Real Estate Failling in SoCal...

[Sapporo Guy]

Love the music.
Now, you know why nobody is interested.

lolo, only 10k per month. I wonder how many garage mates you'll need to make it work.

Seriously, though, the market is going to drop more. I still remember in 87' and how prices fell. Another 2 years and we'll be able to buy a house again!

[nostatic]

while the absolute number sounds bad, it is 26%. If you believe zillow, my old house has already dropped the same percentage from it's peak late in '05.

[DARISC]

I'm confused. Zillow upped my place 30k over the last month. Aint goin' no place so it don't hardly matter to me.

[the]

zillow is in many instances totally out of whack in this current market.

[the]

Here's a good one in Newport Coast, CA. This is incredible. The average cost in that zip code, a year ago, was over $2 million.

26 Stillwater, Newport Coast, CA

It sold in 2005 for around $1.6 million.

Then the bubble really inflated. Newport Coast, and all, you know. They aren't making ocean view land anymore. Can never go down. Plus it's in a really rich area. Rich asians will always bring their money and pay anything, so prices can't decline. Thus, the 2005 buyer made out like a bandit:

Purchase Price: $2,500,000

Purchase Date: 1/23/2007

Shortly after that, the current owner tried to sell it for $2.475, then it was listed for a while at $1.8 million.

Current listing:

http://www.redfin.com/stingray/do/printable-listing?listing-id=1088468&rc=blg_irvine&utm_source=irvinehousingblog&utm_medium=blog&utm_nooverride=1

Ouch.

[nostatic]

notice they don't list the lot size.

lot's of people paid stupid money for stupid residences the last few years.

[dd74]

All a homeowner needs to do now is hold on. New home buyers, well, prices have gone up so much, I don't know if they'll ever "correct" enough for people now looking for a house.

[turbo6bar]

Originally Posted by dd74

All a homeowner needs to do now is hold on.

Sure, if you can afford to hold your breath for 6-8 years, while asset prices stagnate of go down, it's no problem.

Originally Posted by dd74

don't know if they'll ever "correct" enough for people now looking for a house.

That's probably correct. Anyone who did not buy before 2006 will forever be a renter. These families will live in apartments, tent cities, and Hondas.

[Porsche-O-Phile]

Those that can, will. Everyone else is going to end up trading spaces with the people renting today in 3-4 years.

[Rot 911]

That is one ugly house. Around here you wouldn't pay $120,000 to get the same house. Course we don't have all that great CA weather either.

[Chocaholic]

Using any kind of common sense (with more than a 2 year outlook) one would really have to be smoking crack to spend north of $2M for a 2000 sq/ft house....I don't care WHERE it's located. California (and a few other locations) were so artificially inflated that it's not even funny. What goes up must come down. Just ask your northern friends up in Silicon Valley. This isn't the end of the world...it's just a bit of reality settling in. You can only hope that the California Real-estate crack pipe will fire up again soon.

[84porsche]

Originally Posted by turbo6bar

That's probably correct. Anyone who did not buy before 2006 will forever be a renter. These families will live in apartments, tent cities, and Hondas.

Slight correction... These families will live in luxury apartments, and drive Porsches.

[sammyg2]

Houses that were extremely over-inflated (like the examples above) are dropping like a rock and well they should. People got carried away with speculation and paid double what some of those "$2 million" homes were worth.
On the other hand, reasonable 3 or 4 bedroom homes in a decent area are holding their value much better. Bottom line is, stupid is as stupid does. Paying millions for one of those homes is ridiculous and people are finally figuring that out. They are looking to reasonable (for so cal) houses in the $600k to $700k range.

[dmcummins]

There are very few homes over two million here. I just did a search and there was only this one in the 1.5 to 2.5 million price range. http://www.realtor.com/map/search/listingdetail.aspx?ctid=92504&mnp=42&typ=7&sid=e738270818a44e4e956e50f4a70b1aa7&lid=1074877785&lsn=1&srcnt=2#Detail

The weather may be nice in CA, but the cost of home ownership is just unbelievable.

[the]

Originally Posted by sammyg2

Houses that were extremely over-inflated (like the examples above) are dropping like a rock and well they should. People got carried away with speculation and paid double what some of those "$2 million" homes were worth.
On the other hand, reasonable 3 or 4 bedroom homes in a decent area are holding their value much better. Bottom line is, stupid is as stupid does. Paying millions for one of those homes is ridiculous and people are finally figuring that out. They are looking to reasonable (for so cal) houses in the $600k to $700k range.

The areas in So. Cal. that lead the bubble have now reverted to 2004 or so pricing, and are headed to 2003 pricing.

That former $664,000 will also go down to where it was worth in 2002/2003. At best.

[nostatic]

well, of '02 is the bottom then I'm fine with the equity I still have in my ex house.

[stevepaa]

The condo I bought for my daughter in Orange has dropped 12% in two years, or about the same amount of money "lost" as if she had rented, without figuring any tax savings. As she will be there at least 5 more years while she finishes schooling and becomes a teacher, I am in it for the long term.

[sammyg2]

Chapman college?

[sammyg2]

Originally Posted by the

The areas in So. Cal. that lead the bubble have now reverted to 2004 or so pricing, and are headed to 2003 pricing.

That former $664,000 will also go down to where it was worth in 2002/2003. At best.

While I can't predict the future, I have to disagree. Time will tell but IMO this area is near bottom, maybe falling another 2 or 3% and then level off and start back up. The houses that fell to 2004 pricing were a different animal: larger, more exclusive, and much, much more expensive.

We'll have to revisit this thread in 6 months or so.

[the]

6 months/a year ago, you said prices in Orange wouldn't go down at all.

Repost that same chart in 6 months, and we'll see!