From Jeff Collins at the O.C. Register: $657,500: 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 $657,500, real estate data firm CoreLogic reported Tuesday. That’s up $29,000, or 4.6 percent, in a year and $6,000 in a month.
The previous peak of $645,000, reached in June 2007, is equivalent to $750,000 in today’s dollars – or $92,000 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.