The median home price in OC is $555,000.
The O.C. - home to B1 Bob Dornan, the Nixon Library, John Wayne Airport, Kevin Drum, and Fox Teen Dramas - isn't quite what people think it is. I began my blogging career during my mercifully brief tenure there. I lived in Laguna Beach for most of that time, an odd oasis in an odd place. But, despite its history and reputation, the O.C. is not the uniformly rich white county one might think. Large chunks of it are home to immigrant and minority communities (primarily Vietnamese and Hispanic). Quite clearly large chunks of the population are not in the "$550,000 house-buying crowd."
One reason for the high prices in California generally is the stickyness of the housing market. While the anti-tax measure Prop. 13 is widely talked about as a tax rebellion, its provisions put a serious damper on mobility, and seriously reduce the availability of older (in California, older=coastal, mostly) properties. Prop. 13 restricted the growth in property tax levies on existing homeowners, meaning that if you sell and move within California your property taxes are going to increase drastically.
Laguna Beach, aside from being somewhat out of step culturally and politically with the rest of Orange County, was representative of the consequences of Prop. 13. There were numerous families who were "income poor/property rich." That is, they were rich only in terms of assets, but their only asset was their home. It wasn't cheap to rent there, but relative to current buying prices (median single family home $1.7 million, median condo/townhome $788K) it was incredibly cheap . And, it's important to note, while there are some pretty elaborate homes, most of the housing stock is 50s era-ish and fairly modest.
Anyway, I'm meandering here and perhaps I don't actually have a point. To sum up:
O.C. - Not what you think!
Laguna Beach - property rich/income poor!
Housing bubble? shhhh!!
Prop. 13 - wack!