FINALLY - rents coming down, big time. (Lake Forest: real estate market, rent)

[CAVA1990]

Originally Posted by Charles

Maybe you guys are right. I don't know. I'm just asking.

However, here are the median incomes for several south OC communities. Do these incomes support the housing prices of today?

92673 Talega $92,073
92679 Coto $112,998
92694 Ladera $104,306
92629 Dana $64,622
92677 LN $80,146
92653 LH $46,716
92692 MVe $82,690
92691 MVw $75,184
92688 RSM $74,173
92656 AV $74,688

No, but those aren't the homebuyers of today in those places either. Note also that the two highest are relatively new areas with more recent arrivals. I grew up in 92677 (actually it's now 92629) and don't even know what or where the heck Ladera or Talega are.

[Mach50]

Originally Posted by Charles

Maybe you guys are right. I don't know. I'm just asking.

However, here are the median incomes for several south OC communities. Do these incomes support the housing prices of today?

92673 Talega $92,073
92679 Coto $112,998
92694 Ladera $104,306
92629 Dana $64,622
92677 LN $80,146
92653 LH $46,716
92692 MVe $82,690
92691 MVw $75,184
92688 RSM $74,173
92656 AV $74,688

Haha no way....but I think people come into a deal with cash from another investment and/or have some nasty loan still. I agree something does not jive.

[CAVA1990]

Your income numbers would only be useful if they were compared to the median prices of the homes those folks bought when they bought them.

[Charles]

RSM, 92688, MI $74K, Median Sales price SFR $510K
LN, 92677, MI $80K, Median Sales price SFR, $639K
MVe, 92692, MI $82K, Median Sales price SFR, $533K

Sales price numbers were from Oct 09
Median income numbers were from Census 2000 so add 50% (4% annual), still this looks out of whack.

Normalized:

RSM, 92688, MI $110K, Median Sales price SFR $510K (about 4.7:1)
LN, 92677, MI $120K, Median Sales price SFR, $639K (about 5.3:1)
MVe, 92692, MI $120K, Median Sales price SFR, $533K (about 4.4:1)

I think typical ratios are around 3:1.

Also, just about all those communities have HOA and Mello Roos.

[CAVA1990]

I don't think you're understanding what I'm saying. The median incomes include everyone living in that zip code, regardless of when they moved there. That would include retirees who bought their homes 40 years ago. They can live on next to nothing in a house now worth $600K. What matters is the relationship of the incomes of people buying into the market to the median price of homes they're buying. I'm sure you'll find that the incomes of these buyers are much higher than those of the existing residents. Unfortunately I'm not aware of any place such data exists.

[Mach50]

^^ That's a good point, there are definitely families in Irvine where each parent is bringing in 120k+, on that 240k...a 700k house becomes more realistic.

[Charles]

Originally Posted by CAVA1990

I'm sure you'll find that the incomes of these buyers are much higher than those of the existing residents. Unfortunately I'm not aware of any place such data exists.

So, the reason the housing prices in south OC went up is because more people with higher incomes moved in, the demand increased, the supply was fairly constant so the price went up?

[CAVA1990]

Originally Posted by Charles

So, the reason the housing prices in south OC went up is because more people with higher incomes moved in, the demand increased, the supply was fairly constant so the price went up?

That's how I'd explain much of it. However, you still did have the funny money effect you had everywhere else. I think they raised the allowable debt/equity ratios for approving loans so people could buy more house with a given income.

[CAVA1990]

I think the greater differences of newcomer to old timer incomes explains the disparity of incomes to home prices that you see in most desirable areas. People who moved there a long time ago like it so they stay and remain part of the median income statistics. Because it's nice, more and more people want to live there and the top earners beat out the others for the desirable properties. In a place like Santa Barbara, where you have building moratoria or other restrictive zoning practices it gets even more out of whack.

Estimated median household income in 2008: $61,482 (it was $47,498 in 2000)
Santa Barbara: $61,482California: $61,021

Estimated median house or condo value in 2008: $1,000,001 (it was $469,300 in 2000)
Santa Barbara: $1,000,001California: $467,000

Median gross rent in 2008: $1,398. Obviously the rental market and the buying market have no relationship. Another characteristic of highly desirable areas.


//www.city-data.com/city/Santa-...#ixzz0ciaGQia4

[Coldjensens]

Some experts are predicting another real estate crash in 2010 or 2011.

this is because there is another wave of ARMS coming up for adjustment, jobs are down and continuing to fall, thus more people who cannot pay their morgage, the government has done all that they can to boost residential market, but it continued to fail. Now they cannto sink any more money into it. The tax credits for first time buyers will nto be renewed. They cannto afford it. Taxes are likely to go up - a lot. All fo these factors may combine to cause another real estate crash. Maybe some areas will end up like Detroit with many houses selling for $1 - $6,000.