Sweet Orange

Following are some Irvine housing number from Trulia. These numbers are for all Irvine homes (detached and condos). To see previous Redfin numbers for the Irvine housing market, see my past posts “The Irvine Detached Home Report” and “The Irvine Condo Report.” To see what the Altos Research Market Action Index, which covers detached home only, says about the Irvine housing market, see “The Irvine Housing Index Says….”

Based on 338 homes sold from March to May 2009 (down 37.3% from the same period one year ago), the Irvine median selling price was as follows:

Median Sold Price: $550,000

• up 2.8% from the previous quarter
• down 5.9% from the same period of the previous year
• down 5.2% when compared to the same period of 5 years ago

A comparison of the sold price to the list price, shows that the two numbers are not in the same ballpark: The average listing price for week ending June 3, 2009 was $962,442 ($330/SF). However, I should note that Trulia’s sold price is the median, and Trulia’s list price is the average.

The number of Irvine homes currently on the market according to Trulia breaks down as follows:

• number of homes on the market: 1854
• number of these homes  that are in distress*: 791
• 43% of Irvine homes on the market are in distress
  

Source: Trulia

*Distressed homes are defined as those that are in pre-foreclosure, trustee auction. or bank-owned stage of the foreclosure process.

As I stated in my About section, one of my goals for this blog is to highlight the similarities that Irvine and Costa Mesa share as well as the differences between these two Orange County cities. One of the differences is the type of residential income property that is available.

In addition to apartment buildings that are available for investment, Costa Mesa also has smaller options available, such as apartments over garages or a second building on the lot. These options for investment on a smaller scale are hard to find in Irvine. The reason for this can be found in the way these two cities developed: Irvine with basically one landowner (The Irvine Company) calling the shots, and Costa Mesa with many landowners making  numerous independent decisions.

A lot more could be said about the forces that shaped these two cities to be what they are, but that will be for another time. For now, we will look at the type of investment properties that are available in Costa Mesa. The following is a sample of what is available in Eastside Costa Mesa:

411 Emerson Street has a 3 bedroom detach home with a 2 bed apartment over the garage. Asking price: $899,000.

2344 Elden Avenue #3 has a duplex in the front and a three-bedroom detached home with a pool in the back. Asking price: $899,000.

268 Cabrillo Street #3 is a three-unit townhome building. All units are two bedrooms with 1.5 baths. Asking price: $1,040,000.

173 Broadway is six units. Each unit has 2 bedrooms and 1 bath. Asking price: $1,750,000.

Resource: “How to find good investment property” by Liz Pulliam Weston, MSN Money

PHOTOS ARE OF 2344 ELDEN AND 2411 EMERSON

Following are some Costa Mesa housing number from Trulia. These numbers are for all Costa Mesa homes (detached and condos). To see what the Altos Research Market Action Index says about the Costa Mesa housing market, see “The Costa Mesa Housing Index Says….” And to see previous Redfin numbers for the Costa Mesa housing market, see my past posts “The Costa Mesa Detached Home Report” and “The Costa Mesa Condo Report.”

The average listing price for week ending May 27, 2009 was $587,398 ($328/SF). Based on 204 homes sold from February to April 2009 (up 14% from the previous quarter), the Costa Mesa median selling price was as follows:

Median Sold Price: $465,000

• up 3.3% from the previous quarter
• down 12.3% from the same period of the previous year
• down 14.8% when compared to the same period of 5 years ago

The percent of Costa Mesa homes on the market that are currently in distress is as follows:

% of homes that are in distress*: 56%

• number of homes on the market: 789
• number of homes  that are in distress*: 438

Source: Trulia

*Distressed homes are defined as those that are in pre-foreclosure, trustee auction. or bank-owned stage of the foreclosure process.

“The mortgage load of Californians was unusually heavy, and with deflation it became unbearable. Bank failures and the collapse of security values impoverished many retired people who had previously supplied buying power without competing for jobs.”

Where do you think this statement comes from? Maybe an article in the Orange County Business Journal, a recent post in the business section of The Orange County Register, or a comment made on the Inside OC with Rick Reiff broadcast?

No. This reprint of a statement made about the 1930s, when our economy was in a deep depression, can be found in a book written in 1970.*

Hope springs eternal that we will learn from past mistakes, but, as this statement shows, we missed it in a big way this time around.

So here is hoping that when we recover from this recession (which we will eventually), we will decide that we can do without the manic highs that are based on false illusions and will eventually lead to depressing lows.

Well, I can hope!

*Quote source: A Slice of Orange; the History of Costa Mesa

Theatrical poster courtesy Drew Stuzan via Wikipedia

According to Richard Green of the USC Lusk Center of Real Estate, construction of housing has fallen to the lowest level since World War II. (We had other matters to deal with at the time, and home construction wasn’t high on the priorities list.) I don’t know if Green sees this as good news, but as he stated on Larry Mantle’s  AirTalk, it is necessary news.

According to Green, 1.5 million homes can be built and sold in the U.S. annually. However, in the go-go building day of the recent past, 2.2 million homes were being built annually. The inference is that this contributed to the large inventory of homes currently on the market.

Green’s conclusion is that the current reduced level of construction will eventually help to reduce the number of homes on the market. His reasoning is that, since the population will continue to grow and current homes will get older and deteriorate, this will help us to return to a more stable housing market. As he stated on AirTalk , this will help recovery return “sooner rather than later.”

The Orange County Register’s Jonathan Lansner had some related information that is relevant for Orange County. The information is from a recent jobs report from the California Employment Development Department. According to the EDD report, construction jobs in Orange County are down 29% from the peak in May 2002. This translates into a loss of 32,200 Orange County construction jobs. (California’s number is 33% fewer construction jobs than were present at the peak.)

These numbers suggest that reduced housing construction in Orange County will help to deplete the supply of housing that was built up in the boom years and aid a return to a stable housing market. I hope that this mean no more extreme highs or lows—rather a steady state of construction.

However, until we get to that steady state, more pain is in store. A recovery “sooner rather than later,” although necessary, doesn’t mean painless.

“In Orange County, homebuilding dropped to the lowest level in figures dating back to 1946, amounting to a $1.8 billion drop in the industry’s contribution to the local economy, according to estimates.”
—Jonathan Lansner, “More homebuilding cuts seen in 2009″

PHOTO COURTESY THE BUILDING ASSOCIATION OF SOUTHERN CALIFORNIA

The following information provides some insight into the status of the housing market in Orange County. In addition to shedding light on the percentage of Orange County housing that is in distress, this information shows that, although most statistics provide helpful information, considering all data with some skepticism is wise.

According to Steve Thomas of Altera Real Estate, on April 30, 2009, 35.9% of the Orange County homes on the market were in distress. Here is the Altera Orange County breakdown:

• 10,363 homes on the market as shown by the active-listing inventory
• 3,724 distressed homes on the market
• 35.9% of Orange County homes in distress (Source: Altera Realty)

Altera numbers also stated that 29.6% of Irvine homes on the market were in distress. Here is Altera’s Irvine breakdown:

• 686 homes listed for sale
• 203 homes in either foreclosure or a short sale
• 29.6% of Irvine homes in distress (Source:Altera Realty)

However, at that time, Trulia numbers showed a more pessimistic picture. Here is Trulia’s Irvine breakdown:

• 1810 resale and new homes on the market
• 741 homes in pre-foreclosure, auction or bank-owned stage of foreclosure
• 41% of Irvine homes in distress (Source: Trulia)

In addition, Trulia’s numbers showed that Costa Mesa has an even higher percentage of distressed homes on the market than Irvine.

• 780 resale and new homes on the market
• 416 homes in pre-foreclosure, auction or bank-owned stage of foreclosure
• 53 % of Costa Mesa homes in distress (Source: Trulia)

All these numbers are helpful, but, as you see, the Altera numbers show a rosier picture for the Irvine housing market than the Trulia numbers do.

In addition, based on these numbers, most would conclude that the Irvine housing market is in better shape than Costa Mesa’s. However, according to recent Altos Research numbers, the Costa Mesa housing market is in slightly better shape than Irvine’s, and both the Irvine and Costa Mesa housing markets are in better shape that the high-end beach communities.

The bottom line is that the numbers can be worked many different ways, and sometimes the same numbers are used to support opposing viewpoints. So, buyer beware, and look at a range of statistics from different sources to get a clear picture of market conditions.

Update: I just came across some articles on this subject by Jonathan Lansner: “Playing the numbers” and “Perhaps home sales haven’t bottomed yet.“  In the first, he writes about the varying home depreciation numbers that different companies report. In the second, John Burns of John Burns Real Estate Consulting gives a perspective on the subject. SW 6-3-09

If you are facing the possibility of foreclosure, here are some ways to find help:

• Contact a Consumer Credit Counseling Services office. Orange County branches are located in Santa Ana (headquarters), Anaheim, Brea, and Costa Mesa. Website: cccsoc.org; Phone: 800-213-2227 (24 hours).
  Consumer Credit Counseling Services in Costa Mesa can be reached at the website or by calling 714-245-1690. The Costa Mesa branch is located at 2701 Harbor Boulevard inside the Costa Mesa Federal Credit Union. English, Spanish, and Vietnamese are spoken at the Costa Mesa branch.
• Attend a free foreclosure prevention workshop at Irvine’s civic center on June 12. At the workshop, individual help will be provided to homeowners. The workshop is made available by the Orange County Home Ownership Preservation Collaborative, the City of Irvine and U.S. Department of Housing and Urban Development (HUD). RSVP suggested. Phone: 714-568-0823 X225.
• See the HUD website, or call 877-HUD-1515. In addition to information on housing, loans and foreclosure, this site has a list of HUD-approved counseling agencies.

GRAPHIC COURTESY THE CITY OF IRVINE

Is 1920s cottage charm enough to command a high price per square foot in our current tough Orange County housing market? A home on Monte Vista Avenue in Eastside Costa Mesa will give us some answers. 

228 Monte Vista Avenue is a 1927 Eastside Costa Mesa detached cottage with 3 bedrooms and 1314 SF. The listing had an asking price of $699,900 ($533/SF). No homeowner association fee was listed.  The listing stated that it is within walking distance of the Newport Back Bay. If you click on the walking distance link, you will see that many services and amenities are nearby.

When I first saw the listing for this home, my thought was that, although I would not have made some of the decorating choices, it has some charm. I wasn’t sure that the charm would be able to get the $533 per square foot that the homeowners were asking.

However, on May 2, the listing changed from active status to accepting backup offers. I checked the listing today and apparently this home has sold; however, the final sales price is not yet available. We will have to wait for the sales price to show up in the public records (about 30 days) to see what the final selling price was. This Eastside home was on the market for about 30 days. It sold in September 2004 for $650,000 and in July 1996 for $180,000.

Update: 228 Monte Vista sold for $690,000 on May 29, 2009. SW 7-3-09

Here is what some nearby homes have sold for recently:

2562 Westminister Avenue

• sold for $639,500 ($480/SF)
• sold on April 30, 2009
• 1306 SF

2519 Santa Ana Avenue

• sold for $475,000 ($376/SF)
• sold on April 27, 2009
• 1264 SF

201 Susanah Place

• sold for $612,900 ($451/SF)
• sold on March 03, 2009
• 1359 SF

If you want to compare this home with other homes currently on the market, here is a link to a map of available housing in this area.

Note: All pictures are of 277 Monte Vista, Eastside Costa Mesa.