The year 2016 has been a year of records for Orange County with regards to real estate. Prices for residential homes reached heights never seen before, in part due to the large number of new homes being built. The landscape of Orange County has changed dramatically, not in the least thanks to the approval of the Platinum Triangle in Anaheim.
Anaheim’s Platinum Triangle blends leading-edge business, high-salary employment, world champion entertainment and exciting residential neighborhoods, creating a unique opportunity in the heart of Orange County. Here, amidst millions of square feet of new development opportunities for office, restaurant and residential projects, is an established destination featuring high-rise lofts, two championship sports teams, an exciting array of dining and entertainment, plus immediate access to the rest of Southern California from three freeways and a major transit center.
Both commercial real estate and residential real estate made headlines in 2016. An iconic house in Laguna Beach, built into a boulder, was sold. The Sunset Beach PCH water tower home was also sold. This property is now open to the general public.
Meanwhile, although all of that appear to be positive developments, some are worried that it may be the start of a new housing bubble, which is potentially bigger than the one of 2006.
Some claim the housing market is in a bubble far worse than the devastating one in 2006. The argument: Housing is far less affordable today than it was back then, and the home price gains are driven not by healthy, end-user demand but by a lack of construction, artificially low interest rates, and institutional and foreign all-cash buyers.
A June report showed that the greatest financial stresses in the country were placed on home owners in Los Angeles and Orange County, compared to all other metro areas in the country. Furthermore, with soaring rental prices, evictions have also seen a huge increase.
New statistics have been released about the true state of real estate in Orange County. This showed that:
- The median price of a newly built home in Orange County is $934,250, equivalent to a rise of 3.8% compared to last year, which was also a record.
- The LT Global Platinum Center was approved by Anaheim City Council at a price tag of $450. The mixed-use development will soon be constructed and is expected to be finished by 2022.
- An Irvine Cove property became the most expensive property in the county, costing $51 million. The six bedroom “Villa Dei Tramonti” has direct access to the beach, one of only five such properties in Orange County. It is also the most private and the largest of the five, with six bedrooms.
- The average price of all homes sold in Orange County in October was $655,000, up 9% year on year
- A lawsuit against the California Coastal Commission was filed for $490 million after the commission did not approve the redevelopment of an oil field into a retail and housing development. The decision is being appealed by Newport Banning Ranch, who want to clean up the land and redevelop it.
- 25 stories of luxury condominium are planned in place of the Orange County Museum of Art, found in Newport Beach. This would make it one of the six tallest in the county. While the project was approved in November, one group continues to oppose it.
- The average rent for an apartment in the county was $1,781. This has been hiked up steadily for six and a half years.
- Some 6,600 tenants and their families in Orange County were evicted over the course of 2014, which is the same as one eviction for every 63 households.
- The Rock House at Laguna Beach was sold in November for $6.5 million.
Designed a couple of decades ago by noted Orange County architect Brion Jeannette for a software entrepreneur, the 3,000-square-foot, steel-and-glass residence has been on and off the market.
- Investors purchased the PCH water tower house of Sunset Beach, a property that had been on the market for years, for $1.5 million off market in July. It originally had an $8 million asking price. While a four bedroom home, it has now been opened to the public, advertised as “the world’s ultimate beach house”.
- A Corona del Mar building was listed for $5.9 million, making it the most expensive condominium on the marked. Built in 1963, it was originally two condos, but they were reconfigured and merged together, creating a single waterfront property. It comes with a wide balcony, custom glass, and modern finishes, making it look as if people are on a luxury ocean liner.
- The Laguna Beach Twin Points estate, which comes with a double promontory that extends into the Pacific Ocean for hundreds of feet was sold at a price of $45 million. This has been an all time record for the county. The property comes with a 1928 built three bedroom cottage, as well as a guest house. The parcel is 2.3 acres in size, found between Crescent Bay and Shaw’s Cove. The bluffs, cove, and saltwater lagoon are connected by stairs.
- A Montage Resort three bedroom property with views of the ocean became the most expensive condominium on the MLS market this year. In March, it sold for $6 million. At 2,900 square foot, the condo is already impressive, but it also has some extra perks, not in the least the fact that it is in walking distance of a hotel with restaurants and spas, and that they can make use of the concierge and housekeeping as well. The property was recently sold.
- Only 1.6% of mortgaged Orange County properties are now underwater, which shows that the housing market in the area has improved significantly since the financial crisis. However, in that also lies the fear of many investors – it looks very much like a repeat of the bubble, and bubbles will always pop eventually.
Orange County is the place to watch for investors and home buyers alike. Whether the time to buy is now, or whether it would be better to wait, however, is the big question.