Sweet Orange

DQNews Southern California Median Home Sales Price, October 2009

If you follow the housing news, you have probably read and heard numerous times that the median price for an Orange County home has gone up in recent months. For example, DQNews reports that the October median selling price for Orange County homes is up 3.9% from last October.

However, a report by The Real Estate Research Council of Southern California, which is located at Cal Poly Pomona, provides a different picture. Housing appraisers provide the input for the report by reviewing a sample of homes every October and April. The sample consists of the same homes being appraised and compared during each appraisal cycle.

Here are the October 2009 results:

• Orange County home prices are falling 15% annually. (The April report showed that O.C. home prices were down 14% from the previous April.)
• Orange County housing prices have been falling for three years.
• The amount of decline varies by region:
  –North Orange County: down 20.9%
  –Central Orange County: down 17.7%
  –South Orange County and beach areas: down 9%

A report by mortgage insurer PMI Group also shows a decline in Orange County housing prices. The PMI report states that the value of Orange County homes in the second quarter of this year was down 7.81%. In addition, PMI calculates that Orange County housing prices have a 99.9% chance of declining in the next two years.

A likely explanation for the conflicting pictures that the various numbers are painting is as follows: More homes at the mid- and high-end of the market are selling now than in the recent past. This brings up the median price for Orange County homes as a whole, but individual home prices might still be decreasing.

Sources:
Jonathan Lansner, “Appraisers see O.C. home prices off 15%,” The Orange County Register
Kristen Schott, “Orange County among 10 riskiest housing markets nationwide.” OC Metro