ORANGE COUNTY HIGH END gets WHACKED !!!

[Chris Scoreboard Johnston]

Chris Johnston

Why do people that make the median income think they have some divine right to buy a nice home, is that written in stone somewhere? Let’s face it, if that is all the money someone can make, than you cannot expect to live in the more expensive areas. Southern California is an expensive area, and it will still be after the drop, however big it is.

People pursue different careers for different reasons, but if the one you choose only allows the median income, you are going to have to accept what that will bring you in terms of a home.

[Chris Scoreboard Johnston]

Chris Johnston

Why do people that make the median income think they have some divine right to buy a nice home, is that written in stone somewhere? Let’s face it, if that is all the money someone can make, than you cannot expect to live in the more expensive areas. Southern California is an expensive area, and it will still be after the drop, however big it is.

People pursue different careers for different reasons, but if the one you choose only allows the median income, you are going to have to accept what that will bring you in terms of a home.

[cyphire]

Absolutely true LA_renter. I agree it’s an emotional issue. Being on the sidelines (and very, very happy about it) obviously makes me root for the correction. I don’t want people hurt – but in the long term it will allow people that have been prudent to be able to buy homes. It is emotional. What is more emotional is the people who own their homes (or more than one) and/or make money in real estate. It is very hard to argue against your self-interest.

I saw something on one of these posts about the stages of all bubbles. We are now in the denial stage. All booms have these stages. Most people know that there has been a flattening of the market, but still look at short term return to increase because that fulfills their desire. We haven’t entered the next stage which will be a mass exit. And when I say mass exit I don’t mean everyone will sell – I just mean that anyone who will need to sell within the next 5-10 years will probably try to do so sooner than later – because the market will realize that it is only getting worse.

What I am most concerned with is that with a true public understanding that the equity they have is being eroded that consumer confidence will tank. Consumers spend 70% of the economy. With decreased business, companies will try to protect the bottom line. In our society – letting people go is very simple. With higher unemployment and wages going flat or down we will have increased economic danger. And unlike the housing market, the stock market can turn on a dime. With both equity and investments wiped out (and a catastrophic debt hanging over our economy) I think that we as a nation will be like the folks that are getting foreclosed on right now.

I hope its softer than this – but hoping doesn’t make it happen.

[cyphire]

Absolutely true LA_renter. I agree it’s an emotional issue. Being on the sidelines (and very, very happy about it) obviously makes me root for the correction. I don’t want people hurt – but in the long term it will allow people that have been prudent to be able to buy homes. It is emotional. What is more emotional is the people who own their homes (or more than one) and/or make money in real estate. It is very hard to argue against your self-interest.

I saw something on one of these posts about the stages of all bubbles. We are now in the denial stage. All booms have these stages. Most people know that there has been a flattening of the market, but still look at short term return to increase because that fulfills their desire. We haven’t entered the next stage which will be a mass exit. And when I say mass exit I don’t mean everyone will sell – I just mean that anyone who will need to sell within the next 5-10 years will probably try to do so sooner than later – because the market will realize that it is only getting worse.

What I am most concerned with is that with a true public understanding that the equity they have is being eroded that consumer confidence will tank. Consumers spend 70% of the economy. With decreased business, companies will try to protect the bottom line. In our society – letting people go is very simple. With higher unemployment and wages going flat or down we will have increased economic danger. And unlike the housing market, the stock market can turn on a dime. With both equity and investments wiped out (and a catastrophic debt hanging over our economy) I think that we as a nation will be like the folks that are getting foreclosed on right now.

I hope its softer than this – but hoping doesn’t make it happen.

[(former)FormerSanDiegan]

To beat a dead horse, I thought for some folks it would be interesting and intellectually stimulating to see the MAY numbers for the areas that the late latesummer2008 picked to illustrate that the OC was whacked and declining by 20-50% in APril YOY.

YOY numbers for May.

Newport Beach 92661 +32.3%
Laguna Beach 92651 -15.3%
Corona del Mar 92625 -6.7%
Capistrano Beach 92624 +167.5%
Trabuco Canyon 92679 +16.4%
Yorba Linda 92887 +4.6%

So, you see, following the logic of the original post, one might conclude that these areas mostly rebounded tremendously in May. And even the two areas with declines in May were off less than any one area in April. Using that logic would be flawed, however.

Conclusion: The original post was either a pea-brained conclusion based on myopic vision of specific areas of the OC … or sensationalism based on cherry-picked, extremely noisy, monthly zip-code specific numbers.

[(former)FormerSanDiegan]

To beat a dead horse, I thought for some folks it would be interesting and intellectually stimulating to see the MAY numbers for the areas that the late latesummer2008 picked to illustrate that the OC was whacked and declining by 20-50% in APril YOY.

YOY numbers for May.

Newport Beach 92661 +32.3%
Laguna Beach 92651 -15.3%
Corona del Mar 92625 -6.7%
Capistrano Beach 92624 +167.5%
Trabuco Canyon 92679 +16.4%
Yorba Linda 92887 +4.6%

So, you see, following the logic of the original post, one might conclude that these areas mostly rebounded tremendously in May. And even the two areas with declines in May were off less than any one area in April. Using that logic would be flawed, however.

Conclusion: The original post was either a pea-brained conclusion based on myopic vision of specific areas of the OC … or sensationalism based on cherry-picked, extremely noisy, monthly zip-code specific numbers.

[NotCranky]

Don’t forget “attention getting behavior”. Poor guy :(.

[NotCranky]

Don’t forget “attention getting behavior”. Poor guy :(.

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