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Orange County: Love It? Like it? Loathe It?
2007-02-26 06:16:03
There's a been a lot of talk on the blogs about how we Orange County residents feel about our fair county. The perception seems to be that there is a significant minority of people living in OC, that actually don't like living here. It follows that members of this minority don't like one or more aspects of living here whether it be traffic, the economy, crime, pollution or some other facet of life in OC.Now, I'm certain there are some people in OC that feel that way. There are people everywhere in the world that feel that way and that some level of dissatisfaction with environment is unavoidable and universal. And, even if a little discontent turns out some how not to be universal, we all know we've got out malcontents here by what we've read on the blogs. But do they represent a significant minority of OC residents?I'd like to find out just how people feel about life and quality of life here in Orange County ; so I've posted a poll that basically asks the question: "How do y...
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Prices Down in Most Areas of Orange County II
2007-02-26 06:16:03
As a reminder, and to tee-up today?s post, I want to review the metrics we?ve been looking in prior posts. They are listed below, along with percentage of ZIPs where the metrics showed decline:· $ Price Change from 2006 (55.4% Down ),· $ Price Change from Dec 2006 (59.0% Down)· $ Price Change Year on Year (48.2% Down)· $ Price Blended Average (51.8% Down)Given that the majority of ZIPs showed three of these metrics down, we concluded that pricing declines were wide-spread and that, along with county-level price declines, there was an implied lack of firmess in OC housing prices.For the next few days, we are going to continue our analysis of the scope of price declines in some ZIP codes a bit further, but this time we're also going to begin to peel the onion back a little and get a glimpse of the preponderance of negative performance of our metrics (those listed above) by ZIP code.We?re going to start by looking at is at the count and percentage of metrics down in each ZIP code. Here...
More About: Rice , Orange , Orange County

Prices Down in Most Areas of Orange County I
2007-02-26 06:16:03
In yesterday?s blog we showed using a variety of metrics that, on average prices in Orange County are falling. In today?s we that show that prices are also falling in most areas of Orange County as well.Today we?re going compare the latest DQ ?all homes median? data with three different benchmarks at ZIP code level. By looking at three comparisons, rather than one, I hope to remove some of the statistical noise associated with this kind of analysis, trying to take a broad a sample as possible, with the three resultant metrics being:$ Price Change from 2006 ($2006)$ Price Change from Dec 2006 ($Dec2006)$ Price Change Year on Year ($YOY)We?ll also include, the $ Price Blended Average, which is simple a weighted average of first three metrics, with two parts $2006 (largest sample), and one part of each $Dec2006 and $YOY. I know, it?s not horribly sophisticated, but I believe it will help us generalize about and remove some of the noise from price trends within a ZIP. So let's have a l...
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Don't Listen to the "Bull"--Prices are Heading Down, Down, Down!
2007-02-26 06:16:03
Buyer Bears, the bulls are at it again, trying to talk up the market saying that prices are going up. BBs know that the market is in a slow, but sure steady path downward and aren't swayed by the rantings of bulls bent on keeping prices high despite the loss of any personal credibility.Here is a summary of indicators showing from just about every perspective imaginable the undeniable truth that prices are headed south here in OC. Next time a bear tells you prices are up, you may want to point them to this page:First, from the nominal perspective the DQ year-on-year medians:Resale houses $670,000 +1.0% FLATResale condos $438,000 -3.7% DOWNSecond, from the real perspective prices adjusted for national inflation rate.Resale houses -1.5% DOWNResale condos -5.7% DOWN SHARPLYPrice s adjusted for OC's rate of inflation.Resale homes -3.2% DOWNResale condos -7.4% DOWN SHARPLY Thanks to graphix for inflation-adjusted numbers.Third, from a price per square foot perspective and as reported in ...
More About: Rice , List , Listen , Down

OC Home Prices Plummet 5.9% in January! Average Buyer Bear Saves Nearly $4
2007-02-26 06:16:03
I predicted in prior posts that prices for OC homes were headed downward; I just didn't realize it was going to happend this fast or with such a vengence.The median home price for all homes dropped fully 5.9% from December?s prices, lead by a precipitous drop in new home prices of nearly $188,250 or -23.8%. While I don?t have the numbers to prove it, I would speculate that a drop of 5.9% has got to the worst one of the worst month-on-month performances in all of OC history!Now, the bulls are going to are get riled up and point out that on a month-on-month basis, the prices of existent homes and condos aare flat. They?re right, they are. But looking at the data from a year-on-year and this month versus 2006 basis, the story is different.On a year on year basis, both resale houses and resale condo prices are down, .6% and 2.8%, respectively. If we compare this month?s data with all sales from 2006 (a larger sample) we also see that prices have also dropped, 3.1% for resale houses and...
More About: Home , Rice , Buyer , January , Near

OC Affordability
2007-02-26 06:16:03
There's been a lot of discussion about affordability of homes in here in OC. By most measure, affordability, on average, is relatively quite low, but that is better in some areas than it is for others. But how much better or how much worse? Quite a bit more than you might imagineI took average household income from the OC Register and combined it with 2006 median prices from the LA Times. I then divided the median housing price by the average household income; giving a measure of relative affordability I'll call the price/income ratio. Having a look at the data, you quickly realize that affordability is by far the lowest for the less-fortunate among us, while if is much less of an issue for the well-to-do. I don't think this is much of a surprise to anyone. What I think you might find surprising, however, is just how much worse affordability is for the less-fortunate.In one Santa Ana ZIP code the price/income ratio was 21.8, meaning that the median house price was about 22 times ...
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OC Buyer Bears Market Perspective
2007-02-26 06:16:03
In the short term, the data and news seem to indicate that prices are either flat or sort of drifting down, depending on the specific data being evaluated and whether or not those data are in real or nominal terms. So there isn't much pricing risk. Cashflow-wise, renting is also very cheap compared to owning, which is nice. And, interest and mortgage rates are flat, negating any apprarent interest risk.Looking out to the medium term, we see several factors that lead us to believe that housing prices are set to drop, among them: short-term price decreases, reduced sales volumes, decreasing affordability, tightening of sub-prime credit, the culling of "flippers" from the market, increasing housing inventory, the reduction of the attractiveness of OC real-estate as an investment option and net emmigration from the county among them.From where we sit, if even only some of these factors were were to put downward pressure on prices, they would drop, but given they they are all are in pla...
More About: Market , Buyer , Bears , Mark , Ears

Sellers Bearish on Real Estate Market
2007-02-26 06:16:03
Think it is only buyers that are bearish on housing prices? No, based on a survey out, virtually half of all Americans think we're headed for a bubble, including 43% of homeowners!Don't beleive it? They say actions speak even louder than words; look at what SELLERS are up to:--List Price Reductions: Roughly half of all listing.--Multiple Price Reductions: Very common.--Accepted Offers Below Asking: Virtually all transaction.--Rate Buy Downs: As common as "Want fries with that?"--Builder incentives: Up to absurd, media-worth levels.If the market isn't headed for a correction, then why all the concessions on the sellers? part? Can't they just wait out the bears and get every last dollar they can for their homes? No, they can?t and know it. That?s why smart sellers are maximizing their gains by selling their properties before the correction gets any worse. Seller s are making concessions en masse, indicating that the power at the negotiating table has shifted to buyers.
More About: Estate , Real Estate , Real Estate Market , Market

Weak Signal: OC Poll Suggests Housing Price Drop of 7-9%
2007-02-26 06:16:03
The Orange County Register recently conducted an informal survey of readers in an online poll regarding the fate of OC's home prices during the next calendar year.Readers were asked to choose one response from a list of five that they felt best described their prediction for housing prices in Orange County for the period Jan 2007 to Dec 2007. Here's how the responses broke out:?1.6% Up dramatically (gains of more than 10%)?8.5% Up a bit (gains between 2% and 10%)?11.2% Essentially flat (from down 2% to up 2%)?33.5% Down a bit (losses between 2% and 10%)?45.2% Down dramatically (losses greater than 10%)Nearly 80% of those responding that housing prices would go down and nearly 90% responding that the market would be flat or down. Only slightly more than 10% felt the market would be up either a bit or up dramatically. Clearly, the overall sentiment of those taking the poll here is overwhelmingly negative.But, what is the consensus of this crowd regarding of this crowd regarding hous...
More About: Rice , Poll , Housing , Price , Sing

The Subprime Meltdown and You
2007-02-26 06:16:03
Normally, I focus my postings around pricing and inventory analysis, but every once in a while, it?s a good practice to poke our heads up and see what?s going on in the world around us. Today were going to have a look at the apparent collapse sub-prime mortgages and discuss the implication on the housing market in OC.I think that everyone who frequents real estate blogs has heard from at least one source or another that the subprime mortgage business is in dire straights as of late. In one sign of weakness, no fewer than 24 subprime lenders have gone bankrupt, closed doors or are no longer operating independently since December of last year. The news gets worse.In the Faber Report on CNBC, David Faber refers to subprime lending market as being in a state of meltdown and shows how the stock prices on subprime lenders have been plummeting over the last several weeks and days. Now, I don?t have an accurate total at this point, but based on the earnings reports, realized losses have to ...
More About: Down , Subprime , Prime , Rime , Prim