Are house prices in Corona going to still fall?

Asked by Drk, Corona, CA Wed Oct 15, 2008

The Economy is getting worse - not a pretty picture. Should I wait another 3 - 4 months?

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7
Steve, , Rohnert Park, CA
Wed Oct 15, 2008
BEST ANSWER
Look at comparable rentals in the area. Are homes selling for > 250 times what you could likely rent if for (monthly)? It probably is -- many areas in CA are still at > 300x. If so, think long and hard before buying, there's no equilibrium between rents and sales price in the area. Either rents will pop way up (seems unlikely, particularly in hard hit California) or home prices will come way down.

A 'normal' rent/price ratio in a typical CA region (i.e., not 90210 or Malibu) is 175x-200x. Nationwide it's around 130x - 140x. Beyond that, still inflated.
1 vote
Robert Chome…, , San Diego, CA
Wed Dec 21, 2011
In my opinion there is more risk at the higher end price of the market, less at the lower end. Prices are already way back to 2002 prices or earlier AND you can lock in 30 year fixed rates in many cases for <4%. If you plan to stay 7-10 years it's probably a good time to go for it, especially if the PITI house payment is around what you pay for rent. But prices could come down a little more, but probably most of the price drops have already happened.
0 votes
Sophia Davis, , Fontana, CA
Tue Dec 20, 2011
Drk, The answer to your question I hope you did wait because the prices did drop, and if you still are in need of purchasing a home please contact me back I would love to help you find a wonderful home at a great price. Unforunatally Corona and Eastvale has many of homes that will become avaliable due to lenders not responding to homeowners. However Eastvale is a great place to raise childeren schools are great and it's still growing. Good luck. Sophia Davis
0 votes
Melissa Shri…, Home Buyer, Corona, CA
Thu Jun 23, 2011
Avoid short sales. Keep an eye on REOs in decent condition. Know what type of
dwelling and target area you want. Get pre approved. Plan on being in it for a longgggg
time.
0 votes
Todd and Chi…, Agent, Irvine, CA
Tue Aug 11, 2009
In reference to Steve's answer, the rent to purchase in Corona (higher end median) is at about 175 to 200. This would seem to indicate that we have reached that equilibrium. Also the median income ratio is at historic lows, again indicating we are at bottom. The wild card, JOBS. Corona is primarily a bedroom community for Orange County and therefore at the mercy of its employment numbers. We are at the highest unemployment rate in over 20 years. If unemployment drop, watch for prices to be stable and "maybe" increase slightly.

My two cents worth.

Oh, take a look at the site below. Does a quick rental analysis.
Web Reference:  http://www.zilpy.com
0 votes
Diana Margala, Agent, Rancho Cucamonga, CA
Wed Oct 15, 2008
Hi Drk:

We all wish there was a crystal ball. There are a lot of factors that effect the prices. What is important is what is your situation. Have you been approved? Do you have the money that is needed for the closing costs and down payment. Is the payment that you have been approved for a comfortable payment for you? Are there homes that will fit your family needs available in the price that you can afford comfortably? Are you planing on staying in the area for the next 5 years? To me these are the important questions when considering purchasing a home. If you aren't planning on moving for a few years and the home that fits your needs is available and affordable then it is the right time for you to purchase. You can begin taking advantages of the tax benefits of home ownership. You don't have to worry if the home you are living in is going to go up in rent or be sold out from under you. You don't have to worry about is the interest rate going up which will effect the afford ability of your purchase. So my question to you is the time right for you? Also you will want to make sure that you have a Realtor who can help you understand what the market is doing in the area that your are interested in purchasing. One who can help you understand what a good and fair offer is for a property and one who will negotiate the best offer for you. I would love to be able to help you. Give me a call and we can discuses a plan that will best suite you and your family.

Diana 909-945-5763
Web Reference:  http://www.DianaM.com
0 votes
Michael Barr…, Agent, Irvine, CA
Wed Oct 15, 2008
Hi Drk. Nobody really knows for sure, but regardless if the interest rates creep up to counter inflation then any further drop will be washed out. If you have neen listening to our next presidential candidates then taxes may increase so now is good time to buy. Homes sales are on the rise and experts economists predict prices to increase next year.

Here is an interesting artlicel published by NAR

Daily Real Estate News | October 8, 2008
Pending Home Sales Up Sharply

Pending home sales activity surged as buyers took advantage of low home prices and affordable interest rates, according to the NATIONAL ASSOCIATION OF
REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in August, jumped 7.4 percent to 93.4 from an upwardly revised reading of 87.0 in July, and is 8.8 percent higher than August 2007 when it stood at 85.8. The index is at the highest level since June 2007 when it stood at 101.4.

Improved Affordability

Lawrence Yun, NAR chief economist, says home buyers were responding to improved affordability. “What we’re seeing is the momentum of people taking advantage of low home prices, with pending home sales up strongly in California, Nevada, Arizona, Florida, Rhode Island, and the Washington, D.C., region,” he says.

“The improvement also reflects the drop in mortgage interest rates after the government takeover of Freddie Mac and Fannie Mae. It’s unclear how much contract activity may be impacted by the credit disruptions on Wall Street, but we’re hopeful most of the increase will translate into closed existing-home sales", adds Yun.

The PHSI in the West surged 18.4 percent to 109.5 in August and remains 37.8 percent above a year ago. In the Northeast the index jumped 8.4 percent to 79.8 and is 2.0 percent higher than August 2007. The index in the Midwest rose 3.6 percent to 84.5 in August and is 6.6 percent above a year ago. In the South, the index increased 2.3 percent to 96.0 but is 2.1 percent below August 2007.

Yun notes the unusual timing of contract activity in August. “Home buyers in July were hampered by overly stringent lending criteria in the months before the government takeover of Fannie and Freddie,” he said. “August shows some unleashing of pent-up demand before the credit crisis accelerated in September.”

He cautioned that the sampling size for pending home sales is smaller than the track on existing-home sales, so there is more volatility in the forward-looking series. “We need to see just how much of this gain holds up,” Yun adds.

NAR President Richard F. Gaylord says despite all the turmoil in world financial markets, home mortgages are available. “The recently enacted economic stimulus package should help housing by gradually freeing the flow of credit," he says.

Yun now expects growth in the U.S. gross domestic product (GDP) to contract for two consecutive quarters, in the fourth quarter of this year and the first quarter of 2009, before expanding in latter part of 2009 as the housing market begins a steady improvement.

Existing-home sales projected to rise next year

Looking at middle-ground assumptions, existing-home sales are forecast at 5.04 million this year and 5.41 million in 2009. Following national declines of 5 to 8 percent in 2008, home prices are projected to increase 2 to 3 percent next year.

New-home sales should total around 503,000 this year and 471,000 in 2009. Housing starts, including multifamily units, are likely to fall 28.2 percent to 973,000 units this year, and come in around 843,000 in 2009 as builders continue to clear the accumulation in inventory.

The 30-year fixed-rate mortgage will probably average 6.1 percent in the fourth quarter and rise gradually to 6.6 percent by the end of 2009. NAR’s housing affordability index is expected to average 18 percentage points higher this year than in 2007.

The unemployment rate is projected to average 6.4 percent in the fourth quarter and then average 6.6 percent in 2009. Inflation, as measured by the Consumer Price Index, is estimated at 4.0 percent for 2008 and 2.0 percent next year. Inflation-adjusted disposable personal income is forecast to grow 1.7 percent this year and 1.0 percent in 2009.

If you are looking for a screaming deal on a home in Corona let me know.

Kind Regards
Michael Barron
Realtor/MBA
First Team Real Estate
(714) 552-6817
michael-barron@sbcglobal.net

You cand find some homes that are listed in corona from my site free of charge
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