There might finally be some good news this year about the nation's dismal housing market. Or, at least, the bad news could stop.
Either way, it will be welcome relief for current homeowners as well as for potential real-estate investors. Reasons to be optimistic have been sadly lacking since the housing bubble burst in 2006.
HOUSING VS INCOME:
Housing is the most affordable it has been in decades, according to analysts at Moody's Analytics. This group doesn't just look at house prices. They also look at incomes. Nationally, the cost of a house is the equivalent of about 19 months of total pay for an average family, the lowest level in 35 years. Prices usually average close to two years' pay, although that varies nationally.
At the peak, midway through the last decade, a home in Los Angeles cost the equivalent of 4.5 years' pay. The average price has since fallen to just over two years' income now. That's well below its pre-bubble average of 2.6 years. This means average Los Angeles homes are cheaper in "real terms" than they were typically during the period 1989 through 2003.
AFFORDABILITY:
In the end, it will be affordability that will drive people to buy homes. Pricing is down so much in some markets that when you analyze renting versus owning it makes much more sense to own. Housing prices will probably bottom in 2011 while continuting to decrease by 5% in some markets.
INVESTORS:
Here's another sign the market is nearing a bottom. Investors have started to buy up houses and condos, in many instances paying entirely in cash. That's a far cry from the heady bubble days when borrowed money seemed the key to riches. The bubble-era speculators who got burned tended to buy at the peak and borrowed heavily to do so. When the crash came, they quickly saw their wealth erased.
Wall Street Journal 2/27/2011
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COASTAL AREA SALES DATA AND DISTRESS SALES STATISTICS FOR 2011 FROM 01/01/11:
Balboa Island, Corona del Mar, Costa Mesa, Dana Point, Laguna Beach, Laguna Niguel, Newport Beach, Newport Coast, San Clemente
Active Listings = 2,251, w/Bank Conditions = 464
In Escrow Listings = 822, w/Bank Conditions = 461
Sold from 01/01/11 = 464, w/Bank Conditions = 202
*SOCALMLS 02/28/2011
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COASTAL ZIP CODES BY MEDIAN SALES PRICE FOR JANUARY 2010 COMPARED TO JANUARY 2011:
City - # Sold - Median Sale Price - % of price change:
Balboa Island - 92662 - 1 - $2,395,000 - n/a
Capo Beach - 92624 - 3- $610,000 - 14.%
Corona del Mar - 92625 - 12 - $1,570,000 -minus 37.1%
Costa Mesa - 92626 - 17 - $523,000 - 4%
Costa Mesa - 92627 - 20 - $520,000 - 40%
Dana Point - 92629 - 13 - $590,000 - 9%
Laguna Beach - 92651 - 27 - $1,020,000 - minus 17%
Laguna Niguel - 92677 -37 - $685,000 - minus 1%
Newport Beach - 92660 - 22 - $1,190,000 - minus 19%
Newport Beach - 92661- 2 - $2,575,000 - minus 47%
Newport Beach - 92663 - 9 - $1,785,000 - 44%
Newport Coast - 92657 - 11 - $1,890,000 - 11%
San Clemente - 92672 - 22 - $680,000 - 1%
San Clemente - 92673 - 18 - $745,000 - 17%
*DQNews/LATimes, 02/28/2011
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ZIP Codes: 92662, 92625, 92626, 92627, 92624, 92629, 92651, 92677, 92657, 92657, 92660, 92661, 92662, 92663, 92672, 92673
Approximate Location Boundaries: Coastal Communities of South Orange County
Location Characteristics: Specializing in the South Orange County California Coastal Cities known as the "California Riviera." The cities are Balboa Island, Corona Del Mar, Costa Mesa, Dana Point, Laguna Beach, Newport Beach, Newport Coast and San Clemente. From "Castles to Cottages" there is a home here for everyone. Pamela Horton and Amanda Horton look forward to helping you with your real estate needs in this picturesque area!
