How long will this continue? (Orange: short sales, renters, new home)

[DocGoldstein]

It will last as long as QE is effective. Once it's ineffective, they'll switch to another strategy, like I don't know, giving people money to take a loan.

I actually feel bad for the younger types making a home purchase these days. Only 15 years ago, we had a normal housing market with normal prices. Seems like only yesterday.

[Charles]

Originally Posted by DocGoldstein

Only 15 years ago, we had a normal housing market with normal prices. Seems like only yesterday.

Below is the Case Shiller home price index for the Los Angeles area. About 15 years ago, the index was around 100. Today it is around 160. That's a 60% increase in 15 years or a little over 3% per year.



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[EscapeCalifornia]

Originally Posted by Charles

Below is the Case Shiller home price index for the Los Angeles area. About 15 years ago, the index was around 100. Today it is around 160. That's a 60% increase in 15 years or a little over 3% per year.



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Except those numbers aren't uniform across the region. For every house in Compton or Victorville that's the same price it was 15 years ago, there's one in Irvine or Huntington Beach that's tripled in value.

[Charles]

Originally Posted by EscapeCalifornia

Except those numbers aren't uniform across the region. For every house in Compton or Victorville that's the same price it was 15 years ago, there's one in Irvine or Huntington Beach that's tripled in value.

Also, rates in 1997 were 6.5% today they're less than 3% (I just refinanced for 2.75% - I love writing that.)

[CAVA1990]

Originally Posted by killer2021

I have looked at socal real estate from an investment perspective and it doesn't seem to be worth it at all. The potential rent you'll make hardly give you any profit for your investment. The only way I can figure you can make a profit is if you slumlord the investment. For example, convert the garage to a rentable space, convert the living room to rentable space and maybe sell some of the backyard as vehicle storage. If you do that you MIGHT make 10% profit. Seems like the real estate prices need to fall another 15%

I don't think you understand real estate investing. You don't normally profit from the rent. That normally just covers your expenses while you carry the property. You make your money on the resale.

[ohboywhatamess]

Originally Posted by killer2021

Don't be fooled. The people buying have outside money. I know the Chinese have been snapping up OC real estate as investments. The Chinese market is in a bubble so investors over there are bringing their capital to the US because the market over here has bottomed out and stabilized.

The local economy is NOT improving. The economic data shows it. Incomes aren't even beating inflation. So technically everyone is getting a pay decrease as an aggregate. If housing prices go up, it's definitively not a result of local economic improvement.

I concur. This article from the Orange County Register was both sad and eye opening: Report: Many in Orange County lack basic needs | county, orange, - Life - The Orange County Register (Report: Many in Orange County lack basic needs)
Many of the houses that are available are being bought by investeros, especially those that are on the short sale list. The OC is a mess.

[Podo944]

Originally Posted by Lola The yorkie

I have no clue who or what you are..but your post totally insulted me

our desert home cost nearly half a million 4 years ago..so hardly buying shaving cream at the dollar store

our other home is valued at 1.2 million....

we have always been in great financial shape..again..we did not spend everything we made..so at ages 68 and 73 we could easily buy another "shaving cream" home

Er... um... I wasn't thinking of your comment at all, in my post.
I was referring to the uber wealthy foreign investors, primarily the Chinese, that our real estate agent was telling us about.

As to you and anyone else who was wise enough and disciplined enough to save and buy when you were younger, my hats are off to you and don't begrudge others who've done the same.

So hands off your hips and blow away the huff now!

[CAVA1990]

My parents sold their house in San Bernardino County in the late 60s for $35K, which is the equivalent of about $235K today. Zillow puts its current value at $287K, an appreciation rate not that much greater than the CPI. Prices in the inland areas don't seem to have escalated excessively. However, in prime coastal locations it's been somewhat greater. However not that many people wanted to live in South OC in the 60s and there was of course much more vacant land than there is now.

[Ol' Wanderer]

Originally Posted by CAVA1990

My parents sold their house in San Bernardino County in the late 60s for $35K, which is the equivalent of about $235K today. Zillow puts its current value at $287K, an appreciation rate not that much greater than the CPI. Prices in the inland areas don't seem to have escalated excessively. However, in prime coastal locations it's been somewhat greater. However not that many people wanted to live in South OC in the 60s and there was of course much more vacant land than there is now.

My husband's grandmother was one of the few people who fell in love with South OC in the late 1940s, so much that she took her children and grandchildren every year from Manitoba to Laguna Beach for vacation. In 1950, she packed them all up, moved them all down to Laguna, and bought as many pieces of land she could afford, most were located half a block or right across from the beach. One of those properties was (and still is) the family home, a small beach cottage on a small corner lot located half a block from Main Beach, which she paid $8,000 then. According to an online CPI inflation calculator, that's the equivalence of $76,785 today. Many realtors have been offering my husband's family between 1.2M and 1.4M for the lot alone (the cottage is worth nothing and would not be saved, they said.)

Husband paid $61K in 1982 for his house in Top of the World, two miles up the hill from downtown Laguna, and sold it 15 years later in 1997 for $385K. Its current value is $915K.

[CAVA1990]

Originally Posted by Ol' Wanderer

My husband's grandmother was one of the few people who fell in love with South OC in the late 1940s, so much that she took her children and grandchildren every year from Manitoba to Laguna Beach for vacation. In 1950, she packed them all up, moved them all down to Laguna, and bought as many pieces of land she could afford, most were located half a block or right across from the beach. One of those properties was (and still is) the family home, a small beach cottage on a small corner lot located half a block from Main Beach, which she paid $8,000 then. According to an online CPI inflation calculator, that's the equivalence of $76,785 today. Many realtors have been offering my husband's family between 1.2M and 1.4M for the lot alone (the cottage is worth nothing and would not be saved, they said.)

Husband paid $61K in 1982 for his house in Top of the World, two miles up the hill from downtown Laguna, and sold it 15 years later in 1997 for $385K. Its current value is $915K.

My parents built a house in what's now in Dana Point for about $150K including the lot in 1968/9. That's the equivalent of about $1 million in today's dollars. It would sell for about $2.5 million now. Most of the cost back then was the structure as the lot only cost about $35K. The value of the land is now a much larger percentage of the combination.