just can’t ride it no more
I Love OC!
That we collect a premium compared to the US makes sense to me; that the premium is on the decline makes even more sense.
If it is so loathsome for you here Bubbs, it is a big country…pick a place.
More troubling is the fact that the baby boomers are hitting retirement and are going to need to cash in the OC equity to fund their golden years elsewhere. I hear Vegas is getting cheap.
There is no better place to retire than right here. We may get more retirees than we lose.
I wonder how long it will take for Orange County to reach its 1.8 to 1.9 premium multiple.
Meanwhile the comp killers expand in Orange County, and entire neighborhoods are being repriced at market.
That’s a pretty strong statement to make considering we have a negative migration rate.
Lee, not quite. There’s plenty of activity that’s taking place at much higher levels than what you fantasize about.
I’m seeing lots of price reductions. I guess sellers are realizing that the spring selling season is pretty much over. I sense some panic among sellers. I saw the same thing last year.
I have to say something positive about realtors. They are in fact telling sellers to lower the price if they want to sell at all. I have actually spoken to a couple of realtors who refuse to take new clients who are unrealistically pricing their homes. Good for them.
Thoughtful Says:
“Lee, not quite. There’s plenty of activity that’s taking place at much higher levels than what you fantasize about.”
Oh, BS! The upper-income markets in OC have consistently shown the worst sales volume numbers over the past year and that trend is only picking up pace. You really are embarrassing yourself here.
Sales volume? Ok. Price? Not as bad as you want.
this thread confirms it– OC prices have
a long way to fall we arent even close to the
bottom no how no way……
The worst has yet to come to Orange County yet. Toxic loans started to reset in April 2008. Housing is not a bubble until it busts.
Making ends meet before was difficult, but it is nearly impossible now. If you lose your job today, who would take care of your family and loved one? Now I wonder we are going to survive this recession or stagnation –whatever you want to call it.
We got all caught up in the “square footage” of the home. Well, what we didn’t realize was that with our BIG HOUSE comes BIG EVERYTHING! Big taxes, big insurance, big water bills, big electric bills, Home Assocation Fees, etc. We were prisoners of our mortgage and slaves for fatcat Banks and greedy Lenders.
Some interesting facts from the link:
“One out of three the metropolitan areas in the United States showed rising home prices in the first quarter, with only a small number of jumbo loan originations and higher foreclosures resulting in greatly mixed conditions around the country, according to the latest quarterly survey by the National Association of REALTORS®.”
“In the first quarter, 48 out of 149 metropolitan statistical areas1 showed higher median existing single-family home prices from a year earlier, 100 had price declines and one was unchanged. NAR’s track of metro area home prices dates back to 1979.”
A third went higher despite jumbos limping during that period.
Thoughtless Says:
Some interesting facts from the link:
“One out of three the metropolitan areas in the United States showed rising home prices in the first quarter”
I’m sorry to let you know that your beloved Orange County is NOT one of the metro areas that showed home appreciation in the first quarter. LOL
It is interesting to see how the permabulls are looking at national numbers now while always saying that OC is different than the rest of the country and that the national numbers don’t matter.
one out of three is pretty good, ah?
how about 2 out of 3 metro areas are going down in value?
I see some signs of desperation…..
No, bubs, we’re not. But that is good news for the national economy. You know, the one you are so concerned about.
Carlos had THIS to say: “We got all caught up in the “square footage” of the home. Well, what we didn’t realize was that with our BIG HOUSE comes BIG EVERYTHING! Big taxes, big insurance, big water bills, big electric bills, Home Assocation Fees, etc. We were prisoners of our mortgage and slaves for fatcat Banks and greedy Lenders.”
What you mean, WE, Kimosabe?
7 out of the last 16 posted Thoughlessly….opps 17.
Thoughtless Says: “But that is good news for the national economy.”
“One out of three of the metropolitan areas in the United States showed rising home prices in the first quarter, ”
How is that good news? These are news coming from Realtors and that is the best they can come up with?
Aren’t home prices supposed to always go up almost everywhere?
I can understand places like Detroit going down but why would the OC housing market go down unless the bubble is bursting?
Thoughtless is either a paid shill or has OCD. There is no other explaination for the countless hours she spends on this blog. Whichever it is, her credibility is ZERO.
Blow it out your ears, NationalHater.com and Swami. You can’t touch me with a ten foot pole.
correction: “weren’t”
# Thoughtless Says: “Blow it out your ears, NationalHater.com and Swami. You can’t touch me with a ten foot pole.”
Oops, it looks like somebody is getting upset.
hey thoughtless, do you ever get out of the house?
At least, I’m at work and get paid while I post messages but you are at home just wasting your time. You must have some sort of obsession with this housing crash.
I don’t have a boss to steal from the way you do. And moron, YOU are here more than I am!
Upset? Me? I laugh at your childish barbs.
There is a premium to live here. My IE friends always talk about wanting to move here. Especially with high gas prices.
thoughtful,
are you realling say that 2/3 of metropolitan areas having a decline in prices is good news on the housing front.
WOW you are even more delusional then I thought.
Yes I am one of those renters that did not buy the last 5 years and am very unsympathetic to all bought homes they couldn’t afford. You know that affordability thing that you actually have to make a payment every month.
And don’t give me the credit crunch BS. The credit crunch wouldn’t make a difference if people could afford there housing payments, or not got themselves into loser loans, or maxed out all their equity and then couldn’t affoard their loans.
test
*WARNING*
The message board’s commentator and infamous blabbermouth and liar is here! THOUGHTFUL
BEWARE!
These home prices are insane and can not be sustained. The “experts” here will claim that they will stay this way based upon all their nonsense opinions. These are the same people that believed, like David Lereah and his kind, that we would see single-digit gains even after 2005. Funny how they keep hollering all the way down with excuse after excuse. It must suck to have bought a house around 2005 thinking you could sell it for a profit within the next 5 years!
Let it out, son. Boy, renting makes people so angry! I thought it was just swell?
Thoughtful Says: “And moron, YOU are here more than I am!”
Oops again, somebody is getting really upset.
It must be painful to be a bull these days.
Nice post.
Thoughtful says: “You can’t touch me with a ten foot pole.”
Is that a boast or a dare?
Well, my guess is that no one would ever want to touch you, even with a ten foot pole.
Thoughtful is trying to achieve a velocity and volume of blog post that take her back in time………
The theory…………. if she can blog fast and frequently enough….. she will head back in time…… back to 2006……… while back in 2006 she could prevent herself from purchasing a home in the OC at bubble prices…… she probably has a few other things to fix in her life as well….. but those are secondary targets…..
LOL@ribsplitter
When was the last time Mick or Bubble or Mav added 2 cents worth of information or logic or insight to the blog? All I ever hear from you wack jobs is the verbal equivalent of stomach acid.
Bullying bulls want to stop the real estate burn down by making this blog a distasteful experience. They can’t.
They can use dialog-killing tactics: insincere remarks, condescension, insult, and demeaning epitaph to debase and stifle rational dialog.
As if blogs like this are the reason for the financial pain of RE shills / speculators, and not deceitful lending, lies with paper blizzards no one could read.
I wonder how many lawyers who should have known better got stuck with those bad loans. I’ll bet there are more than a few.
This from the NAHB report really spells it out..
“Despite the Federal Reserve’s concerted efforts to lower short-term interest rates, free up credit markets and shore up the national economy, the housing market has shown no evidence of improvement thus far. In fact, conditions have continued to deteriorate in recent times,” said NAHB Chief Economist David Seiders. “The latest HMI shows that even fewer builders now foresee market conditions improving over the next six months compared with our April survey, and builder ratings of buyer traffic through model homes also have dropped off over the past month on a seasonally adjusted basis. This certainly adds fuel to the argument that targeted policy stimulus, in the form of a temporary tax credit for home buyers, is essential to halt the housing downswing and remove the heavy drag being exerted by housing on overall economic growth.”
My only comment would be…well if you had bought so much land, built so many over priced homes, and sold homes to people who could not afford them…you wouldn’t be in this position.
“Yeah, and the salaries around here are THREE times what they are everywhere else too!!”
No…more like 1 1/2 times.
“When was the last time Mick or Bubble or Mav added 2 cents worth of information or logic or insight to the blog? All I ever hear from you wack jobs is the verbal equivalent of stomach acid.”
I personally think you have more of an acidic effect on people than I do here. All we ever hear from you is you stupid opinions, put-downs and boasting. Like all of us here, we don’t really know where the OC RE market is heading for certain, but we like to guess, unlike your “facts”.
Besides that, it’s fun to pick on thoughtful.
I rest my case.
You never had a case to rest so it must have been easy.
It appears that you must begin all of your blog entries with some sort of slam against someone else, so Mick you are an RTard (not sure why though).
Inflation was intended as a tool to avoid stagnant wealth.
Stagnant wealth was due to the gold standard limiting the amount of cash in play in the economic system, so the people with money remained the people with money.
We no longer have a gold standard, and at this point it is IMPOSSIBLE to return to one.
The people in this world that truly have the money now can not possibly EVER become unwealthy…Financial institutions that made TRILLIONS off of the moving of money that could care less about the offloaded assets and their dwindling values…the profits were moved out of that cycle and are being enjoyed to no end as we speak.
Since the rich (100+ mil) would have as hard a time going broak as we do trying to get rich will never go without money, the system is broken.
There must be a way for everyone that is playing the game to go broke at any time…if not then the game is broken…the game is broken folks.
how many games of ball would you play against Jordan in his prime knowing you would never win?
How it failed is rather simple…capitalism is NOTHING when you remove morals and ethics and inject greed in its place. It is not enough anymore to do well, you must be on top…and since on top is not real, companies keep striving for this unreal place instead of just doing ‘well’ so that other companies may do ‘well’ as well…
anyway, back to the norm around here…uh…Eat It in OC is a nerd…
I just don’t get all the anger and personal attacks over the direction of the price of homes. It’s like getting in a fight about the weather next month. Nobody really know the answer and arguing about it isn’t going to change the result. DigDoug, you are confusing a market system with a value system. I think that is the source of much of the anger on this blog. People think they have been “cheated” out of the home they “deserve” by an “unfair” market system. They celebrate foreclosures as some kind of “justice.” Get over your resentments and don’t measure your value by the size of your house. National Bubble could own a mansion in Corona Del Mar, but he would still be a scumbag in my book for gleefully stealing his employer’s salary.
socal78 the bulls never respond to mr mortgage— WHY?
because facts are stubborn things even more stubborn
than truthiness lloollll @ribsplitter
The home prices here are not only insane, the fact is that many, many qualified candidates for high paying jobs refuse to move here because they cannot afford a home (unless one purchased before the bubble and then sold to make a million dollar profit). The salaries are not 3x the us, and even if they were- you still cannot come here from a different area (even at 3x the salary) and buy a decent home.
renters aren’t angry, I’m not angry, I’m just saying that there is no basis for the home prices here. This is not NYC (where actually 45 min. outside of the city - where you take the train into the city for work- AND you can buy a home for less than a million…trust me we almost moved there and that was in a very very good location).
The OC, with these home prices is set up to fail, if you cannot bring in highly qualified professionals- your businesses are set to fail. period.
3x the national is not a good label to have if you want your county to continue to economically thrive.
“I rest my case”
Ha ha ha ha ha ha ha! Haaaa ha ha ha ha!! That is funny!
You’ll be hootin’ and hollerin’ and shoutin’ and a jumpin’ the second you find something to cry about, which is anything!! You’ll rest NO case, cuz you’re on everyone’s case about every case!
I rest my case.
scott you are mocking mom in cdm right?
Well she is complaining about affordability in cdm. She should look elsewhere. That house is pretty cheap in SA.
scott will you want to live there though?
If I could not afford to buy where I live, then I would move to a neighborhood that I could afford.
ok scott. it is certainly very affordable by oc standards.
If the price is legit, that is a great steal for a 1st time homebuyer.
Scott-
That comment shows your ignorance. I can afford to live in CDM, I pay 6000.00 mth rent. 3500 sq. ft house with a pool and a view of the city. We chose this area because of the schools and that we would buy here one day. We save money for the kids college and don’t have to lease our cars. My husband makes plenty of money.
To buy a house with these outlandish prices would be the worst financial decision we could have made. It doesn’t matter what you have in the bank right now. Why would you buy a decling asset?
btw- we’re no where near first time homebuyers. We’ve bought in 4 different states.
Mom in CDM - a most valid point. I have known several area businesses unable to attract higher level professionals for this very reason. And, yes, it does hurt their bottom line.
I always knew rants was Morrison reincarnate.
“You know that I would be untrue
You know that I would be a liar
If I was to say to you
Housing wouldn’t get much higher…”
Mom in CDM,
With an outburst like that I have sincere sympathy for your husband. My comment was not intended to be a negative and neither was it implied to question your (husbands) ability to pay rent.
My Bad- misinterpretation of your comment. There’s so much talk on this blog about renters not being able to afford a house, and being resentful, and entitlement issues, I took your comment as that. Sorry.
Sincere sympathy for my husband- you’re probably right about that one, though- poor guy! 8-).
“Well she is complaining about affordability in cdm. She should look elsewhere. That house is pretty cheap in SA.”
yes if only every owner would lower the price by 70%, their house would have a shot at selling too. but hey it’s always great to live in a century-old rat hole in SA with one bathroom (probably a tiny bathroom at that). such affordable deals in OC, no wonder everyone’s flocking here.
MCDM: I wouldn’t let him off the hook so easily. If he really thought a person would go from renting a high end property in CDM to that S.A. crapbox merely for the sake of “owning”, then he was in fact mocking you. If not, he isn’t very bright.
Or vice versa.
No, It’s just not worth my trouble. if he says he didn’t mean it to be mean, I have to accept that.
Facts are facts: I wouldn’t live in that if it was on the ocean and included a hen that laid golden eggs.
“… it’s always great to live in a century-old rat hole…”
It’s funny - when I go back east to visit family, it is very common to see century-old and even 200 + year old homes still being used. I think the difference might be they take some pride in caring for the homes and the history they contain as opposed to the older homes here. Quite a difference, indeed.
If the permabull realtors on this site think that houses here are worth 3 times the average, and now is the time to buy. Prove it- slash your fee to 2/3 the national housing price and make the same amount as a realtor in Wisonson.
Its’ easier here isn’t it?
$5,000 buys the same amount of groceries here as in WI-right?
outsider: I don’t think cutting two percent off a home price will help make or break a deal unless we’re talking about a $600K home or better
And it all depends on where that cut comes from - just because the agent is willing to take less doesn’t mean the seller will lower the price accordingly
Most of Orange County is a overcrowded, overpriced, keeping up with the Jone’s area. Bottom line:
“Hey I have a 30 year old home that is 1900sq ft 3 bd 2bth you want to buy for $700K and pay 3800 for the next 30 years???”
You better make a minimum of 150k combined household income with no more then 1 kid
How many of you are really living the “OC Lifestyle”. Majority of pople are paycheck to paycheck non owners with no money in their bank accounts making them NEGATIVE worth.
If your tyring to come up in OC good luck! This place is financial suicide. I am born and raised OC, Irvine and know enough in life that I can get ahead quicker getting the hell out of here (aka financial security/retirement).
Goodbye trust fund kids, housewives for money, the mexicans and asians, traffic! Oh almost forgot the Irvine Company, Crevier BMW and Flethcher Jones Benz.
mav Says:
Thoughtful is trying to achieve a velocity and volume of blog post that take her back in time………
The theory…………. if she can blog fast and frequently enough….. she will head back in time…… back to 2006……… while back in 2006 she could prevent herself from purchasing a home in the OC at bubble prices…… she probably has a few other things to fix in her life as well….. but those are secondary targets…..
—
Good one mav!
She went away for a bit and a degree of civility returned. Thanks.
OC House prices will return to 1997 levels by 2012. Incomes are not growing and there have been many local layoffs not being reported and showing up in the fraudelent Bush government stats on unemployment. and you already know that the CPI is a lie….
Less people willing to move here from other areas is actually a good thing right now. Our job market is basically DEAD so the less competition the better! Let’s let our own people get jobs first, wait for this housing mess to straighten out on its own and all the chips will fall as they’re supposed to.