We all remember how steep the slope was in 2007 when the recession hit. We saw the bottom of the well and it was not pretty. Fortunately, markets recover, and we are now atop the mountain we once fell so mightily from.
Seven and a half years after bottoming out amid the Great Recession, median home prices in Orange County finally surpassed their bubble-era heights last month.
The wealthy county is the first region in Southern California to hit that mark, but experts largely dismissed talk of a new housing bubble.
Instead, they cited strong job growth, historically low mortgage rates and a meager supply of homes for sale as the chief causes for the price appreciation.
“It was a lot different back in 2006,” said Nela Richardson, chief economist for real estate website Redfin. “That price growth was fueled by a lot of crazy toxic mortgage products.”
The median price for new and resale houses and condominiums in Orange County jumped 5.9% from a year earlier to $651,500 in May, according to figures released Tuesday by real estate data firm CoreLogic.
That’s $6,500 more than the $645,000 peak reached in 2007, though that does not account for inflation.
The rest of Southern California has further to climb than Orange County, though prices across the six-county region rose 6.9% from a year earlier to $459,500 in May.
May’s median in Los Angeles County – $525,000 – is 4.5% below the county’s bubble-era peak of $550,000. Riverside County is 23.6% below, San Bernardino County 25% below, San Diego County 5.3% below and Ventura County 17.9% below.
The rise in Orange County prices comes as a lack of affordable housing across the state has become a pressing political issue, with some businesses citing California’s high cost of living as a reason to move jobs elsewhere.
“How the heck long can this continue?” asked Steven Thomas, a housing analyst who focuses on Orange County.
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