Do not expect property values to increase any time soon. If you are newlyweds, or first time home buyers, than this is exceptional news for you and your family. As a professional and member of the National Association of Realtor's I have access to all of the properties on the market in California. The market is dominated by bank owned properties (REO) and investment type properties(FLIP). The sad but true story is that in today's market, more houses are being foreclosed on than being sold by traditional standard avenues. It is a buyers market, meaning that there is an abundant supply of properties available and not enough people qualifying for home loans. This factor coincides with the unemployment rate in California as well as traditional lending institutions restructuring and reanalyzing the factors in which they qualify borrowers. If you are in the market please take your time. Prices will continue to idle at the current market value and depending on location some areas are due to see a decrease. My other suggestion would be to seek out recently remodeled homes or look for turnkey advertisement. This is sure to be the best bang for your buck. Investors are taking advantage of the current market situation by supplying a move in ready phenomenal product at a competitive price.
Good luck i hope this helped
The other factor is the sheer volume of homes in default currently and already bank owned but not on the market yet. These will keep the market flat for at least a few years.
Be careful listening to the media and some reports that the sales are up and demand is driving prices up...that is just the manipulation being made by the banks slowing foreclosures in the last 12 months, and trickling out REO inventory. Look at the local numbers...
California Association of Realtors shows Ditressed Sales to Total Sales in Orange County at 41% in the third quarter of this year and rising. And in November 2009 ALONE there were 5,559 trustee sales in Orange County, 248 of which were for one million dollars or more. Considering that this is but a fraction of homes compared to the surrounding areas is a good thing...but barely...as Orange County has typically been higher priced versus Riverside and San Bernardino Counties, but the number show a HUGE increase in defaults in the higher priced homes this year.
Next year trustee sales, short sales and REOs -- specifically in Orange County (but everywhere in California) will be dominated by higher median priced properties than in 2009. This will raise the median home price, but not be an indicator of market improvement. It just means that the market will be flat longer, and higher priced homes will be reduced in value.
To sum up...Orange County real estate (just like all real estate) will increase in value over time...just be prepared for the long haul cause it is gonna be more than a few years!
Certified Mortgage Planner
Financial Literacy Educator
Over time.....prices will go up. We've gone through so many peaks and valleys....but over the years prices have increased historically and will continue to do so. Inflation will account for this.
But....I do think we will see a slow down in volume of sales in the late spring when the tax credits expire. I think some of the activity we've seen is due to the incentives and there should be a flurry of activity for those who want to use it before it ends. I haven't seen anyone using the $6500 expanded credit....but I'm sure there are some who are. Real Estate is an emotion driven market.....and the crazy multiple-offer market we are seeing right now shows some of that.
What I'm not sure is what prices will do when the activity slows down. Over the past 6 months I'm seeing more and more equity sellers coming back into the market, and they want their price. If they are not in destressed....they can wait. So while the activity slows down, we'll have to see what that does to prices.
From your profile you are in Torrance....are you considering a move to Orange County? I'd be happy to send you some listings which show a variety to get you started with? Let me know if I can help.
Hope that helps.
The answer to the question is this: If you buy today, and own the property for more than 5 years, it will go up, at least keeping up with inflation. That's why the property above is now worth a good 15 x what I paid for it.