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 ...
An OC home I know of, sold new in 1967 for around $25,000 then resold in 1974 for $40,000 and today is worth about $800,000.
Climate, jobs, quality of life, low crime support OC real estate.
As my late father said, they aren’t making anymore coastal property. He was a builder, not wise investor.
“I spend a lot of time in SoCal on business - I constantly hear a lot of Chinese are buying those properties with cash”
That is what is happening in my housing tract. I would say half the houses sold are going to Asians with the rest Whites. Hardly any new Latino’s and one Black renting. So with the changes in my tract is pretty much spit between Asian and White. Very few Latino’s and the one Black renter who is married to an Asian lady.
Fortunately I have owned by house outright for a number of years now and I am under Proposition 13 so my house taxes are not to bad.
We have lived in S. Orange County since 1985.
We bought our current House in 1991 when it was brand new.
Back in 2006, we could have gotten $900,000 for it. After the Bubble burst it went down to around $500,000.
Nowadays we might get $725,000, maybe a bit more of we do some upgrades. About 2,000 S.F. for the House and about 9,000 S.F. for the Lot which is pretty big for this area.
We have yet to hit the high values that we had ten years ago, even with the cheap Mortgage Interest Rates.
Thanks to Prop 13, our Property Taxes are about $3,600 a Year. Whoever buys our House will pay double that amount.
Beautiful area. We are three Miles from the Ocean and 10 Minutes from Laguna Beach. Gorgeous Weather, no bugs or humidity.
The area is somewhat Conservative. I have been driving around with my TRUMP 45 License Plates for a couple of Months and my Car hasn’t been Keyed yet.
The In-Laws live in Natchez, MS. We only visit in the Fall and Winter. Cheap to live there, but not our cup of Tea.
We can’t move away due to Family and Job issues. To rent a comparable Home in this area would cost us $3,500 a Month.
Our $1,900 a Month Obamacare Premiums are killing my IRA, so we may have to Sell early next year and live off the Equity. Hopefully the Market will remain strong until then.
PM me if you decide to sell. I am OC lic. RE broker, over 25 yrs. experience.
A few years back a friend asked me for the cost to build a home there. I started by checking on regulations and building permits....
$45,000 for a building permit! Man, those must be gold plated hoops the building inspectors want you to jump through!
And that did not include any relocation and resettlement charges for those endangered hopping mice and the desert tortoises!
” Only as long as the federal government continues to subsidize the California welfare state. “
I don’t know where you get that idea. Legals mostly have jobs, illegals usually do as well just off any books. They like free stuff but even without any they are staying here.
“Stay away from Santa Ana and you’re ok.”
Not any more. Large portions of north Orange County have become like Santa Ana. I could give you the graffiti tour.
One of my friends has to put up with that sort of situation about three houses down from his place in an otherwise great block in the Colony District of Anaheim. The clown that owns the house rents it out to illegals. There is a constant turnover of people, overcrowding, unregistered cars taking up the street, loud banda music at all hours. A real wealth of diversity. The city won’t do anything about it. Maybe if it was closer to Disneyland he’d get some relief.
“- I constantly hear a lot of Chinese are buying those properties with cash - then rent them out to whoever. “
Chinese nationals with full cash purchases have been driving the market. A lot of times these houses sit vacant and are not rented out
>>>Only as long as the federal government continues to subsidize the California welfare state<<<
Actually, the RED State of Mississippi gets the most Federal Money Per Capita. It is the poorest State in the Union.
I am quite familiar with orange county thanx.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.