| Slice | Price | vs. ‘07 | Sold | vs. ‘07 |
|---|---|---|---|---|
| Houses | $480,000 | -26.7% | 1,741 | +99.0% |
| Condos | $290,000 | -30.5% | 764 | +72.9% |
| New | $476,250 | -9.7% | 174 | -51.9% |
| All | $420,000 | -26.8% | 2,679 | +59.6% |
Latest home-selling stats from DataQuick show for the 22 business days ended Oct. 27 …
- O.C. homebuying runs up 59.6% vs. a year ago’s credit-crunched slow selling.
- Leading the way is a 99% boost in single-family houses. If the pace holds for the full month, it’ll be the largest yearly sale pace gain in DataQuick records that date to 1988.
- Key reason for jump: Single-family houses are selling $254,000 – or 35% – below the peak of $734,000 hit in June 2007.
- This will certainly be the 5th year-to-year sales gain after 33 months of slumping homebuying.
- Why? Median selling price is down 26.8% vs. a year ago — and $225,000 lower, or 35%, vs. peak of $645,000 hit in June 2007.
(To see how your neighborhood did, check our sortable ZIP code chart HERE!)
Other real estate news …
- Bankruptcy sought for ocean-view homes in San Clemente
- 14 projects by O.C. developer file bankruptcy
- Slice of Nixon’s Western White House? Only $15 million
- Ladera home prices down, foreclosures up
- Higher-priced O.C. homesellers continue to discount
- O.C. brokers bet $2 million on luxury-home office
- Stable for 12? Seller seeks $8 million for Coto estate
- Foreclosure: Steal, deal or ‘get real?’
- H.B. home prices down 12 % over last year
- Surf City “painted lady” on sale for $1.48 mill
- O.C. foreclosures plummeted in October
- “Worse than the Depression”
- Why loan modifications don’t work
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How are the buyer getting financed?
Per DataQuick, Single-Family Median Home Price:
2006
$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%” for SFH
$685,000 = Aug
$680,000 = Sep
$665,000 = Oct
$660,000 = Nov
$665,000 = Dec
2007
$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 ~ Roger Rabbit “decline is DECELERATING”
$600,000 = Dec
2008
$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”
$515,000 = Jul
$500,000 = Aug
$480,000 = Sep
$470,000 = Oct 6
$475,000 = Oct 13
$480,000 = Oct 21
$480,000 = Oct 27
Per DataQuick, this loss represents a $254,000 decline in single-family home prices from the June 2007 high. And the beat goes on … and on … and on!
My predictions:
$460,000 ~ Year End 2008
$435,000 ~ April 2009
$415,000 ~ July 2009
$400,000 ~ Oct 2009
$385,000 ~ Year End 2009
$370,000 ~ April 2010
$355,000 ~ July 2010
$345,000 ~ Oct 2010
$335,000 ~ Year End 2010
If my prediction becomes true, there will be a loss of $399,000 (55%), in single-family home prices from the June 2007 high. I also project that a bottom in sinking home prices will not occur until sometime around the summer of 2012, and home values will not start appreciating greater than the rate of inflation until the end of the next decade.
The people that suggest my prediction is outlandish, or cannot happen, should be completely ignored, because they never thought this bubble would blowup in the first place. They have been trained to believe that fundamentals like ONE’S ABILITY TO REPAY the loan, are irrelevant.
Knife Catchers. All of ‘em. It is sad that it is always the lower socio-economic levels that make bad decisions and take such a beating.
Dina,
Many are cash buyers, probably the same speculators that walked away 2 years ago. Also, there are the Investment “Clubs” where investors put up $50,000 to $500,000 to participate in the buying of non performing motgages and distressed properties. These will be rented back to the occupants until the market turns and then they will begin selling them at a profit. I’m not saying this is a good thing I’m just stating what is happening. Also, the FHA first time homebuyer programs are probably getting a lot of attention from young faimilies.
Lee in Irvine,
I understand your frustration. After a massive stock market and economic meltdown in September and october this year, people are still buying these homes in massive numbers. No wonder you’re losing it. Keep your chin up. When everything else fails, dreaming will carry you through. Dream on and on and on and on!!!! I can tell you will be a professional renter the rest of your life.
People like Shane should be completely ignored. These are the people that said these events would never happen. I bet you Shane’s 401k, and become a 201k this year, because he never thought this could happen.
Most of the homes that are selling are distressed with prices tags that require a conforming loan. Homes with prices exceed $750,000, without major discounts sit on the MLS like road kill.
Correction:
I bet you Shane’s 401k has become a 201k this year, because he never thought this could happen.
Lee is right - -take a look at Balboa Peninsula. The sellers in denial there still think a 2 BR cottage w/o a view is worth 1.5 and up. But nothing is selling or even under contract except either a brand-new house (spec house that is under water) selling for way less than expected (saw a 2.0 mil. house recently sell with an 850K discount) or one where the house is a shack and they are buying the dirt for 700K. The rest are roadkill indeed until the sellers wake up and get real. I will happily wait them out and rent while they get with the program.
Don’t forget to compare these numbers to normal sales.
I am surprised people would be gobbling up these homes at this rate, regardless, when the economic fallout is just beggining to hit. OC has very unusual and illogical patterns. This is a great place to sell things to people!
Poor Lee in Irvine. He’s falling apart again!
Lee, are you playing the 25 Year old first time buyer or the 50 year old angry housing speculator? lol
Shane,
The numbers to look at are the jobs figures. People are losing interest in housing, they care more about eating and having a few bucks in their pocket.
You nailed it, shane.
Sone of Jimmy, you have solved the puzzle. CdM beach houses must be holding on to their value because people care about eating. I can fish right out in front of my home.
I agree with mick,
Its still not considered a normal sales number. Prices still dropping.
Lets not forget about the reset chart. One more wave of resets on the horizon. Hopefully the bail out plan considers this.
It’s too bad Shane and shockg didn’t finish High School.
If you two were able to read you would see what’s going on here.
Properties @ 55% off, with a median of $180,000 are selling.
Santa Ana……$180,000……. -55.3%…… sales….. 671.4%
Santa Ana……$347,500……. -44.8%…… sales….. 580.0%
Santa Ana……$270,000……. -43.4%…… sales….. 558.3%
Anaheim……$328,000……. -33.4%…… sales….. 554.5%
La Habra……$297,000……. - -45.0%…… sales….. 300.0%
Garden Grove……$337,500…… -18.8%…… sales….. 244.4%
Anaheim……$308,000 ……. -27.5%…… sales….. 226.7%
Santa Ana……$252,000……. -31.9%…… sales….. 200.0%
Santa Ana……$180,000……. -58.5%……sales…..213.3%
Anaheim……$325,000……. -19.7%…… sales….. 155.6%
Other misleading facts;
Brea sales jump 50% by selling 1.5 properties
Dana Point sales jump 133% by selling 4 properties
I don’t know about lee’s predictions, but I know enough to never say never. Who would ever thought that a 3 bedroom junk in Garden Grove would go from $160,000 to over $600,000 in about 6 years….and that same $600,000 house is now worth less than $350,000 only a year or so later. Will it go back down to $200,000? Never say never.
“Lets not forget about the reset chart”
That’s right. Interest rates of zero are going to really hurt…….you!
Good point. 0% shouldn’t hurt at all.
But still not a sign of a healthy market.
If you ask me, 0% is a sign of desperation.
Lots of people here cheering and clapping for bad economic news. In spite of the economy 2,700 homes sold.
2,700 knife catchers. There is one born every minute. Que Lastima!
LOL shockg. What matters is who bought those 2700 homes. What matters is organic sales. Despite the hard data re housing, some people remain delusional. Either that or they are just plain stupid.
This is what stupidity and or delusion reaps . . . .
“Number of U.S. Homes With Negative Equity Is Stunning”
http://seekingalpha.com/article/105570-number-of-u-s-homes-with-negative-equity-is-stunning?source=front_page_most_popular_articles
It is interetsing that we are seeing double digit YOY sales increases in most areas even though that median is well north of the $180k posted by Bill. Why does anyone think that the sales numbers from the 80’s is the target - that is when living on credit born - standard mortgage went from 20-30 years, care loans to 5-6 years and so on.
This is the new reality - you need to save the 20% down and a house is not an invenstment but a long term residence that fixes your cost of living. Those who buy now will be just fine if this is their view.
Since some here seem to like predictions - my prediction is that in the next couple of months (excludinbg the high price coastal areas that will move to their own financial tune) we will see the YOY decrease in sales price numbers drop like rocks for more and more areas, and then come Spring we will see a jump in the sales numbers slightly higher than what we have now - this wil be the birth of a new reality for both price and sales numbers.
Lanser you need to post the historical monthly averages of home sales every time you come out with these home sales blogs!
We can certainly expect the over all median to stay flat or maybe rise a bit as more of the higher end sellers start to lower prices. As the high end starts to capitulate, the knife catchers will think they are getting a bargain. Of course, the knife catchers will become bitter home owners looking for a government bailout in a few years.
This time next year, there will be a balance of low and high end activity and the median will continue to fall…….and when it starts to fall, the drop will be dramatic. So fare we’ve only seen a small correction.
I think it is great that people are purchasing distressed homes, especially under the median each and every month….this is driving the prices down dramatically…keep it coming. Just look at the most recent listings on Redfin and you’ll see exactly what is going to happen in the next few months. Listing prices are way below comps and recent sales. Guess why?
I think home prices are going to go back to 1998 levels, if not lower. I am going to wait a least another year or two until these levels are reached before I buy a house. This is because I am a loathesome, delusional speculator/day trader and want to save 100’s of thousands of dollars. If only I could be a wonderfully successful real estate agent instead of the horrible speculator/day trader that I am.
image009
take a look at the stock of Downey Savings today
http://finance.yahoo.com/q?s=dsl
it’s currently at 38 cents. Ouch!!!!
In case you don’t know, Downey Savings is headquartered in Newport Beach.
I wonder what Sheila Bair is going to do.
after all thats happened in one friggin year
youd think even the imbiciles like shockg
and dimmy 123 would start to get it-
talk about SLOW LEARNERS– damn
these sales numbers are so misleading
its preposterous– I WILL REPEAT– listen to those that
saw what was coming a long time ago- and
dismiss those that didnt and STILL dont have a clue-
anyone buying now thinking theyre getting a “deal”
are in for a very rude awakening—
Rants,
It will be a very, very rude awakening.
rants, they think housing always goes up, up and up. They’re confident we’re on our way to a smooth recovery - the fundamentals are strong :) Folks, fools rush in where angels fear to tread. The New Dictionary of …
I don’t think they’ll ever get it.
I wouldn’t guess that they’re slow learners . . . someone managed to teach them to write complete sentences.
At this point in their life when one relies on ‘teaching yourself’ . . . they couldn’t make that transition. It is clear that they don’t have an economic mindset, or the ability to analyze facts.
Personally, I like to analyze the market in terms of momentum, and work to understand ’cause and effect’. What condition are ‘we’ in financially, why are we here, and how fast are we moving? You don’t conclude with a rosy economic picture in the near term when you dig for these answers.
They simply don’t go that deep into the issue.
For those touting the leveraging of 0% short term rates - do you think those rates will stay there long enough for those borrowers that are now buying with short term rate loans to be able to refi in the future without getting caught with their shorts down?
The ability to REFI is NOT A RIGHT!!!
Just like the ability to buy a home is NOT a RIGHT - PERIOD!!!
I, for one, have no interest in sharing the risk with the common idiot.
Anyone using short term rates as a means to afford the payment is a FOOL!!!
If you have over 50% of the home value in cash, and are willing to bet that cash on the ability to refi in the future at an affordable rate, then by all means, leverage the short term rates to your heart’s content. Ironically, it is precisely the people that don’t have the cash and income that are using these loans again as affordability products. the numbers are small - but the call was made. I have seen first the numbers. Low as they might be - but the plans are being laid now. Just watch.
I have said it over and over again: the majority in OC have an attention span of three seconds. Merely sheep to be taken advantage of.
Even with the recent shift in lending practices, sales volume is still historically low.
If you guys did the research, and speak to some of the principals on Wall Street, you would know that one major reason the Fed decided against buying bad debt is because once that would have been freed up, the lending practices of old would have been kick started in full bore. The Fed wants an increase in safe lending practices - not the same BS that caused this mess. I know companies starting to sell these loans again and the only reason they can’t increase volume significantly just yet is because of what’s still sitting on the books. They will dilute the old with the new soon enough, sell them off at a discount and then watch what happens. The issue with getting OC buyers to use these riskier products has NEVER BEEN AN ISSUE - so they already know the sheep are simply awaiting to be taken again. They will focus on the OC first - guaranteed.
Look at the national economy and the global malaise. There is no way the market has “turned the corner”. It’s just like the stock market - the DOW pops for a 600 point gain one day (dead cat bounce) only to drop 900 pts over the following week. The real estate market is the same, but rather than happen on a day to day basis, it’s a month to month rise and fall, but the general trend is the key. What is the trend? Decline decline.
A year from now, the market median will be less than what it is today, and that’s what matters, not the monthly rise and fall of the cat.
Predicted record unemployment in CA for 2009 - Oh yeah, real estate is ready to rebound alright.
Bill brings up a very important point. Look how many homes are being bought in Santa Ana! And look at the price drops! Think about it, no offense, but who wants to live in those zip codes? I mean, as the RE agents say: Location, location, location!!
In a illogical, irrational, stupid runup a pile of dog crap could sell for 500k in Santa Ana. I wonder if a lot of these people buying homes in Santa Ana now are thinking “oh boy, what a steal! I bought a home in OC for almost nuthin, I mean, this is a 500k home!! Look what it sold for in 2006″ I notice realtors are marketing homes this way now “Sold for 10 million dollars in 2005. Now only 30k. What a steal for this 95 sq ft condo in lovely downtown Santa Ana!!”
These people need to step back, pull out their head and get a reality check if that’s what’s going on! But seeing how many people screwed-up in 2005-2007 or so…is it possible this is part of what’s going on now?
One thing is certain - without enacting and enforcing regulations for establishing ratings on those MBS’s - investor confidence will not be sufficient to sustain that secondary market.
As OCTrojan stated - volatility is across the board right now.
http://www.youtube.com/watch?v=2I0QN-FYkpw
If you’re not reading between the lines and looking at the data behind the data, you might be wrong about your assumptions…
Given the steep discounts - the fact that only 2700 homes sold last month is a testimate to the lack of affordability now and the insane pricing that existed at the peak in 2006.
The belief that “waiting pays” will not go away for some time.
Three years from now - people will be stating: You only got a 25% discount from peak pricing?!?!
The pysche is changing before your eyes.
when people start to realize peak 2006 prices are not coming back for 20 years, people will stop talking about “discounts”
I thought about the comment “cheering for bad news” for a bit b/c I wanted to see if I fit that mold. I guess I do like to see all the predictions I made come to fruition (as a big housing bear who sold in 2006 before prices dropped), though I hope the economy gets back on track. Here’s what I came up with:
The U.S. (and the world for that matter) has a serious problem that has been building for years if not decades. Growth and quality of life has come generally as a result of borrowing and spending/consumption, rather that savings and production. The music eventually stops, and we’re seeing the result.
We need to take the medicine to get back to a healthy position so we can start again. You can’t build properly on a weak foundation, and trying to move forward on top of “propped-up” housing prices, amongst other issues, is not only a big mistake, but it will never work in the long run. That kind of foundation will always crumble at some point.
For some reason (I would say almost always political), our leaders don’t want to admit the fact and educate the population that we are sick and that we need to take the medicine. There will be pain, but we need the medicine to heal and rebuild. They instead want to prop up, borrow more, and consume our way out of this.
Besides validating our predictions (which always feels great when you have these loony ‘expert’ real estate folks and trolls on these boards that I would thing would go away out of sheer embarrassment for being so drastically and utterly wrong), I think that bears have a somewhat positive reaction to bad news because, THE MORE THE BAD NEWS, THE MORE THE CHANCE WE WILL BE FORCED TO TAKE THE MEDICINE, which means, A BETTER CHANCE FOR A RETURN TO FUNDAMENTALS, and ultimately, CORRECTION AND GROWTH.
With mild good news, there is less chance of true and timely correction, and a less chance of getting back to the foundation we need. The delays in taking the medicine will only make things worse for a lot of people–we don’t cheer the band-aid when major surgery is required underneath.
The real “steals” are in Cleveland, Ohio (any big city in middle America) where people are paying $30,000 for a home (+$5,000 renovations) to rent out at $500 per month. Cash flow baby, cash flow. Buy 10 of these, hire a management company at 5% of rent and guess what? Your $300K is producing $50,000+ annually in rents. Yep, I’ll take the 15% cap rate.
I dont think anyone here is “cheerleading” an economic decline. What I do think people want to see is more fiscal responsibility on the part of the individual.
The short term pain of people losing their homes and being foreclosed on, should lead to greater future prosperity. What I mean by this is the more people that lose a home they can not afford is an oppertunity for a family to get into a home that they can afford.
The more people that can buy a home that they can afford to pay for and not have to worry about losing the better it will be for the entire economy.
So I do see falling prices as a good thing. Once prices are more in line with incomes and reality, the better the ecomomy will be. So in some sense the sooner that the bottom hits the sooner we can recover.
I know there are many here that think the value in the OC is just fine or even below what it should be, but the current falling prices, just dont support that belief.
Well, this article being just a BLOG, and not an official study, it definitely falls into the “opinion” category. The irresponsible opinion category actually. Hopefully that’s already well noted among the readership. Using skewed numbers, and skewing numbers yourself (by blatantly omitting other highly important numbers), is the same thing that got the whole housing market into trouble in the first place. Deceptive-and-fraudulent real estate marketing 101. Notice that the BLOG (opinion) leaves the conclusion up to the reader. This shady-used-car-salesman-like blog is a clear and lame attempt to boost OC real estate confidence to rekindle OC home sales - more accurately HIS real estate sales - and more than likely hoping to rekindle the OC real estate boom that made the rich richer, and left the other 99% either struggling to pay outrageous & insane mortgage payments, or struggling to find an affordable place to rent because their outrageously & insanely overpriced OC abode was being foreclosed on.
There are quite a few more numbers and indexes that this blog does NOT contain that need to be taken into consideration when speculating residential real estate. Especially at a time when the ultra rich are swopping down on bank owned homes at today’s staggering rate, taking advantage of the misfortunes of all who have been forced out of the game. Rising home sales alone is a lousy indicator at the moment. And I myself will never trust a thing a shady-used-car-salesman like Jon Lansner writes.
*The job market in the OC will not go down much more.
* Mortage industry type jobs on the rise.
* Tech jobs on the rise and total salaries paid from tech jobs alone in the OC surpasses $8,200,000,000 (Yeah Billion!)
* The FDIC plans to lease up to 180,000 sq. ft. of office space and go on a highering rampage as part of the bailout in the OC.
* THE OC is home to many more corporations that I will not list.
* Under Obama stem cell technology will take off and create a lot of jobs. UCI will lead the way with the OC a stem cell hub and billiions pouring in in the future.
* Dont beleive all what you read! There is no way we go back to 98′ prices! We are not in a suburb that depends on LA anymore! We may go down a bit more but not another 20%. This is not the end of the world either lol!
Gee Jeff. I can understand that OC is “not dependent on LA anymore”, but how does OC escape the global meltdown now occurring? Not that I know how bad it will get, but isn’t it somewhat obvious that there are very serious concerns nationwide, worldwide? Am I living in a utopia that is immune from all this?
I hate it when newspapers misquote and use statistics to lie. Home sales has not double in the last 20 years by Volume. Sales has never double over the best year period.
JJ = Jake = Crazy.
Jeff - from your post above - you appear to believe that we have recently had a net increase in jobs here.
Are you kidding me?
Where did you read tech jobs in the OC are on the rise?
How many jobs were lost in the OC over the year? How many gained?
Where did you read that UCI will become a hub for stem cell research?
How much money did UCI pour into research in 2008? You stated billions for stem cell related business alone?
Are you serious? What time domain?
Where are you getting your facts?
Wanna bet some money on that?
jeff -
I think you’re way too optimistic.
The few people hired to do collections, foreclosures, and loan modifications will not be anywhere near the number of people who lost their jobs when all the big subprime mortgage companies shut down.
The FDIC is here to oversee collapsing banks. I would say that’s a net loss of jobs and money, plus, when this is over, the FDIC will close down and leave.
I agree about the stem cell technology, and there will possibly be some alternative energy/green jobs created here. But, Obama will also cut the defense budget, including a lot of open-ended “research” projects that Boeing and Raytheon have been working on. McCain said he would cut those pie-in-the-sky projects as well, and the defense contractors have already been planning for reduced spending. That’s a lot of jobs lost here.
OC is losing far more companies than it is gaining. Tech companies have been downsizing and relocating like everyone else, and the clothing, surfwear, and sunglass companies here are in bad shape due to reduced consumer spending.
We will continue to lose jobs here, for sure. I don’t know if home prices will return to 1998 levels, but it wouldn’t surprise me.
The Original Jason
I thought JJ’s post was very good. Calling him ‘crazy’ without a compelling counter argument . . . typical.
For example what qualifies more for your adjective; lets take a look at Jeff-speak:
“The job market in the OC will not go down much more.”
* Mortage industry type jobs on the rise.
> I doubt this is true. If it WERE true, the new salaries are no match to the nutty broker situation that they would be replacing. (Net loss.)
* Tech jobs on the rise and total salaries paid from tech jobs alone in the OC surpasses $8,200,000,000 (Yeah Billion!)
> Superfluous consumer spending has been turned off abruptly like a faucet. This will affect many tech sectors, though not enough to get too worked up about just yet for most tech workers. Although there are tech jobs out there, people are scared to jump jobs … and people aren’t anxious to move here from less expensive areas. You don’t create suitable tech talent from the available mortgage workers, RE agent, and retail clerk pool. People who lose a tech job in the near term can likely find a replacement tech position (fingers crossed). There presently are tech jobs in likable places where houses are 180k but not falling by 25% per annum. (Net neutral.)
* The FDIC plans to lease up to 180,000 sq. ft. of office space and go on a highering rampage as part of the bailout in the OC.
References or evidence please? Does the FDIC produce a product that will increase our GDP or our standard of living? People need to quit thinking about increasing the size of government for these types of idle desk-worker jobs. (Net neutral - no evidence)
* THE OC is home to many more corporations that I will not list.
Not an argument. (Net neutral)
* Under Obama stem cell technology will take off and create a lot of jobs. UCI will lead the way with the OC a stem cell hub and billiions pouring in in the future.
Fix the economy with stem cells … that’s an application that I haven’t heard. Oh wait, I heard that last election … how about the 8Billion that CA said they were going to throw at this utter panacea? Now CA is in super debt as well, and the throwing money into the wind fad is over. With the federal government in super deficit, you seem to imagine that we’re going to print some money, then invent perpetual motion here also … but it’s only possible on the government dime? (Net neutral.)
* Dont beleive all what you read! There is no way we go back to 98′ prices!
>Now, you’ve stumbled on a very strong point there.
To add to your list:
> * The heloc has been withdrawn by you bank, and you’re no longer feeling house-rich, nor are you excited about buying more fluff, or optimistic about your early retirement prospects after you 401k was reduced by 25%.
>You sat your family down and explained that everyone needs to start living within their means. (Net negative)
> * We just elected a socialist president who thinks that government can cheer-lead and ‘policy’ us out of a recession (inevitably going to be a depression), and yet also talks of increasing taxes. If you want to slow things down even more, just raise taxes more. He also has made mumblings about wanting to socialize medicine. This will put some of your high-tech businesses on the side-lines (biotech has no market in a government controlled health care program, because this type of system just wants cheap old technologies, they don’t buy new fangled gadgets.)
He will accomplish nothing positive towards this effort, while the economy continues to ‘reset’. (net negative)
Young optimism is fun to see though. Cheers.
None here have a clue. The Federal Reserve is flooding the world with US Dollars via massive currency swaps in order to satisfy the world demand for dollars. Why do you thing the dollar is rallying? These dollars are INFLATIONARY. Real assets will be the only way to go. You just don’t get it. You better crack an economics book before it is too late. Most in this country never miss an opportunity to miss an opportunity.
Hi Renters and First time homebuyers.
I am your good friend TT and want you to get the straight scoop on the situation.
Please read on…
When the reproduction cost exceeds the current market pricing and when renting is more costly than buying, it is a good time to buy and the time is now to buy OC homes and condos in the $300K to $500K range.
EXAMPLE: Just sold a 2100 square foot SFR in a great OC community for $494,000. The home was upgraded like new with $75K in new everything. The home was selling for $650K a year ago.
The lot value is about $100K and the construction cost with soft costs is about $195 per square foot. Therefore, the replacement cost to reproduce this home today is $409,000 + $100,000 or $509,000.
In other words, it costs more money to reproduce the home than it is selling for.
This is why resales are 99% above last year’s volume while new homes are 51.9% below last year.
In addition, it costs $50 per month less to buy this very home with 10% down than it would to rent and that is pre-tax. After tax, you would be several hundred per month ahead by buying thanks to historically low long-term fixed rates coupled to low prices.
Developers are losing their shirts because they cannot compete with the low resale prices driven by the deep discounts absorbed by lenders. In addition, normal sellers do not have this type of equity to discount, which drives short sales again produced by deep lender discounting.
Today lenders who offer REO’s substantially below the last model match and will receive multiple offers in a bidding war scenario, which pushes the pricing up slightly below the last resale if not equal. Those of you who are in the market have experienced this by losing out to a higher bidder.
Lenders percentage rate of discounting has been slowing down over the last few months as the demand for $300K to $500K homes has increased to a pistol hot level. Basic economics at work…supply and demand. The demand for these homes is extremely high.
The bottom line is this…you have a window of opportunity created by desperate fear based lenders trying to unload properties. When lenders realize that the demand will justify stronger pricing, they will stop the deep discounting and the market will stabilize.
Ok, now that you understand the truth renters and first time homebuyers…go go go and get your dream home today!
Okay Jimmy, then buy several bargain houses in OC and get rich.
RE; UCI and Stem Cell dollars … will drag us out of this pit
Yep, it may make some sense to put ALL the chips on “embryonic stem cells”. The 3 BILLION allocated by the state of CA really wasn’t a suitable wager, we need to stack even more Federal chips on that little number. After all, if the ball lands on that one, “what I hear” is that maybe we’ll cure diabetes, heart disease, malaria, cancer (all types) . . . . AND AIDS. Wouldn’t that be great? Don’t you all want that?
For the sake of civil discussion, we can keep things ‘scientific’ and set-aside for a moment the ethical controversy of dicing up human embryos for this quest. We’ll just address the known benefits of our research efforts. (Crickets . ..followed by more crickets.) Well, although scientists have long promised that spectacular things be springing from work with embryonic stem cells, it hasn’t actually happened … YET.
But you know, even if we were to continue for a few more DECADES with our string of bad luck and produce no significant therapeutic products from embryonic stem cells, we’ve at least demonstrated something VERY important. We’ve proven that if we give desperate people a GREAT HOPE, throw in a little moral tension; they apparently will be completely willing to set all logic aside and throw a heap upon heap upon heap of money at it. They apparently don’t even require actual positive results. They’ll even be willing to BORROW heaps in order to throw heaps, and they will be ESPECIALLY willing to spend heaps of other peoples money. All we need to do to keep this game rolling, is just keep publishing news blurbs for the masses with phrases like “some say it could lead to . …”, and “Dr. Bones says it shows promise that in maybe 4 years … ”.
What I want to know, is someone working to find an embryonic stem cell derived solution that will cure the inane, timeless weakness in man that makes him so gullible to believe that there is a snake-oil cure for EVERYTHING (it’s just right there in the bottle … and somebody from that ‘opposing party’ is keeping it from me), and that WE DESERVE TO RECEIVE IT?
RE; UCI and Stem Cell dollars … will drag us out of this malaise
Yep, it may make some sense to put ALL the chips on “embryonic stem cells”. The 3 BILLION allocated by the state of CA really wasn’t a suitable wager, we need to stack even more Federal chips on that little number. After all, if the ball lands on that one, “what I hear” is that maybe we’ll cure diabetes, heart disease, malaria, cancer (all types) . . . . AND AIDS. Wouldn’t that be great? Don’t you all want that?
But you know, even if we were to continue for a few more DECADES with our string of bad luck and produce no significant therapeutic products from embryonic stem cells, we’ve at least demonstrated something VERY important. We’ve proven that if we give desperate people a GREAT HOPE, throw in a little moral tension; they apparently will be completely willing to set all logic aside and throw a heap upon heap upon heap of money at it. They apparently don’t even require actual positive results. They’ll even be willing to BORROW heaps in order to throw heaps, and they will be ESPECIALLY willing to spend heaps of other peoples money. All we need to do to keep this game rolling, is just keep publishing news blurbs for the masses with phrases like “some say it could lead to . …”, and “Dr. Bones says it shows promise that in maybe 4 years … ”.
Jeff - I did want to mention that I completely agree with your point where you suggest: “Dont beleive all what you read!”
A year with another 15% to 20% reduction in home value the cash buyers of today will be pulling their hair out.
I say let them, they obviously have money to spend and they are actually keeping real estate people employed.
People often fail to appreciate the tax benefits of owning. If your family has 2 professional level incomes, you can pay a mortgage or pay rent plus much larger income taxes. Anyone can test their alternative scenarios very accurately by use of a simple, inexpensive tax program like Turbotax, etc. Generalities should just be the starting point. A little due diligence can bring quite a surprise.
Of course the “house sales doubling” data is skewed by last year’s anomalous low figures. Still, continuing healthy sales is good news, and shows an improving market. Now is a good time for many people to buy, IF their individual circumstances are right. Renting still sucks for most people, and the decision for families is WHEN TO BUY, not whether to buy. This is not the end of the world.
I bought in the IE, my mortgage is less than rent-there are great deals out there, the oc is still too pricy