Home Prices Startle Newcomers
Diane Larson’s house troubles started, strangely enough, when her husband was offered a promotion.
In the Houston area, the couple live in a two-story, four-bedroom home bought for just $92,000 that has room to spare for them and their two children. The family’s three dogs frolic in their 5,400-square-foot backyard. But the new aerospace-industry job means moving to Orange County.
For weeks, the couple have combed through listings in Huntington Beach, looking for an acceptable substitute for their dream home. Instead, they find matchbox-sized houses surrounded by pencil-thin strips of grass, carrying $200,000 price tags.
Larson dug up a few prospects she could live with, but for about $250,000--too much for their budget, even with the raise her husband expects.
“His job is supposed to be a step up, but it seems like a step backward,” Larson said. “It’s almost triple the price for half the property. It’s kind of insane.”
Orange County’s soaring home prices may be a boon for sellers and a credit to the local economy, but they are forcing buyers to settle for less, to rent or to forsake these parts entirely.
Sticker shock is rampant, even among longtime Southland residents trying to move within the region.
Terri Avery wants to exchange her two-bedroom house in Glendora for a larger home in upscale Huntington Harbour, shrinking the commute time to her office in Newport Beach and enabling her daughter to enroll in an Orange County school.
She has offered the list price for two homes--as much as $100,000 more than the $167,000 price of her current home. But she has been outbid by wide margins.
“It seems like you can’t touch anything there for less than $300,000 to $400,000,” she said of her target area--within Huntington Beach.
Prices are rising so fast that recent buyers say if they had waited a few months longer, they could not have afforded their homes.
After years of renting in Costa Mesa, first-time homeowner Jim Weisinger bought his three-bedroom home in Santa Ana for $177,000 about a year ago, just ahead of the recent price surge.
“Jeez, the houses around us are selling for $240,000 now,” he said. “It would have been too much for us.”
Out-of-state executives used to pools, yards and the best of neighborhoods have to make compromises to resettle in Orange County, relocation experts say.
“They want Irvine,” said Judy Slack, director of corporate relocations for Prudential California Realty, Southern California. “But they’re settling for Rancho Santa Margarita, the foothills communities and Mission Viejo.”
Even a 50% increase in income could not cover Ron Hoffer’s jump in housing costs. He exchanged a $220,000 townhouse in Highland Park, Ill., for a $508,000 home in Newport Beach.
“We don’t have as much cash to spend,” said Hoffer, a computer consultant at Tustin-based Intellient Inc. “And we spend it on bills, not restaurants.”
At least Hoffer and his wife, Diane, secured a home in the coastal location they desired with more floor space than their Illinois home. Several acquaintances did not get nearly that much bang for their buck, they said.
Managers at Prudential, which is handling relocations for Rockwell International Corp., Toyota and Beckman Coulter Inc., said many Orange County newcomers have decided to rent, rather than buy, because of burgeoning home prices.
High home prices turned Darren Tabor from would-be buyer into renter. Tabor moved to Orange County in March to take a job as director of operations at Costa Mesa-based GameSpy Industries.
Back in McHenry, Ill., he owned a three-bedroom, 1,800-square-foot home. But even after selling it for $137,000, he still could not afford a replacement here.
He lives with his wife and their two dogs in a three-bedroom apartment in Irvine. He pays $1,795 a month--$500 more than his mortgage payments in Illinois.
Corporations seeking to lure employees to Orange County often have to dangle housing cash to get them here, Prudential’s Slack said.
Some give or advance down-payment money to make sure key employees relocate, often in exchange for their promises to stay for a specified time. Sometimes, companies even prepay part of an employee’s mortgage to keep the monthly obligations lower.
If the Larsons cannot negotiate such a deal, they say they may stay in Houston.
“We’d be giving so much up,” Diane Larson said. “I’m not sure we are going to be able to do it.”
