Sweet Orange

For a look at what is going on in with housing prices in Costa Mesa, I provided the numbers for the highest- and lowest-priced homes in Costa Mesa as well as the numbers for a Costa Mesa home that is near the median. Here they are:

The highest priced home in Costa Mesa is currently at 369 22nd Street. This home is located in Eastside Costa Mesa (92627) near the Newport Bay. Note that the current listing price is reduced by 15% from the original listing price.

• Asking price: $2,990,000 ($516/SF)
• HOA fee: n/a
• What: detached house built in 2004
• Size: 4 beds/6 baths with 5800 square feet
• Previously sold: February 10, 1996 for $540,000
• Price reductions:
  * listed April 16,2009 for $3,495,000
  * price reduced on July 22, 2009 to #3,295,000
  * price reduced on August 21, 2009 to $2,990,000

The lowest priced home in Costa Mesa is currently at 1654 Iowa Street, Unit B. This short sale is  located in the Mesa Verde neighborhood  (92626). Note that the current listing price is approximately 50% below the previous 2006 selling price.

• Asking price: $209,990 ($234/SF)
• HOA fee: $250/month
• What: condo built in 1971
• Size: 2 beds/1 bath with 897 square feet
• Previously sold: April 21, 2006 for $406,000

An example of a mid-priced Costa Mesa home is at 832 Presidio Drive. This home is located in Central Costa Mesa (92626) near Tewinkle Park, Orange County Fair Grounds, Orange Coast College, South Coast Plaza as well as many freeways. This is a short sale.

• Asking price: $439,000 ($338/SF)
• HOA fee: n/a
• What: detached house built in 1960
• Size: 3 beds/62baths with 1200 square feet (7200 SF lot)
• Previously sold: July 17, 2009 for $439,000 and July 12, 1994 for $184,000

Note: I just saw this information, so I wanted to pass it along to anyone who is interested. Therefore, the post on green buildings in Orange County will be posted at a later date.

The Orange County Credit Union is offering a free workshop today (September 10) from 7 pm to 8 pm at the Yorba Linda library. If you are unhappy with your current loan, here is a place where you can receive information on your options.

The workshop will cover the following:

• Who is eligible for loan modifications?
• What modifications are the banks willing to make?
• How should you approach the banks for a modification?

For more information, call the Library Information Desk at 714-777-2873, extension 6.

Also, the Orange County Credit Union’s website warns of the following foreclosure scams:

• Phantom help: The con artists claim they can negotiate an agreement with your lender but they require an upfront fee. They may also ask you to start paying your mortgage to them….
• Rent to own: The con artists claim that by giving them the title to your house, they will take over your mortgage payments (or find an investor who will) but allow you to stay and pay a reasonable rent….
• Fake refinancing: The con artists claim that they are refinancing your loan to bring it current and have you sign the “loan papers.”…
• Buyer scouting: The con artists guarantee that they will find a buyer for you, and you will both split the profits when the home sells….

To read more on this, see the Orange County Credit Union website  section on foreclosure scams.

Remember: Free foreclosure prevention and mortgage modification help is available; be wary on anyone who asks you for a fee. If you think that you are a victim of a mortgage scam, contact the Federal Trade Commission, (877)-FTC-HELP, and your state’s attorney general office (California Office of the Attorney General).

GRAPHIC COURTESY THE CITY OF IRVINE

NEW YORK, August 20, 2009…The Conference Board Leading Economic Index^TM (LEI) for the U.S. increased 0.6 percent in July, following a 0.8 percent gain in June, and a 1.2 percent rise in May.

Says Ken Goldstein, Economist at The Conference Board: “The indicators suggest that the recession is bottoming out, and that economic activity will likely begin recovering soon. The Coincident Economic Index was flat in July - the first time it did not register a decline since October 2008. The Leading Economic Index, which has increased for four consecutive months, suggests that the CEI will turn positive soon.”

In a recent post, I wrote that Chris Thornberg, principal with Beacon Economics, see improvement in construction, finance, and retail not occurring until sometime after the recovery is underway. In other words, they are lagging indicators. The employment numbers are another indicator that Thornberg see  as a lagging indicator in this recovery. Lagging and leading indicators are not the same in every recession. However, improvement in the employment numbers is seen by most economist as a indicator that lags in most recessions.

As I wrote previously, Peter Orszag, Director of the Office of Management and Budget, agrees that improvement in the employment numbers is a lagging indicator in recessions, including this one. However, he sees the current unemployment numbers as 1.5% higher than is normal for this stage of recession. He sees two reasons for this.

First, the losses in stocks and, therefore, the reduced amount in retirement accounts is making it necessary for many to delay retirement. Previously, pensions, not stock numbers, determined the amount in a retirement account. So the ups and downs of the stock market have a bigger role in this recession. Second, he says the fall in home prices to below the amount owed makes it difficult for many unemployed to relocate to other areas to accept a job offer. This has not been true in other recent downturns.

After a slight downturn in July, the U.S. unemployment number rose in August to 9.7%.  In a few weeks, the California and Orange County numbers will come out. For now, here is a look at the July and June unemployment numbers:

• U.S–July: 9.4% (June: 9.5%)
• California–July: 11.9% (June: 11.6%)
• Orange County–July: 9.5% (Jun: 9.3%)

For more information on why unemployment remains high, see “Why is U.S. Unemployment so High?“. Also see, “The Conference Board’s August 2009 Global Business Cycle Indicators” and Unemployment in O.C., state buck U.S. trend.”

Note: For Beacon’s economic forecast, see Beaconomics.

GRAPH COURTESY WIKIPEDIA

As a recent post shows, homes in low-priced areas such as parts of Anaheim, Stanton, and Garden Grove are selling much better than homes in the high-priced areas. MDA DataQuick reports the same:

Sales rose 120 to 150 percent in parts of Anaheim and Stanton where prices ranged from $250,000 to $310,000, reports MDA DataQuick.–”Housing sales jump,” The Orange County Register

The Register article goes on to say that brokers are reporting that homes above $500,000 continue to sell slowly.

So, to check this out, let’s take a look at what is happening in two of these ZIPs that have homes priced on the lower end of the market: Anaheim’s 92804 and 92805.

A DataQuick/Orange County Register chart shows that the number of home sales in July in the 92804 ZIP  increased by 11.9% when compared to the July 2008 sales numbers. However, Trulia shows that the May 2009 to July 2009 sales in the 92804 ZIP decreased by 25.2% when compared to prices of one year ago.

In addition, DataQuick reports that in July Anaheim’s 92805 ZIP, had the second highest increases in the number of sales in Orange County when compared to the same time last year (+123.1%). However, Trulia numbers show a less impressive increase. According to Trulia,  the May 2009 to July 2009 sales in the 92805 ZIP increased by 7.1% when compared to prices of one year ago.

Trulia’s numbers cover a longer time period and, therefore, it is not surprising that the numbers differ. However, watching the numbers from these two sources in the coming months to see if they converge or continue in different directions will be interesting. They should give a clearer picture of which Orange County areas are seeing increases in the number of homes sold and by how much.

Following are some housing market numbers for Irvine. The 92603, 92604 and 92614 ZIPs are particularly interesting.

Note that the 92603 July asking price of $582 per square foot seems particularly unrealistic considering that the July selling price for the 92603 ZIP was $374 per square foot. The 92603 ZIP includes some of the most expensive homes in Irvine, including Irvine’s most expensive neighborhood, Shady Canyon. Other neighborhoods in Irvine’s 92603 include Quail Hill, Turtle Rock, and Turtle Ridge.

You might also want to pay special attention to the Woodbridge ZIPs: 92604 and 92614. As reported in the The Orange County Register, the increase in the percentage of Woodbridge foreclosures are some of the  highest in Orange County, especially in the 92604 ZIP. The 92604 ZIP includes the upper part of the Woodbridge neighborhood as well as the  El Camino neighborhood (See the map.)

According to DataQuick, Irvine’s July 2009 housing numbers by ZIP are as follows: ZIP/Median Selling Price/% change in price from previous month/# of homes sold/% change in number sold from previous month (DQNews).

Tomorrow: Irvine detached and condo stats

Chris Thornberg, a principal with Beacon Economics, had some comments on what the leading and lagging indicators of market recovery will be for this recession (AirTalk, Larry Mantle, August 7, 2009). (By the way, Tim Quinlan, a Wells Fargo analyst, says that the recession ended in June. Michael Murphy of New World Investor also says the recession is over. Maybe I’ll write more about that later.)

According to Thornberg, the following sectors of the economy are leading us to recovery:

• professional services
• export services

In addition, Thornberg states that, although the manufacturing sector is not growing, this sector  is “firming up.”

Before I go on to state what Thornberg sees as the sectors that will be the lagging indicators in this recovery, here is what Joel Kotkin, a fellow with the New America Foundation, says about the professional services sector:

Media coverage of America’s best jobs usually focuses on blue-collar sectors, like manufacturing, or elite ones, such as finance or technology. But if you’re seeking high-wage employment, your best bet lies in the massive “business and professional services” sector.

This unsung division of the economy is basically a mirror of any and all productive industry. It includes everything from human resources and administration to technical and scientific positions, as well as accounting, legal and architectural posts.–Joel Kotkin, “Best and Worst Cities for High Paying Jobs,” Forbes

Unfortunately for those of us who live in southern California, Forbes ranks Los Angeles-Long Beach-Glendale as the fourth worst area to find these jobs and the Irvine-Santa Ana-Anaheim area as the seventh worst.

Now for the lagging economic indicators: According to Thornberg, improvement in the following sectors of the economy will not show considerable improvement until sometime after the recovery has begun:

• construction
• finance
• retail

Thornberg, as well as most other economists, sees employment (which is a factor of all of the above mentioned economic sectors) as another lagging indicator. He also states that recovery in each sector will vary from region to region.

Note: For Beacon’s economic forecast, see Beaconomics.

GRAPH COURTESY BEACON ECONOMICS

According to DataQuick/OC Register, Anaheim’s July 2009 housing numbers by ZIP are as follows.

The percent change is the percentage increase or decrease that results when current numbers are compared to the numbers of one year ago. Anaheim contains some of North Orange County’s lower-priced areas. (Stanton currently has the lowest median list price housing in North Orange County.)

The Anaheim Altos Market Action Index for the week ending August 23, 2009 is 22.38. Above 30 is a sellers’ market; below 30 is a buyers’ market.

According to Redfin, 29.1% of Anaheim homes have price reducitons.* According to Trulia, 68% of Anaheim homes are distressed.**

*Based on homes sold or taken off the market between May 26, 2009 and August 24, 2009.

**Defined as homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. Different groups use different inputs and, therefore, come up with different percentages. In this case the foreclosures are not necessilarly on the market yet (and may not end up on the market).

What’s up with these pictures of the home at 2628 West Palais Road in Anaheim? This short sale has been on the market for only a few days, but I have to wonder if the owner is really interested in selling with pictures like this showing on the MLS online site.

OK, I admit the first picture did get my attention, but not in a good way. And then there is the one of the in-construction bathroom. And the final two pictures: Why the bad lighting? In addition, if you click on the MLS link, you will see a picture of the bedroom curtains tied in a knot. Why?

The asking price is $355,000 ($224/SF) for this 4 bed, 1583 square foot, detached house that was built in 1956 in the Anaheim West of Harbor area. What do you think? Are you enticed to buy?

Note: According to Redfin, the median sales price in July for a detached house in the 92804 ZIP was $240 per square foot. This home sold on June 28, 2002 for $315,500.

Next week: a look at how home prices have changed recently, and over the years, in this low-priced ZIP

Today, we will take a look at how the North Orange County housing market for detached homes is doing as shown by the Altos Market Action Index. The most interesting numbers are for the highest priced market in this area, Yorba Linda, and the lowest price area, Stanton.

According to the Altos index numbers for North Orange County, the Yorba Linda housing market has the least healthy outlook, and Stanton has the healthiest outlook. However, as shown by the index numbers, the housing market in all North Orange County cities is a buyers’ market. This is a repeat of what was happening in May.

Note: The Altos Market Action Index shows the balance between potential buyers and sellers, in other words, the balance between supply and demand. Above 30 is a sellers’ market; below 30 is a buyers’ market. The Altos numbers are for detached houses only (condos are not included). For this reason, I have included numbers that show the percentage of houses in each city that are detached.

Anaheim: Approximate % homes on market that are detached: 73%

• Median list price (August 16,2009): $364,232
• Altos Research Market Action Index:
  August 16: 22.19
  July 5: 23.69

Brea: Approximate % homes on market that are detached: 89%

• Median list price (August 16,2009): $550,327
• Altos Research Market Action Index:
  August 16: 16.57
  July 5: 20.14

Buena Park: Approximate % homes on market that are detached: 85%

• Median list price (August 16,2009): $357,945
• Altos Research Market Action Index:
  August 16: 21.09
  July 5: 23.32

Cypress: Approximate % homes on market that are detached: 67%

• Median list price (August 16,2009): $502,327
• Altos Research Market Action Index:
  August 16: 20.12
  July 5: 25.82

Fullerton: Approximate % homes on market that are detached: 78%

• Median list price (August 16,2009): $545,955
• Altos Research Market Action Index:
  August 16: 18.90
  July 5: 21.41

Garden Grove: Approximate % homes on market that are detached: 78%

• Median list price (August 16,2009): $376,622
• Altos Research Market Action Index:
  August 16: 26.00
  July 5: 27.56

La Habra: Approximate % homes on market that are detached: 69%

• Median list price (August 16,2009): $508,236
• Altos Research Market Action Index:
  August 16: 21.56
  July 5: 21.64

La Palma: Approximate % homes on market that are detached: 81%

• Median list price (August 16,2009): $606,200
• Altos Research Market Action Index:
  August 16: 18.77
  July 5: 18.65

Placentia: Approximate % homes on market that are detached: 75%

• Median list price (August 16,2009): $527,559
• Altos Research Market Action Index:
  August 16: 18.14
  July 5: 20.49

Stanton: Approximate % homes on market that are detached: 66%

• Median list price (August 16,2009): $309,736
• Altos Research Market Action Index:
  August 16: 25.48
  July 5: 23.67

Westminster: Approximate % homes on market that are detached: 87%

• Median list price (August 16,2009): $451,536
• Altos Research Market Action Index:
  August 16: 23.12
  July 5: 27.83

Yorba Linda: Approximate % homes on market that are detached: 79%

• Median list price (August 16,2009): $804,377
• Altos Research Market Action Index:
  August 16: 15.00
  July 5: 17.88

Back in May, I wrote that the Altos Market Action Index numbers are showing the low-end of the Orange County housing market to be healthier than the high-end. An article by Kelli Hart in Sunday’s Orange County Register backs up the theory (”Luxury homes fall into slump“). It seems that the high-end of the housing market is going through something similar to what the low-end has experienced.

Hart gives these Real Data Strategies numbers:

From July 2008 to the end of June, home priced at $1 million and more received an average price reduction of 14.2 percent. By comparison, homes priced at $500,000 and less received an average price reduction of 7.6 percent.

And Hart quotes broker Phil Immel as saying:

“Last recession, in the early ’90s, oceanfront (houses) dropped 50 percent before stabilizing.”

Following are the current Altos Research index numbers for some of the high-end  Orange County housing markets. Above 30 is a sellers’ market; below 30 is a buyers’ market. For comparison, Irvine is currently 18.01, and Costa Mesa is currently 17.70. And often criticized Santa Ana scores best with an index number of 20.53. Santa Ana’s current list price for a single-family home, according to Altos Research, is $326,573.

I also included, in bold, the current (August 16, 2009) Altos median list price for each of these housing markets.

Altos Market Action Indexes

• Corona Del Mar: $2,411,818 median list price
  May 22, 2009: 12.28
  August 16, 2009: 9.97
• Dana Point: $1,040,681 median list price
  May 22, 2009: 12.16
  August 16, 2009: 13.68
• Laguna Beach: $2,270,116 median list price
  May 22, 2009: 10.38
  August 16, 2009: 13.27
• Newport Beach: $1,948,468 median list price
  May 22, 2009: 10.11
  August 16, 2009: 9.80
• Newport Coast: $3,157,636 median list price
  May 22, 2009: 10.18
  August 16, 2009: 11.54
• Villa Park: $1,247,864 median list price
  May 22, 2009: 7.36
  August 16, 2009: 10.78