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O.C. beach homes hardest hit by slump in June
July 17th, 2008, 12:00 pm · 62 Comments · posted by Jon Lansner/ocregister.com
Analysis of DataQuick’s June report shows the county’s beach-close communities are suffering the most from the current homebuying slump.
DataQuick identified 341 homes selling in beach cities’ ZIP codes last month, a 35% drop from a year ago. In these 17 ZIPs, last month’s median price change was down 10.5% vs. a year ago. Compare that to other O.C. regions …
• South inland ZIPs had 575 sales, down 21% from a year ago. In these 19 ZIPs, last month’s median price change was off 15.9% vs. a year ago.
• North inland ZIPs had 491 sales, a drop of 23% from a year ago. In these 23 ZIPs, last month’s median price change was down 19.4% vs. a year ago.
• Mid-county ZIPs had 493 sales, a drop of 14% from a year ago. In these 24 ZIPs, last month’s median price change was a decline of 30.6% vs. a year ago.
All told, countywide sales were off down 27%; while the median selling price fell in the past year by 23% .
Other news about neighborhood real estate …
- Huntington/Seal Beach ranked O.C.’s top housing market
- 24% discounts at Platinum Triangle condo sale
- Football star Carson Palmer lists Laguna home at $2.95 million
- Newport mansion will now cost you $77 million
- Aliso Viejo is top city for property tax cuts
- Irvine called 4th best place to live in U.S.
- Irvine among fastest-growing U.S. cities
July 17th, 2008 at 12:12 pm
At some point, even the discretionary markets have to be affected.
July 17th, 2008 at 12:14 pm
these huge declines in sales in beach communities is exactly what I’ve been seeing this year here in Newport Beach.
Very few properties over 800K are selling so this shouldn’t surprise anybody. I guess the beach communities are not so immune after all.
July 17th, 2008 at 12:19 pm
People at higher income levels (obviously not speaking about the ultra-rich) have a greater ability and resources to withstand market changes for a period of time than those at lower levels. But it appears to be just a matter of time before the elevated payments and cost of the lifestyle will catch up with them and force them to make some tough economic decisions. REOs are likely to increasingly permeate into even the highly regarded areas of the county.
July 17th, 2008 at 12:26 pm
That must be why a cottage home near the water in CdM can not be had for less than the low 2M range. It must because they are crashing. When prices by the beach crash, they just stop going up. OK. I understand.
July 17th, 2008 at 12:32 pm
Fear leads to denial.
July 17th, 2008 at 12:38 pm
No, I agree with all. Prices in CdM fell by an astounding 4% over the last year after rising 5 times in the last 10 years. This is a true disaster.
July 17th, 2008 at 12:45 pm
Proximity to the coast will always command a substantial premium, but does not render a property immune from the effects of a severe and prolonged decline in real estate values throughout the region. To what degree prices near the coast will weather this storm is debatable. But the financial ability to withstand some of the downturn, either through wealth, equity, or ability to secure additional financial resources by some of the more affluent at the coast postponed the pain felt by many at the lower end of the economic scale. Is it crashing? Hardly, but it has always been highly unlikely that the coastal communities would go unscathed–it was just a matter of time.
July 17th, 2008 at 12:48 pm
OC Native, I’m on board. A 4% drop over the last year is “a severe and prolonged decline”. Do you think I should be smart and start dumping for 25 cents on the dollar?
July 17th, 2008 at 12:56 pm
and let’s not forget that starting next January, Obama is going to tax the hell out of all the rich people in NB, CdM, etc, further depressing the housing market in these “beach communities”
Did I mention that the state of California has to close the budget gap somehow? People in Sacramento are already working on some tax increases and guess who the primary targets are.
It’s not going to be fun to be a rich person.
July 17th, 2008 at 1:06 pm
Rich people don’t have full time residences in California. They live in Florida and Texas and spend 179 days a year in California. That way they will have an extra $100,000.00 a year to use for housing. Maybe the cost of the Beach Community housing is tied to the price of air travel. Not good for NB.
July 17th, 2008 at 1:24 pm
Sounds like Jimmy is starting to squirm. First 4%, soon it will be 8% until eventually the beach communities will be hit just as hard as everywhere else save for some of the subprime intensive areas like Santa Ana. It’s called “plankton theory.” Jimmy’s staunch denial that his beloved beach properties could ever decline is comical. Once it happens, he will go the way of Ken, Thoughtless and all the other morons proven not to have a clue about the severity of this decline.
July 17th, 2008 at 1:29 pm
Yes Bruce…CA tax structure is deplorable at best. The property tax structure is laughable at best. It almost locks you into your home forever if you are the typical family. If CA adjusted taxes every year, there would be more turnover and the values would be kept in check a little more. I do not even believe you would see 5% annual gains…more like 2-3% were this tax structure in place.
July 17th, 2008 at 1:40 pm
Last week HB and SB ranked number 1. Now this data. What gives?
July 17th, 2008 at 1:43 pm
Oil drops, stock go up. Bubble be very sad.
July 17th, 2008 at 1:58 pm
I don’t study the numbers, but I can tell you that 2 houses on my road are for sale- no bites, and I have 3 friends with houses for sale- one just got a bite, but way below asking price. Another one that I looked at has an offer for 300,000 under asking price. That was 6 weeks ago and it still says active.
Jimmy says:
“That must be why a cottage home near the water in CdM can not be had for less than the low 2M range. It must because they are crashing. When prices by the beach crash, they just stop going up. OK. I understand.”
Jimmy- the prices are much higher here, and should be, I understand this. But let me ask you this- are the houses just sitting? How many people are jumping at those CDM homes now?
When the numbers came out it a couple of days ago, it said that CDM’s median range was now 1.2’s (down by a long way). If this trend continues- it may not crash, but maybe a slow meltdown.
OPEN HOUSES EVERYWHERE- EVERYDAY!!
July 17th, 2008 at 2:02 pm
Recently, the SEC started cracking down on short sellers spewing information meant to tear down equity prices. The SEC should also go after media blogs that are nothing but an attempt to undermine the confidence in the real estate market. This is unAmerican.
July 17th, 2008 at 2:16 pm
The question begs, Why are these expensive homes even on the market? Financial woes hitting the wealthier bigtime.
July 17th, 2008 at 2:18 pm
where are the links NATIONAL? you improved this blog with your links…keep it up.
July 17th, 2008 at 2:34 pm
NationalBubble, how much time do you spend finding typos? This same link shows 1114 goldenrod ave sold for $5000.
July 17th, 2008 at 2:39 pm
now that WAS a bargain! too bad I missed the goldenrod opportunity!
July 17th, 2008 at 2:44 pm
# Mom in CDM Says:
July 17th, 2008 at 2:39 pm
now that WAS a bargain! too bad I missed the goldenrod opportunity!
”
Mom, don’t worry. 1114 goldenrod will sell for $3800 in a couple of years when the current owner go into foreclosure.
July 17th, 2008 at 3:09 pm
From the article in money.cnn from Thoughtful…
“The plan calls for making the process of securitizing loans for investors more transparent, so that they can more clearly understand the nature of the mortgage pools they purchase. That would allow investors to better assess the risks and rewards of individual pools and judge their pricing more accurately, and should encourage then to resume buying these securities.
Until now, lenders provided little information to investors about the nature of the mortgages in a given pool. And most pools were made up of a wide variety of high and low risk loans. That meant investors often didn’t have a real understanding of just how risky these investment pools were.”
So what you saying is..is that the people who borrow the money to get the mortgages will have to be able show that they can pay them back so that the investors in the pools can have confidence in them? Oh, now I see…that should keep RE prices artifically high shouldn’t it? NOT!
July 17th, 2008 at 3:17 pm
people like Thoughtless don’t want to understand that the party is over and from now on, buyers are going to have to show income before buying a house (what a concept!!!) and therefore, prices will continue going down.
What a concept!!!
July 17th, 2008 at 3:18 pm
“I” didn’t say anything. Investors will return, that is a fact. Money makes the world go around.
July 17th, 2008 at 3:19 pm
Bubble, you know diddly about loans.
July 17th, 2008 at 3:20 pm
Your very own quasi-government makes stated income loans every day.
July 17th, 2008 at 3:21 pm
Provider Says: “Bubble, you know diddly about loans.”
Well, I obviously know more than you since I predicted this real estate depression.
July 17th, 2008 at 3:39 pm
It’s in plain english in the article for you to read…is also in plain english on the loan documentation. I also note that thoughts/provider you are post links to articles that support the position that more regulation and safer loans are in store and not the other way around. A safe and sane financial systems is where all of this is leading. You’ll also noticed that the market has nearly evaporated the fraud based equity that some homeowners so desperately wanted to believe was real.
July 17th, 2008 at 3:40 pm
“NationalBubble, how much time do you spend finding typos? This same link shows 1114 goldenrod ave sold for $5000.”
yeah that’s it… they’re all typos. the whole website. someone alert the SEC for Bubb spreading this misinformation
LOLOLOLOLOLLLLL!!!
July 17th, 2008 at 3:50 pm
The article I read said the risks will be identified, so that each type of investor can invest according to their risk tolerance. More risk equals better returns. You can’t control the markets, try as you might.
July 17th, 2008 at 3:51 pm
Watch it, eat it: bears eat their young. Fraud equity has another 90% to go.
July 17th, 2008 at 3:57 pm
bpsqwerty, it is time your landlord raises you rent.
July 17th, 2008 at 4:01 pm
What is up with that listing in CdM - If it sold in 07 for $1.7M why were the 07 property taxes only $1k.
Some one played with the numbers on that one.
July 17th, 2008 at 4:06 pm
I hope prices in CdM go down 40% peak to valley by 2012 so Pretentious2 — whoops, Jimmy2, can chew on it all the way down. Which is what should happen if other less desirable cities go down 50-60% p-t-v. “The coast is immune!” is bs… Of course it will always be proportionally higher, but to say it’s immune from significant price declines shows that you don’t have to be intelligent to have $$.
July 17th, 2008 at 4:22 pm
providers article from clueless magazine…
the article starts out- a group representing
the buyers and sellers of mortgages—
thats like saying a group representing
charles manson have asked for his release
from prison since hes been a good prisoner
LMFAO- hey provider NOBODY wants those
toxic loans now that real estate prices are
dropping faster than bill clintons pants
at strip bar
July 17th, 2008 at 4:28 pm
If you control within a certain size of house, i.e., 2,000 - 3,000. You get 14 listings and 8 sales. Decline on that slice is showing 19%. It’s a more accurate look since anything over 2,000 in the ports has been upgraded.
July 17th, 2008 at 4:34 pm
Should we ask bakers and candlestick makers?
July 17th, 2008 at 5:22 pm
Re: 600 Avocado, Corona del Mar –
Garbage In / Garbage Out. See this mortgage information via public records:
Sales History:
Recording Date: 02/26/2008
Sale Price: $602,000
Recording Date: 06/15/2007
Sale Price: $1,700,000
Buyer Name: Titan Avocado Developers Llc Titan Dev Co Llc
Seller Name: Titan Dev Co Llc Jadwin H W & H L Living Trust
Document No: 85418 385693
Document Type: Grant Deed Grant Deed
Mortgage History:
Mortgage Date: 09/11/2007
Mortgage Amt: $1,105,000
Mortgage Date: 02/26/2008
Mortgage Amt: $1,960,000
Mortgage Lender: Commerce Nat’l Bk American Sec Bk
Mortgage Type: Conventional
It was not an “arm’s length” transaction. Sold and bought by related corporate entities at whatever price they determined.
July 17th, 2008 at 5:27 pm
This is the Obama effect. People have finally realized that the 250/500 Capital Gains exemption on the sale of a house is on the table as a way to cover the 1 Trillion in new taxes the Democrats want. They’d rather sell now and get something that wait for the blood bath when Congress takes away that exclusion and then sell for less and have to pay the higher Cap Gains to boot.
July 17th, 2008 at 5:36 pm
Short of declaring war on Holland, I can’t see any way that President Obama will do a worse job than the current lot.
July 17th, 2008 at 5:51 pm
Jimmy2 Says:
July 17th, 2008 at 12:48 pm
OC Native, I’m on board. A 4% drop over the last year is “a severe and prolonged decline”. Do you think I should be smart and start dumping for 25 cents on the dollar?
Jimmy2: Not knowing anything about you other than that you live in CdM, I wouldn’t be presumptuous enough to tell you what to do. Additionally, if you will re-read my post, I never indicated what level of decline I expected to see in the beach communities, but I think you’ve obviously taken it to the extreme with the 25 cents on the dollar comment. I got ticked off a while back and threw my crystal ball against the wall; I tried to duct tape it back together, but it just doesn’t work. If we learn from history (I seem to remember an active REO market in the 1990s), the beach communities are typically more insulated than others from devaluation, they won’t remain untouched by current market conditions.
July 17th, 2008 at 6:27 pm
Yeah but my house is 3 feet closer to the water than yours so it should not lose much more than 3% and it only takes about 2 years to sell because everybody wants one. On top of that, as the beach front erodes it’s just gaining in value cause its closer, ‘right’.
July 17th, 2008 at 7:48 pm
Obama is our only hope. McCain is just pathetic.
July 17th, 2008 at 8:46 pm
SeekingAlfalfa Says:
July 17th, 2008 at 5:27 pm
“This is the Obama effect. People have finally realized that the 250/500 Capital Gains exemption on the sale of a house is on the table as a way to cover the 1 Trillion in new taxes the Democrats want. They’d rather sell now and get something that wait for the blood bath when Congress takes away that exclusion and then sell for less and have to pay the higher Cap Gains to boot.”
Obama also threatened to throw every bubble buyer into Guantanamo Bay if they didn’t sign on the dotted line of their mortgage contract.
July 17th, 2008 at 8:52 pm
Hey delusional Jiimmy, Orange County real estate is not all beach/coastal.
Whether beach houses sell for $1 million or $2 million does not mean a whole lot to most of the OC RE.
BTW, new reincarnation of Truthi/Thoughtless is Provider.
July 17th, 2008 at 9:25 pm
Check your taxes HB Bear…depends on what your definition of worse is.
July 17th, 2008 at 9:37 pm
If Jimmy actually owns property in Cdm, do ya get the feeling that he inherited it?
July 17th, 2008 at 9:57 pm
the bottom line is if you make less than 250K/year, you are better off with Obama.
July 17th, 2008 at 11:34 pm
I have not heard about that hhunting, but if it is true, it would not surprise me…they are not the sharpest knives in the drawer.
July 17th, 2008 at 11:39 pm
I just love this blog. A drop in number of sales translate to a drop in price? Check out the Bayshore Community, there are only 3 listings on the market compare to average 6-8 listings years ago. Does that mena the price came down 50%? Now go take a look at Turtle Ridge Chantory/Arborel community, there are fewer than 10 listings on the market, compare to over 20 in previous years. Does that mean prices came down 50% over there too? as for 600 Avocado, if the information shown here was not a typo, I would bet you the OC Treaurer office will be on top of it soon. Why? if you bought a property for $2M last week, and turn around sold it to yourself again this week for $500K…think about how does that change the property tax…
July 18th, 2008 at 1:07 am
“Fear leads to denial.”
so i guess we’ll be seeing anger shortly, then acceptance. finally then, prices should come in line to reality.
July 18th, 2008 at 1:14 am
coasts and the nicer areas are not immune. coastal homes are a premium as is. if coastal homes don’t drop in price relative to surrounding areas, who would want to pay super high premium when you can just buy a home bordering the coastal home at a much lower price?
a housing crisis like this will affect all areas, especially ones that rose so high during the boom. of course some areas affected more than others like the IE.
July 18th, 2008 at 5:52 am
LOL Thoughless/Jimmy2, having been defeated in Orange County, then South Orange County, has retreated to Corona del Mar as proof that the RE market is fine and dandy. What’s the matter, Newport Beach too slummy for you now?
Sure, Corona del Mar is invulnerable to the same forces that have brought down prices in virtually every other CA community.
July 18th, 2008 at 12:25 pm
Don’t kid yourselves folks. 25% discount for foreclosures (which is most of what’s selling) makes sense since they are often messed up by prior owners or squatters and ineffectively marketed by banks. Still looks like the market for pre-owned, non FC is 10-15% down. Where it ends up will depend on incomes vs debt costs - but interest rates are much lower than they have been historically, so a $x interest payment corresponds to more capital.
Right now, I am surprised we are not seeing deeper cuts in price, since finance is close to unavailable. This suggests to me that there is some demand by buyers at sensible prices, and that people want to live in OC especially coastal. Fundamentally that matters. OC is no New York/London/SF but it is no South Central either. Riverside county prices need to fall a bit more as it is too far to drive to working areas (real work - not construction/real estate which is going DOWN) unless builders make it worth the buyer’s while.
The real test is what happens when the Fannie/Freddie situation is stabilized. If that happens quickly, current buyers who negotiate well or get an FC in reasonable repair will be sitting pretty. Having said all that, if the credit crunch continues, all bets are off. Then you may well see 50% off peaks for distressed sellers and FCs. People who need to move out of OC for job or family issues will be best advised to rent their properties for a couple of years rather than take the shaft.