Among the many national stories detailing the downfall of the subprime mortgage industry, one whopper of a statistic from an Associated Press article caught my eye last week.
The story cited a study from the Durham, N.C.-based Center for Responsible Lending, which just ranked the metropolitan areas of the country most likely to see the biggest number of foreclosures of subprime loans.
California is heavily represented in the nonprofit’s top 10 list of metro areas in jeopardy of skyrocketing foreclosures. OC apparently isn’t immune either, according to its projections.
The center lumped the Santa Ana-Anaheim-Irvine region together and declared that the area could see a nearly 23% foreclosure rate for all the subprime loans it made last year,good for ninth place in the country. The Merced region is No. 1, with a projected 25% foreclosure rate, followed by Bakersfield.
OC saw just a 3% foreclosure rate for subprime loans from 1998 and 2001, according to the Center, which makes their projected 668% increase a mighty big stretch in my book. The association draws their conclusions on the assumption that the area will see a big-time drop in housing appreciation.
Is that a valid assumption? I haven’t heard of any local analysts calling for such a steep drop in prices here.
Real estate economist Walter Hahn, who does consulting work from Irvine, has long dismissed that scenario. He notes that the limited amount of new homes and continued job growth in OC will keep demand for homes high and minimize the chance of local home prices slipping.
Foreclosures are likely to increase nationally, according to a new study by Santa Ana-based First American Corp.’s CoreLogic. It predicts that 13% of the 8.4 million adjustable-rate mortgage loans from 2004 to 2006 will end up in foreclosure in the next seven years, due to rates resetting at higher levels.
McMonigle Tops Again
More proof that the OC luxury housing sector operates a little differently than that of the rest of the market.
Coldwell Banker’s John McMonigle and his high-end homes sales team were just recognized for the third straight year as the company’s top-selling team.
Newport Beach-based McMonigle Group, which now counts about eight brokers, posted $432 million in home sales here last year. That’s up from $247 million in 2005 and $197 million in 2004. He’s sold more than $1 billion of homes in Orange County in the past five years, and has about $900 million of properties sold, in escrow or in inventory to date this year.
One big property that everyone is waiting to see sold: the $75 million Corona del Mar home that was put on the market about a year ago. No deal has been struck for what would be the county’s most expensive home.
It typically takes about 18 months to two years to close a deal of that size, based on the limited base of potential buyers, the company said.
The 74% increase in sales volume from McMonigle last year came as overall housing sales in the county dropped about 20% year-over-year. That hasn’t dampened interest in the area’s luxury coastal homes, or companies that cater to those types of buyers. A number of competing brokerages such as Surterre Properties and Hom Real Estate Group, both of Newport Beach, started operations here in the past year.
Putting his money where his mouth is, McMonigle, a Shady Canyon resident, also has been a buyer of the some of these pricey properties.
He was one of the first buyers of a lot at the Strand at Headlands, the 121-acre ultra-expensive development going up in Dana Point. Lots running one-fifth of an acre there have sold at an average price of almost $6 million each. He plans to build a vacation home there, he has said. He also had a couple of clients that bought there.
Woodland Hills-based Voit Development Co. opened its doors last month to its new local digs in Newport Beach.
The company’s Shipyard Way office, which runs about 5,000 square feet, counts private and open offices, a conference room, game area and a break room. It also has a patio overlooking Newport Bay, which was designed to be suitable for use as a meeting area.
Irvine’s Ware Malcomb provided interior architecture and design services for the offices. DBAC of Newport Beach was the general contractor.
The space was designed to a nautical theme, incorporating the waterfront location and reflecting the coastal lifestyle and passion for sailing of the developer’s president, Bob Voit, Ware Malcomb officials said.
Coreland’s New Market
Tustin-based Coreland Cos., a real estate service firm that focuses on retail, office and industrial properties, just opened an office in Salt Lake City, its first outside California. Renee Pugh will head up the office. She comes from CB Richard Ellis Group Inc.
