Balboa Island’s real estate market

Balboa Island’s real estate market, spread across three artificial islands in Newport Harbor, faced many of the same woes as the larger Orange County housing market in the month of April 2011. Despite generally favorable economic conditions, such as historically low interest rates, relatively low sales prices, and falling unemployment, the local real estate market remains in a rut. Balboa Island is a largely residential and upscale section of Orange County, and consequently saw a moderate decline in median prices over the last few months. Although the overall median sales price of Orange County residential properties remained steady in April 2011, the subsection of upscale residential sales actually fell in terms of median price. Despite this fall in median price, the volume of properties sold in Orange County fell from both month ago and year ago levels. According to statistics provided by DataQuick, there were approximately seven percent fewer home sales in April 2011 compared to April 2010, and about five percent less compared to March 2011. The anemic nature of the local housing market is especially disturbing when placed in its historical context. In years past, the month of April has been a strong one for housing, although the recession seems to have changed many conventions of local and national real estate. Southern California in general suffered losses as well in April, marking its worst performance in three years and seeing declines in both sales volume and median price.

These indicators seem to point towards a failing recovery on Balboa Island and across Orange County. According to statistics from the California Association of Realtors, pending sales in Orange County were down by more than seven percent compared to year ago levels. Additionally, an economic forecast from California State Fullerton indicated that the median sales price was unlikely to increase by more than five percent in the remainder of the calendar year. The local housing market continued to be flooded by distressed properties as well – more than forty percent of homes on the market in May were short sales or bank foreclosures. While foreclosures dropped off somewhat in recent months this is best understood as a result of backlogs in processing and the fallout from the robo signing scandal.