Things are getting much better for property owners these days. After the market crashed, people saw their median price fall about 40 percent within a 2 year span. Seven years later, we are seeing some properties nearing their peak in some areas, according to local agents and a register analysis of number. Check out this great article to learn more about the improved housing market.
Victor Yack’s waterfront condo appraised at $1.75 million when he took out a reverse mortgage in 2007, the peak of the market in his west Newport Beach ZIP code.
Then the market crashed and the median price fell about 40 percent within two years in 92663, where he lives.
Now Yack, 87, feels the need to move to an assisted living facility and put up for sale the two-bedroom, two-bathroom condo he’s called home nearly a half century.
He’s asking $1.695 million. That’s within 3 percent, or $55,000, of the appraised value back at the peak of the housing bubble. Yack, a retired florist and real estate agent, says it’s not surprising to see his price near peak levels.
“Of course. It’s prime property,” he said of his building, which has views of Newport Harbor’s West Lido and Rhine channels. “This is called the Gold Coast. Anything on the water has got to be good.”
Things are getting better for property owners, and not just on the Gold Coast.
Seven years after the housing market collapsed, Orange County home prices are at or nearing the peak in some areas, according to local agents and to a Register analysis of numbers from CoreLogic DataQuick.
The county’s 2014 median price, at $585,000, is 7.9 percent below its pre-recession peak, closer than any other Southern California county to that improbable summit.
The Register compared each local ZIP code’s 2014 median home price to its pre-recession peak, using quarterly numbers from DataQuick. The median is the price at the midpoint of all sales. (CLICK HERE TO SEE CHART SHOWING EACH ZIP CODE’S RANKING)
The result: Prices were above peak levels in three ZIP codes – two in Irvine and Yack’s west Newport ZIP. A fourth that includes Laguna Beach is 1.1 percent below its pre-recession peak.
Six other ZIP codes were within 10 percent of their price peaks, including ZIPs in Irvine, Newport Beach, Santa Ana, Yorba Linda and Huntington Beach.
Rising prices benefited most homeowners, even those who are yet to get back to peak levels. For example, CoreLogic figures show that 111,500 “underwater” homeowners in the county regained equity in the past five years.
Leading the pack
Not everyone believes the county will be back to peak prices anytime soon or even thinks that getting there is a good thing.
Agents also noted that statistical glitches in the data can distort what’s really happening.
For example, the two Irvine ZIP codes at peak levels – 92602 and 92618 -should be disregarded since they include some of Orange County’s most active homebuilding tracts, such as Portola Springs, Stonegate East, Orchard Hills and Orange County’s Great Park Neighborhoods.
Since new homes command higher prices, the increase in medians in those two ZIP codes are due mainly to construction rather than increasing values. But many agree Newport Beach and Laguna Beach are leading the pack.
“It’s kind of a mix,” said Laguna Beach agent Bob Chapman, a broker associate with Teles Properties. “Some houses in some neighborhoods may have returned to the peak.”
Chapman said homes are selling for bubble-era prices if they’re within walking distance of the beach, have spectacular views, are new or newly remodeled.
Steve High, president of Villa Real Estate of Newport Beach, said homes selling for $3 million and under “met and slightly exceeded high points of 2007 in Newport Beach.” But prices still are well below peaks in the ultra-luxury market of $5 million and up, he said.
A Newport Coast home illustrates the “up-down-up” market best, High said. The 5,500-square-foot home sold for $4.5 million in May 2007, then sold for $3 million in January 2010 after a bank foreclosed on it. In January, it sold for $4.55 million.
“We’ve really seen some leaps and gains,” High said. “I’ve never seen a market correct itself as much as this one did.”
Keller Williams agent Jeff Stokes said Newport Beach homes are selling at pre-recession levels in Newport Heights, Dover Shores and Corona del Mar. Inland, he saw one sale near the peak in the North Tustin community of Lemon Heights.
“The prime areas definitely are up there,” Stokes said.
East Yorba Linda and west Brea ZIP codes also are faring well, driven by high demand and low inventory, said Mike Cocos, general manager of ERA North Orange County.
DataQuick figures show Yorba Linda’s high-end 92887 ZIP code is within 8.8 percent of its price peak; Brea’s 92821 is within 10.9 percent.
“Anything decent sells very quickly,” Cocos said. “Definitely (prices) are going up.”
The recovery has been anything but painless.
Just over 42,600 Orange County property owners lost their homes to foreclosure during the past seven years, DataQuick figures show. At least 30,500 more were forced to sell “short” of what they owed to avoid foreclosure, according to the California Regional Multiple Listing Service.
But those foreclosures and short sales dwindled to 7 percent of the market in 2014, down from almost half in 2010. That drop is boosting overall prices.
“It’s taken this long to come back, and it’s really because they don’t have the short sales and foreclosures,” said Nancy Casebier, an agent with Coast Sotheby’s International Realty in Laguna Beach.
Some agents think the bubble peaks are a long way off, due in part to some lingering weakness and to the lack of mortgage mayhem that created those peaks.
Steve Thomas of ReportsOnHousing.com noted that demand and the number of homes for sale still lag longtime averages.
“I’m not rooting for it to get back to the peak,” Thomas said. “That was an artificial peak. It was based on junk mortgages.”
Thomas lives in Ladera Ranch, an area CNN Money once dubbed “Zombieland” because of high loan default and foreclosure rates.
DataQuick figures show Ladera Ranch’s 2014 median home price was 42.7 percent below its peak of nearly $1.1 million – third worst among 83 Orange County ZIP codes.
“It was the area that was hit the hardest. You had all kinds of people coming in and flipping houses and living the life of equity lines of credit,” Thomas said. “Prices went down to where they should have been.”
Coldwell Banker agent Mac Mackenzie wonders what will happen to home prices once mortgage rates reach 5 percent for 30-year, fixed-rate loans – a “normal rate,” he said. Rates have averaged below 4 percent for the past four months.
“If the interest rates are the lowest than any living person has ever seen and we still have inventory to sell, then where is the market really at?” Mackenzie asked.
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