The Good News and The Bad

It’s always best to get the bad news out of the way first, don’t you think?

In September, I posted ‘Why Orange County’s Median Price May Fall Under $400,000′. At that time, all of the exciting appreciation we’d seen in our housing boom had slipped away to January ‘04 levels. Mere days later, I revised that to November ‘03 levels, which was a median sales price of $435,000.

Time for the update; according to Jonathon Lansner’s recent article for the Orange County Register, Dataquick reported that the median sale price in Orange County as of October 13th is $420,000. Where does that put us in the calendar of the boom? July 2003, folks. We’re almost back to the early days of the Orange County housing boom. Just to twist the knife, that’s 35% off the peak of June 2007’s $645,000.

Okay, it’s bad. That’s definitely not good. But, I promised some good news and here it:

Lansner reported ‘Shoppers for the 22 business days ended October 13 were relatively busy. They bought 2,770 O.C. homes in this latest period, +56% vs. year ago buying activity. October looks to be the fourth straight month sales beat year-ago buying, a nice change after 33 straight months of year-over-year drops.’

There’s no doubt that buying activity is a great sign. It may indicate that at some price points, a bottom may be in sight. But, let’s not be pollyanna about this good news. It’s important to analyze the buying trends to understand it what it means. A disproportionate portion of this purchasing is made up of distress sales and foreclosures in the lowest price points of the market while much of the higher price points continue to be painfully slow.

Stay tuned. The next post will analyze the buying trends and how they compare to buying trends for the same period in ‘03 (our current market value match).