DataQuick’s final stats for June show the median home-selling price at $495,000, a 2% increase above May — though pricing is still down 23.3% vs. a year ago. That’s when the current all-time high of $645,000 was set.
We chose to note the monthly price increase, certainly a modest one, because it’s the first time price have increased month-to-month since November. Even with steep discounting, Sales remain sluggish: June buying was 26.9% below a year ago.
At the local level, only 6 of 83 O.C. ZIPs saw improved pricing vs. a year ago. (More ZIP-by-ZIP analysis is HERE!)
Here’s how the market looks, by key slices:
| Slice | Price | Vs. ‘07 | Sales | Vs. ‘07 |
|---|---|---|---|---|
| House | $550,000 | -25.1% | 1,366 | -18.1% |
| Condo | $366,000 | -19.6% | 449 | -19.6% |
| New | $640,250 | +1.7% | 115 | -62.9% |
| All | $495,000 | -23.3% | 1,930 | -26.9% |
Other pricing news …
- SoCal home price rebound not seen before 2010
- Brokers’ June O.C. home sales worth 18% less
- LA/OC home prices off 23%, by the square foot
- Calif. home prices down 27.3%, nation’s worst
- Newport mansion will now cost you $77 million
- Aliso Viejo is top city for property tax cuts
- Housing bubble hurt Calif. renters, too
- Gov. Arnold says Calif. will ‘grow out’ of housing ills by ‘09
I was told June was the month when all these pending sales and “demand” would finally show up in the sales numbers. What happened?
Sales down a whopping -18% on SFHs! 8)
Per DataQuick, Single Family Median Home Price:
2006 ~ Month End
$690,000 = Feb ~ Watts 15% “In The Bag” 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
$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
$583,250 = Jan ~ Watts declares “Pent up Demand”
$575.000 = Feb
$570,000 = Mar ~ Thoughtful declares “bottom”
$555,000 = Apr
$537,000 = May
$550,000 = Jun ~ Watts apologizes “I Got it Wrong”
Per DataQuick, this loss represents a $184,000 decline in single family home prices from the June 2007 high. And the beat goes on … and on … and on!
I give it a year before things are truly flat. The economic woes of the national economy is going to take 6 months to work itself into the housing market, not to mention steadily rising interest rates as a result of the inflation (both domestically and globally) will dampen volume further come next spring.
The perfect storm: rigorous lending + inflation + rising interest rates + decline of jobs + high foreclosure volume
………. oh wow, that volume is even worse than I would have thought……
……… when the hell are steve Thomas’ 3000 pendings for the 30 days ending in june gonna show up as deals?……….
……… i will answer that dumb question for you……….
……… they won’t………… 1900 deals in a month is where we are at…….
not buying it………
……… if you look back at the Steve Thomas data for what should have closed in June…………..
……… you will find that roughly “25-30%” of pendings are falling out of escrow……..
……… scary indeed……. and to think credit is going to get even tighter……. after the socialization of losses for fannie and freddie investors…..
Yesterday - money was easy and speculation was high - volume was unrealistically high.
Today - lending is a little stricter than is should be, but OK. Speculation is basically dead - volume is down.
This is so basic why is anyone even really taking about what is happening today compared to yesterday?
Just like with economic growth we need to reset expectations on what is normal when people are living within their means. I think the housing market is bumpy, but a lot stronger than many here would like to admit.
Enjoy the economy folks. This is a 30 year cycle…it happened in the 40’s, 70’s and today. I do not think we will see 15-20% mortgage rates like we did in the70’s. But 9-13% is reality. 2011 is looking more and more like recovery time for the economy. Enjoy the time bears…the good usually outweighs the bad, but this is your moment of happiness. I think Lee may even have the party hat on top of his head when he scripts the median update as the beat goes on and on and on.
Who ever said this is fun? It is what it is - it’s reality.
…… we can start talking about normal growth…..
…… when housing prcies baseline on affordability…..
…… that will be when the median OC house is selling for around $380K……..
…….. the housing market right now is anemic….. if you can not admit that in a public forum…… then you are likely hurting really bad economically, because your paycheck depends on the OC housing market……
“This just in… Home sales are slower in winter… better in spring.”
Whoop-dee-doo.
CNBC just announced “Sector Rotation” from Oil stocks to Financials on big volume. Isn’t it strange that this would happen after the SEC announced it would crack down on Naked Shorts. I wish I’d hung on to WAMU a little longer.
………. your just seeing short covering…… not confidence…..
……. which is bad…. because the same shorts will be right back at it…..
……. naked shorting has always been illegal…….
……….why don’t you buy WAMU right now?…….. buy and hold for a year…….. you won’t get burnt……
No Naked Shorting has not been illegal. using Naked Shorts to manipulate a stock price has been.
SeekingAlfalfa Says: “I wish I’d hung on to WAMU a little longer”
This is the same guy that wanted to short an ultra short ETF(lol) and got his ass kicked yesterday. Thank god for investors like alfalfa, they are the ones that make it easier for the rest of us to make money.
Cali…if you do not see the glee and frothing at the mouth of the resident bears here, you are reading another blog. They exude happiness all in the name of falling home prices…well, they got that wish, but the economy went to hell at the same time and they are too prideful to see that housing is sooooooo tied to our economy here locally, it is shameful.
# SeekingAlfalfa Says: “No Naked Shorting has not been illegal. using Naked Shorts to manipulate a stock price has been.”
Now alfalfa repeats exactly what Christopher Cox just said on CNBC five minutes ago when Erin Burnett asked the exact same question.
Even so Bubbs, it is not different from posting an article on this website from another website from another source.
# Mulliganville Says: “Even so Bubbs, it is not different from posting an article on this website from another website from another source.”
I always credit the source and link to it. Big difference.
Alfalfa is making it sound like he knew all that when he is just repeating what he heard on cnbc a few minutes ago.
I know Chris quotes me alot.
by the way mulli, it looks like real estate is pretty slow nowadays (at least for you) because you are on this blog almost all the time.
Don’t you have to go show property to your clients at least once in a while?
Are you currently collecting unemployment?
I mean, I don’t want you to leave the blog, but don’t you have to make a living?
Chris made the comment around noon and I posted at 11:29. Hmmmm.
I know Bubbie it was a time warp.
hey alfalfa,
are you still shorting “ultra short ETFs”?
maybe you just invented a new way of investing: shorting the short etfs. Very innovative. LMAO
Yeah Bubbie, I got out to soon, it’s down another 18% today
I’ll let ProShares know to not bother with long or ultra long ETFs, since it is better and more efficient to short the “ultra shorts”.
………..alfalfa, any naked short in decent volume is going to be illegal…… it was last week and it is this week as well…. no change….
……….. if you are small time, then sure, not illegal, and no impact on the market……. but who cares……. that’s not why there are regulations against it already….
ya, OK, increase… whatever you say people.
From what the SEC says what makes a Naked Short Illegal is failure to deliver within 3 business days the stock that was borrowed to short.
………. you are a clown alfalfa….. that’s only what part of what makes naked shorting illegal….. in addition any naked short that drives down the stock price is illegal…….. any naked short with decent volume is illegal….
….. it was last week…… and it is this week as well…..
Mulli, I think you really miss the big picture if all you see is people jumping for joy about what’s happening.
Mav, I think what you mean is that large volume of trades that are undelivered is how the SEC knows that illegal naked short selling is taking place. The volume of a trade should’nt make any difference if it can be dilivered in 3 business days
Mav, I will leave you a dollar for each tooth.
And bubbs, thanks for your concern. At times, you and I converse very civilly. Other times, like cats, the claws come out. I am doing ok thank you very much. I have some time off prior to my next gig. Went to Tahoe for a week and you did not hear from me at all during the time now did you? I did hang my license with a Newport broker to keep it active. I will be back to work in August or Sept probably. Hope that is ok with you.
It seems the realization may be hitting some Orange Countians that they are not nearly as rich as think they are or used to be. It is a tough thing to come to grips with. When you see your overall net worth drop by 25% since both your home and your stock portfolio has lost value.
The fact that so many in the OC have relied on both industries for their income only further adds to the pain.
Reality is a bastard sometimes.
…….. Samson…… the worst part is….. those who are leverage are going to be even poorer in 2 years…..
Mulliganville Says: “I will be back to work in August or Sept probably.”
but aren’t you missing the spring/summer selling season?
Steve Thomas said that homes are selling like during the boom days.
According to his last report:
“The big story for the Orange County real estate market is that the pace of closed sales, especially the last couple of weeks, has been brisk..”
so, you are missing out on all those multi million dollar sales Mulli.
Mulligan said:
“but the economy went to hell at the same time and they are too prideful to see that housing is sooooooo tied to our economy here locally, it is shameful.”
I agree. It is shameful that real estate equity, not real income, fueled much of our economic growth during the past ~8 years. RE contributed little to our long term economic infrastructure. Time to invest in new, sustainable global industries.
It is time to get to the basics. No more than 28% of your income should go to housing. This country has a savings rate on average of less than 1%. That means there are a ton of people who have a negative savings rate. If people are to become more independent they need to be able to save and invest in profitable markets.
Real Estate is overpriced and has been for a long time. Many put all of their net worth into a home they thought would go up for ever. The money well has dried up. Prices will fall to more reasonable and realistic levels. I dont see any “bargains” out there what I see are prices moving in the right direction.
Samson - I do not know where you want to live, but my recommendation is for you to look a little harder.
Historically OC RE has been priced at 4-5x median income, and that is median income by zip. There is no reason why we should expect the correction to move below this range. If there is some hard data to say it will please share.
Please also note that there are more than couple zips that meet the 4-5x median at $70k, and if you start looking at income by zip (all I could find was 2005 data, which is where the $70k comes from) a good 60%+ meet this criteria.
Oh I can afford the prices now at 28%…I wasnt speaking of just myself. I was speaking for the general population. I have found many places in the area I want to live Brea, Fullerton, etc…
I was just poking fun at how Realtors like those from century 21 are calling the current prices a bargain. I am saying the prices are close to where they should be. A bargain would assume that they are undervalued. The prices before where way overpriced so current prices are realistic prices and not a bargain.
It’s like when people where paying over $1,000 for a Wii when they first came out. When they only cost $250….so now that you can get them everywhere for $250 are they are bargain? No, they are worth exactly what they are worth.
………. Samson….. sit tight…. there is definitely another 20% drop coming……. it will make sense to buy after that 20% drop…………. prices might drop more….. wait until the OC median is at or below $380K for at least 6 months…….. then look to buy…….
My goal had always been Sept-Dec of 08. So it may spill over into 2009. Who knows. There is little to no reason to buy right now. The only reason may be if interest rates take a huge jump….who knows.
…….. if interest rates take a huge jump…….. home prices will drop to account for the jump in interest rates and cash will be king……. the higher the interest rates the better……. it is looking like the bottom will be sometime 2012 and beyond…. just keep saving my friend….
Keep saving and paying the landlord.
Can anyone show a data set that clearly illustrates the relationship between RE prices and interest rates - my understanding form the late 80’s is that sales volume tanked, and of course prices came down, but no where near 20% and we are talking rates in the teens. Instead creative ways to buy RE where found - it was a good time to be a private financer according to my dad.
Not to mention that even when rates were in the teens, housing was still 4-5x medina income (zip dependent of course).
Last - please stop and think about the whole interest rate question.
Banks are already hurting. If they raise rates more than a few tenths over the next 12-months or so what will happen - they will hurt even more - they will drive the REO band wagon right off the cliff.
Now I am not saying that this could not happen, but look at it from a bank CEO position - what would you do? Keep losing money or setup your business plan to stabilize the balance sheet as quickly as possible?
A little less doom and gloom drama please.
Note that rates went down today!!
Active Buyer-
Overnight rates have nothing to due with the long bond, which is what RE loans are based upon.
Rates when down today because the stock market went up. There is always disintermediation out of the bond market.
The benchmark 10-year note fell 31/32 to 99 14/32 and yielded 3.94%, up from 3.82% late Tuesday. Bond prices and yields move in opposite directions.
Sorry, I meant bond prices fell today…rates went up! Active Buyer has it backwards…
The CNN headline today was,
“NEW YORK (CNNMoney.com) — Bond prices sank on Wednesday amid fresh concerns over inflation, after the most recent Consumer Price Index report showed a surprising surge. “
DQNews OC price per square foot data for resale homes. (Again, this only takes into account RESALE HOMES and not new homes).
2006 $/SqFt
$444/sq-ft = June
$433 /sq-ft = July
$435/sq-ft = September
$420/sq-ft = November
2007
$427/sq-ft = January
$420/sq-ft = February
$418/sq-ft = March
$424/sq-ft = April
$415/sq-ft = May
$419/sq-ft = June
$413/sq-ft = July
$404/sq-ft = August
$379/sq-ft = September
$381/sq-ft = October
$369/sq-ft = November
$353/sq-ft = December
2008
$345/sq-ft = January
$335/sq-ft = February
$330/sq-ft = March
$322/sq-ft = April
$318/sq-ft = May
$318/sq ft = June
Looks like prices have dropped from $444 to $318 per sqft - which calculates out to a 28.4% drop in prices since June 2006. When comparing versus price per square foot data the median price has been a lagging indicator of the real drop in home prices.
(