Consultant John Burns helps us wrap up Eyeball ‘08, what’s been a two-week long, holiday cornucopia of opinion of how 2008 will play out for local real estate. To read the rest of Eyeball ‘08, CLICK HERE!

Burns, who advises many of the nation’s major builders, has been sour on the O.C. market for sometime. We wondered if watching his clients slash prices and give away land had altered his views …

Eyeball: What’s your outlook for the O.C. housing market for 2008?
Burns: 2008 will be an outstanding buyer’s market, with resales trying to play catch up with the tremendous price decreases the new home builder’s are already offering.

Eyeball: Chances we’ll see a bottom in 2008?
Burns: The odds are pretty good that the new home builders will find a bottom in price because they have already dropped price, net of incentives, more than 20% at most communities. I don’t think the resale market will fall that fast, but it will fall. The areas that will be most affected will be Santa Ana, Anaheim and Garden Grove … where the crazy lending seems to have been craziest, and South County where price appreciation exceeded that of the overall county and a plethora of new home communities has created a large supply of 2-year-old to 5-year-old resale homes with distressed sellers. The South County price correction is already well underway.

Eyeball: What, if any, of the fixes proposed (rates, bailouts, regulation) or in place, will help the most? Read the rest of this entry »

Realtor Bill Nelson joins Eyeball ‘08, our two-week long, holiday cornucopia of opinion of how 2008 will play out for local real estate. The blog’s parade of outlooks ends tomorrow …

It’s not been a fun year for local Realtors, who’ve had a front-row seat for a market turning from hot to cold seemingly overnight. Bill Nelson, ‘07 president of the 14,000-member Pacific West Association of Realtors, was kind enough to tell us what his eyeball is seeing out there …

Eyeball: Your outlook for the O.C. housing market for 2008?
Bill: Homeownership has historically been an excellent long-term investment, providing both equity and tax benefits over time, and we see no change in that outlook. 2007 will be the fifth best housing year on record, despite public apprehension about the real estate market. In fact, 2007 practically mirrors the home sales and price gains experienced in 2002, when consumers were very confident about the market. Realtors believe that investors and first-time buyers taking advantage of today’s market opportunities will bolster both the pace of the market and home values in 2008.

Eyeball: Chances we’ll see a bottom in 2008?
Bill: We believe the market will stabilize in 2008. Pent-up demand, coupled with an abundance of safer mortgage products will lead to market improvements. Further, conditions are ideal for buyers. Prices have moderated and interest rates are approaching 40-year lows. It’s the belief that many economists that foreclosures will slow dramatically by the third quarter of 2008. As that inventory is absorbed, we anticipate stabilization of the market.

Eyeball: What, if any, of the fixes proposed (rates, bailouts, regulation) or in place, will help the most? Read the rest of this entry »

Bank economist Scott Anderson joins Eyeball ‘08, our two-week long, holiday cornucopia of opinion of how 2008 will play out for local real estate. This is part 15 of our 17-part series on the market …

Bankers certainly have plenty of skin in the housing game. So we figured to we needed to know what they’re thinking. Scott Anderson, economist at Wells Fargo Bank, put his eyeball to the Orange County market …

Eyeball: What’s your outlook for the O.C. housing market for 2008?
Scott: The O.C. housing market is becoming more unbalanced by the day. This is evident in the glut of existing home inventories in the County. Unsold existing home inventories in Orange County hit 25.3 months at current sales rates. That is five times the level of inventories found in a “normal” housing market with rising home prices. The final nail in the proverbial coffin was the August and September financial turmoil, which is quickly morphing into a full-blown credit crunch. This caused banks to tighten credit standards even further and extend the tightening into the prime and Alt-A mortgage markets that up until then were virtually untouched by what was unfolding in the sub-prime space. Orange County home sales have dropped nearly 42 percent over the past twelve months through October, and median existing home prices have dropped by 6.4 percent, according the California Association of Realtors.

Eyeball: Chances we’ll see a bottom in 2008?
Scott: I see little chance of a housing bottom in 2008 in Orange County. The first step in any kind of recovery will need to be a firming in existing home sales. To date, all we have seen in the data is continual declines. But even a stabilization in sales won’t be enough to stabilize prices in the O.C. With unsold inventories so high, there will be persistent pressure in 2008 for median home prices to fall further. Another 10 percent decline in median home prices over the next twelve months is not out of the question. If the U.S. and California economies fall into recession, the housing bottom could be pushed well into 2009 or even 2010.

Eyeball: What, if any, of the fixes proposed (rates, bailouts, regulation) or in place, will help the most? Read the rest of this entry »

Realtor/economist Gary Watts plays Eyeball ‘08, our two-week long, holiday cornucopia of opinion of how 2008 will play out for local real estate. Every day at noon, we’ll offer up a new market watcher’s thoughts on the market …

Watts’ forecasts of the O.C. housing market always draw emotion, no matter what your own outlook has been. While he saw the recent boom coming he missed the hints of the current slowdown. We asked the Mission Viejo real estate agent for his thoughts …

Eyeball: What’s your outlook for the O.C. housing market?
Gary: My forecast for 2007 appears to have been too rosy! Everything was in place: low interest rates, increase in wages, growing economy, low unemployment and the best selection of housing in 10 years at great prices . . . but the buyers remained on the sidelines. I was surprised by the financial crisis – especially since subprime makes up only 5% of the entire loan market while the Alt-A market (better than sub-prime but less than prime) makes up only 8%. 2008 could be a surprising year.

Eyeball: Chances we’ll see a bottom in 2008?
Gary: The first question I ask my Realtor audience is: “how many of you have qualified buyers waiting to buy?” Almost everyone’s hand shoots up immediately. This is called pent-up demand. As soon as the “fence-sitting” buyers begin to believe the bottom is near, they will once again enter the housing market. Not in a big way, but a way that will show a beginning trend towards a normal market.

Eyeball: What, if any, of the fixes proposed (rates, bailouts, regulation) or in place, will help the most? Read the rest of this entry »

Veronica Hicks of CondosEtc. visits Eyeball ‘08, our two-week long, holiday cornucopia of opinion of how 2008 will play out for local real estate. (We originally goofed on her first name, sorry! Corrected 1/4/08) Every day at noon, we’ll offer up a new market watcher’s thoughts on the market …

No market niche has been harder hit than O.C. condos, which suffer from a loss of easy-money loans available for this segment’s common first-time borrower. Hicks, who specializes in condo shoppers, give us her view of this world …

Eyeball: What is your outlook for the O.C. condo market for 2008?
Veronica: 2008 is going to be a great buyers market. For sellers looking to trade up, even though they are selling with the market down a bit, they are going to be able to buy a home at a better price than they would in a seller’s market. For sellers looking to cash out, now is not the time. I believe that the condo market is going to remain a tough market through 2008, with prices on condos on a downward trend compared to what we have seen in the last few years. Sellers are definitely going to have to upgrade just to be competitive. There has been a shift in the mix of condo sales. There is an increase in the percentage of higher-priced condos in the sales mix but the “entry-level” priced condos are down because of the difficulty in getting a loan with a higher loan to value ratio. Those loan products just aren’t available anymore. Condos, when priced right and marketed properly, are still moving. They may be moving a bit slower and sellers are making more concessions, but there are buyers out there. Especially investors.

Eyeball: Chances we will see a bottom in 2008?
Veronica: Right now there is over nine months of inventory on the market, and if we see more short sales and (bank-owned) REOs on the market … just the inventory levels would suggest that it will take more than a year to correct … It would be great to see a bottom toward the end of the 2008, but I believe it is going to take more time that. I believe the biggest factor in the recovery is the effect of the foreclosures on the condo market because of the sheer volume of short sales and REOs. Many people are simply upside down and looking for alternatives – even at the risk of ruining their credit. Two, a lot of unfinished developer product that is going to need to be sold or leased. There are 500 units on Jamboree in Irvine alone to be completed soon, a significant number in Anaheim, and smaller projects all over. If developers offer incentives that resellers can’t match, that is going to have a negative impact on the 2008 resale market. And last, but certainly not least, is the limited options that borrowers have with small down payments. Tougher credit approval guidelines, the tightening of the lending criteria, and fewer loan products for these consumers is going to put a lot of pressure on the buyer pool.

Eyeball: What, if any, of the fixes proposed (rates, bailouts, regulation) or in place, will help the most? Read the rest of this entry »

Economist Alan Nevin chats with Eyeball ‘08, our two-week long, holiday cornucopia of opinion of how 2008 will play out for local real estate. To read more of what will grow to a 17-part outlook, CLICK HERE!

It’s not been fun for local builders, who’ve had to slash prices just to lure in a vastly shrunken group of home shoppers. Nevin is a private economist who also serves as chief economist for the California Building Industry Association. We caught him as he was leaving for Europe …

Eyeball: What’s your outlook for the O.C. housing market for 2008?
Alan: There will be no change in the O.C. housing market in 2008; and no price movement.

Eyeball: Chances we’ll see a bottom in 2008?
Alan: The market will bottom out in late 2008.

Eyeball: What, if any, of the fixes proposed (rates, bailouts, regulation) or in place, will help the most? Read the rest of this entry »