Here's recent history of the Fed’s policy committee and its Fed Funds rate. Next Fed decision is June 24/25.
Early May O.C. home price below $500,000
May 23rd, 2008, 9:23 am · 94 Comments · posted by Jon Lansner/O.C. Register columnist
Fresh homebuying stats from DataQuick shows you no longer need a half-million bucks to buy the mythical “typical” Orange County residence. For the 22 business days ended May 6, the median selling price was $490,750, a 22.1% drop from a year ago and 23.9% off the June ‘07 peak of $645,000. If the current pricing hold for all of May, it would mark the first time a month’s median had been below $500,000 since March ‘04.
The price fall is widespread as just 14 of O.C.’s 83 ZIPs saw higher median prices this year vs. last. (ZIP chart is HERE!)
The low pricing has helped sales activity a bit, as the latest reading shows volume above 2,000 purchases per month. Several measures of affordability suggest that local shoppers have far greater buying power today. April was the first month in nine months where sales topped that 2,000 level, which — I must add — is about half the historic norm. Here’s a look at the market for that period by key slices …
| Slice | Price | Vs. ‘07 | Sales | Vs. ‘07 |
|---|---|---|---|---|
| House | $554,000 | -22.5% | 1,477 | -15.9% |
| Condo | $390,000 | -15.3% | 535 | -28.2% |
| New | $430,000 | -30.3% | 203 | -38.1% |
| All | $490,750 | -22.1% | 2,215 | -21.7% |
Nationally, Realtors reported today that April’s U.S. median selling price for an existing home dropped 8% vs. a year ago, to $202,300.
May 23rd, 2008 at 9:26 am
Wow!!! Let’s celebrate. The bears have been right. Now, the question is, how much lower will the median go? maybe 400K?
http://www.nationalbubble.com/home-inventories-go-up/
May 23rd, 2008 at 9:28 am
Per DataQuick, Single Family Median Home Price:
2006 ~ Month End
$690,000 = Feb ~ Watts forecast 15% for SFH
$695,000 = Mar
$705,000 = Apr
$705,000 = May
$700,000 = Jun
$699,000 = Jul ~ Watts revises forecast to 11%
$685,000 = Aug
$680,000 = Sep
$665,000 = Oct
$660,000 = Nov
$665,000 = Dec
2007 ~ Month End
$675,000 = Jan ~ Watts forecast 7% SFH
$675,000 = Feb
$695,000 = Mar
$720,000 = Apr ~ New Century Bankruptcy
$695,000 = May
$734,000 = Jun ~ Peak of O.C. Housing Bubble
$718,000 = Jul
$710,000 = Aug
$655,000 = Sep
$650,000 = Oct
$655,000 = Nov
$600,000 = Dec
2008 ~ Weekly ~ Month End
$600,000 = 01/07 ~ Watts “Pent up Demand”
$595,000 = 01/15
$595,000 = 01/23
$583,250 = Jan
$585,000 = 02/07
$575,000 = 02/13
$575,000 = 02/22
$575.000 = Feb
$580,000 = 03/07
$575,000 = 03/14
$567,000 = 03/20
$570,000 = 03/26
$570,000 = Mar
$553,750 = 04/08
$565,000 = 04/14
$563,000 = 04/22
$550,000 = 04/28
$555,000 = Apr
$554,000 = 05/06
Per DataQuick, this loss represents a $180,000 decline in single family home prices from the June 2007 high. And the beat goes on … and on … and on!
May 23rd, 2008 at 9:31 am
Today will be a sad day for the permabulls.
Let’s see:
median under 500K
NAR reporting prices down 16.7% in the West
oil at $133
gas over $4 everywhere in OC
unemployment going up
May 23rd, 2008 at 9:40 am
OC is FREE !
Free Falling…….
Thoughtful’s a good girl…….. crazy ’bout Elvis….. loves horses…… and america too…..
http://youtube.com/watch?v=726Zf-zin-s
May 23rd, 2008 at 9:41 am
Your house is only worth what somebody is willing to pay, or should I say qualify for. Most people who are trying to sell their house don’t want to sell it, they NEED to sell it.
In order to do so they must keep lowering their price. Isn’t it great-LOL!
May 23rd, 2008 at 9:45 am
mav,
Maybe so, but he won’t back down.
May 23rd, 2008 at 9:46 am
graphrix Says:
September 26th, 2007 at 2:08 am
Ugh here we go again about the median price. Look if you had the data that John Karevoll and Hanley Wood have and like them see that the median is being skewed then it is. These people have 20+ years of experience in data collection and they say that the median is being skewed by the lack of low end sales. They both have said that the lower end sales have dropped higher than anything else.
I have taken the data from Irvine and you can clearly see that the median is skewed by the lack of low end sales. They have virtually disappeared. Yes the median works somewhat well for a large data set but when the data set is cut in half and the lower end is dropped and the upper end is now lower it changes. You can talk about statistics 101 all you want but without the data the conversation is meaningless. Make the data easily available and we can talk but without it we are all just wasting space.”
May 23rd, 2008 at 9:48 am
Wow, more than 2,000 resales alone! Too bad the picture is twisted by the lack of new home sales. That will continue to distort the picture until building resumes.
May 23rd, 2008 at 9:51 am
Sure the median doenst demonstrate ever factor of the market….but many where using it to show how strong the market was in years past….in that sense it is just as valid. The median works, because it can be used for comps in any neighborhood. Mostly as it relates to price per sq. ft.
So we are back to 04 prices. Wow! Now not buying in the last 4 years is looking like the smartest move ever. Imagine this, it is very possible that people who bought 4 years ago are in a home that is worth less than they paid for it. That is insane. So the current median is at 490…I had thought the bottom would be around 450 to 475, I may have to adjust.
May 23rd, 2008 at 9:54 am
“The median works, because it can be used for comps in any neighborhood. Mostly as it relates to price per sq. ft. ”
Huh?
May 23rd, 2008 at 9:55 am
DQNews just relaeased OC price per square foot data for resale homes. (Again, this only takes into account RESALE HOMES and not new homes).
2006 $/SqFt
Jun 444
Jul 433
Sep 435
Nov 420
2007
Jan 427
Feb 420
Mar 418
April 424
May 415
Jun 419
Jul 413
Aug 404
Sep 379
Oct 381
Nov 369
Dec 353
2008
Jan 345
Feb 335
Mar 330
Apr 322
Thoughtful, VOR, sighbur……….. let’s see you spin this. I know you despise the median but when comparing versus price per square foot data the median price has been a lagging indicator of the real drop in home prices.
Now looks like prices have dropped from $444 to $322 per sqft - which calculates out to a 27.5% drop in prices since June 2006.
May 23rd, 2008 at 9:57 am
How would 2004 prices put someone who bought in 2004 underwater? By my reasoning, they have had four years of enjoyment and are even. Then there are those who still have appreciation since then.
May 23rd, 2008 at 9:58 am
A median price per square foot for the county as a whole has the exact same value as a median price for the county as a whole, in a nustshell: NONE.
May 23rd, 2008 at 9:59 am
Most of us understand the median price is NOT an accurate indicator and has a lot of flaws.
However, it is (WAS) the number one tool used by this industry to lure people into buying overprice homes. THAT’S A FACT. Gary “in the bag” Watts likes to use it as a tool to get his army of minions in line.
May 23rd, 2008 at 10:01 am
what has inflation been since 2004?…… LMAO……
inflation adjusted price drops are going to be just horrid when we finally reach the OC housing bottom in pricing
May 23rd, 2008 at 10:08 am
It was the number one TOOL used by all the TOOLS in the industry. Thoughtless can I get some of the stuff that you are smoking?
May 23rd, 2008 at 10:12 am
Bubble reminds me of those protesters who yuck it up at the funerals of our soldiers.
May 23rd, 2008 at 10:17 am
this isa fun
May 23rd, 2008 at 10:21 am
hey guys,
more bad news for the economy
http://www.cnbc.com/id/24793710
Is this ever going to end? I hope so because too many people are hurting.
May 23rd, 2008 at 10:25 am
Thoughtful does bring up a very valid point from Graphs post when THE UPPER END WAS THE ONLY THING THAT WAS MOVING. Then, the median was skewed upwards. Now that the lower end IS THE ONLY ONE MOVING, somehow the converse of this simple equation is not applicable. Hmmmm…why is that Bubble?
May 23rd, 2008 at 10:47 am
# Crystal Balls Says:
- “Bubble reminds me of those protesters who yuck it up at the funerals of our soldiers.”
–
Maybe it is time to go back to having these posts cleared by a moderator.
That is ugly.
You need to slink away — post under a different name with a different attitude.
May 23rd, 2008 at 10:57 am
You will soon see 50% reduction from the peak. The question is when.
50% discount, it’s gonna be a fire sale with no buyers. We still have the 2010 mortgage resets coming. Then it will be a bloodbath.
Oil will hit $150 a barrel, World markets will crash, Companies will start laying off workers, and works won’t make their mortgage payments, It’s a ripple effect.
May 23rd, 2008 at 10:58 am
loan losses on helocs force tighter lending standards
which put even more downward pressure
on prices in a self fulfilling death spiral
http://www.occ.treas.gov/ftp/release/2008-58.htm
May 23rd, 2008 at 11:02 am
If someone had an interest only loan since 2004 and the value of the home is the same as it was in 2004, they have basically rented their home for the last 4 years….and most likely at a much higher amount than they could have by actually renting a home.
If they bought in 2005 to 2006 and had an interest only loan, they not only just rented their home for those 3 years from 2005 to present, they also owe more on the house than it is worth.
To be fair to you thoughtful, because you seem to think everyone put 20% down, this doesnt take into account those that people. Of course with values off 21%, that 20% down isnt looking like all that much.
I know you need things spelled out for you very clearly to understand them so there it is.
Regardless you wont concede anyones point that doesnt agree with yours so whats the use of trying.
Things are not getting any better for people. Money is not falling out of the sky with the exception of the lame check the feds are handing out.
Gas is going up, sales are going down, jobs are being lost, house prices are falling, etc….if you think this is the bottom you really need to read a paper or two.
May 23rd, 2008 at 11:06 am
Sharky, we are through the bulk of the resets…there will be some every year, with 2010 being the very last of the 5 year loan resets with higher than avg. inventory movement predicating the adjustment.
May 23rd, 2008 at 11:07 am
Yipes! More frightening prospects for the economy and housing:
The link: http://www.rgemonitor.com/blog/roubini/252665/
“The Systemic Effects of Countrywide Going Bust”
An excerpt: “So, unless a miracle occurs the BAC-CFC [Bank of America-Countrywide] deal is now dead on arrival and CFC will end up bankrupt (the bank subsidiary into a FDIC receivership and the holding company into Chapter 7 liquidation).
Of course the bust of CFC is only a symptom of a much bigger systemic banking problem in the US: with 47% of the assets of all large US banks being related to real estate (residential, commercial, etc.) and with 67% of assets of smaller banks being related to real estate hundreds of smaller community banks and dozens of regional banks and a few national banks will be bankrupt in the likely scenario that home prices fall at least 20% (they are already down 14.7% from peak based on the Case and Shiller/S&P Index) and possibly as much as 30% by the time they bottom out in 2009-2010.”
“Now markets and investors are realizing that the financial storm is not over; rather we were for a short while in the eye of the storm where all looks calm right before the tempest starts raging again. So the worst is ahead of us – rather than behind us – for the economy and financial markets. And the coming bust of Countrywide will be one of the first signals that this year old financial crisis will get much worse before it gets any better.”
Yes, I think I’ll walk the fence a bit longer.
May 23rd, 2008 at 11:09 am
Samson, many areas are seeing 2004 prices today. In most of those areas the cost to own in on par with renting. How then, can you support your argument that people who bought in 2004, at 2004 prices, would be paying more to own than rent? It defies logic. Pleae stop trying to pee all over everyone’s choices.
May 23rd, 2008 at 11:11 am
It’s really lame how people keep trying to convince everyone that owning a home sucks.
May 23rd, 2008 at 11:18 am
bloodbath ? someone call ?
Ei Caramba !
The price per square foot data is a hoot. It’s great to see it, but in truth, it’s essentially what I’ve been seeing in Ziprealty when you look at their trend feature. A plot of the data suggests that we are still inflecting downward, accelerating the rate of decline. This will be irrefutable once we get to September, and the very slight spring bounce effect has been worked through.
I suppose the bull response will be … “well that’s predominantly GG and Santa Ana” . . . but in fact, the $/Sq-ft drops in South Central OC have been just as shocking.
There is some blood in the street for sure, not even ankle deep yet though.
I’m very thankful that I don’t own a home presently.
May 23rd, 2008 at 11:25 am
What happened to Gary Watts?
And his predictions?
May 23rd, 2008 at 11:26 am
crystal,
what a horrible thing to say. you have said a lot of idiotic things in this blog, but that constitutes something a lot worse. shame on you.
May 23rd, 2008 at 11:27 am
oh my god, another horrible days in the stock market.
Home builders stocks are crashing. That usually means that another leg down in housing is coming.
May 23rd, 2008 at 11:30 am
# Crystal Balls Says: “Bubble reminds me of those protesters who yuck it up at the funerals of our soldiers.”
That statement is really despicable. You shouldn’t even joke with that.
May 23rd, 2008 at 11:30 am
Please remember that DQ reports are snapshots of the market 2 - 4 months ago, and tend to be badly skewed. (See “Two big problems with DataQuick’s monthly median price reports“)
With DQ reporting that 38% of April sales were REOs,
I’m pretty sure the DQ medians are being skewed to the low end at this point in time, although that’s probably not be the case in Irvine. Countywide, however, starter homes in Santa Ana & Stanton & starter condos are what’s making up the market.
Buyers are buying at these prices, despite huge obstacles in getting qualified and slowly rising interest rates and a flood of negativity from all corners.
The questions are:
1) Will the pool of qualified and motivated buyers last through the pool of REOs?
2) What will happen with interest rates?
3) What wil happen with the economy and jobs?
I think we’ve got serious problems on all three fronts. However, I think there’s probably aren’t as bad as the “permabears” think.
Indeed, for some, now may actually be a good time to buy! (see “Time to buy?“)
(Please read the post before criticizing the logic. I’m not saying prices won’t drop more.)
May 23rd, 2008 at 11:31 am
# Thoughtful Says:
- “It’s really lame how people keep trying to convince everyone that owning a home sucks.”
–
In perverse sort of way your posts are the best example of how bad it can be for many.
May 23rd, 2008 at 11:33 am
Dr. Thoughtful says “I have taken the data from Irvine and you can clearly see that the median is skewed by the lack of low end sales. They have virtually disappeared. Yes the median works somewhat well for a large data set but when the data set is cut in half and the lower end is dropped and the upper end is now lower it changes. ”
I assume you have simply confused the “low end” with the “high end” in your statement above. On the other hand, a lack of basic math/ statistical skills would certainly explain your continuing bullish views.
IIRC, after New Century and the subprime industry belly flopped in Feb. 2007, the bulls continued to point to the rising median as evidence that the bubble would not burst, when clearly this was only a result of the lack of subprime hurting the “low end” disproportionately. THE NAR AND OTHER BULLS ARE IN NO POSITION TO CRITICIZE MEDIAN PRICES BASED ON THEIR PAST HYPING OF THE STATISTIC.
May 23rd, 2008 at 11:46 am
GD, your reading skills are what are lacking. Go back.
May 23rd, 2008 at 11:47 am
I think Crystal Ball’s comments about Mr. Bubble are pretty damn accurate. He behavior IS ugly.
May 23rd, 2008 at 11:52 am
“THE NAR AND OTHER BULLS ARE IN NO POSITION TO CRITICIZE MEDIAN PRICES BASED ON THEIR PAST HYPING OF THE STATISTIC.”
Of course they can, when it doesn’t work in their favor. That’s their M.O. Ignore stats that do have weight, hype the ones that are flawed, but always push the positive and spin the negative. It is propaganda.
May 23rd, 2008 at 11:53 am
MEDIAN is like looking at a pie chart with 3 big pie pieces that tell you nothing about what is truly going on…if anything it is one of those stats used to hide undesirable truths.
[SavingInLA] makes the best point with the PER SQUARE FOOT. The flaw in your calculation I assume is that you probably lumped beach front into the calc…take that out since it is a seperate world from OC Proper…Santa Ana to Ladera is OC Proper and subject to the average…Beach Front is a global market and needs to be removed.
Rock On!
May 23rd, 2008 at 11:54 am
MEDIAN is like looking at a pie chart with 3 big pie pieces that tell you nothing about what is truly going on…if anything it is one of those stats used to hide undesirable truths.
[SavingInLA] makes the best point with the PER SQUARE FOOT. The flaw in your calculation I assume is that you probably lumped beach front into the calc…take that out since it is a seperate world from OC Proper…Santa Ana to Ladera is OC Proper and subject to the average…Beach Front is a global market and needs to be removed.
Rock On!
May 23rd, 2008 at 12:07 pm
Mr. Bubble isn’t like those funeral protestors. Those protestors want to impose their twisted ideology onto the world, and see inncocent victims as collateral damage in their self-rigtheous war. On the other hand, Mr. Bubble, er, nevermind.
May 23rd, 2008 at 12:08 pm
how anyone with an IQ larger
than their shoe size cant see
the train wreck that our nation
is facing (orange county is
part of the entire nation last
time I checked) is simply
mindboggling… it defies logic
May 23rd, 2008 at 12:15 pm
Unfortunately, we’re going to see this happening more and more often in the months and years to come.
City of Vallejo files for bankruptcy
May 23rd, 2008 at 12:26 pm
We rest our case.
May 23rd, 2008 at 12:44 pm
Got a new name for National Bubbie “Grave Dancer”
May 23rd, 2008 at 12:46 pm
Trying have a discussion with National Bubbie is like the old Who’s on First routine.
May 23rd, 2008 at 12:47 pm
You notice how Bubble revels in digging up negative news (no matter how irrelevant to the local housing market). then ends his post with this hypocritical garbage.
“Is this ever going to end? I hope so because too many people are hurting.’
May 23rd, 2008 at 1:01 pm
Thoughtful;
“In most of those areas the cost to own in on par with renting.”
Huh? Where? In Orange County? There very clearly is a disconnect between rental costs and home prices which is partly to blame for the current price collapse. Let’s see some proof of these areas you speak of.
May 23rd, 2008 at 1:02 pm
Many bears already said in 2006 that the median price statistic comes with many flaws. Home prices in OC will continue to tumble whether we look at the median statistic or not.
Fact is that
- unemployment is up and will continue to go up
- the number of high(er) paying jobs is decreasing (e.g. Boeing)
- NOD and NTS going strong
- NOD and NTS increasing significantly along the “immune” Coastal region
- inflation is in double digits (ignore bogus CPI report)
- Sales volume down (20% vs. same month 2007…and 2007 was weak!)
- reduced consumer credit availability will further hurt local economy, job market and ultimately housing.
- Mass Psychology regarding Real Estate as an investment is shifting significantly
- HELOC money is working itself “out of the system” and will continue to put a huge damper on the economy that became accustomed to that funny money in circulation.
- The “cutting” of the interest rates by the Fed created a force against the downward momentum of home prices. Interest rates cannot be reduced much further and with that this resistance will no longer work be there against the downward price momentum. Ask yourself how that will affect the home prices…
* Inflation is the increase in price due to the depreciation of the currency as a direct result of the increase in money supply through creation. In the current economic and Real Estate environment, inflation will put additional downward pressure on home prices as food and energy prices rise. This will yield more home loan defaults and the potential homebuyer has less money for housing. So while many RE bulls look at inflation as a Saviour to the current housing crisis they ignore the fact that inflation can be the cause of increase for non-credit dependent purchases (food, energy, imports) while credit-dependent assets (e.g. Housing) will actually suffer from inflation in today’s economic environment.
May 23rd, 2008 at 1:06 pm
Mulli says “we are through the bulk of the resets” this just isn’t true.
Residential Foreclosure Situation
• Sub‐primes are not the only iceberg in the
choppy waters
• $515B in ARMs reset in 2007
• $680B in ARMs reset in 2008
• The foreclosure pressure will continue to
increase into mid‐2010 and then drop off
dramatically
• Look for an extraordinary bailout of the
residential market to limit foreclosures
Source: Mortgage Bankers Association, National Delinquency Survey, March 6, 2008
May 23rd, 2008 at 1:08 pm
nvest80,
you meant to say credit dependent assets (like housing) will suffer deflation
and you are exactly right, good post
May 23rd, 2008 at 1:11 pm
Total Delinquency & Foreclosure Filings 2007
• US 2,203,295, up 75%
• Texas 149,703, down 4.6% (1 of only 6 down)
– California 481,392, up 238%
– Florida 279,325, up 124%
– Ohio 153,196, up 88%
– Michigan 136,205, up 68%
– Arizona 69,970, 151%
16 states
doubled or
D C o a69,9 0, up 5 %
– Nevada 66,316, up 215%
– Virginia 24,199, up 456%
Maryland 25 109 up 455%
more; D.C.
was up
– 25,109, 608%
– Connecticut 23,470, up 100%
– Massachusetts 41,487, up 161%
Source: RealtyTrac, Inc.
Data include all default, delinquency and foreclosure filings reported.
May 23rd, 2008 at 1:16 pm
Thanks BTD -
I knew the Mulli comment wasn’t a match to what I had seen in the charts previously.
(Standard bull Wishful response now: Oh, those folks have refinanced already with fixed loans … )
May 23rd, 2008 at 1:19 pm
This story may be of interest:
Discusses NOD vs. Sales ratio vs time, along with the valuations vs time for SD.
http://www.voiceofsandiego.com/toscano/
Obliterates the notion that this is going to be a cake walk versus the ’slowdown’ of 90’s.
May 23rd, 2008 at 1:22 pm
WE HAD THE HOUSING BUBBLE.
NOW WE ARE HAVING THE OIL BUBBLE.
May 23rd, 2008 at 1:24 pm
Here’s a good video explaining how we’re not even half way done with this downturn.
http://finance.yahoo.com/tech-ticker/article/17662/No-Bottom-in-Sight-Home-Prices-to-Fall-Another-10-15-Percent-Says-NYU-Prof?tickers=CFC,WM
May 23rd, 2008 at 1:28 pm
RealtorDaveE Says:
May 23rd, 2008 at 11:30 am
“Please remember that DQ reports are snapshots of the market 2 - 4 months ago”
May 23rd, 2008, 9:23 am · 53 Comments · posted by Jon Lansner/O.C. Register columnist
“For the 22 business days ended May 6, the median selling price was $490,750″
May 23rd, 2008 at 1:35 pm
At the moment there are 3902 pending sales in Orange County. The median list price of those properties is $463,000. A month ago the median list price of pending sales was $475,000. It looks like we’re still sliding downhill.
Until the glut of low end bank owned homes get worked through, we’re not going to see much stability in the