Signs of life in Southern California's housing market

Southern California’s housing market took another small step toward recovery in September as the median sale price for homes in some areas rose above last year’s levels – the first such increase since the market crashed.

The median price paid for all homes in six Southern California counties in September -- $275,000 -- was unchanged from August and 11% below the same month last year, according to San Diego-based MDA DataQuick.

But in Orange County, the median home sale price last month of $429,000 rose modestly from $425,000 the same month a year earlier -- the first year-over-year gain since 2007, DataQuick said. If condominium sales are excluded, last month’s median home sale price in San Diego and Ventura counties also beat their September 2008 levels.

Christopher Thornberg, a Los Angeles economist who was an early predictor of the housing bubble, said several factors converged last month to give home sales a boost. "Tax breaks, low interest rates and pent-up demand added up to create a surge in sales that’s surely gone some way in stabilizing prices,” he said.

But Thornberg cautioned that prices could fall again.

“The question continues to be, how is this going to stand up when the next wave of foreclosures hits the market?” he said.

Even if the housing market takes another hit in the coming months, Thornberg said, the bulk of the market correction is past.

“If prices do fall again, it’ll be another 10% to 15% max,” he said.

The Southern California median price remains at 2002 levels, even without considering inflation, and is 46% below its peak level of $505,000 set in several months of 2007.

Those relatively low prices pushed the number of homes sold in September up 5% over the same month last year, and 0.2% above August. Home sales in the past year picked up first in the lowest-priced inland areas, where massive foreclosures pulled prices down.

Last month’s sales, with a rising median price over last year in some areas, show the mix of homes sold is normalizing. Sales of homes priced at or above $500,000 were 21% of the total, up from 13% in January, DataQuick said.

-- Peter Y. Hong

Most popular homes on the Internet in Orange County

 

Here's a look at what online house shoppers in Orange County were doing last week, according to Realtor.com. These properties received the most hits in searches for homes within 20% of the median list price of $599,000:

1. 53 Laurelhurst Drive, Ladera Ranch, CA 92694 has four bedrooms and three bathrooms in 2,400 square feet. $550,000

2. 10 Celestine Circle, Ladera Ranch, CA 92694 has four bedrooms and three bathrooms in 2,156 square feet. $550,000

3. 181 S. Dunas St., Orange, CA 92869 four bedrooms and three bathrooms in 1,707 square feet. $545,000

4. 27022 Via Grande, Mission Viejo, CA 92691 four bedrooms and three bathrooms in 2,950 square feet. $550,000

5. 11660 Midway Drive, Cypress, CA 90630 three bedrooms and two bathrooms in 1,474 square feet. $499,900

Interesting to note that the four-bedroom, three-bathroom model seems to be as sought-after as a standard. In last week's L.A. County post there were more foreclosures being looked at.

--Lauren Beale

Thoughts? Comments?

Photo: The most searched home in Orange County last week at Realtor.com was this Craftsman-style house in Ladera Ranch. Credit: Terry Roark

 

Orange County foreclosures: down but far from out

Orange County's median home price remains the highest among the six Southern California counties -- at $390,000 in March, according to MDA DataQuick. That was down 23% from the previous year, also the smallest drop among the Southern California counties.

But like the rest of Southern California, previously foreclosed houses are driving the market. Aliso Viejo broker Steven Thomas notes that as of the end of April, the number of foreclosed homes and short sales -- those offered for sale at a price below the mortgage amount -- has dropped substantially. Thomas estimated the total of forecelosures and short sale properties on the market in Orange County in April was down 37% from its peak level in August.

As many commenters and readers of this blog are aware, there's a widening gap between loan defaults and actual foreclosures, suggesting the system is clogged. Whether lenders are simply overwhelmed or there is a deliberate effort to prevent flooding the market further with repo properties remains a mystery.

Even with foreclosures down, however, the percentage of distressed properties among homes for sale in several Orange County communities remains astonishingly high. Thomas' data, through April, shows Santa Ana leading the county with a for-sale inventory that is 79% foreclosures or short sales. Foothill Ranch is next with 75% of its inventory distressed. Garden Grove and Anaheim each have about 70% distressed inventory, while in Lake Forest, La Habra, Rancho Santa Margarita and Buena Park, foreclosures and short sales exceed 60% of homes for sale.

 The county's very high end still has relatively few foreclosures. Seal Beach's distressed inventory is only about 1% of its total, according to Thomas' stats, and in Laguna Woods, Corona Del Mar, Laguna Beach and Newport Beach foreclosures and short sales still comprise less than 6% of homes for sale.   

-- Peter Y. Hong

Regulators 'crack down' on appraisers

In addition to bad loans and mortgage defaults, fraudulent appraisals played a role in fueling the Golden State’s real estate meltdown, and now state regulators are taking a closer look.

Last summer, the Office of Real Estate Appraisers launched a investigation into a Whittier appraiser after the Orange County Register ran the article, "$625,000 house on a street wrecked by subprime loans?"
   
The appraiser’s evaluation of the home in a hard-hit Santa Ana neighborhood was later determined to be "grossly misleading."

According to the Register's follow-up story, the appraiser surrendered her license "and agreed to pay $2,000, if she reapplies for her license, to cover the cost of the investigation."

The office found numerous problems with the appraisal of the property, the Register reported, including:

-- Omitting the fact that the home is next to an apartment building.
-- Using inappropriate examples as homes with comparable prices.
-- Failing to analyze the terms of the sale, such as the lack of a real down payment....

The office received 101 complaints in January and February, compared with 538 complaints in all of 2008.

Members of the public are encouraged to file complaints about suspicious appraisals by going to http://www.orea.ca.gov/.

-- Scott Marshutz

Thoughts? Comments?

The 'hidden homeless'

In an L.A. Land post last week, I was wondering out loud about where all the people went who used to live in the 19 million houses and apartment units sitting vacant nationwide. In addition to the ideas mentioned, L.A. Land comments offered others, including that the some homes were purchased for flipping and never had occupants. Here's another place some have gone, from Tuesday's New York Times article, "Motel rooms have become homes for some":

COSTA MESA, Calif. -- Greg Hayworth, 44, graduated from Syracuse University and made a good living in his home state, California, from real estate and mortgage finance. Then that business crashed, and early last year the bank foreclosed on the house his family was renting, forcing their eviction.

Now the Hayworths and their three children represent a new face of homelessness in Orange County: formerly middle income, living week to week in a cramped motel room....

As the recession has deepened, longtime workers who lost their jobs are facing the terror and stigma of homelessness for the first time, including those who have owned or rented for years. Some show up in shelters and on the streets, but others, like the Hayworths, are the hidden homeless -- living doubled up in apartments, in garages or in motels, uncounted in federal homeless data and often receiving little public aid.

The Hayworths tried staying with relatives but ended up last September at the Costa Mesa Motor Inn, one of more than 1,000 families estimated to be living in motels in Orange County alone.

And it's happening not just in Southern California:

Motel families exist by the hundreds in Denver, along freeway-bypassed Route 1 on the Eastern Seaboard, and in other cities from Chattanooga, Tenn., to Portland, Ore. But they are especially prevalent in Orange County, which has high rents, a shortage of public housing and a surplus of older motels that once housed Disneyland visitors.

So much for Anaheim being home to "The Happiest Place on Earth."

-- Lauren Beale

Thoughts? Comments?

Related post: What's ahead in the spring home-buying season

O.C. Supervisors OK realty fraud prosecution fund

The Orange County Board of Supervisors approved a service fee March 3 to establish a Real Estate Fraud Prosecution Trust Fund.

By state law, counties can collect a $3 recording fee for certain real estate transactions in order to provide a funding source for a specialized unit to prosecute, investigate and deter real estate fraud crimes. The recording fee, which was proposed by the District Attorney, will be collected during transactions such as deed of trust, request for notice, notice of default, etc.

The fee will expire in three years and is estimated to generate approximately $1.6 million in annual revenue. It will be deposited to an account, and the money will be restricted for use only in real estate fraud prosecution.

An advisory committee comprised of members of the real estate industry and professionals in the lending, credit counseling, escrow and title insurance industries will be formed to oversee implementation and prioritization of the specialized fraud unit.

After a year, the board will hear a report on the success rate of this program and at that time reevaluate it.

--Scott Marshutz

Thoughts? Comments?

Property tax revenues to drop in many Southland cities

In the "less is less" category, see "Cities brace for revenue losses as property values continue to drop" at latimes.com:

Assessors in Los Angeles, Riverside and San Bernardino counties are forecasting the first drops in property tax collections in more than a decade, presaging reduced revenues for many cash-strapped local governments.

Until now, property tax revenues had been a relatively stable source of money for cities amid a recession that has dramatically reduced sales tax intake, particularly from car dealers.

Even with the decline in home values, the property tax base in five Southland counties grew last year thanks to continuing sales and the completion of construction begun during the 2003-2006 building boom. But assessors in those counties said they have reduced the value of more than half a million properties and expect to make deeper cuts to their rolls by the summer.

Not surprisingly, San Bernardino will be harder hit -- with an anticipated 5.7% drop -- than L.A. County, which projects a 1% drop. Orange County expects to retain the same property tax base or see growth up to 2%. Ventura County expects the base to remain flat. Has anyone out there gotten their property tax lowered and, if so, by how much?

-- Lauren Beale

Thoughts? Comments?

Photo: John Curulli had his Altadena home, purchased in 2006, reassessed from $470,000 to $425,000 and saved nearly 10% on his property tax bill. Credit: Anne Cusack / Los Angeles Times

Year-end home prices tallied for Orange County

Community

ZIP Code

Sales Count SFR

Price Median SFR ($1,000)

Price % Change from 2007

Sales Count Condos

Price Median Condos ($1,000)

Price % Change from 2007

Median Home Price/Sq. Ft

ORANGE COUNTY
Countywide		17,860	$513	-25.4%	7,292	$325	-27.3%	$305
Aliso Viejo	92656	238	$596	-18%	485	$400	-19.2%	$223
Anaheim	92801	281	$330	-40%	83	$236	-32.9%	$264
Anaheim	92802	172	$374	-32%	44	$301	-29.4%	$261
Anaheim	92804	493	$375	-32%	144	$180	-48.1%	$268
Anaheim	92805	323	$338	-39%	45	$228	-42.1%	$262
Anaheim	92806	195	$415	-30%	22	$231	-38.1%	$251
Anaheim Hills	92807	312	$505	-22%	58	$239	-52.3%	$282
Anaheim Hills	92808	143	$664	-11%	104	$379	-14.8%	$312
Balboa Island	92662	18	$2,150	16%	n/a	n/a	n/a	$1,859
Brea	92821	238	$500	-18%	27	$338	-16.4%	$295
Brea	92823	49	$574	-18%	n/a	n/a	n/a	$257
Buena Park	90620	421	$380	-29%	6	$259	-35.2%	$297
Buena Park	90621	182	$385	-27%	22	$310	-29.5%	$280
Capistrano Beach	92624	48	$678	-29%	19	$268	-53.0%	$480
Corona del Mar	92625	110	$2,040	7%	37	$1,195	-10.0%	$1,127
Costa Mesa	92626	270	$538	-22%	66	$365	-19.0%	$336
Costa Mesa	92627	222	$520	-32%	64	$412	-19.0%	$402
Cypress	90630	277	$495	-14%	51	$361	-12.6%	$298
Dana Point	92629	176	$840	-14%	111	$488	-20.1%	$440
Foothill Ranch	92610	89	$633	-20%	60	$288	-32.8%	$321
Fountain Valley	92708	398	$580	-14%	21	$278	-15.9%	$322
Fullerton	92831	140	$515	-15%	61	$290	-21.1%	$331
Fullerton	92832	107	$371	-33%	19	$179	-21.9%	$293
Fullerton	92833	353	$415	-34%	99	$414	-12.8%	$295
Fullerton	92835	172	$645	-20%	27	$262	-26.1%	$324