Sweet Orange

Here are some quotes from a post in a recent John Burns Consulting newsletter. They provide some food for thought when deciding if housing prices are going up, down, or sideways:

When forced to answer the question, we [John Burns Consulting] say that most home prices are reverting to 2003 prices - some areas have overcorrected and some have not fully corrected. While that covers our butt nationally, we know the truth is much different depending on what submarket or pool of homes you are talking about.

…

If you read the newspapers, you would think prices are appreciating, whether it is the Case Shiller price index or median resale prices - the two price measures that used to be the most reliable measures…

According to CS, prices are up 6% in LA (includes Orange Co.) and 11% in San Diego since March of 2009. According to the median price, prices are up 12% in LA, 17% in Orange County, 12% in Riverside and 18% in San Diego since April of 2009. Neither is correct if you are talking about most homes in those markets.

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According to a [Realtor Survey of Existing Home Prices] survey, prices only recently started appreciating in Orange County, and they are still trending down very slightly in the rest of Southern California.

…

To understand home prices (and all else housing-related for that matter), you need to look at everything. If you are making a decision based on headline data or a regression to the mean, you are taking a lot of risk.

Click on the link to see the rest of this John Burns Consulting newsletter.

Last week, I posted the price per square foot numbers for Costa’s Mesa’s 92626 and 92627 ZIPs. For comparison, here are the price per square foot numbers for Costa Mesa as a whole and Orange County as a whole.

February 2010 median price per square foot numbers for all Costa Mesa:

• House–$345 (up 13.7% from February 2009)
• Condo–$243 (up 39.7% from February 2009)
• Both (House + condo)–$304 (up 8.4% from February 2009)

Graphs: Price/SF Costa Mesa houses, Price/SF Costa Mesa condos–February 2010

February 2010 median price per square foot numbers for all Orange County:

• House–$283 (up 4.8% from February 2009)
• Condo–$234 (up 7.8% from February 2009)
• Both (House + condo)–$270 (up 4.7% from February 2009)

Graphs: Price/SF Orange County houses, Price/SF Orange County condos–February 2010

Source:  Redfin

Orange County Housing Graphs Courtesy Redfin: inventory, house price per square foot, condos price per square foot

According to DataQuick, the most recent housing numbers for Orange County are as follows:

• Sales are up 5.7%: 5034 homes sold in February 2010 vs 4590 homes sold in February  2009.
• The median selling price was up 11.2%: $417,000 in February 2010 vs $375,000 in February 2009.

For comparison here are some Redfin numbers:

• Redfin reports that the number of Orange County homes that sold in December 2009 was 3401, up 30% from December 2008.
• The median selling price in December 2009 was $415,000, which is up 7.7% from their December 2008 number. Redfin also reports that the December 2009 median price per square foot was $270, which is also up (1.5%).

Note that the price per square foot suggests less of a price increase for Orange County housing than does the overall price.

Here is an example of a home that sold for more than the list price. This home, which is in Irvine’s El Camino neighborhood, was listed on August 12, 2009, for $415,000, delisted on August 19, then relisted on September 8 for $415,000. This El Camino condo sold on 10/19/2009 for $437,500, approximately $22,000 more than the asking price.

8 Pierre Irvine, CA 92604 (El Camino neighborhood)

• 3 beds/2 baths
• 1223 SF
• Condo built in 1977
• HOA: $175
• Asking price: $415,000 ($339/SF)
• Selling price: $437,500 ($358/SF)

Current estimates for this home:

• Cyberhomes: $406,828.
• Eappraisal: $362,930
• Zillow: $438,000.

The University area of the City of Irvine is bordered by the San Diego Freeway (I-405) on the north, Laguna Canyon Road (I-133) on the east, the San Joaquin Hills Transportation Corridor (SR 73) on the south.This area includes the communities of Rancho San Joaquin, Turtle Rock, University Park, University Town Center, Quail Hill, Shady canyon and Turtle Ridge.

The University area also includes the Irvine Business Complex (IBC), which is bordered by the San Diego Creek on the east, Barranca Parkway on the north, The Newport Freeway (I-55) on the west and MacArthur Blvd. on the south.This area of the city includes both commercial and residential areas.–Irvine Police Department website–Irvine’s University district

Housing prices and stats are important information to have handy when considering buying a home. But the stats are only part of the story. Neighborhood characteristics are also important. With that in mind, following are some links that provide descriptions of the neighborhoods in University, which is one of Irvine’s three geopolicing districts. Special thanks goes to the Irvine Housing Blog.

• Rancho San Joaquin
• Turtle Rock
• Turtle Ridge, see the Orange County Business Journal article: “Turtle Ridge? Lifestyle combines City Life with European-Inspired Country Charm”
• Shady Canyon, also see the Orange County Business Journal articles
• Quail Hill
• University Park
• University Town Center, also see “Irvine’s Town Center: Then and Now”
• Irvine Business Complex (IBC), also see the City of Irvine’s IBC webpage

For information on inventory and pricing of homes in this Irvine district, see “Irvine by the Neighborhood: University District Home Pricing & Inventory Statistics.”

Many of the cities with the longest road to recovery are California cities, where home prices rocketed out of control, and entire economies were supported largely by a real estate bubble. Fresno, Modesto, Salinas, Bakersfield, Stockton and Los Angeles all saw home prices soar to unsustainable levels and then begin their inevitable plunge.
–”The Best And Worst Cities For Recession Recovery” by Joshua Zumbrun

According to Forbes, a median priced home in the Los Angeles-Long Beach-Santa Ana metropolitan area costs over five times the median income of this southern California area.

Here are some other economic stats from Forbes on the area that they call Los Angeles-Long Beach-Santa Ana:

• GDP at start of recession: $597 billion
• Projected GDP at the end of 2010: $581 billion (-2.6%, projected)
• Unemployment: 10.1%
• Median home/median salary ratio: 5.3

Forbes also states that although the southern California area was hit hard by the real estate bust, the area still “has a robust underlying economy” and the economy is growing. However, the area “still has some of the most expensive real estate in the country, indicating a housing recovery could be years away.”

Meanwhile, home buildeing company Standard Pacific is gung ho on housing in Orange County:

This [Orange County] is our best-performing area in the world.
–Ken Campbell, Standard president and CEO

According to First American CoreLogic’s August index report, the median selling price for houses in Orange County was 7.9% less than it was in August 2008. If the distressed properties (short sale and bank-owned properties) are excluded, the decrease is 7.1%. However, First American sees an increase for the Orange County median selling price in 2010.

Here is First American’s 2010 prediction for Orange County housing prices as well as some others. The percentages listed are the amount that the median home price in Orange County is predicted to increase or decrease by next year. I have listed them in descending order from the most optimistic to the least optimistic forecast.

• UCLA Anderson Center–up 15.9% to 16.6%
• First American CoreLogic–up 9.5% (California prices up 7.9%, U.S. prices up 4.6%)
• Veros–up 2% by year-end September 2010 for their benchmark, which is single-family mid-priced homes
• Anil Puri of Cal State Fullerton–down during the first half of 2010, then flat or up 2% to 3%

Keep in mind that a predicted increase for the median price of all Orange County homes does not necessarily mean that the price for your home or a home that you want to buy is predicted to increase. Rather it could just mean that more homes on the high- or mid-level will sell during the next year that did this year.

Up to this point most of the homes selling in Orange County (or the nation for that matter) were on the low-end of the housing market. As more homes on the mid- and high-end of the market are sold, the overall median selling price will increase, but the selling price of many of the individual homes in the mid- and high-end might decrease from what the home would have sold for in the previous year.

For more information, see “Forecast sees 9.5% price gain for O.C. homes,” Jeff Collins, OC Register November 3, 2009

This energy efficient and ecologically built residence will demonstrate how homeowners can conserve energy and dollars by adopting and
utilizing green building products and services. It will feature an unparalleled display of energy-saving systems and environmentally friendly materials in a fully operational residence.–Living Green Homes Construction and Development, Inc. on its newly built Huntington Beach home

Saving money and energy. Sounds like a good combination for our economically-strapped times, or any time for that matter. Developer Living Green Homes is attempting to prove a way to do this with its newly built Huntington Beach home that they are seeking a GreenPoint Rated designation from Built It Green as well as the LEED Platinum rating from the U.S. Green Building Council. The 3213 square-foot, three-story, single-family home has three bedrooms, three full bathrooms and two half bathrooms. It is located in downtown Huntington Beach at 319 21st Street.

If you want to tour this new green home, you can attend today’s grand opening from 1:30 to 4:30. The grand opening will include speakers as well as food and drink from local restaurants. These include 118 Degrees Restaurant, which is located in Costa Mesa, as well as  Andrei’s Conscious Cuisine and Portola Handcrafted Coffee Roasters, which are both located in Irvine.

If you can’t make the grand opening, tours will available in the coming months. During the tours, the sponsors will provide product demonstrations for environmentally friendly building products, appliances, hardware, and services. Eventually, this home will go on the market.

Note: A YouTube video that provides more background on this project is available. Also, thanks to Evan Little of Surtterre Properties for the tweet that informed me of this event.

Related post: “Going for the Green–and Platinum–in Orange County: The Environmental Nature Center in Newport Beach”

178 Flower

According to Redfin, the median price per square foot that a single-family home in Costa Mesa sold for in September was $403/SF. Here are some Costa Mesa homes that are currently on the market that have list prices that are near this median price per square foot.

458 Swarthmore Lane

The square footage for these detached houses range from 1470 square feet (458 Swarthmore Lane) to 3504 square feet  (178 Flower Street). The house on La Playa has a $90 monthly homeowner association (HOA) fee listed; the other houses have no HOA fee listed. None of these houses are listed as a short sale; however, the Swarthmore Lane house is listed as corporate owned.

178 Flower Street: 5 bed/5.5 baths in Eastside Costa Mesa 92627
Asking price–$1,399,000 or $399 per SF

2189 Tustin Avenue: 3 bed/2.5 baths in Eastside Costa Mesa 92627
Asking price–$1,249,000 or $416 per SF

157 Del  Mar Avenue: 3 bed/2.75 bath in Eastside Costa Mesa 92627
Asking price–$599,000 or $408 per SF (update: changed November 2 to $579,900 or $394/SF)

2296 La Playa Drive: 2 bed/2 bath in Eastside Costa Mesa 92627
Asking price–$574,900 or $396 per SF (update: changed November 2 to $549,900 or $379/SF)

458 Swarthmore Lane: 3 bed/1.75 bath in Central Costa Mesa 92626
Asking price–$539,000 or $393 per SF

Note: According to DQNews, in September, Costa Mesa’s overall median selling price for condos and houses combined was $485,000. According to Redfn, the overall medain selling price in August for Costa Mesa houses was $551,000, and the overall medain selling price for Costa Mesa condos was $300,000.

As a follow up on one of last week’s post, here is a comparison of two single-family houses that are priced near the September median price per square foot for their cities. One is in Irvine; the other is in Costa Mesa.

Irvine house that is priced near the Irvine median price/SF ($338/SF):

64 Rockport, Northpark Neighborhood

• Asking price: $839,000 ($336/SF)
• What: 2000 detached house with 4 bed/2.5 bath with 2500 SF
• Lot size: 4317 SF
• HOA fee: $175/month
• This is a short sale.

Note: An open house is being held for this home on this Thursday, Saturday and Sunday.

Open house hours:

• November 5 at 11am-1pm
• November 7 at 12 pm-5pm
• November 8 at 1pm-5pm

Costa Mesa house that is priced near the Costa Mesa median price/SF ($403/SF):

2039 Phalarope Court, Mesa Verde Area:

• Asking price: $899,000 ($415/SF)
• What: 1966 detached house with 4 bed/2.5 bath and 2166 SF
• Lot size: 7035 SF
• HOA fee: none listed

Note: In June, this home was listed for $1,050,000. In May 2005, this home sold for $810,000.

I have posts that take a deeper look at Costa Mesa and Irvine homes that are priced near the median price per square foot in the works.