The median price of a house sold in Humboldt County has dropped to its lowest level since March of 2004, according to data released today by the Humboldt Association of Realtors (HAR). The October value of $238,000 represents a 32 percent decline from the peak of the housing bubble — in March, 2006 — when the median-priced county home went for a whopping $349,500.
The steepest declines have occurred in Arcata, where median prices topped $400,000 12 times during the bubble (including an anomalous monthly value of $608,000 in 2006). The latest value is down to $259,000.
Add in an average 30-year mortgage rate of 4.62 percent — the lowest rate on record — and you have the strongest buyers’ market in years.
At the risk of statistical overload, here’s another informative way to view the current market’s overall health: Standard or “conforming” mortgages (as in the kind most everyone got before lenders went apeshit and starting giving loans to everyone, including dead people) require that your monthly house payment not exceed a third of your gross income. That’s how much banks figure your family can handle without falling into debt.
In Humboldt County we hovered right around that healthy ratio until 2002, when mortgage payments began their perilous climb. At the peak of the bubble, the average local mortgage payment was a ridiculous, completely unsustainable 67 percent of the median county income. In other words, homeowners were paying roughly twice what they reasonably should have been paying on their house payments.
The October number is back down to 34 percent, the lowest it’s been since March of 2002.
This article appears in Empire Falters.
It’s more than just the “bubble” that affected our county. Prices here are still stupidly high. Even after they dropped, they are still more than double what they were only 9 years ago.
What else costs more than twice as much now as it did 9 years ago? Nothing.
Realtors selling at abnormally high prices to out-of-the-area investors and retirees is causing artificial price inflation, and it needs to stop, before even more of the people who actually live in this county are unable to buy a home.
Sure, realtors can make a lot of cash doing what they do, but just because you can do something doesn’t mean you should. Those who contributed to this ridiculous situation should be tarred and feathered.
Median price is not an average price but merely states that more lower priced houses are selling than higher priced houses. That is usually the case no matter what the market is doing as the “median price” is always lower than the “average price”. Doesn’t mean your house is actually losing value but it may not sell quickly if it is in the “high” bracket before more low priced houses sell. Rates are actually lower than you state for a lot of loans. Realtors do not set the prices, the market actually determines what the price will be or where it will sell no matter if it is a low priced property or a high priced property. Low prices sell quicker as more can afford them.
Interesting that the graph shows that all of the areas except Arcata have come of their lows, but the headline is to the negative side. Statistics are statistics. I track the home values every week throughout the county. Maybe Fortuna should be included also.
@Humboldt Hippie: I chose not to include Fortuna because their stats are extremely volatile, due to the relatively small sample size of homes sold there each month. For whatever it’s worth, Fortuna’s October median price was $230,000. But, to illustrate my point, in January they saw a low of $144,250; five months later it shot up to $320,000. Essentially, one expensive home sale can skew the data dramatically.
As for the graph, you’re correct that it appears market lows occurred in January, not October. That’s because the website Zillow.com uses its own methodology based on “zestimates” whereas HAR’s methodology reflects hard numbers (median price of homes sold).
@Anon1: The median is not always lower than the average. Median simply means that an equal number of homes sold above and below the given figure. I agree with you about Realtors: They can’t sell a home for more than buyers’ are willing to pay.
I should also mention, regarding conforming loans, that they’re subject to a price limit — currently $417,000 in most markets.
What else costs more than twice as much now as it did 9 years ago? Nothing
umm… how about gas, or commodities, bread, milk… gold… silver… I think you should evaluate inflation, not what the government prints as inflation, but what a household see when they buy grocerys.
Not quite. The median price rose 65 percent between October 2001 and October 2010, meaning prices are 1.65 times higher than nine years ago. Meanwhile, the median (reported) income has increased 28 percent (1.3 times higher). Of course, these figures hardly tell the complete story, especially when you consider that our largest industry (marijuana) is virtually invisible when it comes to reported incomes.
Good point, Ryan. We do have a unique inflationary factor. Still, I think that homes are overpriced in most markets, and the “market correction” is causing many sellers to balk. Eventually they’ll sell at more realistic, lower prices.
I don’t understand why anyone would want home prices to drop. That is what put so many people into foreclosure. It is just the opposite, the rising of home prices that will help the economy. The thing that should drop, are the rental prices. Where but in Humboldt County is it cheaper to buy a home than to rent one. Unheard of!!!
Does it matter whether or not people “want home prices to drop”? Lower prices would make homes more affordable, but the market pays little heed to such considerations.
If housing prices rose only 5% and incomes rose a whopping 50%…it would make a $200k house cost $210k, and a person who earned ten bucks an hour would earn $15 bucks an hour. That’s in fantasy land…
The real difference, being any percent higher for inflation over income, is actually exponentially worse than how little a few tenths of a percent make it seem in number speak. It’s enough cash to make somebody notice when you call a 65% increase in real estate prices 1.65 times the before prices, and a 28% increase in income a multiplication of 1.3 times higher.
My point is, it seems like you’re suggesting the statistics make light of the difference…but it’s not negligible, it’s a really big negative for “we the people” and all that.
CindyH- Think about what you are saying. Is it better to have the prices of milk go to $20/gal? how about apples to $50 each? Or used cars OLD junkers to $40,000? It is better for prices to drop.
Why is it that somehow people think that they are “better”, “smarter”, or “wiser” if THEIR house costs more than others—even if it is basically a shack loaded with termites and rusted nails built in the 1940’s? Don’t drink the Realtor koolaid. I rent…because I saw the bubble coming and did not have 20% down to get a conventional loan. Everyone laughed at me…Realtors called me a “loser”…you will never own a “home”. Well I have been saving and saving for the down payment..by almost starving myself. Same old clothes, cars, appliances no electronic toys. Today, I have enough cash to BUT two houses CASH! But I went through hell …while Realtors lied and laughed at me for not being a sucker. It’s my turn to laugh…yes I pay rent…and it is too high. But, I can buy anything I want…and never have to worry about the depression we are in…losing my job. Who cares? I am NOT a DEBT slave to a banker a Realtor or consumerism. I say what I want to whom I want…and have MOBILITY. I can walk anytime…and move anywhere. I never have to worry about a “mortgage”, bankers or other liars. You can have it—the old house—the new cars—the HI Def large screen TV’s —all the toys. I HAVE MY FREEDOM. I just might send my money to a REAL worthy cause? Wikileaks! for freedom…and to ask our leaders why they LIE to us the voters and taxpayers.
Not over yet ! 30-50% more to go !
Zillow: US homes lose $1.7 trillion
http://www.bizjournals.com/sanjose/morning_call/2010/12/zillow-us-homes-lose-17-trillion.html?ana=e_sjo_rdup
I understand what you’re saying Cindy H, the renters get the real butt end of the deal (myself included). But it’s all the cause of professional real estate investors, not most people who just want to own a home and gasp actually live in it. The concept of owning more than one home is so far removed from my reality, I’d feel like King Evil if I bought a home soley for making some repairs and raising the tenants’ rent….let alone a whole apartment building full of people.
It’s great how the journal has placed a headline link on their home page that says “as expected, sohum marijuana growers voted against prop 19” but we never ever see headlines from them that read “as expected, greedy local real estate investors jacked everybody’s rent by 30% over three years.”
Will the Journal publish future headlines like “As expected, the Richardson Grove Improvement Project has massively failed at improving anything in Humboldt County, and has only contributed to increased urbanization.”
“As expected, the Journal’s reporters are massively chicken shit when it comes to digging into the suit-and-tie money side of an issue.”
@Numberzzz: You’re vastly oversimplifying the housing crisis. Here’s the best explanation I’ve found for what caused the multi-national bubble. In short, you’d be better off blaming (1) sub-prime lenders who made reckless home loans with impunity by offloading the risk to (2) greedy Wall Street investors who lumped all the time-bomb loans together into mortgage-backed securities — a tricky sleight of hand maneuver that obscured the pending collapse until it was too late.
And all those bastards wore suits and ties.
Depends what you’re talking about, Ryan. I don’t know what oversimplification there is in calling out the person who raised my rent and suddenly sold the house for twice what it’d been on the market for, for over a decade. The guy who owned several city blocks of homes. I’m not the only one who was in that scenario, and neither was he. I’m not oversimplifying more or less than a few lines on a graph are.
I’m familiar with what your link is saying. Would you be so bold as to say Security National Bank and their affiliates intentionally milked the local buyer’s market (in truth, any and everybody who was willing and interested in giving up some money), as the article you linked illustrates? Because I am bold enough to say they intentionally screwed lots of people in a big way.
I’m not denying that locals were swimming in the same waters as everyone else. Just sayin’ that if you expected Humboldt County landlords and sellers to opt out of the bubble out of the goodness of their hearts or a sense of philanthropy then you were bound to be disappointed.
Thanks for the quck reply. That reads like a wishy washy way of blaming the victims. Why is it that you don’t deny locals were in the same pool as everybody else nationally, yet have blamed “growers” on inflated rent prices locally during the time? The Journal has always been quick to get that baseless punch in first and foremost whenever it can, while NOT addressing the issue of the specific local banks and their affiliates who were selling numbers to anybody who’d pick up their brochures.
How do you figure I was blaming growers for inflated rents?
You’ve written specifically so in at least one article I recall, and the Journal has made the claim at least a few times. Does the Journal staff have an unspoken understanding with certain local big money movers to not make certain waves? Because Security National and affiliates wasn’t and isn’t being given due attention for the local housing boom and bust, in this and other articles. Security National is interstate, so it’s a big enough deal to (have at this point) see(n) what’s going on with them here vs. there as well, but no such reading.
Security National does not make real estate loans to the local market, Numby, which is not to say their hands are necessarily clean. There’s plenty of blame to go around. If you think that Humboldt’s black market — conservatively estimated at half a billion dollars annually — has no effect on housing prices then you’re not thinking clearly.
That’s another wishy washy, safe and uncertain reply. What does the article you just directed me to illustrate?
Will the Journal ever publish a headline “As expected, the CEO’s of Security National wiped their hands clean of yet another massive money mess they made.”
Well we were gonna, but now that you’ve spoiled the surprise, forget it.
Johnathan. I must be coming to terms with complacence,..but I’m inspired by your confidence in accepting it.
The North Coast Journal is pretty much a South Park Conservative thang going on. It’s a lot more complicated than that, but that’s how it’d look on a yes/no chart…like a big arrow pointing to a big YES. Like, you know? Or would you even know it?
Ryan’s link to “This American Life” does not disappoint, and here’s a lively interview (Dec 5th episode) by Harry Shearer with the author behind the brilliant “Naked Capitalism” blog.
I would say the story ryan linked to does disappoint…there’s an underlying idea present that people are supposed to understand that they’re going to be ripped off before they’re ripped off…that somebody buying real estate in china is why the opportunity came along to rip me off.
Security National set up an affiliate bank for the sole purpose of ripping off as many people as possible. The journal repeatedly kisses their asses and pays them homage as a house of nobles in some sort of Humboldt’s Great Gatsby scenario. I don’t keep count of how many times the Journal uses that foundation in articles and editorials…but it’s enough to notice. I was looking to buy a house not more than $100k, through a NINA loan. I’m not going to get into what I experienced, except to say they truely encouraged me to look at houses that cost twice as much and repeatedly assured me all financial what-nots weren’t a concern. Perhaps luckily for me, the same realm of houses I was looking at exceeded my spending ability before I found a sure thing (I was outbid on a place I’d began the process of buying…even had paid $450 for an inspection that I had to jump through hoops to be refunded). But skyrocketing costs didn’t change their approach.
Now the affiliate bank is defunct (as expected) and the higher rungs of that ladder are all the richer, having passed the debted buck…while continuing to buy real estate in Humboldt and thumbing real philanthropic ideas about what to do with it. The bank makes its fortune collecting on defaulted loans while handing out loans with the other.
People in Humboldt County getting ripped off in the housing market has nothing to do with the huge reserve of money that people have saved or stocks in China…but the greeeeeeedy motherfuckers who want to tap into it, starting with the most gullible.
I’ve had time to listen to fifteen minutes of the story you linked, Joel. It sounds more like the real human side of events.
The complicated explanations of departments and paperworks is just as relevant as any individual’s experience in dealing with them. Unquestionably, in home loans the money goes from the banks to the people…ultimately to make more money for the banks FROM the very same people. The real individuals who run the banks know the scam better than anybody. The heads of Security National are the type of people who have enough money to hire multimillion dollar PR firms to get what they want…a method of that is to bombard your periphery with ideas congruent to what they want.
Did the recent trillion+ dollar corporate bailout help you and me, or Security National? Who’s at risk of losing their home…people who dealt with their banks or the people running the banks?
Numberzzz,
My point about the Scandinavian countries was real, and to show that a different model besides capitalism can work in the real world, but capitalism is not evil at its core, predatory capitalism is completely different.
Is there any way to bullet point or condense what your trying to say, globalbanks are bad, wall street is evil, and the mega bonuses that financial devices accrue come from our pockets, I would cede most of that to you, I am just getting lost on your reference to the NCJ cover ups, Burns the sell out, and south park…
After a cursory Google search, I’d say this is a good start on exposing the Journal’s bankster-sucking ways.
Jonathan, federal interest rates aren’t determined by random lotto balls, I’m sure we agree. They’re determined by people who spend all day every day figuring out what kind of chain reaction will occure based on what kind of numbers they present, based on what kind of numbers are presented to them. The presentations are real, but “The System” is run by humans. A number is what somebody writes down, however it popped into that person’s head to write it down.
In other words, it sounds like you’re asking for something more vague than the specifics I’ve mentioned, because you can’t follow them. Locally, it’s really easy to see who wrote what down when. If you’re asking me “why”…I’d be jsut as interested to read your ideas. “That’s just business” is an acceptable answer, and very telling of who says it. Read the link posted at 1:02 by yeti…
Excellent link, Yeti…I wasn’t even paying close attention to local tides at the time, the whole thing would have meant little to me. Can’t help but notice patterns over time.
a comment from within above…his take of the same presentation everybody’s given…consistencies are consistencies, whatever the reason:
Humboldt resident
April 3, 2007 4:53 PM
Great article. Yeah, the Northcoast Journal is a class-prejudiced propaganda rag that targets local bourgeois liberal society.
Like others, I’ve been accused of conveniently being “Shawn Warford” by the Hooverites and Simsians because I am one of many people who face a few simple, obvious realities about local newspapers.
I don’t see the NCJ as total puppets of Arkley Jr. so much as friendly contract laborers. They keep their liberal mask on to maintain credibility with credulous readers. But whenever the guy who owns the press their paper is printed on wants them to do hatchet jobs and smear political enemies, the NCJ kennel is always there to bark and snarl at the victim. They’ll also refrain from any serious criticism of their buddy Arkley, mischaracterizing the ruthless, power-hungry foreclosure magnate as merely an innocent “philanthropist”.
They’re exactly like most mainstream journalists and editors, who have been intellectual prostitutes to ruling classes for as long as there have been newspapers.
Arkley doesn’t own the NCJ’s press, and your posts are making me feel like the last three letters in your pseudonym.
Burp.
Ryan, whether or not “Arkley” owns the NCJ, they got you burping their critics on your work wall. The NCJ pays your rent, newshound beotch. So what kind of journalist are you?
“Help me blame all my problems on Arkley or else YOU ARE IN HIS POCKET!”
“Like others, I’ve been accused of conveniently being ‘Shawn Warford’ by the Hooverites … I am one of many people who face a few simple, obvious realities about local newspapers.”
Such boastful nuttiness.
oh boy it’s the NCJ posse here to get in their laughable disclaimers and poke fun at the latest “that guy”! Whate the hell is your comment supposed to mean, hank? Or is what you write when pressed about it really what you think? Look, joel knows the inside blog joke…from three years ago! Are any of you “on the clock” right now? I’m not, so I can’t help but wonder.
Whatever any of you think of anything I’ve written above this post, it’s the absolute peak of my participation…my sole involvement, through your publication’s internet forum nonetheless. In a moment I’ll resume the rest of my life. It’s like you do it so much…with lives of your own off the clock…you take your involvement for granted…or something. Punch in, punch out, haha where’s the beef.
Numberzzz, you seem to have all the time in the world to pound out your suspicions on the keyboard so I take it you probably don’t work. If you do and I was your employer you would be out of a job.
The point of this article was to report statistics about the local housing market. Prices went up then down, that sort of thing. Because it was beyond the goal of this reporting to assign blame and go on some moral crusade against your favorite villains you throw a tantrum. Start your own blog and see who reads your ideas if you don’t like this one.
Richard, I made about five comments under one article in less than a day. Should have taken you about ten minutes to read everything. Staffers at the journal write entire articles every week for years…it’s painting a much more detailed picture. POUND POUND! SUSPECT SUSPECT!
“I made about five comments … in less than a day.”
While the quantity is notable, perhaps Numberzzz should work towards lucidity.
Joel, I notice your cartoons don’t poke much fun at your own demographic…via whatever means you formulate those of others. What “issues” are most important to you in Humboldt County? Do you think you’ll live here a long time? I promise I will maintain polite correspondence.
Garberville…tie-die t-shirt. McKinleyville…frumpy t-shirt with holes. Hoopa…tank top.
Damn. I should have consulted with you.
So what’s important to you in all that’s happening with humboldt county? It takes all of three seconds to type it.
Three seconds? No way; I type at a snail’s pace. Growth is going to be a big problem here. I’d hate to see rampant, mindless, suburban, McKinleyville-style development. The deflating of the housing bubble shouldn’t be a reason to ignore a problem that will not go away. The Home-Depot-on-the-Bay obviously looks good to the minority that votes, but even when the housing correction reduces home prices by another twenty to thirty percent, the poor bastards who work there will not be able to afford a home. I could go on.
Well, you have earned a degree of my respect…not that it’s worth shit to you coming from me.
You ever have a job where a superior pulled you aside and said “we’re really not supposed to talk about that with customers (and later on in life “customers” becomes “clients”.) Mindblowing sheeit.
I’m not sure what you’re alluding to. I still tend to describe the people I work for as “customers,” as I’m not an attorney or an accountant.
No allusion, if that’s the word. I would integrate your response into whatever human mechanism I operate, duh. In relating that to the north coast journal, see above.
The rich are taking advantage of the poor every chance they get. To be somebody who earns a million+ dollars a year in the united states, your life has got to be about seeing a category…whatever that category may be…of human beings as generic commodity. Like Simcity in real life. The heck would I have to do to find myself in a position of having a $5,000 mortgage…for each of the thousand units I owned? And be able to pay them off with money to buy more every year? I would either have to have been born into that scenario or, some time ago, decided to scalp as many suckers as I could. I don’t think people are throwing themselves into debt voluntarily.
So…looking at the housing boom/bust in Humboldt County…who was involved in handing out the loans at the time?
Oddly, posted onto this article, that last spam sure makes sense.
Notice the declining tops and bottoms creating a downward channel since mid 2005. If you draw a straight line down through the tops, you create a barrier against rising prices. THAT LINE MUST BREAK to the upside in order to say that the decline is over. It may not be over even then, but if the prices are to rise, it must go through that line.
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