2019 Forecast Orange County, CA and Beyond
February 01, 2019
Due to what happened in 2018, housing market began to shift from a 6-7 year seller’s market. 2018 started with low inventory, low interest rates, and numerous offers. Then the market shifted as interest rates rose, demand lowered, and inventory took off. Autumn market inventory continued rising. Demand continued to lower. Mid-November the expected market time rose over 120 days, which is officially a slight buyer’s market. Over the year homes appreciated 5% coupled with an increase of a little more 1% interest rates and buyer’s payments increased more than 20% for the same home that they were looking at the year prior; this is the reason for the slow down… affordability.
Closed sales in 2018 were down 8% compared to 2017.
2019 Orange County Forecast
• Slight rise in distressed inventory (not a lot, but more. Good opportunity help borrower’s with arm loans).
• Over realistic, overpriced sellers (realtor partners need to price houses appropriately in order to sale the home, not have it listed for extended lengths of time).
• Normal housing cycle. Spring is the best, then summer, autumn, then winter (lots of stale inventory all year, real estate coaching will be paramount).
• Increase in homes in the market for Q1 (many will be trying to ride the high of the market from 2018 before it completely cools off, Inventory expected to rise to 9000 homes in OC).
• Appreciation will be stale to start, then lowered at the latter half of the year. (Beginning of the year will be a much stronger refinance market due to the positive equity).
• Luxury market is expected to drastically slow (especially for financing. Cash offers will have a lot of strength during this slow market as they will be in the drivers seat).
• Fewer move up sellers (again due to appreciation slow down).
• Closed sales forecasted to be down 4%-8% (not great to hear for the masses, however with the right insight into the market, there will be plenty of business to be had).
• Many buyers looking/pre-approved but stale due to high prices of the 2018 market and varying interest rates (buyers will know they are in the driving seat, remind buyers that homes always appreciate in the long run and now that they have the market in their favor they should be taking advantage of it).
• Interest rates will rise to around 5.2% for the year. (Now is a great time to act for purchasing and refinancing, throughout the year borrowers should be reminded that 5% + or – is actually a very low interest rate compared to historical interest rates).