Missing the Trees for the Forest

You’re probably aware of the saying that one can “Miss the Forest for the Trees.” (One can miss the big picture when focusing on the less significant details). 

When reading the columns in O.C. Register’s Marketplace section, however, I have to say that Jonathan Lasner and his colleagues have “Missed the Trees for the Forest.”  That is, they have taken a conglomerate of statistics from all over California to explain the current situation of the local O.C. home market.  Or, they fail to distinguish between North Orange County and South Orange County.  Often, they have focused on all of Orange County’s home market stats and failed to see that it’s the “Trees,” the individual cities with their individual areas that are especially important.

For example, if home prices are dropping drastically in Buena Park, Anaheim, Garden Grove and certain other areas of Orange County, those cities can have a huge impact on the overall stats for Orange County home prices / sales.  If cities in South County are dropping at a faster rate than cities in North County, then the same stats are reported for both North and South counties.  What’s happening in these areas is not necessarily what is happening in Yorba Linda, Anaheim Hills and Brea.  And conversely, what is happening in North Orange County cities is not always the same as what is going on in South County cities.

Additionally, there are areas within cities that are suffering huge home price reductions while other areas within those same cities are enjoying stabilization.  For example, there are some areas in the downtown area of Anaheim that may be experiencing serious price reductions while homes in Anaheim Hills (same city, Anaheim) are stabilizing after experiencing reductions.  There are some areas in Fullerton (e.g. north of Tri-City Park in Parkhurst Place and corner of Bastanchury and State College) where the homes are stabilizing.  Then there are homes in Southwest Fullerton (e.g. near Harbor and Orangethorpe)that are experiencing huge price reductions.  The point is — some neighborhoods and communities hold their value much stronger than others, depending on a variety of factors. 

In conclusion, it is short-sighted to assume that since the overall index for median home prices in all of Orange County is dropping at a certain percent, that all areas of all cities are falling at that same rate.  This is absolutely untrue.  When someone asks my opinion on the “market,” that is a difficult question to answer in a sentence or two.  It really depends on what one means by the “market.”  North County?  Placentia?  Mission Viejo?  South County?  Northeast O.C.?  Don’t be misled by all the numbers you see in the news — what really matters is what is going on with the “Trees.”