The consultants at Real Estate Economics in Irvine say they expect O.C. home prices to fall 1.7% in the next 12 months — and prices could again be appreciating within 18 months. Their latest report suggests that the ailing market is turning and that such a rebound may be evident by mid-2009, based on REE’s own O.C. housing index. REE writes:
- Though the index has been trending in positive market territory (an over-correction), the severity of the short term impact of price-slashed distressed properties, tightened credit and extremely low market psychology will continue to hinder market conditions for the balance of 2008. The over correction will eventually serve to restore buyer confidence.
- Since the market has already reached equilibrium, this further decline reflects a housing market that is in
the process of over correcting, due to the high foreclosure rate. - An over correction is common and lays the foundation for the next cycle. An over correction can continue for years, as it did in the late 1990s.
- Mild price appreciation, within 18 months as foreclosure activity recedes and the credit crisis resolves.
- As for raw land … “Overall upward price pressures will be more apparent in Orange County than in heavily oversupplied outlying real estate markets once national economic and market recoveries take hold.”
- Irvine Co.’s Bren loses $1 billion! Maybe.
- O.C. foreclosure starts plummet amid new law
- Homebuying doubles or more in 17 O.C. ZIPs
- O.C. home inventory lowest since March 2006
- Early Sept. home sales take biggest jump in 5 years
- Gov. vetoes foreclosure help for Calif. renters
- Renters favor Obama on housing issues. Do you?
- Wall St. woes could smack Newport Beach
Some noteworthy local business news …
- When is Sprint’s 4G Internet coming to O.C.?
- Feds seize billionaire Nicholas’ Gulfstream
- Retailer with big store at The Block files for bankruptcy
- O.C. city has most valuable businesses in U.S.
- How to avoid bad doctors
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how can you report the prices wil go up soon, when we are just beginning to deal with the financial market problems, and banks having liquidity problems?
don’t just repeat what an ‘expert’ says without a bit of thinking.
did this person foresee the crash?
you know everyone has one…
Where in the world did they get that 1.7% in 12 months? Sounds pretty optimistic to me. Why not…..2.5% Or maybe 3.14? Hmm, maybe they are picking this number because it sounds nice and low and has a nice ring to it? I have a feeling they have no idea what they are talking about.
I think we’ll be seeing this MORE than this price decline in just next month’s data alone. And I don’t need to be an ‘real estate economic consultant’ to tell you that.
These must be the consultants Ben Bernanke and Henry Paulson are using.
I agree, this is waaaayyyyy too optimistic. The real bad news in the economy, ie unemployment and the worldwide markets tanking is just beginning. We’re in for a decent length recession at minimum. After the data is out for this Xmas spending, I think some eyes will be opened.
I am not much of a believer in the Zillow data, but in some areas of Irvine it is trending up over the last 30 days. Let’s see what inventory day says.
Interesting Bruce…I saw zillow trend up around me as well.
What a bunch of crap. Unless subprime lending or liar loans are comming back, prices have plenty to fall. The median income is no where close to affording houses at current prices. Zillows data is so screwed up, they don’t include tons of sales that should be included which skews the values. Articles like this along with the government intervention with attempting to halt foreclosures will just drag this pain on longer. Let the free market work this thing out so we can move on with our lives.
Throwing money at a burnging house won’t put out the fire. Thanks congress!
# Dina Says:”Throwing money at a burnging house won’t put out the fire. Thanks congress!”
Dina, what do you expect?
These are the same geniuses that got us in the mess to begin with. Ask Congress and Henry Paulson to fix the financial markets is like asking Michael Jackson to babysit your kid.
More predictions. Acting on this could be very risky.
Why not wait till you see normal sales volume AND price appreciation? Is that such a bad thing?
Dina:
People pay their bills on time do not get a break.
People who saved and spent money within their means do not get a break.
People who rent and did not buy a home because they knew they could not afford it do not even get acknowledgment.
People who saved, rent and are hoping to finally buy a home they can afford are not only being ignored but are being challenged by our own government, as they are doing everything they can to hold RE inflated prices up.
Republicans want to help out irresponsible lenders and Dems want to help out irresponsible borrowers.
Welcome to America where the responsible middle class are being ignored… once again.
No McCain, No Obama … screw you both.
qwerty i say, wqerty
Sure, the prices are going to rebound! Great economy, great prices right now (choke). Sure they are so low and cheap now they are just ready so take off!
Glad I sold my house this summer!
sharpster - amen, brother.
If you’re serious about following real estate in Orange County, I recommend Realtor.com. We have an agreement with SoCalMLS to make actual sales data on homes visible within 24 hours after a sale closes through our Find Home Values tool, meaning you’ll have accurate and reliable information on neighborhood trends and prices to use in negotiations with your Realtor when you find a home you’d like to purchase. You’ll also find property details and photos, as well as the transaction’s listing and buyer’s agents. Without accurate information, we think you risk making a poor decision with potentially significant financial consequences. While we recommend buyers and sellers work with a Realtor, we suggest they also visit our site for accurate and relevant information on the Orange County market. (http://beta.realtor.com/search/searchresults.aspx?loc=orange,+ca)
Get real Lanser, you should definitely find another type of employment. Homes have not yet fallen to affordable levels. We can always continue as we have in the past few years, but we will then need another bailout.
I am going to include a message I posted earlier this week.
As a society, I believe it is time to “grow up”. It appears that our local citizens feel that they deserve to live in a home they cannot afford and purchase items with the credit cards that they cannot repay. This is all being done without a basic understanding of mathematics. What is even scarier is that the government continues to borrow in the same manner.
The home prices will continue to drop slowly as everyone begins to “open their eyes” to this horrific mess. Perhaps there should be a stronger push in schools to learn more mathematics.
Let’s get real everyone. It comes down to numbers. Not what you feel you deserve.
REIC’s litany against housing bubble deamons:
“The recovery is a year away, more or less.”
Repeat yearly until correct.
Proper application of this litany will guarantee your reward of the Golden Blazer and admittance into the One-Hundred Million Dollar Closer Club in the Great Brokerage in the Sky.
Truly Clueless “Experts”
Equilibrium? Are you stupid? Seriously. The ONLY reason there aren’t way way more sellers in the marketplace is because prices have dropped so far so fast. Most would-be sellers can’t quite swallow what a monumental mistake they made by not selling earlier. It will take awhile for them to adjust and accept that they “lost” hundreds of thousands of dollars.
First, volume gets back to normal (and it’s not close yet) and then eventually prices stop dropping a year or two later. We still have several years to go on the downside in terms of price. Those who believe otherwise will be proven wrong.
Sorry they forgot to mention in this article they were talking about the OC that exists in the alernate universe. Very funny article to come out on a day like this.
“Since the market has already reached equilibrium”, WTF? Who are these “consultants” signing and dancing with the pads on their knees? One sure thing is they failed economic 101,how much do you need to make per. year to afford the still over inflated SoCal median home price of $500K? And given current economic conditions, can you still walk in a bank and sign the $500K morgate? Come on Lanser, stop posting such self serving bullcrap!
Does anyone know what the average percentage of list price, homes are selling for in Orange County?
As I read the comments many of you have posted I can tell you study the California real estate market with blinders or don’t study the market at all. I know for a fact that Real Estate Economics has market analysis tools that shed more light on the current and future real estate market than any other real estate economics company. The insight they provide is the most valuable information I have ever used. Visit one of their free Webinars this month if you really want to understand what’s going on. Get Educated, it’s Free.