How low will home prices go in OC? (Santa Ana, Anaheim: rentals, mortgage broker)

[flo2900]

Just curious if prices here will ever go as low as pre 1999 level.
Between 1999 and 2006 home prices in OC grew 180%...thats almost 3 times.

Your opinions please

[New Englander]

Originally Posted by flo2900

Just curious if prices here will ever go as low as pre 1999 level.
Between 1999 and 2006 home prices in OC grew 180%...thats almost 3 times.

Your opinions please

I believe that the prices will go down. Housing in general should see some appreciation over the years (just like inflation), however this run up in quite unprecedented.

The best way to look at things is to look at the per person/family income and try to gauge housing affordability based on those numbers.

[Reivax]

Is the belief that homes in places like Santa Ana, Orange, Anaheim, Garden Grove, etc. will drop from the low 600's to the low 300's?

This will be catastrophic for many and gold-rush-boomtown for the vultures hovering over the misery of others.

[TurcoLoco]

This is the main reason why I (and many others) had to flee OC!
The only thing that I couldn't handle (afford) was the ridiculously, unjustifiably high cost of housing/rentals...

If prices ever gets as low as pre-2000 which was really not that low to begin with yet somewhat reasonable, then, I'd definitely consider moving back!

[New Englander]

Originally Posted by Reivax

Is the belief that homes in places like Santa Ana, Orange, Anaheim, Garden Grove, etc. will drop from the low 600's to the low 300's?

What is the justification for homes selling for low 600s in those areas?.

[Reivax]

Originally Posted by New Englander

What is the justification for homes selling for low 600s in those areas?.

The fact that someone was willing to pay 600,000 for one of them.
Supply and Demand.
Understand, I'm not saying I think they're worth that, just that I think the justification is easy to understand.
The "why in hell would you do it?!?" is beyond my knowing, though.

[goodbyehollywood]

Originally Posted by New Englander

What is the justification for homes selling for low 600s in those areas?.

No justification, other than greedy mortgage brokers, who worked on commission, were willing to lend $600K, no down payment, no income verification, no assets and no questions asked, to people who were more than willing to lie to buy a home they knew they couldn't afford. At that starter interest rate of 1.9%, it was a bargain. Of course, they probably don't think that now. Which is why that $600K price tag isn't quite so appealing anymore, either.

[RedNC]

Originally Posted by TurcoLoco

This is the main reason why I (and many others) had to flee OC!
The only thing that I couldn't handle (afford) was the ridiculously, unjustifiably high cost of housing/rentals...

If prices ever gets as low as pre-2000 which was really not that low to begin with yet somewhat reasonable, then, I'd definitely consider moving back!

Let’s suppose that a $600k home goes down to $300k. If that were to happen then you had better be ready to close the deal on that day, because there will be thousands just like you ready to bid prices right back up.
I remember when $200k was a stretch now $300k would be a bargain. Go figure.

[flo2900]

Reivax,

Would you stay here or return from Houston if prices would fall like some predict from low 600`s to low 300`s?
Just curious

[sheri257]

Originally Posted by RedNC

Let’s suppose that a $600k home goes down to $300k. If that were to happen then you had better be ready to close the deal on that day, because there will be thousands just like you ready to bid prices right back up.

Yeah but, would those thousands qualify for a mortgage now?

As was previously pointed out, many people who bid up those prices had no business getting a mortgage to begin with. Their credit sucked, and their income claims were, at best, questionable.

Now with the credit crunch and tightened lending guidelines, people who bid up prices before probably won't be able to bid up prices now since it's highly unlikely that anybody will lend them money.

And, even people with great credit and cash can't get mortgages right now ... the pendulum so to speak, has swung to the other extreme. So ... it's got to negatively impact prices at some point.