Would you buy one of Robert Bisno’s Condos if you had some spare cash and you knew your friend was going to get $5,000.00 for the referral? How about investing in a spiffy foreclosure? The little beauty pictured above was bought in 2006 for $600,000.00 and just sold for $245,000.00 at a recent auction. Sure it needs some TLC, but that’s a nice little 55% + off the peak pricing! Is it time to buy Real Estate? Are we finally at a bottom?
Pssst…. Here’s a little secret you should know before signing any escrow papers: Orange County is ranked as the Nation’s 7th Riskiest Home Market.
Lasner on Real Estate (O.C.Register) has rankings listing the 50 biggest national housing markets and the OC ranks as the 7th riskiest market around. Guess which region is the very worst? If you guessed the Inland Empire comes in at the #1 riskiest, you’d be right! OC is actually improving, according to the stats. In the spring of 2005, it was the 6th most risky in the nation. Bottom line: there’s a 85.8% chance that O.C. home prices will be lower two years from now. Buyer beware!
Here’s the current line up and the percentage chance of decline for each listing over the next two years.
- Inland Empire, 95.5% chance of decline
- Fort Lauderdale, 92.2%
- West Palm Beach, 91.9%
- Orlando, 91.1%
- Las Vegas, 88.1%
- Tampa-St. Pete, 86.6%
- Orange County, 85.8%
- Los Angeles, 85.7%
- Miami, 84.8%
- Sacramento, 82.2%
At least our property taxes went down (for those of us who bought between 2004-2007). The housing market is leading us into a brand new Depression. Too bad it’s all about the greed of the banks and the speculators, the average person is the one who suffers.
RED.
We have a small “out-house” in Mission Viejo that cost more than the home in your photo.
As to the real estate market. Knowing “when to hold them and when to fold them” has been a challenge for gamblers for more years than I care to admit.
We have not seen the bottom yet but there surely are bargains on the market today. What is sad would be if you purchase a bank foreclosure from a family that has been put out in the street because they can’t cover their mortgage.
anon teacher,
I really feel for the people who bought houses in the last couple of years for fear of being locked out of the housing market that has become so incredibly unaffordable.
The photo of the Santa Ana property that I posted is a very good example of what has happened. That property was “worth” well over a half MILLION DOLLARS in Santa Ana. The price per square foot was over $500.00. Those numbers, alone, are outrageous. In a normally regulated market, it would have cost the buyers 20% of their own money to have gotten in ($120K) and qualifying income of nearly $150K annually. The whole industry essentially melted down with deregulated practices that created a RE bubble.
Someone pulled a whole lot of equity out of that place before the bank became the defacto owners.
According to the Risk report, there is more price deflation coming to the local RE markets.
Larry,
South County is having its own corrections according to blogs of the area. I have to laugh at your outhouse comment! I have seen places in Palo Alto that were little more than a rundown shack sporting a price tag of over a million dollars! Prices are still holding up in Marin county, but there are some signs of softening.
“What is sad would be if you purchase a bank foreclosure from a family that has been put out in the street because they can’t cover their mortgage.”
Larry, this is a sad scenario that has been happening and will continue to happen. There are a lot of folks that are “upside down” in their mortgages, are unable to refinance and are facing steeper mortgage payments as their ARM’s reset. Combine that with sharp increases in daily living expenses (think gasoline, food, utilities, insurance/copays, etc….) and there is a whole lot of hurt going on out there. It is expected to continue. It is expected to get much worse in the next several years.
If anything like us, we are glad we didn’t buy a home, during that period. We are now looking for a home now, I think of how sad people finally attained a dream to have it turn into a nightmare.
Until the market normalizes through depreciation in value, affordability will not return and buyers will not jump in. The price declines are justified and appropriate.
http://www.beyondthemargin.net/2008/06/dirt-on-housing.html