OC median home prices reach pre-recession peak:645K (San Francisco, Orange: for sale, real estate)

[LuvSouthOC]

Several Bay Area counties have been back to price peaks for months, while San Francisco home prices surpassed pre-recession peaks more than a year ago. OC is the first county in Southern California to reach the pre-recession peak.


$645,000: O.C. median home price back to pre-recession peak - The Orange County Register

[Urban Planner]

The fact that rents have kept pace means our problem isn't a "bubble" as some on this forum love to believe, it's simply the lack of new housing units (supply). The less we build, the more expensive it will get.

[LuvSouthOC]

Originally Posted by Urban Planner

The fact that rents have kept pace means our problem isn't a "bubble" as some on this forum love to believe, it's simply the lack of new housing units (supply). The less we build, the more expensive it will get.

There is some truth to that. They mentioned elsewhere that OC has more jobs than it did pre-recession, but only maybe 45k more. That alone couldn't have fueled home prices that much.

[harhar]

Originally Posted by Urban Planner

The fact that rents have kept pace means our problem isn't a "bubble" as some on this forum love to believe, it's simply the lack of new housing units (supply). The less we build, the more expensive it will get.

I could see this. Jobs are more prevalent, but perhaps there's stagnant wage growth, making it take longer to save for a "proper" down payment. There is some building going on, but the homes being built are 3600 sq ft monstrosities really meant for multi-families. It looks like builders want the most for their land, and since land is at a premium they aren't going to build small single family homes.

However I still am seeing more and more "creative" loans because of house prices, which isn't necessarily a bad thing if given to responsible borrowers, however these programs only raise house prices and create a more shaky financial foundation IMO.

[expatCA]

Originally Posted by LuvSouthOC

There is some truth to that. They mentioned elsewhere that OC has more jobs than it did pre-recession, but only maybe 45k more. That alone couldn't have fueled home prices that much.

Foreign and US investors are driving a lot of it.

[Electrician4you]

Originally Posted by expatCA

Foreign and US investors are driving a lot of it.

In certain areas. Sure. But there are still a lot of FHA loans out there. I haven't looked in a while but investors don't buy at the height. Foreigners looking for visas probably buy at any time. US real estate is cheap compared to the rest of the world. It's not just the added jobs that drive the market. It's also people that were working before and feel that they are steady enough to buy. And it's also the fact that there simply aren't enough houses for sale. I read that right now there are about 6,000 houses girl sake. Back at the bubble there were almost triple that. Combine that with lower loan rates you have a tight market. Rates now are in the 3 1/2-41/2%. Back then they were 6 1/2.

[Cardiff Kook]

Girl sake?

[Electrician4you]

Originally Posted by Cardiff Kook

Girl sake?

Sorry auto correct. Was meant to say for sale. (In OC)

[k374]

Originally Posted by expatCA

Foreign and US investors are driving a lot of it.

access to cheap capital and investors chasing yield in real estate because other asset classes that are viewed as "safer" investments are severely under performing. But looks like the steam is going to run out soon enough. If the US enters a recession and interest rates rise housing as we know it is f-ked!

[GO JACKETS]

That's not inflation adjusted and it's been almost 10 years. According to the article adjusted for inflation the median home price is still $100k less than the peak. Makes for a good headline but it's bad economics.