OC Home Prices Dip

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The Los Angeles Times reports today that:

Orange County last month posted its first year-over-year decline in median home price in more than a decade, another sign of the widening reach of Southern California’s housing slowdown, data released today showed

Amazing. A ten-year run of growth snapped for the first time. It has always been amusing to hear people in Orange County talk about their homes like they are immune from the market forces that impact the rest of the country. They continually cited the OC’s desirability, proximity to the ocean and beautiful California weather as reasons why their homes were immune to the market fluctuations.

Well, now we’ll see how well the OC’s prices will hold up as the supply of buyers is cut by tougher underwriting guidelines, as more properties sit on the market and as people begin to lose their homes to foreclosure.

I am not one of those raving bubble bursters that have been wrong for the last decade and are now enjoying their day in the sun. I am a homeowner here in OC and have made a nice little profit over the last few years – but I realized that we are not invincible here. I made some decent decisions about how and what and where we bought.

It will be interesting to see how the rest of the year shakes out in terms of the housing and mortgage markets. I am afraid that the people who bought in at the top, who leveraged themselves to the hilt, will have very few choices, except to make more money or cut expenses to meet their home payment obligations.