SoCal Home Prices: What’s Happening June 2009?

Southern California has become a kind of barometer for troubled home values.  Unlike Nevada and Florida’s transient and part-time populations, in  Southern California  it’s actual home- and condo-owners who live on their properties full-time who are in trouble. Or, we have local investors who find their rental properties are no longer worth the trouble of keeping they are so far underwater. As mentioned in an earlier post, statewide, about 27% of homeowners are now underwater. With the unemployment rate at over 12% and rising, with even the state laying off workers, that percentage is most likely going to get worse.

home floating on waves

Six counties make up Southern California. Here are the stories of the two extremes of the spectrum. On the one end is Orange County, richest of all the counties, full of gorgeous new homes and award-winning planned communities. On the other end is San Bernardino, the New Appalachia, where poverty is grinding and the marginal population is being pushed from the other, richer, surrounding counties. The contrast is stark.

Orange County shows that in some ways things are getting better for us. In Orange County, for instance, last month [June 2009] home values dropped only 8% over last year. That’s the slowest drop in a long time. The median price in Orange County is now $485,000. Some cities have held steady or even improved: Aliso Viejo held last year’s median value of $600,000; Anaheim Hills increased about 10% across its two ZIP codes to a median of $498,000 [92807] and $640,000 [92808]; Fullerton in 92833 decreased less than 2% from last year to a median of $378,000; Fountain Valley also decreased 2% to a median $570,000. Two areas of Irvine increased in median value in 92303 up 5% to $690,000 and in 92616 up 4% to $662,000. Its other areas decreased around 15% to over $600,000 with pricey 92603 down 34% to a median of $920,000.

Laguna Hills rose 1% to a median of $629,000 while Laguna Beach lost 21% over last year to a median $1,265,000. Must be tough. This, of course, makes us wonder what is happening in the highest priced areas, Newport Beach and Newport Coast? Well, there were really too few sales to decide. What sales did take place were unmistakably downward in price, but it would be hard to get too much higher…Corona del Mar had 12 sales in the month showing a 40% slide from last year to $1,180,000.  Seal Beach is now a median of $710,000 while Huntington Beach now has two areas with many sales bring its median to $587,000 [92646 down 5%], $522,000 [92647  down 3%], $695,000 [92649 down 21%] and $822,000 [92649 down 17%].

Orange County does have a few working class areas, such as Santa Ana which shows three areas actually down to a median of less than $300,000 [92701 to an incredible $213000, 92704 to $288,000, 92707 to $255,000]. Orange 92868 is down 10% to $318,000, though its other ZIPs are all closer to $500,000 and holding fairly firm. One area of Garden Grove and one area of Anaheim have medians of less than $300,000 [92844 to$298000 and 92805 to $272,000].

What does this mean? Orange County is the most affluent county in Southern California and its citizens have the most in reserves. Unemployment is less here, but the pain is being felt. As the recession grinds on and the unemployment rate rises, biting deeper into the ranks of middle- and upper-income workers, even here values tumble. In California the recession shows no signs of abating.

Other area counties are suffering terribly, especially San Bernardino, the hardest hit of all. Despite record losses in home values there from 2007 to 2008, home values countywide dropped another 40% in June 2009 over June 2008. The median home value in San Bernardino in now $135,000, almost unbelievable…

Sold2

Outlying areas have been very hard hit. Twentynine Palms in down 45% to a median $80,000.Yucaipa and Yucca Valley are down 24 and 26% respectively to $215,000 and $100,000 median. The High Desert is a disaster area: Apple Valley is down over 50% to a median of around $88,000; Victorville is down 40% to a median of about $95,000. The good news there? Hundreds of homes are being sold…Sales are very brisk at these prices, so maybe the bottom is near. It must be. These prices are below replacement value, meaning we can’t build homes for these prices.

The City of San Bernardino itself has only one ZIP with a median value of over $100,000 and that is 92407 at $140,000, a drop of 31% over last year. The rest of the city has plunged in value nearly 50% to closer to $58,000 and, while some homes are being sold, sales are by no means brisk. This is the New Appalachia where SoCal poverty is concentrated and food stamps are common currency. This is where our charity dollars should be going.

More affluent areas, as always, are doing better, but still dropping. Upland has dropped 6% in 91784 to $471,000 median and to $259,000 in 91786, down 13%. Rancho Cucamonga has dropped over 25% in all areas to a median now of around $300,000 and in 91739 almost $400,000. But, the housing stock here is mainly new and high quality. This is a tremendous dip. Rialto is down 32% to $198,000. Colton is down 42% to $110,000. Chino Hills, also with newer housing stock, has dropped only 6% to a median $298,000, again undeard of… Ontario’s hightest median value is $235,000, down almost 30% over last year. Fontana is down around 35% to $122,000 in 92335, to $185000 in 92337 and down 18% to $260,000 in 92336. Again, in Fontana hundreds of homes are being sold, many below replacement value.

Really, there’s no good news in San Bernardino County.

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