As reported by the OC REGISTER

Orange County, the nation’s best housing market? But, yes, that’s what the Federal Housing Finance Agency’s freshest data shows.

Of course, nothing FHFA does — that’s the old “OFHEA” math for the serious home-stats fan — is ever simple. So hold on, but here’s what FHFA’s fourth-quarter report says:

  • Orange County home values — by one FHFA index that derives values from purchase records — rose 6.38% in 2009.
  • That’s tops among the 25 major U.S. markets tracked by this methodology. Yes, O.C. is No. 1! We’re followed by Denver (+5.48%); Houston (+3.71%); and Pittsburgh (+3.26%).
  • By the way, that 2009 gain for O.C. still left local prices off 10.15% for the past five years, according to this math.
  • FHFA also tracks home prices with an index that includes both purchase info as well as values from appraisals included mortgage refinancings. That index shows O.C. home prices down 2.18% in 2009. That ranked O.C. 111th out of 299 markets tracked nationwide.
  • Curiously — even with the 2009 variances — this purchase/appraisal index shows O.C. values off 10.07% in five years.

Critics question the FHFA math because their underlying data comes from the files of government-backed, mortgage giants Fannie Mae and Freddie Mac that FHFA regulates. Loans that Fannie and Freddie control are typically for smaller dollars, so the FHFA index may miss some of their activity in the higher-priced (and currently weakened) slice of the local market.

Still, it’s curious that either way you look at FHFA math … Orange County’s long-suffering housing market ended 2009 as an above-average performer — maybe even the top dog.

PS: How does FHFA index — it’s not a median — work? It’s “a weighted, repeat-sales index, meaning that it measures average price changes in repeat sales or refinancings on the same properties. This information is obtained by reviewing repeat mortgage transactions on single-family properties whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac since January 1975. The HPI is updated each quarter as additional mortgages are purchased or securitized by Fannie Mae and Freddie Mac. The new mortgage acquisitions are used to identify repeat transactions for the most recent quarter and for each quarter since the first quarter of 1975.”

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