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Economic forecast for 2009 in Orange County

by Ashlie DuCros

See what the economic expert Gary Watts is saying about the future of Orange County real estate...

For 2009:

  • Delinquent December tax bills should give us a peek into potential problem properties.
  • It will be early January before we know the full impact of the latest bailout
  • The housing market below $250,000 has most likely reached the bottom
  • Prices now in the $350,000 range are close to the bottom
  • The rest of the housing market still must suffer a restructuring of price levels
  • Expect foreclosures and short sales to dominate the market through 2010
  • Listing inventory should rise due to the large number of foreclosures set to enter the market

The Light in the Tunnel:

  • The credit conditions should greatly improve, bringing more buyers into the market place
  • Demand for properties will continue to be higher than the past three years
  • American households have $7.4 trillion in checking, savings, and money market funds
  • Americans have $4.1 trillion stashed in Treasury bills and other bonds
  • This total of $11.5 trillion could pay off every home mortgage in America!
  • Investors have "parked" $3.5 trillion in money market funds and it has to eventually move someplace. Hopefully, a large chunk goes into real estate lending
  • Most lenders will recover 70% of their outstanding loan balances through repossessing homes and then reselling them. If not, they can sell them off to the Treasury at auction at the current rate of "x" cents on the dollar (unknown at this point)
  • Price declines have allowed first-time buyers back into the real estate market
  • Pent-up demand from buyers, who have been "fence-sitting" for the past couple of years are now re-entering the housing market, should help reduce our current housing supply
  • The U.S. income this year will be $14 trillion, while global income will be $53 trillion
  • The U.S. economy earns $26 billion every day and, even with loan write-downs in the hundreds of billions, it will represent less than 1/2 of 1% of the combined assets of all U.S. households and non-financial corportations

Orange County:

  • It has 4 of the top 20 income-earning cities (NB, YL, IR, MV) in America
  • It has the 5th lowest unemployment rate in the State and job growth is projected to grow next year at a rate of 1% - adding 14,000 new jobs
  • There are 94,000 small-business employers, of which 62% have fewer than 5 workers and 95% employ fewer 50 people - leading to stability through diversity
  • There are 8 billionaires who call this county home
  • This county ranks 4th in the nation with 315,396 millionaires
  • Rents are up 4.5% (June to June), making OC the 6th highest rental market in the U.S.

If you would like a copy of this full article, please email me at ashlie.ducros@mailpcr.com

We are here to assist you in making the right choice in Real Esate! 

Sources: OC Business Journal, WSJ, Federal Reserve, World Wealth Report, U.S. Census, EDD, REIS Inc.

What does this $700 Billion Bail out mean to you?

by Ashlie DuCros

Emergency Economic

Stabilization Act of 2008

Troubled Assets Relief Program

 

With the economy on the brink and elections looming, Congress approved an unprecedented $700 billion government bailout of the battered financial industry on Friday. Approved by a wide margin the measure passed by 92 votes, 263 to 171. Passing the bill was the result of strong lobbying on the part of the White House and other supporters of the bill all week, following the House defeat of a similar measure last Monday – a defeat that shocked the markets and congressional leaders on both sides.

The legislation, which would allow the Treasury Secretary to purchase as much as $700 billion in troubled assets in a bid to kick-start lending, would usher in one of the most far-reaching interventions in the economy since the Great Depression. The law gives the Treasury $250 billion immediately, then requires the President to certify that an additional $100 billion in funds are needed, and finally $350 billion are subject to Congressional approval. The Secretary of the Treasury may use the fund to buy residential and commercial mortgage loans, credit card securitizations, auto loans and other financial assets for which there is no current market. Companies that sell their bad assets to the government must provide warrants so that tax payers will benefit from the future growth of the companies. The bill also supports homeowners at risk of foreclosure by giving the government more say in how  loans for troubled borrowers are modified so people can stay in their homes.

The House debate began on the heels of two market-moving events: a worse-than-expected monthly jobs number; and a surprise merger announcement between Wachovia and Wells Fargo. For the past two weeks, lending between banks and between banks and businesses has gotten considerably more expensive. Small businesses are having trouble getting loans. As of Friday, one key measure showed that banks were hoarding cash rather than loaning it.

Investors have come to the realization that the Bush Administration’s $700 billion rescue plan will take time to have an effect. But the passage of the bailout package, billionaire investor Warren Buffet’s investment last week in General Electric Co. and even a skirmish between Wells Fargo and Citigroup, Inc. over control of Wachovia Corp. are all positive signs for the economy.

What Does This Mean for Buyers? For Sellers?

Now is a VERY attractive time for Buyers!

LOW RATES = LOW PAYMENTS

Sellers are seeing offers & price declines have slowed.

- Great Deals in the Marketplace

- Low Down Payment Programs

- First-time Homebuyer Programs

- Low Interest Rates

- Affordable Monthly Payments

**Call us today to find out how you can make this economic situation work for you!**

Real Estate Broker, California Department of Real Estate #01050210

Ashlie DuCros

Direct: 714-743-9778

Ashlie.Ducros@mailpcr.com

www.ashlieducros.com

 

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Ashlie DuCros & Associates
Coldwell Banker Previews Global Luxury
21580 Yorba Linda Blvd.
Yorba Linda CA 92887
714-743-9778
Fax: 714-849-5489