Pictures tell a lot of the story - just ask anyone who saw Irvine Renter's informative recent post on the Irvine Housing Blog.
The screen grab above is off of ForeclosureRadar.com. It shows properties in some stage of foreclosure (green=preforeclosure/notice of default; blue=auction/notice of trustee sale; red=bank owned). As you can see, this area has a fairly dense sprinkling of distressed properties.
Here is another snapshot moving a bit southeast. On the right of this map is a favorite bubble area, Ladera Ranch (click on image to enlarge).
How are things on the coast? Obviously, not as bad as farther inland. Below is a screen grab that covers Dana Point near the harbor. At the bottom right is Capo Beach:
If you'd like a random comparison, below is a random snapshot of an area just outside Temecula. It's still way worse out there and that's how it's going to be...you're not going to see sub-$100/square foot in South OC.
Monday, May 18, 2009
A walk around South OC
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7 comments:
I'm actively looking in the first picture you showed. What is weird is how few houses are actually being offered for sale, despite all the distress. I guess the number of PFs is way higher than the others, so it is still early (wish I knew exactly how early...) I just can't understand why there is not more for sale, I was expecting a deluge by now.
Thanks for the good info and regular posts.
GLY, I'm hearing a lot of buzz that foreclosures and evictions are lagging behind NOD's because the volume is so large that the banks can't process them in a timely manner. Some folks claim it's a conspiracy to keep prices inflated, but that assumes a level of collusion and competency that I'm not sure the banks are capable of. I'm with you, I'm impatient. I know a house just down the street from me that's in default and about to go to auction and I WANT to know when it's going to finally be empty and for sale. And yet the people are still in it and i'm still waiting.
What we are experiencing the the final insult. Banks and irresponsible borrowers started this party and with our tax dollars (read: bailout), they can bury their heads in the sand a little longer. This is then coupled with the fact that these borrowers get to live in the homes without cost as long as the banks bury their heads below ground. Eventually the levy will break and we'll see 1999 pricing. This actually shouldn't come as a surprise since without jobs no one can buy a house.
There is a house on my street that does appear on the Foreclosure radar. It has been unoccupied and they are not even trying to sell it. It did list for a couple of days and then they pulled it off the market.
Yea, I think prices could get pushed as far down as '99 prices over the next year as things continue to shake out with the foreclosures and continued job losses. I also think the recovery will be very slow because "reality banking" will (hopefully) keep unqualified buyers from getting into homes they can't afford. There's also the "shadow market" of hundreds (thousands?) of people who are underwater but can currently afford to stay in their homes. However, they aren't going to be going anywhere for some time (i.e. low rate of home upgrades in the coming decade for many buyers). Could it be 15+ years before we see prices where they were at the peak of the bubble?
It's frustrating as heck, waiting for the inevitable. But I keep reminding myself (with the help of blogs like this one) that patience over these years is likely to be the best investment of time I'll ever make. If you calculate retirement savings and the like, buying a rapidly depreciating asset with borrowed money would be suicide. Two more years maybe?
I just wish the government would stop funding these delaying tactics, using borrowed money (that will be paid by our taxes, eventually).
The scary thing is what is going to happen to our south OC neighborhoods in the future? I saw a report on homes in Lake Elsinore in the newer neighborhoods with the windows broken, graffiti everywhere and squatters in them. The homeowners who still own and maintain their homes are in distress over the destruction of their neighborhoods. Is this the future of Ladera and Talega?
I believe we may be really underestimating the impact of unemployment in OC and all the garbage that comes along with it. The recorded unemployment rate is 8.5% in OC (May 6). This might go down a few points over the temp hiring this summer, but the way international business is going it would not surprise me at all to see unemployment hit double-digits before December in OC. Every job lost in OC is causing a chain-reaction that impacts the local and state economy in a very negative way.
California badly needs as many taxpayers as it can find. It needs 11% unemployment like a hole in the head.
The vote down of the ridiculous Prop 1 B.S. may have put a stake in the heart of raising taxes for now, which is a good thing. But now state spending cuts simply have to come. The state's constitution requires a balanced budget. Thousands of Californians are going to be layed off (teachers, school administrators, municipal employees, transportation service employees, state employees, and other govt. employees including firemen and cops).
Property tax receipts are going to decline steadily over the next 5 years. Unless there are reforms in California's tax codes, families may decide to leave. Unless something is done soon, like finding a new bubble or govt simply charging it's way forward with a credit card, even OC neighborhoods are going to be adversely affected.
Even if OC never reaches affordability vs. take home incomes, it sure is fun to watch the conceited bastards of 2005 earn their just desserts. Since you and I are now paying their mortgage, the response to them should always be a "You're welcome!".
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