I’m calling it official in an unofficial way: The high-end of the Orange County real estate market is no longer immune from the current economic doldrums and the housing bust. They appeared to be in the recent past, but no longer. Here is the evidence to back up this claim.
First, see my post “Shady Canyon in Irvine, the High-end Real Estate Market Feels the Squeeze,” then see Julie post “Battle of the Deep Pockets: Who’ll be the star on Goldstar?“. These post show that the high-end OC real estate markets in Irvine and North Tustin (in the $3M to $4M range) are lowering prices in the hope of selling these homes.
Next, there is the Orange County Register article that reveals that even Coto de Casa, home of the “Real Housewives of Orange County,” is feeling some housing pain. The article states that Realtytrac latest foreclosure data on Coto de Casa shows “[a]bout 25 homes are in pre-foreclosure, 13 are up for auction and seven are bank owned.”
Then there is the lost of immunity from price drops by the Orange County coastal homes. Although these high-end homes have been able to claim immunity from the housing doldrums, this no longer is the case:
“Analysis of DataQuick’s March homebuying report shows the county’s beach-close communities are no longer immune from the current housing slump. DataQuick identified 295 homes selling in beach cities’ ZIP codes last month, a 46% drop from a year ago. In these 17 ZIPs, last month’s median price change was off 11.9% vs. a year ago.”
—Jonathan Lansner, “Home-sales tsunami reaches O.C. beach towns,” Orange County Register, April 17, 2008
Finally, there are the foreclosure listings for some of Irvine’s pricier neighborhoods (the 92603 zip area). The following homes, which have an estimate of over $2M in back payments and fees, are in some stage of foreclosure:
- A home on Summer House, with an estimate of approximately $2.5 in payments and fees, is set to go on the trustee’s auction block on May 22. This is according to a public notice in the Irvine World News.
- A home on Ridgeview, listed at approximately $3M, is in the foreclosure process according to RealtyTrac.
- A home on Hidden Trail, listed at approximately $2M, is in the foreclosure process according to RealtyTrac.
- A home on Vernal Spring, listed at approximately $2M, is in the foreclosure process according to RealtyTrac.
I started this post by saying that the high-end Orange County real estate market wasn’t affected by the housing downturn in the recent past, but that has changed. And in the Shady Canyon post that I wrote last week, I stated that homeowners in this upscale Irvine neighborhood are feeling the effects of the market downturn, but the effects are not as severe as in the low- and mid-range Orange County housing market.
Now here is my prediction for the near future: I am starting to think that the high-end OC housing market is going to see more changes soon. My guess is that the high-end of the Orange County housing market will see price reductions proportional to what the low- and mid-level priced housing market has seen.
PHOTO COURTESY FLEUR-DESIGN