House Prices In Orange County

Housing Market Still a Challenge for Both Buyers and Sellers

Hit by a double-dip drop in home prices, sellers face challenges not felt since the great depression. In California, home prices tumbled 8.2 percent in May compared to one year ago.

At the same time, buyers with less-than-stellar credit find it harder to obtain financing. Buyers are also worried that a home may not be a good investment right now. To counter the problem, government-backed programs like Fannie Mae and Freddie Mac are providing incentives to bring buyers back—especially those who plan to live in the home rather than buy it as an investment.

Real estate experts say that both sellers and buyers can still profit in today’s housing market. The key for sellers is to work with a real estate agent to determine what price can be put on a home that will benefit the seller and attract buyers.

Coldwell Banker CEO Jim Gillespie, recently appearing on a CNBC panel discussion on “Housing: Near the Bottom,” said that if a home is priced right it will sell. “There are plenty of buyers out there,” he said. "It’s just a matter of pricing it right and making sure you listen to your professional Realtor.”

But sellers are concerned they may not get the mortgage they want for a new home if they sell the one they’re in. The panel agreed that buyers need better access to credit.

Potential buyers should study mortgage options and be cautious in making sure they can afford the home. They should also consider sharing a home, possibly with other family members.

Renting remains an option, but rents are going up. The regional Consumer Price Index shows that in May, Southern California rents took the biggest jump in two years. Rents rose 1.7 percent in May over one year ago—and they are expected to rise further.

Both the seller and buyer are key to getting the real estate market moving again. The market appears to have bottomed out, but a surplus of available homes remains a problem.

Foreign investors with cash have taken some of the inventory off the market. That could help bolster the market, but it can also prevent people who need a home from scoring the best deals. To help in the situation, Fannie Mae, which has been acquiring thousands of foreclosed properties, is offering qualified homebuyers up to 3.5 percent of the final sales price to put toward closing costs. In addition, selling agents representing buyers who plan to occupy the home can receive a $1,200 bonus. The incentive must be requested at the initial offer.

Irvine Housing Blog | House Estate World

For the last couple of months, I have been commenting on the surprising collapse of local demand and the lack of a spring rally. Today, I am going to feature the comments of others noting the ominous signs for the Orange County and Irvine housing markets.

June 17, 2011

Home prices in Orange County will fall about 4 percent next year, Chapman University economists said Thursday, and will not recover any time soon.

The housing market is being buffeted by "countervailing forces'' of supply and demand, said Esmael Adibi, director of the Anderson Center for Economic Research at Chapman.

" We're not building many new homes , which is good news in terms of home prices, but we're still dealing with a large supply of distressed properties ,'' Adibi said.

Adibi and Chapman President James Doti, who is also the Donald Bren Distinguished Chair of Business and Economics at the school, released their economic forecast to a gathering of business and community leaders in Costa Mesa.

Related: Sales Down Nearly 20% in O.C.

One "big drag'' on the local economy, the economists said, is the scaling down of government spending, which has led to layoffs.

Meanwhile, Orange County's 8.6 percent unemployment rate , which is already considerably better than the state's, will continue to improve, with job creation gaining momentum by year's end, Adibi said.

Job growth nationally could reach 1.4 percent, bringing the unemployment rate down to 7.5 by the end of 2012, Adibi said. Countywide job growth could reach 2.2 percent in 2012, he said.

Orange County should add 20,000 jobs this year and another 30,000 next year, Adibi said. Unemployment in Orange County fell from 9.1 percent in March to 8.6 percent in April, the latest figures available. California's unemployment rate is nearly 12 percent.

Most of the added jobs expected in Orange County will be white collar positions—attorneys, accountants, and computer programmers, Adibi said. Private education organizations also will do strong hiring "because people are retooling and going back to school,'' he said, and the healthcare industry will also grow as the population ages and demand increases.

Manufacturing will experience some recovery, particularly in high-tech as business invest more on equipment, Adibi said.

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