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 ...
It’s a beautiful area, great weather, in a state with ah economy controlled by communists. Why wouldn’t the prices be high?
When I lived there, many years ago, the Inland Empire was on a home building binge with no end in sight. The population must have shot up enormously.
It’s high because communists and fascists create dacha societies...elite enclaves away from the peasants. Got to have a high price of entry to keep the rabble out.
...but then Cal. wouldn't get 55 electoral votes...Si or no?
A family friend bought her ranch-style house in Santa Ana in the 1950’s for $25,000. 25 years ago, she was bragging that it was worth $400,000. Back then, she was renting her garage out to a tenant for $800/month.
Generally, Orange County does not have as many gangs as Los Angeles County, Riverside, San Berdo, etc. Orange County straddles the ocean and has nice weather, too. Orange County was not as fully developed as early as Los Angeles County so generally, the houses are newer.
It one of the few republican areas. Not sure why many aren’t seeing high home prices as a success of the area. Not every area needs to be a section 8 nightmare like you seen to want.
America would be the big winner if California is stripped of its illegal alien population and its electoral votes.
Thanks to the demographic transformation of California through 3rd world immigration legal as well as illegal we are now a hard core Democrat Left bastion.
It’s a balance. ON the one hand, high prices indicate an affluent population lives there. On the other hand, high prices make it difficult for young families to buy a home in such places.
But on another hand, given that the largest single investment for most middle class families is the home they own, people who own homes in areas of high prices are wealthier than the rest of us, at least on paper.
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. Some were retirees who cashed out, and bought nice homes in other parts of the country for a fraction of the proceeds of their California home sale.
Santa Ana was the first but virtually every north Orange County city is now plagued with illegal garage conversions.
Another neighborhood wrecker is having a home in a nice neighborhood become an illegal alien dormitory with 20 or more people crowding into it. Noise, congestion, littering, even urinating and defecating in the yard, these are all part of the Family Values that Don’t Stop At the Rio Grande bequeathed to us by Obama and Dubya.
And we can also say, that the housing market is a free market. And that high prices in desirable areas, are simply a result of supply and demand.
Some areas of California are extreme cases, when it comes to housing prices. But the same concept exists everywhere in America.
All of you reading this, can readily identify “bad” neighborhoods in your own hometown, in which prices are lower, and you would not pay any price to live in. On the other hand, all of you can identify upscale areas in your home areas, in which housing prices are much higher than other parts of your city or region you live in.
BTTT!
I only lived there for 12 months but I actually believe it’s worth it.
The coastal towns in OC are truly paradise. I lived in Corona del Mar in the late 70s and it was barely short of perfection.
However, back then, you would always see the Border Patrol driving down I-5, escorting men back to the border. When’s the last time anyone saw that? And I say ‘men’ because back then few brought their families.
Also, I didn’t see any correlation of cost of living there to incomes. There was enormous income disparity between those who made the big bucks and the peons. Few peons lived on the coast, even then. I was told that by the mid-80s there was a large migration there from Iran and other ME locales. So maybe a little less paradise-y.
Orange County was once something of a conservative bastion. That may or may not still be the case, but it’s more so than areas to the north.
Property taxes in northeastern states are about three times higher than CA. It is expensive to heat and cool a McMansion there. The total monthly costs to own a house in southern CA or the northeast work out to be about the same. One "benefit" in the northeast is the police state is much further along, while in CA the cops are spread thin, an unexpected side effect of Proposition 13.
Here is my math:
Thirty years ago I rented an Orange County small house (with no yard except a swimming pool) and noisy neighbors for the same amount that:
(wait for it)...
My current mortgage on my own home with 7+ acres of land in the Northeast surrounded by state forest.
Orange County was great—the problem was the home prices were going up faster than my salary—and that was thirty years ago. I had to bail if I ever wanted my family to have a real home and yard.
Wherever “rich people” live, they will be taxed out the wazoo and therefore prices will rise.
>Wherever “rich people” live, they will be taxed out the wazoo and therefore prices will rise.<
I was out in L.A. back when Reagan was inaugurated. I remember being astounded that a small house way out in the suburbs cost over $200,000.00 back then. We bought our 1st house in my home town in the mid eighties for under $50,000.00 and it was huge compared to those homes in California.
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??
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