No Bubble Pop Yet In Orange County, Say Realtors

Written by Posted On Monday, 21 February 2005 16:00

If buyers are hoping for a break in housing prices in Orange County, they are going to be disappointed, say local Realtors.

"Situated south of Los Angeles County and north of San Diego County, Orange County is a bedroom-business-tourist county famous for its beaches, its weather, and its amusements," says Realtor Fran Bertini . "The northeast side of the county rises into the Santa Ana Mountains, and the southwest side descends to the Pacific Ocean and to about 42 miles of beaches."

Exclaims Realtor Chris Wakim , "Here we go again! For those of you who speculated a drastic decrease in residential property sales and prices... think again! Prices are increasing as I type this "opinion" and will once again result in a mad scramble for anything in Orange County with four walls and a roof. It likely won't be as ridiculous as it was last year however, but it will be similar. Buyers should buy now before summer prices escalate. Sellers should list their property around the beginning of April."

The reason is location. "Orange County (The "OC") is located between Los Angeles and San Diego, along the Pacific Ocean, and stretching inland about 20 miles," says Wakim. "It is home to the original Disneyland, the Anaheim Angeles baseball team, excellent colleges (University of California at Irvine, Chapman University, California State University at Fullerton), the famous Laguna Beach "Pageant of the Masters" and some of the most beautiful beaches in the world."

"For buyers who have been waiting "for the bubble to burst," it's not looking very hopeful," says Realtor Vicki Lloyd . "For the beginning of the year, it is starting to look a lot like last year, but with higher prices. County-wide, our inventory levels have fallen back to less than two months supply, and well-priced homes are again selling within days of coming on the market."

Lloyd explains, "I recently attended another market forecast presentation, prepared and researched by a local real estate economist. I have heard his predictions for the last 10 years, and found him to be quite accurate, even when our market was declining! Although a number of "gurus" have predicted a leveling off, or slight decline in local home prices, he is confident that we will continue to see significant appreciation in Orange County this year -- probably around another 15 percent. The reasons he provided were solid:

  • The national economy is improving and unemployment is very low. Orange County just reported a 2.7 percent unemployment rate, and jobs are distributed over many industries resulting in very little exposure to massive layoffs.

  • There is very little land left to develop, and the processing of plans, obtaining approval for permits, and all the infrastructure fees are both costly and take a long time. The new home builders have not been able to keep up with demand, so there is no excess inventory, and prices of new homes are increasing with each new release.

  • Interest rates are still excellent and not expected to go much over 6.5 percent in the next year.

"It's a really wonderful place to live with mild weather, beautiful beaches close by, and weekend getaways in the desert, or mountain resorts available within a two-hour drive!"

She advises, "For first-time buyers, I strongly recommend doing whatever it takes to get a home now, and not waiting for home prices to decrease. Take a serious look at your personal finances, and if your job is stable, or your income is expected to increase in the future, it may be a good idea to stretch your financial qualifying ability by choosing one of the adjustable rate mortgages. You can get a lower interest rate by taking a 3-year or 5-year ARM, which will keep your payments lower during that time period."

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