House for 300-400k range in Orange County? (San Diego, Irvine: fit in, real estate)

[bhcompy]

perhaps, perhaps not. markets can change fairly quickly and the 300-400k for a nice home in oc is most likely NOT going to drop to 200k. its been a long time since housing prices were that low in OC and i really doubt buyers would allow it to get to that point because of how desireable this area is in the nation

[Humanoid]

markets can change fairly quickly

They can change, but there is not a single piece of data that indicates the housing market is going to turn around any time soon.
The housing market moves slow compared to other markets and you lose very little by waiting to buy.

its been a long time since housing prices were that low in OC and i really doubt buyers would allow it to get to that point because of how desireable this area is in the nation

I don't think 6-7 years ago is a "long time". You could easily find a nice condo/townhome in south orange country for below 200k just 6 years ago.

If buyers let it happen 6 years ago, its unclear why they won't let it happen again. Its also unclear where the buyers are going to come from, the people in the area can't afford the current prices. All the easy money is gone, you actually need crazy things like down-payments, good credit-scores, verified income to get a loan now.

[bhcompy]

south orange county was still developing at that point. now that areas like rancho santa margarita, ladera ranch, etc are established and full of families, it changes pricing. there was a time when I would drive from long beach to irvine down the 405 and there were large pieces of land and rolling hills on both sides of the freeway past newport. and this wasnt very long ago, i'm only 25. buildout has changed prices dramatically.

also, keep in mind that areas like colorado have already stabilized or are on the up and up. prices in high end suburban family areas outside of denver start at around 220 or so and probably average around 275k-325k in my searchings. the mean income isnt much different in the area. I don't think that the price on a single family home will fall below those numbers, and i definitely doubt that the lowend for a decent condition home in a nice OC neighborhood will drop to 220k

[recycled]

The hyperinflation in OC housing prices from roughly 2000 - 2006 was driven in large part because this county was one of the hotbeds of the subprime mortgage mess. Those outfits went from nowhere to the top of the local economy and pumped a ton of semi worthless loan paper into the housing market, which simply caused prices to rise beyond reason. Now most of the home loan sharks have evaporated and their employees are gone. The worthless loan game has dried up. Those of us who actually work for a living in OC at a real job, even if it pays pretty well, don't really make any more than we did in around 2000 or 2001 if you take real inflation into account. Therefore, it is not so far fetched to think that housing prices will settle back to where they were before the artificial hyperinflation driven by almost worthless loan paper went into a frenzy. That would bring home prices back to some resemblance of reality. It was to the benefit of those in the mortgage scam business to see the home values artificially inflated beyond reason, that's what gave them bigger commissions when they wrote up the loans. Remember the saying, don't try to catch a falling knife. The knife is still falling.

[bob-jenkins]

I dont think OC residents who purchased before 1998 realize how lucky they truly are. Only 0.5% of housing ever increases quadruple its value in 10 years. Someone shined a pretty heavenly light on us. You really need to appreciate how much OC real estate did for you, only 1 in 200 were as lucky with the real estate market as we were from 1998-2008.

[Humanoid]

buildout has changed prices dramatically.

There is still plenty of land to build on in Orange County, but the "buildout" had nothing to do with the price increases. Up in Ventura Country there was similar price increases, yet the county is only home to around 800k of people and there is more undeveloped land than developed.

[Charles]

Originally Posted by bob-jenkins

I dont think OC residents who purchased before 1998 realize how lucky they truly are. Only 0.5% of housing ever increases quadruple its value in 10 years. Someone shined a pretty heavenly light on us. You really need to appreciate how much OC real estate did for you, only 1 in 200 were as lucky with the real estate market as we were from 1998-2008.

It doesn't do a bit of good unless a person sells and converts the paper profit. And it doesn't do a bit of good if a person sells and buys in the same or similar market because everything else went up too. In fact, the taxes also would be higher on the new house since the first house's taxes were regulated by Prop 13.

One of the only way to realize the gains from the property value run up is to sell and move to a region which doesn't cost as much. Better yet, one that didn't run up so irrationally and is therefore not going to fall down (nearly as much). That's what we did. Bought in 1997, sold in 2006 Thousand Oaks. Moved not too far from the Denver metro (45 miles).

[Unkllars]

It's not the 300-400K range that is getting affected by the market downturn, nor is it the 3 million+ range that is either. Its the 600-1.5 million range that is getting hit the hardest. You are more likely to see a home that was 829,000 now go for the low 7s to even under in the 6s. That is the portion of the market that's hurting!! People can afford the low range, and wealthy people could care less about the 'market' since they pay cash and other more liquid assets for their estates. That 6- 1.5 was filled with speculators who were looking at the immediate upward trend instead of the cyclical trend and got into loans they shouldn't have, and are creating headline news next to Britney Spears.

Buying a 300K home is the equivalent of renting for about $1800/mo from an annual after-taxes perspective, and that's what rent is on those places, so someone explain to me how it is better to rent a place for the same cost as a mortgage (and being within conforming limits, you can put 3% down on an FHA loan with a rate hovering around 6.0%, qualifying off of tax records instead of stated income) because it's not making sense?

[Mika>Kimi]

Originally Posted by bhcompy

also, keep in mind that areas like colorado have already stabilized or are on the up and up. prices in high end suburban family areas outside of denver start at around 220 or so and probably average around 275k-325k in my searchings. the mean income isnt much different in the area.

The main problem with that argument is that Denver is not OC, and all real estate is local. I seriously doubt that real estate rose at the same rate there as in OC the last few years (this site lists that Denver median went from $165K in 2000 to $220K in 2007, whereas OC peaked at around $700K). If median income is an indicator of where prices will go (which is typically not true for CA) then they would certainly drop more rather than stabilize or be "on the up and up."

[bhcompy]

what i was pointing out is that a comparable western city, specifically with a large tech area and lots of economic growth, is not going to have prices less than a coastal area offering the same thing, like portland, seattle, san fransisco, greater los angeles, and san diego.

economies are local, but these areas are more highly desireable to people nationally and internationally, which is why housing prices shot up so far in the first place. im just saying they wont fall into the high 100s and low 200s in orange, maybe they will again in riverside and san bernardino. i think that between 300 and 400 is where they will stabilize(for a good/decent SFH) because otherwise they are undervalued and there is no reason demand wouldnt jump because of the new found affordability