Purchasing
- Your first home
- Your next home and move
- An investment property
- A vacation home
Refinancing
- To tap your home equity
- To save money
- To avoid rate increases
- To lower monthly payments
Home Equity
- Loans and lines of credit
- Finance major expenses
- Consolidate Debt
- Invest
Orange County sees mixed reactions to slow market
By Melissa Wirkus
As the market
continues to slow throughout most
parts of the country, we are seeing
some of the biggest horror stories
emerge from none other than California.
Throughout California, houses appreciated
in value extremely quickly, and by
extremely large amounts of money.
Some even doubling or tripling in
price in what seemed like over night.
But now the housing boom hay-day is
over and many homeowners are finding
themselves struggling to get by. Orange
County is one of the California cities
that is having the hardest time coping
with the downturn.
These homeowners (for the most part)
spend a tremendous amount of their
income on housing,
and some are now struggling to pay
their increased mortgage payments.
While some are struggling though,
some are hardly fazed by the slowing
market. It seems a market that is
home to beautiful Southern California
abodes is having mixed reactions to
our slowing market.
“Five years of housing boom
accentuated financial divisions among
homeowners, with some paying much
of their income on housing and others
hardly any at all. At least, that's
what recent government data suggest.
Overall, Orange County owners spent
25.4 percent of their income on housing
in 2005, up from 22.9 percent in 2000,
according to the U.S. Census Bureau.”
But on the outskirts of these “average”
figures is a wide range of data from
all across the board. Ranging from
people who do not even have a mortgage
anymore, because the dutifully paid
it off, to people who owe more on
their home than it is even worth.
“For example, last year 21.6
percent of all owners
had no mortgage payment at all, new
census figures show. That's up from
16.9 percent in 2000.”
But with this increase in people not
having a mortgage
comes an increase in people spending
more of heir income on housing costs.
“Households earning less than
$75,000 a year account for 43 percent
of all owners. Of those with mortgages,
about four out of five spend more
than 30 percent of their income on
housing.”
A spike in refinancing has helped
people to keep their mortgage costs
down though, since mortgage rates
have been at historic low, even though
we have seen small month-over-month
increases.
Despite all of this bad news, many
analysts agree that the majority of
homeowners are keeping their heads
well above water.
“Christopher Cagan, a research
director with First American Real
Estate Solutions in Santa Ana,
said most owners are on solid financial
ground and that's good for the economy.”
“‘The popular image is
of Americans taking out every last
dollar from their houses and treating
them like ATMs to buy flat-screen
TVs,’ Cagan said. ‘Maybe
some people are like that, but that's
not the majority.’”
Of course their will be some strain
on the economy as the housing market
continues to cool, but things should
remain pretty stable for the most
part.