Here's recent history of the Fed’s policy committee and its Fed Funds rate. Next Fed decision is June 24/25.
Calif. home price down 24%, nation’s worst
June 2nd, 2008, 5:07 pm · 60 Comments · posted by Jon Lansner/O.C. Register columnist
First American LoanPerformance says California is again the nation’s worst housing market with prices falling at a 24.37% annual rate as of late April. California has held this dubious distinction since May ‘07.
Following California in April price tumbles: Florida at -17.11%; Nevada at -16.61%; Arizona at -15.78%; and Ohio at -13.41%.
National best was Utah, up 4.13%, and Montana, +4.12%. Only 17 of the 50 states and District of Columbia showed price gains in the year, according to FALP’s math that tracks “paired sales” — gains or losses on individual homes. (To read more, CLICK HERE!)
Other news about regional home pricing …
• SoCal home price rebound not seen before 2010
• S&P puts LA/OC prices off 24% from peak
• Realtors says California home prices down 32%
June 2nd, 2008 at 5:11 pm
None of this applies to OC. Everyone know’s that Orange County is a paradise even greater than Heaven!
June 2nd, 2008 at 5:22 pm
BTD, you’ll never know will ya?
June 2nd, 2008 at 5:39 pm
Where’s the financing?
June 2nd, 2008 at 5:48 pm
I still find it comical that our market peaked in 2007 even though pretty much everyone knew by 2005 the local RE market was overheating there was a huge bubble waiting to pop. agents and media still screaming buy buy buy! both laughing all the way to the bank
way to go OC - we’re #1!!!!!
June 2nd, 2008 at 5:55 pm
And good neighborhoods are still down 15%.
June 2nd, 2008 at 5:57 pm
This site is a good window into what good neighborhoods are going for. I think it came from Nanowest originally. It has been quite the eye opener.
http://www.ipoplaya.com
June 2nd, 2008 at 5:59 pm
“California is again the nation’s worst housing market with prices falling at a 24.37%”
California -24%
OC -22%
What a Classic
I’m sure rants, graphrix and a lot of the other bears in here can remember when housing started to sink the bulls (realtors) in here were preaching how the bust wouldn’t affect OC because we are different.
Now we all have the pleasure of reading the truth.
Thanks, Jon!
June 2nd, 2008 at 6:02 pm
Dang…pull out the bottom and the top and you have the 15% adjustment Tful is talking about. Or, you can think all of the neighborhoods are the same…like the C class and the S class…
June 2nd, 2008 at 6:03 pm
Yes, I had that right, it was Nano.
“Nearly real time updates of what a local neighborhood is doing. We don’t need a real estate professional any longer. By the way the homes listed on this site were selling for between $400 and $450 PSF two years ago.”
Scroll down to see the prices per square foot now.
June 2nd, 2008 at 6:16 pm
With the fed rate cuts creating more inflation than good, look for higher interest rates to implode current housing prices.
http://www.telegraph.co.uk/money/graphics/2008/06/01/ccliam101big.gif
June 2nd, 2008 at 6:23 pm
you perma-fools used to hang onto to good neighborhoods being flat…..
……….. now you perma-fools hang on to good neighborhoods being down 15%……..
LMFAO…………. soon janet/thoughtful/roc/EZ/gilligan/sigh-dud/etc…….. are going to talking about how great it is…. good neighborhoods are down ONLY 25%….. LOL…………..in between wheel of fortune episodes……and NODs….LOL….
June 2nd, 2008 at 6:25 pm
Lions and tigers and bears, oh my!
June 2nd, 2008 at 6:33 pm
Some Real estate agents are on the same level as Carnival barkers, only without the bearded lady. They just can’t seem to tell the truth if it might affect a sale.
June 2nd, 2008 at 6:55 pm
Real Estate Agents are contributing to the problem by telling people lies because they are so desperate to make a sale, ANY sale right now.
June 2nd, 2008 at 7:01 pm
That’s not fair Outsider, many female agents have ample facial hair.
June 2nd, 2008 at 7:20 pm
FWIW, IPO only tracks homes 2,000 square feet or bigger in Irvine and Tustin Ranch. I don’t want to speak for him, you can go look at the IHB and see his 26 page thread where he discusses it, but it’s my observation from what he’s written that if you have a better than average Irvine house (which is pretty nice to start with) and you price it agressively (10-15% below comps which are already 15-20% off peak pricing) you’ll get a bidding frenzy and have the home moved in a couple of days at or maybe slightly above comps.
The stuff below this tier isn’t moving and is getting crushed.
June 2nd, 2008 at 7:33 pm
It’s easy to go property by property and see what the drop is. No need to generalize.
June 2nd, 2008 at 7:37 pm
It all started with Alan Greenspan
June 2nd, 2008 at 7:45 pm
Who needs to generalize. The data is so in your face you can’t miss it unless you want to.
http://www.irvinehousingblog.com/forums/viewthread/1492/P1300/
MasterofdaMoney works in lending. He writes:
IPOPLAYA - Everything I’ve dealt with recently is in the $250K-600K range. Nothing in the super high end. Most of the places I’m doing now are 30-40% discounts from the peak prices. I’ve done a few recently in Moreno Valley that are legit 60-70% off peak prices.
June 2nd, 2008 at 7:54 pm
I know we are talking about OC here but I did see an appraisal last Friday for Moreno Valley that was 67% off. I checked the comps 55 pending sales, 45 REO, 3 Short Sales. Sales area: .75 mile radius surrounding subject. Very high volume but in that area the higher volume is only acelerating the price drop. Volume isn’t everything a high sales volume when the market is dropping can push prices down at an incredible pace. Just like it did in the 90’s.
June 2nd, 2008 at 7:57 pm
The market increases 30% YOY for many years and now it’s a disaster that the market is down 24%. Are all analysts and reporters in their 20’s with no historical perspective.
I’m in my 40’s and as far as I can tell this is NORMAL. The market overheats and then declines. It’s called cycles. Anyone with historical perspective should remember the declines in the early 80’s (remember the RTC and Savings & Loan Debacle) and again in the early 90’s. The big surprise to me is that this did not happen in the early 00’s instead of the 2008.
The bottom line is that the median priced house in OC is much more than the average household can afford. Even with a 24% drop, it’s not cheap to buy a house. From an investment perspective, the Return on Investment based on current prices and rents is still very very low if not negative if you don’t have appreciation.
Although the poor are the first to fall, even higher priced properties will decline when buyers realize they will not see any appreciation for years. Yes, it took over 7 years for property values property values to recover from peaks in 1989. This recovery may be even longer.
Don’t get me wrong. I still think Real Estate is a very good long-term investment, but timing is importantant.
June 2nd, 2008 at 8:04 pm
I looked at the ipoplaya site before and, in nearly every case, the list is higher than the sold price. As I have said before… 2003 prices is what is going to sell today, a year from now it’ll be 2002 (maybe). I’d be satisfied if buyers were using real loans, real down-payments and home sales were back to historical levels (this is the metric we should use to determine where the market is). I predict now that we’ll be nearly there this time next year but prices will still be failing but slower (can’t go on forever, can it?). This time next year…median $420K. The bulk of the market is buyers that make up the largest portion of the potential buyers..right now that happens to be first time buyers and those who can slash prices to move their home on contingency. How alt-A loans will affect this scenario remains to be seen.
Also, I see none of you brave bulls took my dare on trying some of your God like logic on Calculated Risk or even Ben Jones blog..you’re posers just like I thought.
June 2nd, 2008 at 8:06 pm
I’m not seeing only low end houses on ipoplaya.com, just not seeing what you mean. All mortgage guys have opinions, just like us, they are no more knowledgable than anyone else. In fact, they have a tendency to think their clients represent all humanity.
June 2nd, 2008 at 8:09 pm
I looked at CR, there was nothing to comment on. It was regurgitated distressed inventory data that we already saw here.
June 2nd, 2008 at 8:24 pm
“I’m not seeing only low end houses on ipoplaya.com”
Because he doesn’t track them - AT ALL.
2000 feet or bigger.
Select Irvine and Tustin Ranch Zips.
Only.
June 2nd, 2008 at 9:17 pm
We’re number 1! We’re number 1!
June 2nd, 2008 at 10:19 pm
outsider Says:
– “Some Real estate agents are on the same level as Carnival barkers, only without the bearded lady.”
==
We got one here. A Thoughtful one — sometimes in disguise, but always here.
June 2nd, 2008 at 10:22 pm
It’s George Bush’s fault
June 2nd, 2008 at 10:24 pm
That’s exactly what I thought, thoughtful…a poser..nothing more than hot, fetid air.
June 2nd, 2008 at 10:34 pm
There have been several here (several names) who have ridiculed Peter Schiff and his prognostications althought I’ve yet to see where they show him to have been wrong.
Good piece on him here.
Note that EVERY ONE of his TV appearances are on record and available on his site — yet no one can show where he’s missed the trend or been wrong with his prognostications.
This is ‘Thoughfully’ presented to show how Schiff is able to publicly take a stand, state his beliefs, do so under one name, and continue to be right even as some, posting on this blog, try to discredit him and act as though they have a handle on what’s really going on.
http://biz.yahoo.com/usnews/080530/30_permabear_peter_schiffs_worst_case_scenario.html
June 2nd, 2008 at 10:53 pm
You have been warned many time. The worst has yet to come. Housing in O.C. is about to take a big hit until the end of 2008 and possible 2009 to hit bottom.
June 2nd, 2008 at 11:06 pm
“It all started with Alan Greenspan”, President George W. Bush, and Republicans.
June 2nd, 2008 at 11:32 pm
According to you carlos from your previous posts no one will have a job anymore so it wont matter
June 2nd, 2008 at 11:54 pm
Down 24%?
Cool.
Only 26% to go!
June 3rd, 2008 at 12:35 am
Thoughtful Says:
June 2nd, 2008 at 5:55 pm
And good neighborhoods are still down 15%.
So, that means a $800k home is now worth $680k, and anyone who put 20% or less down can’t refinance, because a $640k loan amount would put them around 95% LTV, and would be tough to get approved. If they tried to sell, then they would lose money after they paid commissions. And, prices would have to go up 18% from $680k for them to be back at $800k. So what if they can hold on and prices just remain flat, but if they have an adjustable loan that resets in 5 years where will interest rates be? It really sucks to be someone who put only 10% down, or got a HELOC after the purchase.
I took the ten most recent prices from ipoplaya’s site, and they average $360 a sqft., and if they were at $400-$450 a year ago, then they are down 10%-20% this year. For those that are down 20% on a $800k purchase would need prices to go up 25% to get back what they paid.
And, if you talk about it in real terms, prices would have to go up even more. Real terms are what really matter, otherwise you are really losing money.
June 3rd, 2008 at 1:10 am
FUGETTABOUTIT!!!
Demographic wave coming!! Boomers looking to sell their homes and move-away because they need the money for retirement. Already we are seeing it, areas like Utah and Montana going up in price. Why? The economy there, really?
The demographics are horrible for CA real estate. No one wants to live here, not because we don’t have nice weather and nice beaches and cute girls in bikinis in September, but because a home is 20 times net income!
Ask every boomer you know. How many of them are planning on selling and moving somewhere cheaper for retirement. A significant percentage. This is a downward force of home prices that will overwhelm the local market.
Absent hyperinflation, the smart money would not own CA real estate at any time in the next decade.
June 3rd, 2008 at 6:59 am
OC is still unaffordable to most. Another 20% drop coming in the next year.
June 3rd, 2008 at 7:45 am
I thought we ( the OC) were on the upswing yesterday? wait two hours? then buy?
June 3rd, 2008 at 8:04 am
graphix-
You hit the nail on the head.
Prices have come down 20%. Inflation was over 4% last year. With the price of food and gas skyrocketing, my bet is inflation is closer to 6% this year. Add 10% to the 20% downturn and that translates into a 30% decline in prices. Meaning that prices would have to increase closer to 40% just to get back to where the peak was.
That means that affordability graph may make some sense (Thoughtful, you should like that comment), especially if there is upward pressure on wages.
The question then is, are you all seeing 5%-10% increases in your weekly pay? (Commission only sales folks excluded of course)
I know I’m not.
June 3rd, 2008 at 8:11 am
real inflation since 2005 has been god awful…………..
if you believe the CPI I have a bridge to sell you………….
unfortunately salary inflation has not matched inflation on core good like: petroleum, rice, grain, cotton, etc…………… cumulative inflation on those basic necessities has been 100% or more……. incomes have not increased at this rate……… and for the bulls on this board their income has likely decreased…….
June 3rd, 2008 at 8:19 am
………… oh yeah………. and to make matters worse…….
the stock market has been flat to down………..and the fed rate has driven money markets down……….. our assets are worth less……our dollar deflates…….. while our country drives itself deep and deeper in debt………
any asset tied to credit / financing is going to be absolutely HAMMERED in the next 3 years……….
June 3rd, 2008 at 8:23 am
I agree Mav. I’m on fixed income (I fondly call my pay + annual increase fixed income), and I can tell you that my real pay has fallen. We used to be able to make the house payment, gas and food payments plus have extra each month. Now we feel the squeeze, without the extras. How are folks managing who were on the edge to begin with? I feel for each and every one of them.
Speaking of which…gotta go. My “fixed income” is calling.
June 3rd, 2008 at 8:33 am
Marcia,
You too nailed it.
“The question then is, are you all seeing 5%-10% increases in your weekly pay? (Commission only sales folks excluded of course)”
Most “commission-only” that I know are really hurting. Makes sense when you realize commissions are paid to those selling something that needs to be “sold”. In tough times people hang on to what they have and aren’t willing to buy anything not absolutely necessary.
Good point on the inflation — the ugly part of all this is the things we need to buy (gas, food) are increasing faster than discretionary items, which makes the impact greater than the numbers would indicate.
In other words, food, medicine and gas are up far more than 4%, so if the inflation numbers are diluted by including items we don’t need to buy, the real inflation is much greater - that’s why we’re seeing a slowdown.
Those goods and services that are inflating so much are the very things we pay for, in cash, are recurring regular expenditures, going higher, faster than our income.
June 3rd, 2008 at 8:41 am
The good news is that the fed seems posed to raise interest rates to try and slow down inflation. This will really help the housing market…..prices will fall to levels not seen since 1998.
June 3rd, 2008 at 9:59 am
Marcia, theres a bucket of water with your name on it
June 3rd, 2008 at 10:47 am
My intention is not be condescending, but someone who is financially pained by gas at $4.50/gal and/or a 4% increase in food prices should not be considering buying a house - they should be considering training for a better paying job.
June 3rd, 2008 at 10:57 am
The “Soft Landing” theory (floated here last year) has officially been replaced by the “Bottom Now” theory.
Neither theory got much traction, so purveyors boast about living in expensive neighborhoods. (not that we can check)
June 3rd, 2008 at 11:58 am
I bought my home back in 1997, and saw my home value nearly triple before the crash.
Even with the drop in the market, it will take at least another three years of falling prices just for me to see my home break-even again.
Hopefully that won’t happen! However, it sure makes it hard to get an ELOC now days!!!
June 3rd, 2008 at 12:20 pm
All I know is activity is up…in July, Dataslow will report aforementioned bumps. It is what is.
June 3rd, 2008 at 12:27 pm
“someone who is financially pained by gas at $4.50/gal and/or a 4% increase in food prices should not be considering buying a house”
in other words, almost everyone
June 3rd, 2008 at 12:29 pm
omg, what a mess!!!
home prices are down 24%. This is a disaster.
June 3rd, 2008 at 12:31 pm
“4% increase in food prices”
LOL, what planet are you on………. are are you on the managers special peanut butter / spaghetti diet like most americans
food prices have sky rocketed
June 3rd, 2008 at 12:43 pm
Bubbs, hanging on every negative economic indicator is disastrous. We all create our own reality.
I was talking to one of the top producers from Newport Coast today (he does not work for Redfin…shocking I know!!)…anyway, these were his words and many Realtors are acting in accordance: If the seller is not realistic, I am not taking the listing. Why waste the time for 6-9 months only to have the seller, who thinks they know it all, move on to another agent at a lower price at that point. BINGO.
I have been telling you all that Realtors do not care about high prices…we only care about realistic prices…that is it in a nutshell.
June 3rd, 2008 at 12:56 pm
Ahhh…a top producer in Newport Beach…one of the “let them eat cake” crowd. His reality is certainly useful to the mere mortals wandering the streets of OC, I’m sure.
Mullie, if you would be so kind as to give us the Y-O-Y sales volume info for April going back, say to 2004, if you have it.
Saying that sales volume is increasing during the prime selling season, is a bit like, saying the baseball team is actually swinging at pitches during a baseball game…of course sales are increasing…they are SUPPOSED TO this time of year.
Does that point to a recovery? I suppose one could say that the sale of 800 REO properties out of 2000, when in a normal market there would be only 80 out of 2000, is a recovery sign.
Tell you what. Give us the sales volume history WITHOUT the REOs in the mix, and then let’s see what kind of increase/decrease there is. How about that number?
Then I say let’s see what happens to sales volumes the minute the Fed starts ratcheting rates up. Do you want to make a guess as to what that is going to do to prices?
The rich will always be awash in cash to move it here, there and everywhere. Who cares. I think that’s why the price/sq ft has gone up actually. Because a sale of a $35MM property will certainly skew the per sq ft price, if the overall volume at $850K and up is extremely low. What do you bet?
June 3rd, 2008 at 12:59 pm
And by the way Mullie, bully for you that sales activity has increased enough to keep your own mortgage payments current. You are one of the lucky ones in your industry; though I think I would agree with you, luck has little to do with professionalism.
June 3rd, 2008 at 1:06 pm
I don’t know how agents were able to look themselves in the mirror and cash those 6% commission checks when seven-figure houses were almost selling themselves in a week not too long ago. Many were living the high life, driving the new luxury car du jour and looking down their noses at the rest of us. Now, they may actually have to work for their check. Cry me a river.
June 3rd, 2008 at 1:10 pm
Marc,
I have never pointed to a recovery…the foundation for Realtor bashing in here is they want high prices. Nothing could be further from the truth. The market determines the price…not the seller, and certainly not the Realtor. Sure, there is the occasional pocket listing which goes for a premium. They are few and far between.
I know 75% of the deals are below $500,000. I also know that the last 7 months prior to April, and now May, had sales below 2000 units per month. April and May will be consecutive months moving upwards. Yes, the REO train is boarding. There will be a couple of trains leaving the station. And the bulk of these are in GG, SA, and the slime sectors of Anaheim. Makes sense right? Most affordable = most speculation.
I am a totally realistic believer in RE. It is my opinion, that 2008 and 2009 will be looked back upon as some of the very best years to purchase RE around these parts in quite a while. The bulk of the loan resets after 2008 will be to prime borrowers, with better means to handle their financial situations.
And gas and food…ahhh, the hot topics…inflation!!!
If your tank goes from $40 to $60 to fill, skip the Starbucks.
Food is up 4%??? Oh my gosh! What will we do??? Bread now is $3.12 instead of $3.00? Call for help.
People are smart…we have reduced the suv and truck purchases and are moving to more economical modes of transportation.
Rent, buy, it matters not to me. Just know that at 2003 prices, more and more people are coming off the fence…again, it is what it is.
June 3rd, 2008 at 1:33 pm
Stupid article says nothing about how outrageously overpriced the market was prior to the drop. It was 50% overpriced compared to low end in 1996 or so. Everyone I know that lost a house also had purchased fancy new cars , overpaid for the house, and had an adjustable or interest only. Buy low, sell high dummies!
June 3rd, 2008 at 1:40 pm
Blah, Blah, Blah… GO LAKERS!!!!
June 3rd, 2008 at 5:03 pm
hey gilligan time for wheel of fortune ta ta
mr mortgage always gets the real deal info
here it is…
http://www.youtube.com/watch?v=t997hlTqepw