Lynne Tillman remembers it happening sometime after the tour of the $350,000 homes in Tustin. Maybe it was the pressure of the move or seeing so many different houses all in one day, or just dealing with the prices that seemed . . . so high .
"Whatever the reason, this poor woman I was showing houses to, this very dear person who seemed so nice and so eager to move here . . . well, she just broke down in tears," Tillman recalled. "She just s at there sobbing. I felt so helpless."
A real estate agent for almost nine years in one of the hottest--not to mention one of the most expensive--housing markets in the United States, Tillman and her counterparts in Orange County are getting used to this sort of thing. Not that it happens a lot, but it is happening.
"It used to be enough to just be a good agent and to know the market," she says, "but now, it's getting so that you have to be a little bit of family counselor and psychologist, too."
So it is in the Orange County real estate market--one so hot and volatile that it is reducing people to tears. Spurred by heavy demand and the lack of "affordable" housing, this is a market where the median sale price of a single-family home has skyrocketed to almost $169,000.
And although the median price may vary widely from one part of Orange County to another, prices nevertheless have reached the point where seven out of 10 county residents can no longer afford to buy in their own area, according to a recent survey.
As if anyone here needed reminding, the latest statistics from the National Assn. of Realtors show Orange County ranking as the third-most-expensive housing market in the country, following only New York and Boston, in that order.
If all this is nothing new to most Orange County residents, it is often enough to send newcomers packing for the return trip to Des Moines, where $169,000 will buy a comfortable farmhouse on five wooded acres, as opposed to a 1,200-square-foot town house in Newport Beach.
The indicators of this feverish seller's market have become almost legendary across the United States. At new developments, grown men and women camp under the stars outside real estate offices for days just for the privilege of bidding the asking price on houses that are not even built yet.
Lotteries are held to determine who can buy homes in new, planned communities. And in the fast-moving resale market, things aren't much better for the beleaguered buyer. Sellers often find themselves with three and four competing bids, and it is not uncommon for houses to go for more than the asking price.
So explosive is the market that real estate agents often caution that if a house has not sold within a week, there may be something wrong with it. Some houses in the $250,000 range, in fact, sell in hours, not days. And many buyers consider that a bargain.
All this is good news, of course, for those Orange County residents who already own homes, are selling them or have been in the market for some time. A house that cost less than $100,000 a decade ago can now fetch three times that much, leaving the seller with a nice nest egg of equity.
But for first-time buyers here--such as the housewife who sobbed like a child, who turned out to be from New Jersey--or the thousands of executives who are transferred into the county every year, house-hunting can become one long nightmare that starts with the initial price shock-- $200,000 for this? --and ends when the first mortgage payment is due.
And there is more that just price shock. Outsiders are often turned off by the idea of planned tract communities where every fourth house looks the same and where lots are so small that a front lawn can be covered with your average hallway throw rug. After all, who ever heard of a zero lot line in Kansas?
"A lot of people come down here already owning an acre or two, and they see homes on tiny little lots for twice or 2 1/2 times the money," says Pat McCurdy, a real estate agent with Century 21's Irvine office. "If you went to Denver or Seattle, for $150,000 you can get a nice house in a nice section with a large lot, while in Irvine you can't touch a detached home for much less than $150,000. You pay all this money and some people think all the houses look alike."
Consider, for example, the case of Terry and Betsy Van Noy. They are leaving the comfortable confines of Omaha and their 4,000-square-foot, five-bedroom, five-bath home (complete with finished basement recreation room with fireplace, pool and table tennis tables) on a half-acre, for an equally comfortable but very much smaller house in Anaheim Hills.
"We weren't too shocked by the prices, because we had heard things were a little crazy out here," says Van Noy, who will become western division director for group sales for Mutual of Omaha. "But we weren't fully prepared for how small the places would be. In some of the neighborhoods, the houses are so close together that you can almost walk from roof to roof."