Hey everyone. I've been a lurker on this site for a couple of months now and have been trying to learn as much as possible about the housing market. Thank you for all the great info and opinions here. My wife and I got married about a year ago and we have been watching the market since as we would like to buy a house. We have been saving up for a 20% down payment and we are looking in the 300k range. We currently rent a nice 2 bed 2 bath condo from family in Diamond Bar (further drive to work than we would prefer) for only $1k a month. Unfortunately, Orange County hasn't been hit that hard by the housing downturn and prices remain stubbornly inflated. A report for September showed that Orange County pricing even went up by almost 1%. We were specifically looking for some houses in areas like Brea, California, and the median family income in relation to median house values still seem out of whack. Does anyone have any opinions on this market? We would like to eventually buy, but it seems like prices here refuse to be reasonable and I'm afraid of what will happen if the tax credit is extended and even increased. I was planning on at least waiting until the ARM resets blow over and I wanted to see what happened with the tax credit. It sucks because my wife and I would love to be comfortable in a house that we can afford that is close to work but it doesn't seem like the government/realtors wants to let this market correct itself. Any advice/opinions are appreciated. Thanks.
SoCal - Orange County Housing Market
By tazerok Follow Tue, 20 Oct 2009, 2:57pm 1,172 views 14 comments
Watch (0) Share
Quote
Permalink Like Dislike Viewing Comments 1-14 of 14 Last » See most liked comments
|
tazerok is moderator of this thread. |
Follow
Befriend (25)
413 threads
6,980 comments
Saint George, UT
elliemae's website
IMHO the new wave of ARMs resetting will hopefully drop the prices to somewhat affordable. I would wait until the house you want at the price you want happens. I don't think we're at bottom yet.
Follow
Befriend
8 threads
186 comments
Sunnyvale, CA
Obviously, I don't know much about your area and RE is very specific to local areas. But, since its OC, most likely its like Bay area. My opinion here, and its worth as much as you paid for..
1) There is no way in the hell, the prices are going to raise for a while. Its deflation at its best. So, hold on to your cash for now. There will be inflation, but will be down the line.
2) When the $8k credit ends, it will be interesting to see what the govt does, if it increases to 15k as the rumor is and extends to "any" buyer, that means, housing is much more fragile than you or I think.
3) IMO, this recession is from credit hangover, so, unemployment is a forward indicator as contrary to the MSM saying lagging indicator.
4) Why do you think as soon as you are married, you need a house? No offense, but, if its too long to commute, move to a closer place and rent another nice condo.
Waiting one more year will give you a clear picture or atleast will tell you the direction in which we are drifting..Good luck!
Follow
Befriend
243 comments
Cupertino, CA
I agree with dont_getit.
Further: as long as the gov't doesn't artificially install price supports under the housing market, by waiting until at least 2010 you should do OK. You have to be willing to wait for the boomers to exit housing. The whole thing is deleveraging because the housing demand isn't there as it once was for the past 60 years. There is still a housing demand, no question, but not like back in 1985.
And, there are those who sold at the top in 2007 (OC top) and who are getting involved in bidding wars since that's what they did back-in-the-day, so don't get caught up in the hype.
If you want to buy in OC, check out Lansner on Real Estate in the Register. He has a lively online column that attracts OC comments. Also has links to other OC housing blogs.
http://lansner.freedomblogging.com
Follow
Befriend
1 threads
1 comments
Brea, CA
I appreciate the input and I agree with what's been said, I just needed to hear it again because after talking to people on a regular basis, it almost makes me second guess myself. It is frustrating trying to convince people about the reality of the housing market right now. As for dont_getit, we don't feel that we absolutely need a house just because we are married, but once the market is at or near bottom and it makes sense to buy, then we would like to. We've been married for a year now and we held off on buying even though we were financially ready, so there is no absolute need to have a house now. Unfortunately, the rents are double what we are paying now anywhere closer to our work. We are renting from a family member's extra house so it is hard to find anything comparable. The drive isn't too bad and we are comfortable where we're at so there is no problem waiting longer, it is just frustrating that the government is going to continue to prolong this whole process. Anyways, thanks for the input, we'll continue to sit on the sidelines as planned.
Follow
Befriend
21 threads
581 comments
South Pasadena, CA
Orange county is more like a "fortress" than any other California county. (even more than S.F.)
It still has the highest ratio of pre-foreclosures to foreclosures as well as the highest ratio of bankruptcies to foreclosures.
These indicate that too many distressed home-owners are able to sell / short sell rather than foreclose.
It also indicates that lots of them prefer to file bankruptcy rather than foreclose.
These ratios are like they were in May 2007 in Alameda county.
However, the number of both bankruptcies and foreclosures is very high there and mounting quickly.
I think this indicates that prices will decline during the next 2 years in OC.
It may happen faster than that, because of very high current prices and a lot of jumbo loans with not much room for FHA loan modifications, etc. The current situation looks like a typical state of denial. As you wrote: "It is frustrating trying to convince people about the reality of the housing market right now." - another indication of the denial state, which proves we are very far from the bottom.
It would be worth for you to wait for a year or two.
Also your current rent is $1k. If you consider buying for $300k you may try to find a better rent in the $1.6k-$1.7k range. It would be still better (financially) than buying for $300k.
Follow
Befriend
10 threads
116 comments
It looks like the tax credit will be extended until June 2010 and offered to "move up" buyers
at 6,500 dollars to further frustrate qualified buyers who are waiting for realistic price drops to occur.
It is interesting that foreclosures are up by as much as 800 percent in the Glendale-Burbank area but the local news has not covered it at all.
They keep saying the market is "stabilizing" which can be translated as circling the drain faster than ever.
Follow
Befriend
30 threads
763 comments
@Pinnacle
Geez, send me a link so I can read on this one because Obama is losing me on this one. Let me get this straight, we reward the poor homeowners who made bad business decisions in 2005, attempt to stabilize unaffordable home prices through tax incentives and I should feel all warm and fuzzy because unemployment is stabilizing....?
Follow
Befriend
30 threads
763 comments
@misstrial
Folks in congress want to save face anyway they can, tax credits and economic recovery plans have been going on for years and I am now just seeing how it affects those that follow the rules.
Follow
Befriend
30 threads
763 comments
@tazerok
I am in the same situation with 2 kids (3 years old, and 1 year old)....I am not buying until home prices are affordable and comparable to incomes. By affordable I mean that should i need to rent out the place I will turn a profit. Your not in a rush to buy milk, so why be in a rush to buy a home?
Read this excerpt from the housing crash arguments page: http://patrick.net/housing/crash3.html
My grandmother always used to complain about the cost of milk. "Why, when I was a girl, a gallon of milk cost a dime! Just look at how much people are overcharging for milk now." I asked her how much people got paid back then. "Oh, about $15 a week", came the reply. Hmmm, sounds very much like the reasoning people use now when they talk about how much their father's house appreciated "in the long run" without considering that inflation and salaries rose a proportional amount.
What I am saying is that with all the offshoring and unemployment trends now is not the time for us to buy. Buying now will result in the home depreciating below our purchase price and us spending the next 5-10 years in a home waiting for the price to rebound.
This is a business investment with real money, we cant treat this as if we are spending monopoly money....unless you plan on using FHA?
Follow
Befriend
243 comments
Cupertino, CA
4X:
Sorry for sporadic postings - very busy here...
Yeah, and its looks like they're going to extend it or even raise the amount to $30k.
Probably they'll do this to make the RE Industry contributions coming in and to keep the homeowner welfare train rollin'.
~Misstrial
Follow
Befriend
10 threads
116 comments
I also notice that some of the local Homebuyer Assistance Programs are offering 3 percent
second mortgage loans up to 95,000 dollars to low income buyers. Some of these loans do not require any repayment for 30 years and a total "down payment" out of pocket of only 1 percent.
This makes lots of sense with California being bankrupt and having 22 percent
underemployment.
Follow
Befriend
21 threads
581 comments
South Pasadena, CA
4X says
You don't need to go to far. For example, look at the first link on Patrick page:
http://www.washingtonpost.com/wp-dyn/content/article/2009/10/27/AR2009102703791.html?ref=patrick.net
BTW, your Republican friends are in the game not less than Obama:
"Republican Senator Johnny Isakson, a former real estate agent, wants to extend it through June but double the income limit and make it available to all home buyers. "
Follow
Befriend
5 threads
78 comments
Danville, CA
tazerok says
a lot of people are in denial... you won't lose out, at BEST, housing will remain flat for IMO, 5 years, and thats once it hits bottom, IMO probably not until 2013... so you have a long time to save up, and buy the house of your dreams... Every single one of my friends who I try and tell about this horrible (and getting worse) housing market thinks I'm crazy, and wrong... I'll wait it out and see... I'll watch them all buy houses now, I'll wait 5 or so years, and we'll see who got the better deal in the end... and who can keep their house, without paying 50%+ of their income....
you sound familiar with what's going on and it seems like you know it's best to wait... don't let bottom callers fool you, stick with your gut...this is FAR from over! good luck!!!!
Follow
Befriend
30 threads
763 comments
@Michael
I am neither Republican nor Democrat...I am a swing voter Obama was fighting for...he got my vote this round. If you like, you can refer to me as Progressive, or Teddy Roosevelt Jr. I am HOPing that his tax credits for homes and cars do not affect the economic downturn...I am not a home owner and would like to see your homes fall as low as possible so that i can get my family in at a normal rate. I should not have to pay for your poor business decisions. In an ideal world, Obama can continue to provide tax credits to keep homeowners "pacified" with good faith efforts while home prices continue to drop thereby "pacifying" me and other non-home owners.
If he wants my vote again:
-Let the home, finance markets fail
-Bring manufacturing jobs back to America
-Pull out of Afghanistan, Iraq...use that money to fund his recovery plan
-Reform Healthcare preventing the bankruptcy of Americans due to health conditions
He still has time, lets see how it plays out.