SoCal home prices plunge 27% in May

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Masterofdamoney_IHB

Masterofdamoney_IHB

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<a href="http://www.thestreet.com/s/socal-home-prices-plunge-27-in-may/newsanalysis/realestate/10421605.html?puc=googlen&cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA">http://www.thestreet.com/s/socal-home-prices-plunge-27-in-may/newsanalysis/realestate/10421605.html?puc=googlen&cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA</a>



Housing prices across Southern California plunged a record 27% in May, signaling that more trouble lies ahead for builders and lenders exposed to the region.



Sales volume in the market fell 15% from a year ago, marking the slowest May in more than 20 years, according to DataQuick Information Systems.



The median price fell to <strong>$370,000</strong> from $505,000 in the counties of Los Angeles, <strong>Orange</strong>, Riverside, San Bernardino, San Diego and Ventura.



Sales of foreclosed homes repossessed by lenders continue to dominate many of the inland markets, such as Riverside County, where foreclosure sales totaled 57% of all home sales volume, DataQuick said.



As housing prices fall, the domino effect is that loan-to-value ratios are ballooning for many borrowers, which in turn creates more foreclosures as buyers find themselves unwilling to continue paying the mortgage on their houses.



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All of this is coming straight at the areas that haven't been 'hit' hard yet. Irvine is literally having spears thrust at it from every direction. When they find a kink in the armor, it's over.



This should be he beginning of a 2-3 year price collapse in Irvine, as people realize that a landlocked McMansion is NOT worth a million dollars. :)
 
No, no, no. Irvine is different. And so is Newport, and Laguna Beach, and Yorba Linda, and Coto, and San Clemente, and Los Alamitos, and Seal Beach, and Tustin, and Huntington Beach, and Fountain Valley, and Anaheim Hills. The only areas which are not different are Santa Ana, Garden Grove, and Anaheim.
 
<a href="http://lansner.freedomblogging.com/2008/06/18/slump-pinches-even-local-ultra-luxury-housing/#comment-72310">But, but, but, but I thought Newport was immume?</a>
 
[quote author="awgee" date=1213826869]No, no, no. Irvine is different. And so is Newport, and Laguna Beach, and Yorba Linda, and Coto, and San Clemente, and Los Alamitos, and Seal Beach, and Tustin, and Huntington Beach, and Fountain Valley, and Anaheim Hills. The only areas which are not different are Santa Ana, Garden Grove, and Anaheim.</blockquote>


NIMBY!!!
 
[quote author="Masterofdamoney" date=1213825794]<a href="http://www.thestreet.com/s/socal-home-prices-plunge-27-in-may/newsanalysis/realestate/10421605.html?puc=googlen&cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA">http://www.thestreet.com/s/socal-home-prices-plunge-27-in-may/newsanalysis/realestate/10421605.html?puc=googlen&cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA</a>



Housing prices across Southern California plunged a record 27% in May, signaling that more trouble lies ahead for builders and lenders exposed to the region.



Sales volume in the market fell 15% from a year ago, marking the slowest May in more than 20 years, according to DataQuick Information Systems.



The median price fell to <strong>$370,000</strong> from $505,000 in the counties of Los Angeles, <strong>Orange</strong>, Riverside, San Bernardino, San Diego and Ventura.



Sales of foreclosed homes repossessed by lenders continue to dominate many of the inland markets, such as Riverside County, where foreclosure sales totaled 57% of all home sales volume, DataQuick said.



As housing prices fall, the domino effect is that loan-to-value ratios are ballooning for many borrowers, which in turn creates more foreclosures as buyers find themselves unwilling to continue paying the mortgage on their houses.



---------------------------------------------------



All of this is coming straight at the areas that haven't been 'hit' hard yet. Irvine is literally having spears thrust at it from every direction. When they find a kink in the armor, it's over.



This should be he beginning of a 2-3 year price collapse in Irvine, as people realize that a landlocked McMansion is NOT worth a million dollars. :)</blockquote>


How much is a landlocked McMansion worth? In my mind those are for the well off, so I'm curious as to how well off one needs to be in order to own one.
 
[quote author="Masterofdamoney" date=1213825794]<a href="http://www.thestreet.com/s/socal-home-prices-plunge-27-in-may/newsanalysis/realestate/10421605.html?puc=googlen&cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA">http://www.thestreet.com/s/socal-home-prices-plunge-27-in-may/newsanalysis/realestate/10421605.html?puc=googlen&cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA</a>



Housing prices across Southern California plunged a record 27% in May, signaling that more trouble lies ahead for builders and lenders exposed to the region.



Sales volume in the market fell 15% from a year ago, marking the slowest May in more than 20 years, according to DataQuick Information Systems.



The median price fell to <strong>$370,000</strong> from $505,000 in the counties of Los Angeles, <strong>Orange</strong>, Riverside, San Bernardino, San Diego and Ventura. </blockquote>


This should be very interesting over the next 6-12 months. These stats still don't reflect the <a href="http://www.businessweek.com/lifestyle/content/jun2008/bw2008065_526168.htm">coming option arm crisis</a>. Prices will continue to fall much further in Irvine.
 
[quote author="stepping_up" date=1213829534]



How much is a landlocked McMansion worth? In my mind those are for the well off, so I'm curious as to how well off one needs to be in order to own one.</blockquote>


In line with income for people in the upper income of the area they are in.



The nice McMansions (tract home style) should sell for no more than what the local area higher incomes can support.



That being said, maybe $600,000 for your average McMansion in Irvine?



Please note that TRUE, CUSTOM homes with large lots and ammenities are not McMansions, and should demand higher pricing.



A 3000+sqft tract home should be in the 500K-600K range, absolute maximum.
 
"A 3000+sqft tract home should be in the 500K-600K range, absolute maximum"?



How did you draw that conclusion?



A 3000 sq ft track home in Irvine were selling at that price in 1999...



A 3000 sq ft track home are still selling at that price in cities like Plano, Texas - no bubble there...top notch school there too. By the way, did I mention it is hot as hell there?
 
[quote author="JoonB" date=1213835185]I've had several realtors today calling me on this property- i wonder what this will eventually go for



http://www.redfin.com/CA/Newport-Beach/2005-Yacht-Mischief-92660/home/4723992</blockquote>


OK, if this is what you can get for a million bucks, landlocked McMansions are definitely NOT worth $1M. This is an 8,400 sq/ft lot with an ocean view and it didn't sell at it's $1.2M asking price? I'm stunned. Is there something fatally wrong with it? When I see something like this it does make me wish we could be in the market for a $999K property.
 
Unbelieveable is right, stepping up. 1M for this place is tempting. Frankly even at 1.2M its tempting. It makes the 1.5M + listings in Woodbury that much more laughable and wither higher HOAs and Mello Roos to boot. Don't you think this is set artificially low to get a bidding war started.
 
wow! i'm stunned as well!



that home is defin not my taste. the spanish theming is way overdone imo. exterior design is one thing but i'm not sure i could live with red spanish tile in every single room inside. the knock on that home is it's really just a 2bd/2ba with a loft. but nice location and neighborhood. given there's nothing fundamentally wrong with the place, if i had to spend <em>only</em> $1M here vs $1.5M for a 3000 sq ft in northpark, i'd choose this in a heartbeat.
 
[quote author="freedomCM" date=1213849645]WOW



If it is indeed a selling price, that is 42% off the REO price in Newport Beach!!!!



The high end: Not so immune.</blockquote>


If I were a betting woman, I'd put my money on it going for much more than asking price.
 
[quote author="stepping_up" date=1213851227][quote author="freedomCM" date=1213849645]WOW



If it is indeed a selling price, that is 42% off the REO price in Newport Beach!!!!



The high end: Not so immune.</blockquote>


If I were a betting woman, I'd put my money on it going for much more than asking price.</blockquote>


Yeah, it was listed much higher ($1.3MM, I think?) while they were finishing construction. Then the listing got taken down. Now it's back - I wonder if it is bank-owned, or if the owner is trying to start a bidding war...



I think another issue is that the whole lot is not usable. The rear portion of the lot is sloped, and not usable/buildable.



The views from those homes are great, though.
 
[quote author="stepping_up" date=1213836163][quote author="JoonB" date=1213835185]I've had several realtors today calling me on this property- i wonder what this will eventually go for



http://www.redfin.com/CA/Newport-Beach/2005-Yacht-Mischief-92660/home/4723992</blockquote>


OK, if this is what you can get for a million bucks, landlocked McMansions are definitely NOT worth $1M. This is an 8,400 sq/ft lot with an ocean view and it didn't sell at it's $1.2M asking price? I'm stunned. Is there something fatally wrong with it? When I see something like this it does make me wish we could be in the market for a $999K property.</blockquote>


Its just all depends. My buddy bought a 1 acre lot near Crystal Cove. He had every intention to build two small McMansions. Then the city stepped in and limited the house to only 4000sqft to 4500sqft. This completely blows the entire cost model out of the water and he was stuck with a white elephant. As well as he found out about the "new" CCR's that had limits on height, width, easments and of course water drainage, earthquake requirements, fire requirements, etc. etc. etc. etc.



Add all of these plus an extreme cost and your cost model is quick crap and a half with no way to recover.



good luck

-bix
 
No- I am not a realtor- I am just like most on this board- just waiting for homes to come down in value so I can buy a house!



I signed up for realty trac long ago and i guess they sold my info to realtors specializing in REOs, etc, so I get phone calls unfortunately from these people. I guess I should have made up my info- I wasn't really expecting to get calls from them! It's very annoying especially since I gave them my work number and I don't have caller ID at work, so I would otherwise screen these calls.
 
I either give folks my fax number or the number for the city dump, depending on my mood.



I used to date a cocktail waitress who would do that (the 'city dump' trick) when men would hit on her.
 
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