Builder consultants Real Estate Economics of Irvine once again ranked its dozen slices of O.C. housing, based on sales and pricing strength in May. Here’s the current rankings, with the previous quarter’s rank in parentheses …
- Huntington Beach/Seal Beach (1)
- Irvine/Tustin (3)
- Westminster/Garden Grove/Stanton/Los Alamitos/Buena Park/Cypress (4)
- Fountain Valley/Santa Ana/Costa Mesa (8)
- Laguna Niguel/Dana Point/South Laguna (11)
- Orange/Anaheim/Villa Park (9)
- Brea/Fullerton/Placentia/Yorba Linda/La Habra (10)
- Newport Beach/Corona Del Mar/Laguna Beach (6)
- San Juan Capistrano/San Clemente (2)
- Lake Forest/Foothill Ranch (5)
- Mission Viejo/Rancho Santa Margarita/Coto De Caza/Trabuco Canyon (12)
- Laguna Hills/Aliso Viejo (7)
Of the highest-rated markets, Real Estate Economics said …
- Huntington Beach/Seal Beach: “Among the highest priced in the county, averaging $380 per square foot, and was one of only three areas reporting an increase in resale volume over May 2007.”
- Tustin/Irvine: “Third highest number of resales in the county with a 12% market share. The area reported the lowest annual decline (13%) of average value ratios in the county.”
- Westminster/Stanton/Los Alamitos/Garden Grove/Buena Park/Cypress: “Improving values in this area, which averaged $300 per square foot, resulting in the second largest volume in the county capturing almost 13% of the resales. It also was one of just three areas reporting an increase in resale volume.”
Other neighborhood real estate news …
Yawn.
I thought Aliso was selling anything and everything, yet it drops from number 7 to number 12. What gives?
The only lifelines left for the struggling housing market in Fannie and Freddie are on their last breaths. Imagine the unimaginable.
………… this is like ranking the smartest elected officials………..
Sweet… I own in Huntington. Looks like everything’s fine now.
………….. real estate is a great investment………. when you are investing other peoples money………..
……………. pretty awful when you have to pony up the cash………
Not one candidate have even spoke on the reason gas prices are so high, the DOLLAR’S value and until we fix that no man is going to save us and they will not tell you this. EVERY major economist has said we are so far down a pit that we might not even make it out. Go research the Federal Reserve and you will see why. A Private Bank controls our nation’s money contrary to the U.S. Constitution, they control the money supply or inflation rates, interest rates, have no oversight and the best part is it is a guess to whom own the Federal Reserve. They are a private entity with NO OVERSIGHT. Why do you think our founders fought so hard to destroy the Fed. TWICE!
“All tyranny needs to gain a foothold is for people of good conscience to remain silent.”
“Commerce with all nations, alliance with none, should be our motto.”
“Conquest is not in our principles. It is inconsistent with our government.”
“Educate and inform the whole mass of the people… They are the only sure reliance for the preservation of our liberty.”
“Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question.” 1st Inaugural, 1801. ME 3:320
“Experience hath shewn, that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny.”
“I abhor war and view it as the greatest scourge of mankind.”
“We are overdone with banking institutions, which have banished the precious metals, and substituted a more fluctuating and unsafe medium. . . These have withdrawn capital from useful improvements and employments to nourish idleness. . . [These] are evils more easily to be deplored than remedied.”
“This fictitious capital . . . is now to be lost, and to fall on somebody; it [the bank] must take on those who have property to meet it, and probably on the less cautious part, who, not aware of the impending catastrophe, have suffered themselves to contract, or to be in debt, and must now sacrifice their property of a value many times the amount of the debt. We have been truly sowing the wind, and are now reaping the whirlwind.”
“I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people to whom it properly belongs. “
–Thomas Jefferson
“If Tyranny and Oppression come to this Land it will be in the Guise of Fighting a Foreign Enemy.”
“No nation could preserve its freedom in the midst of continual warfare.”
“Liberty may be endangered by the abuse of liberty, but also by the abuse of power.”
“Perhaps it is a universal truth that the loss of liberty at home is to be charged to provisions against danger, real or pretended, from abroad.”
“We are right to take alarm at the first experiment upon our liberties.”
“I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations… the means of defense against foreign danger historically have become the instruments of tyranny at home.”
“It will be of little avail to the people that the laws are made by men of their own choice if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood.”
- James Madison
OK, so where do all you geniuses think the real estate market is headed after the election and how far percentage wise from where we stand now? What’s the consensus of where we will be 3 years from now? Curious people want to know
Wow, I can’t believe it! Nobody has said anything about this. Must be too worried about p*ss-ant Iran playing with their bottle rockets. Although it isn’t happening here until 2010, this is exactly the reason why demand for oil and gas is going to level off and start to drop in the coming months and years. People are fed up and just can’t afford oil and gas at these prices. There just isn’t the money necessary to support prices this high. The people that bought big trucks and SUV’s for status or novelty or comfort are getting rid of them and going to much cheaper and economical means of transportation. The SUV market will continue to implode over time and the truck market will soon be only for the people that absolutely HAVE to have them for work and hauling. There won’t be much in the way of an every day driving or recreational use market for trucks any longer. The American public gets the conservation message loud and clear. We also understand the need for energy independence from foreign oil and the need to develop other forms of energy. I still say Ethanol is NOT the way to go. You just can’t get the energy or economy out of it that you can from gasoline and that makes it environmentally unfriendly as we have to use MORE of it to go the same distance you can on gas. Even Ethanol blends, like Missouri has mandated, greatly decrease fuel economy. On top of hurting fuel economy, it’s driving Corn prices and anything made from it higher which hurts everybody but the farmers. The Government needs to quit subsidizing it and quit mandating it’s use. Plant more Sugar Cane if you want to make Ethanol. Now to the more depressing new…..only 58,000 INITIAL jobless claims. Meaning only 58,000 people lost their jobs recently and filed for unemployment benefits. Gee Wally, that’s swell! What country soaked those up? The higher fuel and oil prices go, the higher production costs go, the more economical it gets for companies to outsource their work overseas where labor costs are cheaper and can offset that rise and maintain profitability. THAT is basic Econ 101. Anybody in Washington D.C. care? Obviously not!
Looks like South County is placed on the bottom half and not doing well vs the North. That says a whole lot. I could speculate why, but it would be much more fun for all of you to speculate on your own.
Pass the popcorn.
…………. Alfalfa……… 3 years from now I would say OC home prices will be 50% off peak pricing……….. not including inflation……..
inflation adjusted that will probably be 70% off peak pricing……… but of course it depends on what you believe inflation to be………… that would be based on CPI from 2006 to 2011……… the real inflation numbers probably put the decline at over 80% inflation adjusted…….. no matter how you look at it….. it’s going to be ugly………. credit is going to be very tight next year……
…….. the pool of available buyers dries up daily………. with each current deal, the down payment (20% in cash or more) is destroyed…….. cash is taken out of circulation…… deflation in hard assets combined with inflation in consumable necessities…….
……….. GD2………..
NationalBubble-
I hate to burst your bubble, but 2005 is ancient history. Your talking about the past and this is a statement about the current strength of the HB/SB market.
I’ve looked at this Redfin listing before and the house is on a large lot… 7,300 sq/ft. You could rent it for maybe $2200-$2300 a month. A person buying it with 20% down would have a conforming loan which would allow them a small cashflow after tax breaks are figured in. This tells the house won’t sell for much less than the current list price. Maybe a little less, depending on the condition, but most of the decline has already been factored in.
What this post tells me is that the areas with lowered asking prices, mostly in North OC, have increasing sales and firming prices. In other words, they are near the bottom.
Seeking what does that link have to do with Obama? You might as well blame the dotcom crash on Bush if we are going that route. Save it for Rush.
Liar L, they may be near bottom…if by near you mean more than half way there then, yes, near.
By near I mean within 10% on that particular property.
eat it,
The perception is that a Democratic controlled government will get rid of the Capital gains exemption and mortgage interest rate deduction. Follow the link above and you’ll see what I mean. Palley is a Keynesian as most liberal Democrats are. The investors are not waiting to see if this becomes an actuallity, they are headed for the exits now.
SeekingAlfalfa Says:
July 10th, 2008 at 9:24 am
“OK, so where do all you geniuses think the real estate market is headed after the election and how far percentage wise from where we stand now? What’s the consensus of where we will be 3 years from now? Curious people want to know”
After Obama wins, real estate will be the least of our worries. Right after his swearing in in 2009, armageddon will occur. The stock market will fall 90%. Taxes will increase by 99%. Mice will chase cats. Cats and dogs will live together. The TV network programming will be reality TV 100% of the time. Iran will reveal that they had already developed nukes several decades ago.
PBT, Gee, that sounds terrible.
Oh crap, I’ve been moderated
Re ‘This Guy’
To say that this exemption fed the bubble in a significant way - I don’t buy it. It certainly came into some peoples mind as tertiary incentive to buy … but they have to live in the place … wouldn’t apply to investor houses. This would be like 4th on the list of reasons … not worth taking action on.
Having to pay cap gains tax on inflationary property value increases is criminal … the exemption should stand. The govt. is largely responsible for the inflation rate.
Flippers who put renters into a house, and then falsely claim that they themselves lived there, and then acquired the exemption …. criminal, and should be prosecuted with scorched-earth intensity. The exemption should require stronger proof that the owner lived there.
It must be bedcause I mention John Maynard Keynes, democrats and liberals, all in the same paragraph
Liar Loan Says: “This tells the house won’t sell for much less than the current list price. Maybe a little less, depending on the condition, but most of the decline has already been factored in.”
I hate to burst YOUR bubble but the listing for 499K has been on the market for 72 days with no offers so far and they just lowered the price again a couple of days ago. Doesn’t look like we reached bottom, does it?
In order to sell it they’ll probably have to lower it another 60K so the pain for that brilliant person who paid 685K in 2005 is barely starting. If you own in HB, I feel sorry for you because prices are still heading lower over there. Not too many people want to pay more than 400K for a home with a view of that ugly power plant and oil wells.
Even here in Newport Beach prices are going lower but not as bad as HB.
Blood, you and I agree about the flippers and hopefully they won’t touch the exemption but there is the percetion out there that this could happen. There have been articles in the The Nation, Salon and I believe Slate about this and it could be they’re floating trail balloons.
………… Alfalafa…… if that guy is right GD2 is in the bag………..
…. it’s funny because I agree with most of what that guy says (i.e. tax deductions are designed to steal from the poor/middle class and give to the rich)……………..
………. however if you remove the interest deduction for housing…….. affordability would shrink further…. and I imagine we would see foreclosures on par with the Great Depression…………..(maybe we will get there anyway)……
Well… I kind of like the powerplant and the oil wells. They’re part of the character and history of the city. Personally, I hate the traffic and parking in Newport and wouldn’t want to live there for that reason. To each his own.
I said earlier that the house is within 10% of it’s bottom price. That would be a $50,000 further cut. What the owner paid in 2005 has no bearing on the current market price and 72 days isn’t very long. Most escrows last almost that long these days. How do you know they haven’t received any offers? Do you know them personally?
comparing the prices of these homes
now is like comparing the IQ’S of
paris hilton and lindsay lohan LMFAO
WHATS IT MATTER– liar loan didnt
see the bubble but can call the bottom
clueless dweeb
Liar Loan Says: “How do you know they haven’t received any offers? Do you know them personally?”
well, it is pretty obvious they haven’t received any DECENT offers since they lowered the asking price again just 2 days ago. Lowering another 10K is not a sign of a confident seller. LOL
“What the owner paid in 2005 has no bearing on the current market price”
Well, it does because more and more people are upside down on their mortgages.
“I hate the traffic and parking in Newport ”
Well, you couldn’t afford to live in NB anyways so stay there in HB with a view of the powerplant since you seem to like it so much.
Seeking Alfalfa - the site you link to in your comment above downloads a virus when you enter the site!!!!
Of course what would I expect from a site that trys to say that the mortgage interest tax deduction was a significant contributor to the housing bubble - get real.
If you need to ask ‘hey is that the ocean?’ then you don’t really have an ocean view amigo.
the house national refers to is garbage grove with an hb zipcode.
that house is no different from a home in santa ana, costa mesa, aliso, san clemente, rsm, mv, portola, quail, or ladera.
they are all going to 200/sq foot and below…all of them. this number is in line with historical trends and is affordable by the masses of people.
don’t just let the loonies lose their homes and their credit…applaud them for it. thank them for finally getting out of our houses.
buh, buh, buh….BUHBYE!
with regards to the gas price…it truly needs to go up to about $8/gallon. it is something that should not be used as casually as it has been all along, the problem is that it should have gone up due to taxation so that we could reduce taxes on personal incomes. instead it is no doubt making fat cats fatter…oh the putrid greed of perverts.
Obama will raise your txes and cut and run from every evil terrorist group Heck try $7.00 a gallon in 2009 no drill no gas you libs are the reason you all suck
I wonder if Jimmy drowned himself in the Ocean after seeing that CDM wasn’t #1. More so, that it dropped from 6th to 8th.
This election will have little to do with what will happen to the housing market. The problems with the market have already happened we are just now seeing the effects.
The economy as a whole is in for some serious correcting. It is time that people learn to spend within their means and actually begin saving. I truly think we are on the verge of a lot of change in the way we live our lives. The expanding world economy is going to have a bigger effect on us than most can imagine.
I think it is exciting. We are long overdue for something different. The status quot of years past has had a negative effect on our society and it needs to be woken up! Michael Douglas may have been right in the 80’s stating that “Greed is good”….I think the mantra of this new Century….is just the opposite.
everthing that happens in the world that is not a natural disaster is calculated.
governments and the people that lead them, cash valuation and movement of currency, oil and the cost of that oil.
my point of this is that a group of unknown size controls the money, therefore the world.
the world up until recent centuries was ran by charisma and the sword for the most part. weak wimpy evil perverted snivling men created a new game and have been evolving and perfecting that game.
rules of law (open to interpretation in their favor). powerful and easily controlled military that can be used to police any situation in the world. absolute control of the center piece of the entire fabric of the known world…the control of currency valuations.
this one simple calculation that is nothing but made up by a select few is what drive all of the comments on all political and financial blogs. we are monkeys guessing what happens next. the real people in control simply unfold their plan one day at a time in a very methodical fashion.
That house on Friesland in HB is worth 320k TOPS. Crappy school, lots of rental in the area, too close to Beach Blvd. and half the houses are run down. It also is located on a thru street with lots of traffic. Anyone that pays 450-500k for it is a fool.
Active,
Sorry about the virus thing. I didn’t have any trouble with it. I don’t agree with the guy either but he is an economist that the left looks to and like I said this is the perception that a lot of RE Investors have right now, that the tax codes will be changed. if they leave it alone it may cause a lot of buyers to come back into the market quickly, but it won’t be until after the election and the all clear is sounded.
Mav, very interesting take.
“if they leave it alone it may cause a lot of buyers to come back into the market quickly, but it won’t be until after the election and the all clear is sounded.”
sure, since it is so easy to qualify for a loan nowadays….
give me a break
the only way buyers will come back quickly to the market is if lenders start giving subprime, no money down, stated income, and negative amortization loans.
“liar loan didnt
see the bubble but can call the bottom
clueless dweeb”
“Well, you couldn’t afford to live in NB anyways so stay there in HB with a view of the powerplant since you seem to like it so much.”
This is just weird. I’m having flashbacks to my elementary school days. Guys if you want to debate real estate, I’m all game. Present some intelligent arguments and we’ll debate our respective sides.
My side is trying to understand what happened and what will happen without looking through a bull/bear lens. I spend a lot of time valuing assets in the stock market, and even though it’s less liquid, I believe you can derive instrinsic value for real estate based on similar concepts.
Shannon says there are lots of rentals in that area, so deriving a comparable rent/own ratio shouldn’t be too difficult. Eventually you reach the point where investors and renters alike will pile into the housing market to scoop up underpriced deals.
Don’t worry Bubbie ACORN will make sure they do
“My side is trying to understand what happened and what will happen without looking through a bull/bear lens. ”
Are you serious? You still don’t know why we had a housing bubble?
Can you get it in your head that the median income per family in OC is 70K while the median home price is 495K? Can you see anything wrong with that?
“Eventually you reach the point where investors and renters alike will pile into the housing market to scoop up underpriced deals.”
yes, that point is 20% lower than current prices.
Liar Loan,
I live a stones throw away from this house and my rent is 1630.00 3/2 2 car garage. In my opinion your carrying cost quoted above are too low. The house will easily be 3000k a month at 2400.00 p/i 500.00 property taxes and 100.00 insurance. That would not leave any room for a cash flow plus you would lose any opportuniy for interest on that 100k you put for a down payment plus another 10k for closing costs. It is a lose lose situation.
# SeekingAlfalfa Says: “Don’t worry Bubbie ACORN will make sure they do”
Do you mean like the help HOPE NOW provided to prevent foreclosures?
“What is a healthy ratio in your mind?”
I was going to answer your question but since you apparently doubt that I have an intelligent opinion on this, I’m not going to waste my time with you.
Enjoy your view of the powerplant and the oil wells!!!
and don’t come to NB, we have too much traffic here and homes are too expensive, ya know?
NB - what value is there in saying the median income in OC is $70k - that is like saying the median house price in the US is $250k (or what ever it might be today). Talk about the median price by zip and then compare that number to the median income for the zip. If those numbers are out of wack than there is an issue worth talking about.
I am glad you are making a buck off of this down turn, but please try not to spread the doom and gloom with such general statements - it just does not make sense. I am sure it will not impact the hits at your site too much.
What a shock. Price stability and sales volume in a beach community. More evidence that the beach continues to hold up well.
Hey Bubble,
What’s up with this?
“Even here in Newport Beach prices are going lower but not as bad as HB.”
What happen to the higher they are the harder they fall mentality?
Go get checked out in the ER at Hoag. Just a stone throw… :)
Shannon,
I factored full monthly carrying costs minus the tax breaks for ownership. This would vary for different people, but I was figuring a 25% federal bracket, 9.3% state bracket, and no AMT. That would save somebody about $800/mo in taxes starting out. You’re right that the opportunity costs will matter to some people, but many would forgo a 2% return on cash for a longterm equity return that is greater.
The rent would be the determining factor for this deal. At $1600 it wouldn’t be a good deal, but for a little more rent, or a little lower price, it gets much closer. At some point rents create a level of resistance for the housing market.
Bubble-
Now that the bubble HAS burst, maybe you should start a new site: http://www.NewportRenters.com
Liar Loan,
2% return on cash is absurd. I earn 6% tax free on a multitude of tax exempt bonds. That is low but I’m conservative with my money.
When you take your taxes and itemize your deductions such as your 800.00 a month savings, you can no longer take a standard deduction and for married couples it is 10,700.00. Your 800.00 a month comes out to a 9600.00 yearly deduction. 1100.00 less plus once again your opportunity costs for earning money and having it be liquid is GONE. In a declining market that 100k downpayment could be lost in a very short time frame.
Shannon-
A bond is not the same as cash. Even muni bonds can default. It wasn’t that long ago Orange County declared bankruptcy.
You’re correct that the tax savings really depend on each individuals situation. Many people itemize and deduct a multitude of other things, so the mortgage interest deduction and property tax deduction add to that. In my case, I deduct more than the standard deduction before I even get to the interest and property tax deductions. There’s a reason people don’t want to see that deduction eliminated by the Democrats.
My block in 92647, 6 homes closed in 3 mos. Avg 336/sq. ft. A market still exists out there.
Liar Loan-
Hate to burst your bubble, but almost everyone forgets to remove the $10K deduction you get for not itemizing. So your $800/month tax savings is too high.
You take your gross annual deductions, subtract out $10,000, and then multiply your net by the 35% to get your savings.
Monthly P&I: $2,400 = Annual $28,000
Prop Txs: $500/month = $6000
Insurance: $150/mo = $1800/ yr (not deductible for owner occupied)
Assume $36,000 less $10,000 standard deduction, gets you to $26,000 x 35% = $775/month.
So on: $2,400+$500+$180-$775 = $2305/month
Shannon is renting at $1650/month. So that makes this 40% more expensive than renting.
I’d say prices in this neigborhood still have a ways down to go.
This assumes nothing down, btw. If you put any skin into the game, then you have to factor in the lost interest income too.
I can see nothing has changed. Bubble still does not want those that are not “his kind” in Newport. Didn’t he call me an elitist at one point? Yep, thought so.
I do agree that at one point in time, this used to be a forum for shared ideas and thoughts to be passed around. Now, it is just D.C. in the OC. Back and forth, back and forth…nothing EVER gets accomplished since emotion and not clear heads is the prevailing ingredient to posts here.
Bubbs: move to marin and purchase that electric scooter…oil is evil you know.
How long until Israel bombs Iran?
The house at 8131 Freisland is in default.
Marc,
We were actually assuming a 20% down payment of 100k with a purchase price of 400k. That makes this as an investment laughable. With 3% down you would be looking at a monthly cost at approximately 600.00 more plus PMI.
I guess people in seal beach dont stab and shoot each other as much as in santa ana….why is that?
” “Conquest is not in our principles. It is inconsistent with our government.”
“I abhor war and view it as the greatest scourge of mankind.” ”
neither of these have anything to do with banking, fiscal policy, monetary policy, or real estate.
btw, McCain, a former war hero, has said that he despises war…
HB rules. Come on in the water is lovely!!! Buy buy buy