Home market watcher Steve Thomas at Re/Max Real Estate Services in Aliso Viejo reports that the number of O.C. distressed properties for sale (homes listed by agents as foreclosures or short sales) was 4,859 last week, up 422 vs. two weeks earlier or a +9.5% change. As a percent of all listed homes for sale, distressed properties were 31.6% of the market last week vs. 29.1% two weeks earlier. Since Dec. 27, the number of distressed homes on the market has grown 1,108 while the “non-distressed” supply is 1,231 lower. (A look at overall home supply is HERE!)
Here’s a look at various slices of the O.C. market as of last Thursday: total inventory listings; distressed property listings; and the share distressed listings have of total inventory supply on a percentage basis in each niche …
| Slice | All inventory | Distressed | Share |
|---|---|---|---|
| By price … | |||
| • O.C. $0-$500k | 6,745 | 3,473 | 51% |
| • O.C. $500k-$750k | 4,342 | 1,141 | 26% |
| • O.C. $750k-$1m | 1,778 | 226 | 13% |
| • O.C. $1m-$1.5m | 1,171 | 84 | 7% |
| • O.C. $1.5m-$2m | 623 | 16 | 3% |
| • O.C. $2m-4m | 759 | 7 | 1% |
| • O.C. $4m+ | 243 | 0 | 0% |
| All O.C. | 15,392 | 4,859 | 32% |
| • Attached | 5,848 | 2,034 | 35% |
| • Detached | 9,541 | 2,574 | 27% |
| County high share … | |||
| • Santa Ana | 1,601 | 933 | 58% |
| • Anaheim | 1,252 | 699 | 56% |
| • Lake Forest | 361 | 182 | 50% |
| County low share … | |||
| • Laguna Woods | 398 | 6 | 2% |
| • Seal Beach | 184 | 3 | 2% |
| • Newport Coast | 166 | 4 | 2% |
you should split that into price ranges, ~75% in the under 500k range are distressed. I’ve only seen 2 that were not (these are my numbers based on properties I have seen.)
The table says 51% distressed property under 500k, not 75%. Maybe in certain neighborhood like SA it is around 75%.
Lawrence Yun, chief economist for the Realtors today, said he believed the housing market may be on the verge of bottoming out with a rebound expected to start toward the end of this year.
“Subprime loans and other risky mortgage products have virtually disappeared from the marketplace, and over the past five months, this has been reflected in soft but fairly stable home sales,” he said.
Jon: It may be time to start splitting up the $0-$500K market into two or more markets as this bucket is getting quite large and includes houses that are both in the first-time buyer and move-up buyer bracket. I think it would be interesting to see this broken down a little more.
Carlos: The NAR first denied that there would be any slow down or lower of prices, and then have been calling the bottom ever since (going back to when David Lereah was their chief economist). Their predictions are not too credible (look at their forecasts for sales last year, which was revised down almost every month during 2007).
Until inventory and sales (on a seasonally adjusted basis) stabilize and then recover to healthy conditions (typically around 6 months of inventory based upon seasonally adjusted sales), we will not see the market bottom. We may see some dead cat bounces, but not a market bottom. And, with distressed homes continuing to increase, it appears that housing prices in OC will remain under downward pressure.
the word “Share” is deceiving, OCR should probably change that to %. 51% of properties 500k-and-under are distressed, but this represents a 71.5% share of the total distressed property market. all the other pricepoints combine to make up the other 28.5%.
I agree I’d like to see 500k broken out a little more if for no other reason that it dwarfs all other categories (too big), but arguably too diverse also. need either SFRs / Condos 500k & under, or make the cutoff 450k since prices have dropped that much anyway and the boundaries need to adjust with the times.
It does not matter what rate of decline in house prices we presently have. The market will not rebound any time soon as long as the prices are out of the buyers income reality. RE loudmouths can say and squeel as much as they want but that does not change reality.
I forgot to mention that based on what seems to be very pessimistic forecast from Moody’s, the prices in OC will drop 20% off the peak. My house in Irvine is now worth close to $600k, at the peak same model sold at $710K. The reset of subprime mortgages will peak out this summer. Are we about to hit the bottom in 4 months?
For many real estate investors, the best investment they will ever make is in distressed property. Though they look worn out, small repairs can make them look good and helps you to get more returns.