How much has real estate helped the overall Orange County economic revival? Let’s take one guess with a peek at my latest Big Orange Index, a collection of three dozen benchmarks of the local economy dating back a quarter-century.
Since my economic barometer bottomed in the fourth quarter of 2009, The Big O has risen in 12 out of last 13 quarters. That gain through this past winter has amounted to an overall 18 percent gain in the index – or by my theory, an 18 percent jump the local business climate’s strength.
In that same period, The Big O’s Property Owner Index is up 36 percent. The only other sub-index that gained more – FYI: six niche indexes make up the Big O – was the Boss Index, up 55 percent. (Why are CEOs still so grumpy?)
So, real estate’s bump is no small factor. In the past year, The Big O’s Property Owner Index was up 22 percent. What’s driving this advance? For one, homebuyers snapped up 35,165 Orange County residences in the past year – the fastest pace since 2007. That’s also up 19 percent vs. a year earlier, according to Data-Quick.
Don’t forget lenders who recently have discovered how to lend again. Mortgage making of all sorts in Orange County ran at an estimated $132.5 billion in the past year, Data-Quick says. That’s up 110 percent vs. a year earlier.
There’s even a little hiring going on. The Big O’s dicing of state Employment Development Department jobs data found payrolls in real estate and finance jobs
averaged 163,459 workers in the past year. That’s a 2.5 percent yearly gain for an industry that employs roughly 1-in-9 in the county.
Local builders see these upward patterns – and have jumped back into construction. Chapman University economists estimate the residential building permitting pace was up 21 percent in a year. Note: Homebuilding is still one-third off its recent peak activity in 2006.
Landlords are enjoying an uptick, too. (And renters conversely are not!) Large-complex rents in Orange County averaged $1,528 in the past year – up 4.6 percent vs. a year earlier, according to Real-Facts data.
Real estate’s clout also can be found in The Big O’s “Banker Index” that estimates local collection rates. Orange County residents are paying bills at the best rate since 2008, by my math. One reason: Mortgage defaults in Orange County, measured by Core-Logic, are down 36 percent in a year. Foreclosures, also from Core-Logic, are down 46 percent. The local property tax collection rate – estimated from Orange County Tax collector data – is up slightly in the past year.
An upswing in local property markets – while painful for some, such as renters or house shoppers – is not just welcome relief for those in the property game. The income and wealth created by the current real estate revival is no doubt helping to fuel a pleasant turnabout in the overall Orange County business climate.
Bottom line, Costa Mesa Real Estate and Orange Counties growth go hand in hand and it appears the best is yet to come. Please call me if you are seeking to move up or simply buy your first dream home.
