In a few short years I was priced out of the condo market as properties went to 2-3 times the price in just a few years. Gas shot up eventually well over three bucks. My kaiser health insurance got so expensive I had to let it laspse (not wise).

I decided like you that I’d probably fare better in another state. I sent out resumes flew out for interviews and finally accepted an offer in the south. I can tell you in hind site I should have never stepped foot outside of southern cal. Even with all it’s ills I regret leaving.

The company that hired me for a new upstart canned me in less than a year hired someone for my job at half salary. They just wanted someone to do the dirty work of an new upstart and threw good money just to get me to leave my last job. Now I’m stuck in a small town where there not much to do with or without money. Not the best situation. I’ve not looked for a job as I can’t bear the thought of staying here.

Thankfully my boyfriend’s job is keeping us afloat until I can get another job. But I can tell you that getting hired out of here to the west coast again won’t be an easy task. Be careful the grass isn’t always greener.

The new home sales prices are inflated because of the huge incentives required to move product.

Wallstreatspeak: Short-term Oversold Technical bounce

AKA Dead Cat Bounce.

BTW, even with the median price down, it is clear (at least where I live in South OC) that prices are off 10% or more from Summer ‘05.

Same Model comparisons
‘05 1 sold for 725K
Now:
1 list for 645K
1 list for 649K
for 90+days both.

Original asking of first (now 645K was 729K)
Original asking of second was 689K)

One closed late ‘06 for 635K, but after talking to one of the above homeowners, they are hoping people will ignore it as a comp based on advice from their agent.

They have serious pressure from a 4BD in same community priced at 660K with 30+days. Same model sold in ‘05 for 829K (with nicer yard, but similarly situated). I didn’t go to open houses on either one, so I can’t comment on interiors, but the one on the market now has all of the normal OC accoutrements (perganiteel).

I wouldn’t be surprised if the technical bounce lasted a bit longer, but if you read the DQ numbers, it’s clear that resales are down 3% on median, and it’s the new home sales that are lifting them up. Still, volume is the primary leading indicator of shallow markets (I’ve also traded penny stocks, and technical analysis is a must there), so I would expect weakness at least through ‘07 (just from a technical standpoint, not looking at any of the fundamentals.

John Doe

But can someone enlighten me as to why median OC home prices continue to rise going into 2007?

Bubble bloggers have long suspected a significant correction in OC occuring sometime in 2007, not to mention a predicted glut of homes placed back on the market for sale following the holidays.

Yet inventory in OC keeps declining (homes, condos).

What gives?

Are home buyers in OC saying to themselves: “Oh yeah, $642,000 is a reasonable price for this cement matchbox of a house with no basement!”.

I must be an idiot for not to understanding what OC homebuyers in Nov, Dec and Jan have been seeing…

I love LA… the crest mountains, malibu, Pacific ocean, Catalina Island…

OTOH: Crime is rampant, polution is awful, mexican gangs, crowds, traffic…

Considering I have a very young child and since education is not a priority here (poor schools). I’m considering leaving.

Right now, I’m renting for 1350 per month so its not too bad. Still not sure the quality of life will be good here in 10 years.

My old home in New Jersey… 1:15 to New York/1:15 to Philly…. much lower costs… Weather is moderate and water is warmer in the summer. Appalachians are about 2hrs or less away. Beautiful trees and plenty of water.

Cost of living is 70% of here.

Chance of getting caught in a drive by shooting… about zero.

Yeah. I only feel at home in LA but sometimes I think its just a little silly. If I get an offer back there for similar money… Also North Carolina in the Research Triangle area (inland)…

LAEF2

So the conversion rate is even worse and more than $140T.

(The Island at the Center of the World by Russell Shorto is a great book. I highly recommend it, especially the introduction of why the book was written.)

All of the things you said are true.

However, lowering the desirability of a location has the nasty little surprise of having people who can afford otherwise to simply leave.

In other words, its not the absolute change of desirability, but rather the relative change. In other locations, they may not have the weather, but their housing is much cheaper per sq ft. That may not matter to you, but for many people, it will. The area will then rebalance itself relative to other areas.

Think of it in this way. SoCal weather was just as good as it was 15 years ago. There were a large number of immigrants then too. They were also living many to a house then as well. Yet housing was 1/3 of the price. We in OC (or LA for that matter) are nowhere near built out. Rather, there is a large feedback lag in demand for housing and the ability to deliver. This is precisely why busts follow booms, because by the time land speculators can raise enough capital to provide supply, demand has found an alternative. Housing shortages are ALWAYS temporary.

John Doe

I am White and I was brought up thinking that I need to live with my family alone. That means Mom, Dad, and the kids. Well that isn’t what is happening any more in SoCal. Many immigrant families live 2-3 families to a home. So your home at 2X the value is easily paid for when you have 2-3 generations in the home.

Also with some other immigrants they have multiple (non related) families living in one home. These conditions are far better then where they would otherwise live, but they are not conditions that most WASP families are used to.

This isn’t something to be taken lightly. It’s the new shift in SoCal and it’s very unlikely to change. Start looking forward to 3+ families living in a “single” family home.

So the home costs may be out of line, but they don’t look so bad when you have 12-15 people in the home.

Thoughts?