O.C. home price hits 66-month low at $400,000

December 16th, 2008, 9:15 am · 32 Comments · posted by Jon Lansner

Nov. stats by DataQuick
Slice	Price	Vs. ‘07	Sales	Vs. ‘07
Houses	$430,000	-34.4%	1,365	+52.5%
Condos	$260,500	-38.0%	575	+54.6%
New	$492,750	-21.8%	237	-21.0%
All	$400,000	-31.4%	2,177	+38.9%

Deep discounting and a modest recovery from a near homebuying shutdown continued last month. Final home-selling stats from DataQuick, out his AM, for the month of November show:

Median selling price: $400,000, -31.4% vs. a year ago.
Lowest price since May ‘03.
O.C. homebuying ran +38.9% vs. a year ago.
This was the fifth-straight year-to-year sales gain after 33 months of slumping homebuying.

(To see how your neighborhood did, check our sortable ZIP code chart HERE!)

It’s been quite a fall from the top:

Single-family homes have dropped $304,000 — or 41% — below the peak of $734,000 hit in June 2007.
Condos have dropped $209,500 — or 45% — below the peak of $470,000 hit in March ‘06.
Newly built homes have dropped $371,250 — or 43% — below the peak of $864,000 hit in February ‘05.
Overall, the countywide median dropped $245,000 — or 38% — below the peak of $645,000 hit in June ‘07.

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Chuck in Newport says:

December 16, 2008 at 9 am

Right on schedule wouldn’t you say, Lee?

NationalBubble.com says:

Congratulations!!! We hit the 400K mark. This is something that Steve Thomas never talks about. The reason why more homes are selling in OC is because home prices are dropping like crazy giving the impression to some suckers out there that they are getting a great deal, just to find out a few months later that somebody else bought the same house at a lower price.
The same happened in 2000 when people were buying Cisco stock after a 20% drop in price thinking they were getting a great deal just to see the price drop another 60% in the next year.
Unfortunately, when people buy real estate they are leveraging themselves so the losses get amplified.

So, should we expect the OC median price to go down to 350K in the next 6 months? Maybe even lower?

This 60 minutes video will show you why the housing market is going to get much worse.

greg says:

With these prices, the focus for the next couple of years (and always should have been) will be the comparison on rent vs owning. With these prices and sub 5.0% interest this comparision is near parity. However with the thousands of damaged credit files out there, most that could buy will continue to rent because of tight (realistic) underwriting. At the market turn owning will actually be cheaper on a monthly basis.

“Single-family homes have dropped $304,000 — or 41% — below the peak of $734,000 hit in June 2007.”

Imagine how mad our senior citizen expert Jimmy2 must be right now while reading these horrible news

bloodinthestreets says:

Logic of basic graphical predictions would lead one to expect more down-side to this house value catastrophe based on this graph. (So . . . watch out).

However, I’d like to point out that if ‘Dan’s , ‘Own_Home’s . . . and ‘Jeff’s quaint notions prove to be correct, the graph above will have sudden horizontal shelf . . . actually horizontal after a huge upward step back to 07 prices. (so buy as many stucco boxes as you can right now !)

Their logic seem to be founded on knowledge regarding the super human powers of Obama and his reform team (Obamanomics) will prove no match for market gravity and momentum ! ( If you believe our new batch of realtor-cheerleaders).

Liar Loan says:

Wonder if the OC Register will have a splash on the front page about how we broke through $400k, just like the old days.

How about it Lansner??

Dina says:

Yeah! - but I’m still waiting.

Greg -

So many of the recent ‘buy v. rent’ analysis attempts here leave out this important factor: home values continue to fall at thousands of dollars a month.

They also assume that rental rates are magically fixed for perpetuity - but they are not.

I think you’re right though, at the bottom, there will be no denying that it is cheaper to buy (if you qualify for a loan and you want to take the risk).

Helen Highwater says:

Better brush up on your Mandrin.

http://business.theage.com.au/business/chinese-go-shopping-for-us-real-estate-20081208-6u3n.html?page=2

lee in irvine says:

December 16, 2008 at 10 am

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
$480,000 = Oct
$430,000 = Nov ~ OMG!

So far, per DataQuick, this loss represents a $304,000 decline in single-family home prices from the temporary, June 2007 high. And the beat goes on … and on … and on!

Bogey says:

LOL Helen, shouldn’t you be playing golf over at Peli today since the sun is shining? Will you be joining hwood?

From your link

“Mr Mei doesn’t want to see a rush of Chinese buying houses in the US and getting burnt”.

Even the Chinese know better. Next stop 350k, then 300 end of 09

Bill says:

Realtor vs. realist

Sighburrdood Says:
February 13th, 2008 at 9:52 am
The bottom of the market is NOW. The best buys you will EVER see in Orange County are NOW. The lowest interest rates, with highest conforming limits you will EVER see in Orange County is NOW.

mav Says:
February 8th, 2008 at 3:53 pm
*sarcasm on*
$535K median ?!?!?…. down from $645K in just 6 months…..!?!?!
$110K in just 6 months ?!?!?
Don’t worry this is just seasonal !!!!!
*sarcasm off*
we are clearly going to be in mid to low $400s by the end of the year

Great Accurate Prediction Mav!

Jon,

Why have all of my predictions been deleted from this blog?

samson says:

So median price is down to May 2003 levels, interest rates are at an almost all time low, inflation is at a 10 year low.

Another 500K + layoffs are predicted by the end of the year, resulting in over 2.2. million people out of work this year.

The fed is about to drop rates to .5% or even lower.

…and lenders are still tight on lending.

It is hard to see housing prices climb anytime soon.

I mean look at just condos….45% off what they where less than 3 years ago. By not buying, people have saved 100’s of thousands of dollars…..that 45% off, almost kills the 100% increase in value that those home owners had in 2006. How many borrowed against that false equity, and are now in trouble?

Craziness.

One quick point.

If you look at my chart above, you’ll notice the steep decline from Nov to Dec of last year WASN’T an anomaly, because because prices never recovered. It was like the BAR had been reset at the end of the year, and all potential sellers (including banks) had to adjust.

I think the same is gonna happen in 2009. In other words, I think we’re gonna be starting at lower lows than even I anticipated.

Whats with the duplicate all the time?

Tom M says:

We need one of our bulls to call a bottom. Anyone, Jimmy, Own_home step up and call another bottom.

no_vaseline says:

Somebody get Steve Thomas on the phone.

So I can mock him.

Lulz.

Free Janet! The blog s*cks without her.

Mike Wizowski says:

I’ve been copy and pasting the dqnews price chart every month for a year now…according to that, Inland prices peaked in Dec 06 with Riverside county at $432,000 and San Berdoo at $370,000. Those counties are, as of this month, $220k and $185k respectivley. That is a 50% decline from peak. 50%.

Most people dont bother to report what I said above…they go month by month making the drop look better than it is. I give Jon credit, he states the June 07 peak and does the math, for the 38% total drop, instead of just reporting the current 31% yoy drop. Good job John.

It seems the tide has rolled out of our real estate dependent economy, and exposed thousands upon thousands of people pretending to be wealthy.

I stick by what I said in the past; of all the bubble cities in the USA, Orange County has the most to lose on a dollar basis. Why? Because we started at a much higher multiple than other bubble cities. Orange County is always going to have a premium, but not anything remotely close to the nonsense we saw in June of 2007.

All this makes me want to say that the average folks need to rise up, pull out the pitch fork and torches, and demand that the entire real estate industrial complex change. The good old boy/girl network, is gonna get a massive facelift.

BTW, Mike, notice how much smaller the declines are on a dollar basis in the Inland Empire, than the vastly overpriced Orange County. What a sham we were running. 8)

Eat it in the OC says:

This from DataQuik

“Many first-time homebuyers are, understandably, cheering as foreclosures dominate sales, tugging down prices and raising affordability,” he continued. “For home sellers and the industry, though, one concern over foreclosures representing half of all sales is that those transactions simply repay lenders. They don’t trigger a move-up purchase.”

Does anyone here come to the conclusion that this will have to effect on the higher end or between 500K and 750K?

rants says:

I’ve finally found out why the realtors on this blog are
acting so delirious– its a new psychological phenomenon
brought on by the dramatic loss of wealth in our country-
the realtors on this very blog are living proof as they continue
to live in a delusional state of wealth loss denial- they all had
pinned their futures on the imaginary value of their homes–
poor suckers- now they are stuck trying to deal with the cold
hard reality that they arent wealthy at all- it was all just a cruel
fleeting illusion thats been dashed on the cold hard rocks of
reality– lllooollll @ribsplitter deluxe

http://www.cnbc.com/id/28249915

carson city says:

December 16, 2008 at 11 am

If SFR’s keep dropping at this rate, conforming loan limits will apply by 2010. No gov’t backed mortgage money for OC above $417K; this is coming and will be the kiss of death for the $750k and above market.

I know I’m piling on, but what better time to post comments from our local Carnival Barker, than right now. Congratulations Gary, you are now the most un-respected real estate prognosticator in The O.C.

Gary “In the Bag” Watts at his absolute best! Pay special attention to the first quote, “Look mom, no hands!”:

10/23/2005 ~ “I only forecast off the numbers … It’s all based on pure economics.” ~ Orange County Register

02/13/2006 ~ “Fifteen percent is pretty much in the bag for Orange County in 2006 … It’s impossible for prices to go down this year.” ~ Fortune Magazine

07/21/2006 ~ “I think we probably are not going to see 15 (percent), but I think 11 or 12 (percent) is still realistic.” ~ Orange County Register

07/22/2006 ~ “”August ought to be the last month of weak appreciation numbers.” ~ Orange County Register

07/22/2006 ~ “I really think that we are pretty close to the bottom of our real estate prices … August ought to be the last month of weak appreciation numbers.” ~ Orange County Register

12/31/2006 ~ “If the un-motivated sellers stay out of the market, we could be in for a very big surprise.” ~ Orange County Register

01/01/2008 ~ “Cyclical housing downturns have always occurred. The good news is these situations do not last forever. The cycles tend to run approximately 27 to 36 months, so this cyclical downturn should run its course by summer.” ~ Impact Real Estate Jan 2008 Housing & Economic Forecast

06/23/2008 ~ “I apologize for not knowing what Wall Street did to our mortgages” … “I had no idea how Wall Street restructured these loans.” ~ Orange County Register

Dan says:

Lee—know I sorta understand why you are constantly cutting and pasting housing stats–sans any future prices….sans any new or useful information…

You are extreamly bitter about being left behind your peers…you were the smart kid in school…yet all of the jocks and good looking girls own beautiful homes and have high paying jobs….and yet you’re stuck in customer service making 45 grand a year….how can this be??

“All this makes me want to say that the average folks need to rise up, pull out the pitch fork and torches, and demand that the entire real estate industrial complex change. The good old boy/girl network, is gonna get a massive facelift.”

Ahhhh….you find solace in this blog….

Yes, Dan, saving hundreds of thousands of dollars and being able to save for the future is stupid. Instead, Lee should taken that Option-ARM loan and refied to get all the toys and live the high life like those “jocks and good looking girls in those beautiful home did”. Aren’t those people the same ones seeing their imaginary wealth flushed away like turds down the toilet? The solace I find in this blog is that I can see first hand that I made the best financial decision of my life, hands down, by not buying a crappy home for 600K when it’s now going to 400K (and falling like a rock now). Lee’s information is way, way more useful than that of any realtard advise, such as “now is the best time to buy!” or “they already have multiple offers, you’d better hurry!”.

Are Eat it in the OC and Lee at Moms the same person?

Lee, you don’t happen to be Chinese do you?

Another prop for Lee. If there were 5 Lees for every Dan, the blog would be much more interesting and INFORMATIVE. Lee, let the provider/Janet/Dan/shane types come and go, as they do (here for a time throwing stones and then going back into hiding when they realize the meltdown is true after all)- -keep up the info!!! Like Eat It, I have saved mega thousands by not buying any of the six homes over 1.0 mil I bid on in July of ‘07 (and I get to laugh when they sell for less than I offered- -one under 800K!).

Mick says:

December 16, 2008 at 12 pm

Whooa dude!! That’s one gnarly price drop man! Where is this runaway train gonna stop?

mav says:

the chinese have bigger problems to deal with
like dealing with their stock market crash
and avoiding a civil war on capitalism

the four horsemen of deflation have arrived:

1. Zero Interest Rate Policy
2. Government Spending Programs
3. Banks hoarding cash
4. Unemployment spiking

save your cash folks

testing me patience, arrrg

SavingInLA says:

December 21, 2008 at 11 pm

Jon - For the 10th time quick interviewing realtors!!! You are being use. Gary Watts, Steve Thomas, etc. were all nobodies until you hyped them up when reality any other realtor could have been plugged in their place. You are being used.

It only increases the hatred on the board of realtors. Yes, they are human beings trying to make a dollar - but that is it. While years ago the home price and selling data was privy only to realtors and they had a monopoly on the data coming out of their part of the economy - that era has passed.
Internet has made the data readily available and for you to only interview realtors who will look at everything from their rose colored glasses is a sign you are behind the times. Realtors are realtors, they are not economists. So stick to interviewing them otherwise you will only end up with a bunch of Good Time To Buy, Good Time To Buy, Good TIme To Buy,………….

By the way DQNews released OC price per square foot data for resale homes - October data to be release this weekend. (Pay attention Mary Jane)

SEPTEMBER DIPPED BELOW $300/sqft for first time - $250/sqft soon to be on the way.

(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
$307/sq ft = July
$302/sq ft = Aug
$296/sq ft = Sep
$293/sq ft = Oct
$278/sq ft=Nov

Looks like prices have dropped from $444 to $278 per sqft - which calculates out to a 37.4% drop in prices since June 2006. When comparing versus price per square foot data the median price has for the most part been a lagging indicator of the real drop in home prices.

REMEMBER THE COOL WINTER MONTHS ARE STILL TO COME. LAST YEAR PRICES DROPPED $60/sqft FROM AUGUST TO JANUARY ALONE (or $120,000.00 drop in 5 months).

Slice	Price	Ch.	Sold	Ch.
House	$500,000	+18%	1,833	+11%
Condo	$290,000	+7%	881	+22%
New	$617,500	+24%	171	-17%
All OC	$435,000	+10%	2,885	+12%

Orange County Register