‘Look At The Graph’: Orange County Is Falling
One reader suggested this topic. “Have been watching or know about the bubble in OC, Ca, and how the real estate agents, brokers, etc are trying to hide it.”
“Over the last 18 months, I have had to endure FRONT PAGE news of how the average Home price continues to break new Highs. Over and over, with Large cap numbers like $620,000!!!! average.”
“Well, over the last month, the ‘average’ home price has tumbled, yet no word, no article, nothing. ( except a pg. 3, three sentence statement- home prices take a breather).”
“Just look at the graph; OC register hasn’t updated today. ( New avg= $585k) Do you think they just don’t want to post a single digit gain and Falling?!”
Lots of ‘minus signs’ in those tables.
san diego county home sales plunged in January to the lowest level since at leasts the mid-90’s. SF sales down 26.8% vs. a year ago; condo sales down 28.4% vs. a year ago. on quinhouse.bloggerspot.com
Same happy horse$_hit is happening in Santa Barbara.
The number of articles about the soaring median home prices were un-relenting over the last 5 years. Now that the January ‘06 median sale price is looking more like 2004 prices (could be a blip, but looks like most of 2005 price increases have been wiped out)… not a word about it.
THINGS THAT MAKE YOU GO Hmmmmmmmm.
remember, it’s not “what have you done for me last year”, but “what have you done for me last month” that counts here.
the realtors can take their diminishing, fading yoy numbers and jump off the huntington beach pier.
Sorry, real estate shills, there is no place left to hide. The more you deny the truth from here on out, the less credible your claims will become.
Piss on realtors! They are dummies looking for easy money.
I feel the most sorry for the realtors that have been doing their job for years and are now getting lumped in with all the wannabees; guess that’ll be changing soon when lots of folks aren’t making fast money anymore with little to no skills.
Thanks spunkmyer,
I have been an agent sine the early 90’s and am sick of the entire situation now. My job at the franchise tax board starts in a few months. I used to really enjoy selling RE, now it is just depressing.
Had a seller call me today, he went FSBO (for sale by owner, himself) in December. Called me then to gloat that he sold it himself for 300k, kinda haha screw you call.
Previously spen at least 15 hours talking with this moron, educating him. Of course his crap deal fell apart, he just called me today and asked it I had a buyer for him. He borrowed 10k at a stupid price from a mort. broker to pay his bills. I yelled at him and told him to not call me back until he was ready to take my advice.
List your home at 265k with a 7% commission, 4% to the sellers office and 3% to me. I will not take his crap listing and have him sit on the market for 3 months and not get paid. Told him to price it bellow everything in his hood and reduce 5k/week or lower than all other listing no matter how they compare.
He told me I could talk to his wife (whom he is divorcing) and I told him he could pack sand, if he wanted to sit on the market for three months and not sell I would reccomend someone nice that would over list his home until he lost it to foreclosure.
I know most on this board hate agents, but I didn’t cause this shit and dislike it as much as you guys. There are a shitloade of real people at the edge of the cliff staring at financial ruin and don’t have a clue.
Hell I passed on property in 02′ for 200k that now sells for 450k. When I passed it was allready overpriced. Todays buyers are allready dead, they just don’t know it yet.
Any who have impatience with the presant situation, take heart. It will be less than another 3 SuperBowls and RE will look so bad you will be scared shitless by the thought of owning a home. That is the time to move and buy at least 3. Skip new bikes and a vacation or 2 to make it happen. They will pay you back so much in 10 years that you will be able to retire.
It’s not the realtors… it’s the Johnny come Lately’s.
The realtors exist to smooth a deal and bring buyer/seller together. The good ones do so honestly and professionally, the poor ones use deceit.
obviously, the good realtors seem to have almost disappeared because of the flood of bad guys&girls and really stupid buyers coming into the market. All the deceit going on by the realtor organisations does not help the honest realtors that are left either.
I share your frustration with the media’s focus on how strong the market was overall in 2005 while missing the obvious downturn that began around mid-2005 and continues to this day. But this particular price graph doesn’t do it for me. January is a funky month for real estate and its difficult to extrapolate about what might happen based on this one month. In fact it looks like Jan 2005 had a similar down-tick in prices. This appears to be seasonal rather than indicative on a long-term trend.
Ben correctly points out all the minus signs on the tables. I think the price table from a year ago (in terms of % change) would have looked about the same. The sales volume chart, however, is a completely different story. It speaks, ahem, volumes about how the market turned in mid-05. With sales volumes declining there is no place for prices to go but down, absent a contraction of supply which doesn’t appear to be in the cards. This is the story the media is missing/ignoring.
I hate to brag (well, not really!), but could the posters here have been any more correct about what is playing out in the OC?
Four week sales volume (Used homes / Used condos / New homes):
-18.5% / -20.4% / +15.7%
Four week median sales prices (Used homes / Used condos / New homes):
+14.8% / +15.5% / - 26.1%
These numbers are for the 22 business days ending January 24, 2006, if I am interpreting the brief description correctly. What does this suggest? As we have been predicting, the homebuilders are severely undercutting used home sellers, and only the low-priced new homes are selling. Look out below!
“the homebuilders are severely undercutting used home sellers”
Definitely yes.
Is there anyway we can determine if these lower prices for new homes reflect acutal houses or as was pointed out to me they represent a higher number of new condos on the market?
if the assumption is correct you should see a clear downtrend in sales prices of new homes relative to what is happening with existing homes. It gets a bit more complicated because sales data for new homes and existing homes usually don’t apply to the same time frame (regarding closing date for the purchase).
When I was touring the “Villages of Columbus” development next to me in Irvine, I noticed that many of the lower-end SFR were sold out but the more expensive McMansions were still available.
A 30k drop in one month is pretty impressive. Month to month drops especially in a volitile month like January may not mean much, but still that is a TON.
Ventura had a median of 500,000 in the Ventura County Star today.
500k? That’s a big drop.
At first I was getting all set to scream liar and hurl insults but technically you are correct. The Star reports 26 sales, mostly condos so the median for the CITY of San Buenaventura is $500k. Some are even city sponsored afforadable housing below market units.
That said all areas are reporting lower sales and generally lower sales prices but the shift is almost all if not all due to what sold. Individual price reductions of any worth are yet to appear. Depending on how bad things are in the OC they could take back the prize for most expensive median SFR in DQnews next Friday.
I also think it’s funny how the Register doesn’t mention price drops unless it’s in the back of the paper. I read it online mostly and when that 620k median was hit they published it online almost immediately on the front page.
Also the Washington Post. And how much play did the NY Times give Bloomberg’s comments on housing–admittedly not official stats. Part of the problem is the media still turns to the NAR’s or Dataquicks’s Press Release as their source and these organizations tend to play-up favorable comparisons.
same story here in Europe, that is just the way the newspapers and realtor organisations work. And by publishing just the average or median sales prices, people can remain in the dark about what is happening for a very long time.
I know someone trying to sell a $2.5M house in OC. 50+ potential buyers have looked at it, not a single offer yet. It’s been on the market for a few months now, job relocation forces the sell, seller is getting frustrated and doesn’t want to accept a low offer. Last summer this house probably would have sold in a few weeks. The cracks are just starting to show in certain markets..these things take some time to turn down substantially. I guess this is an example of “sticky” downward pricing in RE.
Yeah Jane, that’s where it starts, at the high-end. It will be sticky but situations such as this will happen more and more and eventually the comps go down.
Must be nice to own a 2.5 mil place. Which beach town? Hopefully they don’t sell until after summer so you can visit!
Laguna Niguel…it’s nice, but in my opinion would be more fairly valued at about half the asking price, so I’ll continue to call myself “Jane”.
How could so many people think we could all get rich selling each other real estate? When Tom Barrack announced he was getting out of the US real estate market I knew that was the beginning of the end.
Jane, I guess it’s the whole “get rich quick” theme that’s driving this market out of whack with fundamentals. It’s no different than any other financial mania; people just get caught up in it.
Laguna Niguel is nice near the coast there but most of it seems overpriced. The city seems to have built many larger “estate” homes in recent years that pump up the median. Used to be cheap due to the driving distance to major business centers (that’s why my parents bought in Irvine). I remember when it was considered the red-headed stepchild of Laguna Beach but now it’s all fancy. Go figure.
Not saying I wouldn’t want to live in that 2.5 mil house though
Jane, what town is the house in? I posted some stats on Laguna Beach yesterday and was wondering if that’s where it’s located.
Thx….
Yep, not disclosing the 585K number is ridiculous. As a matter or fact, I noticed that in that OC register article comparing the SJC home with the Santa Ana home, they deleted the fact that the median is now 585K. It used to say the 620K price AND the 585 in the same sentence. Just erased, gone now…jerks.
Hopefully it’ll be even lower in Feb…yeah baby.
I know this is a Jan number, but does anybody know if a 26% decrease in the med price of a new home is normal this time of year. Did this happen last year? New homes are now $90k under Resale homes. Won’t this impact appraisals and comps. Like I said I know Jan can be a funky month but that really stands out.
Three northern Calf counties shows big yoy drop in sales, and the yoy price increases retreating towards single digits, no doubt reflecting price drops of late.
http://www.dqnews.com/ZIPSJMN.shtm
Ah the numbers…I have the Dataquick numbers before me.
Is it Christmas already? Do we all love home builders, or what?
Where do I start?
First, the YOY sales volume in Huntington Beach is down in all four zip codes.
92646 -13.7%
92647 -51.0%
92648 -20.8%
92649 -39.5%
Next, we have had a PRICE DECLINE in 92646——-> -5.6% to $510,000.
That’s enough to make me do flips.
BUT WAIT, THERE’S MORE!
1. The median price of a home in OC FELL $39,000 in less than a month from $621,000 to $582,000.
2. The median price of a USED home is $665,000. The median price of a NEW home is now $495,000. It costs $170,000 MORE to buy a USED home than a NEW home in OC.
3. In terms of the median price of a home, we are only $37,000 from showing a YOY DECLINE.
4. There are 15,315 homes for sale in OC, according to http://www.ocrealestatefinder.com.
5. The price of a NEW home has fallen -36.1%.
6. The price of a USED home has gone up +16.7%.
The topping on the cake…
In typical fashion, before and after the Dataquick numbers, The Orange County Register decided to NOT talk about the OBVIOUSLY HORRIBLE NEWS, and decided instead to talk about the Anaheim Angels Name Controversy (Johnathan Lansner, Housing Whore), and what an interesting company New Century Financial is (Subprime Lending Shylocks).
In the world of Orange County Real Estate, a very large nuclear bomb went off today.
Homeowners have no idea how screwed they are.
Their homes are priced $170,000 ABOVE the prices of NEW HOMES.
And remember, these numbers are A MONTH OLD.
Back when these numbers were happening…
There were ‘only’ 13, 500 homes on the market.
Now there are 15, 315.
Wow.
Wow wow wowzy wow wow.
Wow.
I think I need a drink…
auction - that’s a lot of good news. make it a double
Auction,
Shylock is the perfect analogy, but they’ve taken blood with their pound of flesh.
i have attempted to get dataquick numbers for LA County but the lines are blurred/scribbed. Having trouble getting any kind of data for january from any LA county RE data source. if OC numbers are true, and i do not doubt they are, theN LA county figures should show a corresponding decline as well. Last readable data showed a 7% decline in LA Median prices since sept2005 or drop of about $40,000. this was for a 5-month period sept-jan.
If you got a house last year for $554K with payments of $2332, you are not sitting pretty at a $590K valuation. You’ve had $28K mortgage carrying costs and $7K in taxes. Transaction cost might run about $35K. You would have to spend a total of $624K to sell it for $590K.
The owners could have rented something really nice for $2833/mo and be in the same situation. Renting for anything less could be considered getting ahead.
I might not be fair with the tax break and principal reduction, but I also didn’t count upgrades/maintenance.
A drop in median prices is common for January, with a rebound in the median price in February. The current m-m drop of 5% is larger than in previous years (3-4%), and it appears the drop in total sales and increase in inventory may also differentiate this year from prior years.
Below are the DQ numbers from the past three years. Note that in the prior years the January median reverted back to the median price of 2-3 months prior (Oct or Nov of prior year). The current figures revert back to the median price of 8 months ago (May 05).
Dec 05—621k
Jan 06—590k (drop of 5.2%) (last hit 590k in May 05)
Feb 06—?
Dec 04-551k
Jan 05-534k (drop of 3.2%) (Oct 04: median 532k)
Feb 05-555k
Dec 03—467k
Jan 04—450k (drop of 3.7%) (Nov 03 median: 437k)
Feb 04—475k
Dec 02—385k
Jan 03—369k (4.3% drop) (Oct 02 Median: 369k)
Feb 03—384k
Do you have anything comparing New Home prices during those years? I am trying to figure out why there is such a huge decrease in the price of new homes.
LARenter, my guess is that they are building more condos which tends to bring the median down.
The BIG difference, is there are currently 4x as many homes for sale, then in years past. Inventory is HUGE. The price will not rise this year.
That’s excellent research. I reckon the February numbers are going to be examined very closely.
Maybe I should drive one of the points I just made home bit harder…
…so David DiaLereah can see it…since he probably reads Ben’s Blog.
“Next, we have had a PRICE DECLINE in 92646——-> -5.6% to $510,000″
Dear David-
That is a YEAR OVER YEAR PRICE DECLINE.
I thought you said we’d ‘only appreciate by 5% to 10%?
Lereah got some ’spainin’ to do.
Did you buy that investment property in Vegas yet?
Yeah, let’s hear about declines from the peak last summer.
For some reason, those are never reported. Of course, if declines gain momentum into the spring and summer, they won’t be able to apply that lipstick to the pig anymore.
Large amount of inventory and large price reductions in Ventura. Mostly 10-15% reductions with low sales.
Where can I find actual houses with price reductions? So far, this isn’t showing up on loopnet.com
One high end home in Ventura, 400K drop.
By the way, the numbers I’m giving you guys come from today’s Dataquick chart, ending Jan. 27.
The numbers on the chart linked to are old, from Jan. 24.
Anyone wanna bet on whether the Register will stop publishing the Dataquick numbers?
Should be interesting to see what happens when Oxnard has another 2800 new units available in the near future with the Riverwalk development.
where are they building 2,800 new units? more good farmland getting bulldozed i presume? grrrr…….
oxnard used to be such a mellow place.
Cereal, they are building right along the Santa Clara River, adjacent to El Rio and the new 200 million dollar bridge. Used to be where Blue Diamond excavated materials for concrete and such. Also, 2100 houses being developed in Santa Paula. This whole housing bubble is insane…
So, I see an innocent looking article about defaults and foreclosures in today’s San Diego Union Tribune
The defaults and forecloure in SD are increasing as posted here before. As usual the dataquick guy puts a positive spin on things : “It’s almost nonexistent, said DataQuick analyst John Karevoll of current foreclosure activity.”
Okay pretty boring so far. But something caught my eye. Somewhere towards the end of the article they slip in this one sentence :
But he said as the real estate market settles down to a more normal pace and prices do not rise enough to permit early refinancing, defaults and foreclosures will inevitably rise.
hmm … 2000 defaults per quarter is like 8,000 per year. That is pretty significant. There is a chart in this article that shows numer defaults in San Diego per year going all the way back to 1992. The last time there were 8,000 defaults in a year was 1998!
Wow, this things pretty significant… Any comments?
I saw that article. They made tried to make a reassuring comparison, noting that the recent increase in preforclosure notices leaves the level far lower than in 1996, at the end of the last recession. Not mentioned was that the economy is supposedly very strong at the moment — a comparable point in the business cycle to 1989, not 1996. Wait for seven more years before you decide whether the current bubble bust resulted in more foreclosures than the last one.
In some EU countries foreclosures have been ‘nearly nonexistent’ but at the same time rising strongly for years, while prices were slowly rising or stable (and interest rates going down).
When prices start declining and/or interest rates go up foreclosures can increase exponentially; just look at the latest foreclosure numbers for the UK. It reflects the fact that there is no risk priced into this market.
My comment is this:
Don’t listen to John Karevoll.
Read us the CHART.
We want to hear the NUMBERS.
What is the median price of a New San Diego home, and what is the median price of a Resale San Diego home?
We want numbers, numbers, numbers.
Interesting that there are 1391 pre-foreclosures in Ventura County.
It sure feels good to be renting @ 1550 for a 3/2 house in nice area of Ventura, when a dip-shit bought @ 630000 next door and on a normal mortgage would be paying 3400 with 20% down. Especially when 5 houses down there has been a house on the market since October and reduced to 620000 from 655000. Burn baby burn
krills: Can I find the reduced Ventura prices on any sort of website that is available to the public?
ziprealty.com
I’ve been looking at homes in Inglewood, CA. Prices have definitely gone down. The most expensive home was over $1M and now the top price is $799 in nicer areas. There seems to be huge disparity in price to value. 3+2 with fireplace/jacuzzi/coi pond/hardwood/beamed ceilings are going for the same as a 2+1 with nothing to offer but an ugly metal fence and a corner lot with a red no parking zone out front.
I think that the median sales price doesn’t say enought about what you can now get for your money. I think a lot of sellers are huddling around the going price.
Homewishes,
What zip codes in the Inglewood, CA area are you looking at? Do you think the current stalemate about the airport expansion is having any effect on the market in that area?
Mary
inglewood is the city which everyone has to pass through to get to West La. I might try looking for homes in nearby Culver city, Playa Vista, Westchester or Marina Del Rey. I,m sure that at $7-800,000 you might be able to find a regular SFH in these more upscale cities, though the supply would be extremely limited. In the case of Marina del rey, virtually non-existent, as there are only upscale high-end condos there. I think that current inglewood prices at what you quoted would be overpriced, except for the LaDera heights/baldwin Park area which does have some million dollar homes atop the hill overlooking La cienega Blvd. Overall, i Do not have a high opinion of Inglewood, especially since they voted against buiding a Wal-Mart.
if anyone wants to buy one of orange county’s high rise condos at Marque Park Place Tower on Michelson in Irvine, there are now 25 available for sale through the MLS.
Looks like a lot of flipping being attempted.
talk about delusional pricing. we have price ranges of $659,000 to $1.7 million for units averaging 1200 to 1500 sqft.
I guess the $1.7 m units have granite counter tops?
And creative (affordable) financing. Prices always appreciate. Refinance later.
Obvious strategy… buy the $659K property. You are looking at a cool mil-ski in profit right off the bat.
Take advantage of that uninformed seller!
most of the units listed for sale are vacant. Monthly association fee is $1,000-$1,100 per month or so. will be interesting to see how long sellers want to keep throwing money at them.
Local builder tried to ‘auction’ some (14) out of 74, high end condos here in pismo two weeks ago, wanted $1000 per foot. Called off the auction when only 4 or 5 were sold. Got his d– k broke off. Will keep you posted. Worth half as much as he wanted.
North Park shows 84 new homes sold at a price of $319,000… decline of 5.6%
The problem is that we have HUNDREDS of condos coming online in 2006.
Props to ‘Auction Heaven’ for the nice handy-work! Thanks! Keep up the great work!
JF
Thanks Johnny.
Just to add a bit of spice to the numbers…I have a story to tell you. It’s a true one, which makes it all the more hard-hitting, and it happened today.
I met a client today who lives where my wife and I want to live.
I’ll keep his identity secret, as well as his location, since I don’t feel the need to publicly humiliate him.
Anyways, this client and his wife were at my work today, and he blurts out where he is living.
“Yeah, we live over at ______, and we love it.”
“Really? My wife and I really want to move to _____, and we haven’t met anyone who lives there…can I ask you a million questions?”
Why of course I can. Blah blah blah, blah blah blah blah. Sounds just like I thought it would. Freakin’ perfect for us.
Now- mind you, I’ve done my homework. I know every property that’s on sale in _____, I know when it went on sale, and I know how much it’s stayed flat, or dropped. I also know how often properties there have been flipped. But…I must play dumb. After all, he is a ‘client’. So I say…
“What do you think the odds of getting in there soon are?”
His wife and him roll their eyes.
“Oh, I don’t know. Stuff there very RARELY comes up for sale, you know.”
Wrong. I know there are currently a HANDFUL for sale, and some in the first steps of foreclosure. But I say…
“Oh really? Man, that sounds tough. So what size ____ do you have at ____?”
“We own a _____. But trust me, you won’t be able to get there, into one of those, for less than ______”
It was all I needed to hear.
This poor shmuck and his poor shmuck wife bought LAST YEAR, and they think their _____ is still worth ______.
Here’s the part I CAN tell you.
The value of his property has already FALLEN $200,000…
…and he doesn’t even know it yet.
There are ____ of the exact same ______ for sale RIGHT NOW on the market-
-starting at $200,000 less than he bought for.
The guy’s underwater already, a virtual walking dead man…
…and he don’t even know it.
Was I going to tell him the bad knews?
Hell no I wasn’t.
Instead, I shook his hand and wished him the best, knowing that one day soon…he and I would almost probably-
…be trading places.
And we rent.
True story.
That’s a great story!
We can see the same here (Carlsbad) as idiots who bought to flip in the past year or so put their homes on the market for significantly more than what comparable homes are selling for. Prices have been flat/down in our area for 18 months. You’d think flippers would be following the market closely, right? Nope. Another flipper just bought a house around the corner from us. I’ve been watching flippers drown around here since 2004. Most took their homes off the market and started renting them out. Let’s see how this shakes out when they actually figure out they are already underwater (how long will it take these clueless folks?).
Krills,
I looked through the Star and couldn’t find the article referring to Ventura’s $500K median. I’m perplexed, seeing that the median should be around $625K. Man, that sure would be sweet. By the way, if anybody needs a laugh check out the Zillow value graphs of some of the older piece of shit homes in Santa Barbara. POOOOOOF! No wonder they don’t want to release numbers up there.
Dataquick latest report reprinted in LA Times Feb 16th or 17th showed Ventura county median sales price for new/resold homes to be $608,000 in Jan 2006, a 5% increase from july 2005. Have problems with Datquick so i do not read too much into them.
pismo bear…i thought 4 of thise magnificent oceanfront condos would be sold that day regardless of price…..were there no bidders….this unit was a condo-hotel on the shores of shell beach,it would be a wonderful place to live…..
it would sure be nice if datquick figures for LA County would not be crunched/scribbed so as to make them unreadable. if anyone can get readable january data for LA County from dataquick please post it. All other counties come up clear.