Posted on 09/04/2016 10:05:19 AM PDT by Pelham
Once again, my math shows one Orange County house costs roughly what three median-priced American homes do.
Yes, plenty of real estate affordability benchmarks exist. One I track is a personal concoction that paints a simple picture: the ratio of the median selling prices of existing single-family houses in Orange County to the same measure nationwide, according to the National Association of Realtors.
In 2016’s second quarter, Orange County median price was a record high $742,200. That’s the third highest among the 178 markets surveyed by the Realtors group. Nationwide, pricing hit $240,700, also a record.
This means local homes run 3.08 times national costs for the second quarter, or what I like to call the “Orange Premium.” Basically, real estate’s price of paradise.
Yes, that means theoretically you can buy one home here or three typical homes elsewhere. Yes, that’s reason to gulp a little.
It’s a stat that’s squeamish for more than a house hunter’s wallet. To the overall local economy, high home prices mean local bosses have to pay up salary-wise to compete for top talent.
Here are five trends behind this house pricing gap.
1. How long has the Orange Premium been this way?
Actually, the second-quarter premium is the smallest since 2012’s third quarter. So this is relatively small house-payment pain, by my O.C.-to-U.S. scale.
Orange County homes first sold at triple the U.S. price as the last economic expansion, from 2004 through 2007, fired up local real estate. The ensuing housing bubble bust and the Great Recession trimmed the Orange Premium to 2.75 percent from 2008 and 2009. Real estate’s rebound pushed the gap back above a triple – minus two tiny quarterly dips – ever since.
Let’s just say we are used to this.
2. Has the Orange Premium been worse?
(Excerpt) Read more at ocregister.com ...
So true. We need to dump both sanctuary cities and “country” peasant towns that also live without law. What book was that, Mexifornia? I’ve seen these American “bidonvilles” myself, in Arvin, and in places east of LA and Orange counties toward the desert. Houses with corrugated tin, no health or electrical inspections. It’s NOT OK to have third world pockets like this.
This could be a great place again if we countered the libs and just started checking immigration status before all services are doled.
PA maybe? When I lived in NJ I was surrounded by 7 acres of cops, firemen, school teachers, and other government employed wildlife.
“I’ve heard a few stories, of people who have lived in California for years, and sold houses and made a lot of money on the deal.”
Happened to me and my wife. In 2004, we sold our house in SoCal for four times what we paid for it, just eight years prior. We essentially got back every mortgage payment we’d paid on it, and then some.
When I lived in Long Beach I was in line at the hardware store and the guy in front of me was buying a zillion fly zapping things. The checker commented, and he said that the house next door was filled with illegals, several families it seemed, and they were defecating in the yard, and flies were all over the place,
Imagine that next door.
Let’s just say higher elevation—most of the population in the state lives in the valleys.
wow. That really worked out well for you and your wife.
So often, these stories of high housing prices are discussed, from the standpoint of how difficult it is for buyers, especially young people.
And I appreciate those concerns.
But another side to housing prices escalating, is that people such as you and your wife, enjoyed a great financial benefit from seeing your equity in the property grow so much. That side of the story of high housing prices is rarely told by the media.
My question is, how does a middle class person come close to affording the real estate taxes on a home assessed at close to $750,000.00??
Young people can’t afford rent or mortgages here now, and they have a very hard time finding work. Most if not all of my 19 year old son’s friends live with their parents. There isn’t a good alternative. They are students.
“wow. That really worked out well for you and your wife.”
It did, but I shook my head during the whole process. My wife and I did a ton of upgrades to that house during the eight years we owned it, but in no way was it worth what the market would bear at the time.
I felt really bad for the young family who bought it at that price. They were upside down on the mortgage within eighteen months.
On the other hand, if you live in Nevada or Arizona you can drive there whenever you want and enjoy the good stuff without having to endure the downsides.
If California ever becomes a Republican state again, Orange County real estate prices will probably double from these levels. :)
OC will always be the highest overall in soCal. Illegals or not. The more sanctuary BS in LA the higher prices in OC. Stay away from Santa Ana and you’re ok.
The reason prices are high anmd always have been and will be? It’s in Orange County.
Only as long as the federal government continues to subsidize the California welfare state.
Just ask Texas, when a friend moved from Cal. to Texas many Californicators were buying multiple homes in his housing tract, cash on the table(lot of Vietnamese). They simply got WAYYYY more house/amenities for the dollar.
It's one reason why some 'rats think they can turn TX into a blew state...the influx of 'rats(that ruined their state with illegals and debt)taking their bloated Cal. real estate dollars and spreading like locusts to other low-cals.
It’s still conservative, especially in the south OC. But people like me are retiring, cashing out on the equity (about $400k), and moving to another state.
The people who will buy my home likely won’t be as conservative as me. In Irvine, chances are the next buyers will be Asian immigrants.
Might want to stick to a dry climate when relocating, the CA people I’ve met who moved to the southeast absolutely hate the humidity.
And, I’m sure everyone gets a huge benefit from those taxes. How frustrating it has to be. It’s great, I suppose, for sellers.
The situation is similar in Northern Virginia, actually. My friend’s 23 year old son lives at home, for the same reason. My daughter is fortunate that one can still rent for less than $700 where we live.
Where I live the cost of living is fairly high. A small house is in the $300,000 range. It’s a resort town that attracts a lot of people. Every few months there is another push for “affordable” housing. And the usual suspects all go on and on about how the poor can’t afford to live here and the worker bees can’t find cheap apartments.
STOP LIVING WHERE YOU CAN’T AFFORD! And if you can’t afford to move there. THEN DON’T MOVE THERE!!!
I spend a lot of time in SoCal on business - I constantly hear a lot of Chinese are buying those properties with cash - then rent them out to whoever. Over HALF the homes in LA are rental properties, I have heard...
Prescott AZ area is where I am going.
I’m from Silicon Valley but spent spring and summer last year in FLA. After that experience I knew exactly why our NorCal property costs the most in the US. There just is no better weather ANYWHERE! It suddenly seemed totally worth it! I practically kissed the ground when we returned home.
My older sister and my B-I-l bought one of the first homes in Cypress and on pleasant evenings one could smell the delightful odor of a nearby pig farm wafting on the breeze.
Now it seems it is nothing but houses and development all the way down to San Diego, with the interruption only of Camp Pendleton in Oceanside. I have often wondered how the Marines have held out there given the value of that land and the Liberal (anti-military) political climate present in that once great state.
Oh, btw, I left CA in the 70s primarily due to the even then traffic congestion.
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