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CoreLogic: Orange County Median Home Prices Hit New Record


From Jeff Collins at the O.C. Register: 7,500: O.C. median home price hits record

The median price of an Orange County home – or the price at the midpoint of all sales – was 7,500, real estate data firm CoreLogic reported Tuesday. That’s up ,000, or 4.6 percent, in a year and ,000 in a month.

The previous peak of 5,000, reached in June 2007, is equivalent to 0,000 in today’s dollars – or ,000 higher than June’s median.

This brings up a few important points that I’ve mentioned before …

1. This is the median price – not a repeat sales index – and the median price can be impacted by the mix of homes sold (not as useful as a repeat sales index).

2. As Collins notes in the article, these are nominal prices. When adjusted for inflation (real prices), prices are still 14% below the bubble peak.

3.  This is not a bubble.  A bubble requires both excess appreciation and speculation, and there is a little evidence of speculation – these are qualified buyers who will not default if prices decline (unlike many buyers during the bubble).

4. Note that the central / coastal areas are closer to the previous peak than the outlying areas.  This is the typical pattern; the price increases start in the central / coastal areas, and then move inland as the cycle matures.  Plus the inland areas saw the most speculation during the bubble – especially using subprime loans – and it will take longer for prices to reach a new peak.
Calculated Risk

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