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.