South Orange County Real Estate 2013 Predictions

OC Real Estate

Sherry Swift

Predicting The 2013 Real Estate Market

OC real estate was a wild roller coaster ride in 2012 and 2013 looks to be at least as exciting. Assuming 2012 trends carry over into 2013 we can say we are in a recovery, a slow one, but a recovery nonetheless.

A number of factors that can affect the housing market in 2013 include:

  • Jobs growth – if it stays at marginal numbers the recovery will take longer and prices will appreciate slower on continually low volume
  • The Fiscal Cliff Effect – the chatter does little to boost up confidence in any recovery and the outcome, whether it’s a major cut in government spending or significant tax cuts, will hamper the recovery a bit.
  • Taxes – what happens to the Bush era tax cuts and other possible tax increases, including if and how much our struggling state increases taxes, will negatively impact buyers ability to purchase a new home by decreasing their ability to save for a down payment and decrease the amount they can dedicate to housing each month.
  • Banking Regulations – the bubble was partially inflated by the government encouraging banks to lower their lending standards to make more people homeowners. Once the bubble burst they made a 180-degree turn and encouraged banks to tighten their lending standards, and thus died the zero down, stated income fog a mirror mortgages. Slowly lending standards are returning to something that almost resembles common sense so we will see if 2013 continues that trend.
  • Rental Rates – if they climb as predicted more people will be interested in becoming homeowners

Let’s take a second to particularly at two of the biggest factors that impact the housing market; interest rates and consumer confidence. Interest rates are a massive effect on how much someone pays per month for their home (a much more important number than the purchase price for most people) and hints towards the willingness of banks to lend money.  Consumer confidence tells us whether people feel comfortable enough in the future to take on such a major purchase.

The chart above tracks the 30 year fixed rate over the past year. As you can see from the chart above interest rates have stayed at record lows. The FED has already pretty much guaranteed that rates won’t be going up significantly in 2013 so this should help the housing market. As long as rates stay low more buyers can afford a mortgage and owning becomes more and more beneficial compared to renting.

South Orange County real estate Sherry Swift consumer confidence

The chart above trends consumer confidence, a major impact factor on the housing market. Consumer confidence sentiment breaks down to two things; how confident people are in the economy today and how they see it in six months. This number trended up nicely this year, if that continues we should see a nice increase in the volume of real estate transactions in 2013.

So what are the experts saying? Most predict values will increase anywhere between 4 to 10 percent next in California. Chapman University always does a fantastic job with their modeling and predictions and they see values increasing 6.8% in Orange County in 2013. This recovery trend is great as long as the volume continues to increase to provide depth to the recovery and sail us into a normal market.

Ok so what do we think will happen in South Orange County real estate? Following the general trend of Orange County real estate we think 2013 will provide an increase of around 7.5% for South Orange County Real Estate. Volume should increase as well as we continue into a real recovery and normal market conditions.  Assuming these predictions are close to accurate 2013 should be a good year for both sellers and buyers. Sellers will be able to get the most value for their home since 2007 and buyers will still be getting good deals at historically low interest rates. Move up buyers benefit on both accounts and investors who can lock in properties in 2013 should be greatly rewarded in the near future.  Trying to time a market is like trying to catch a knife, only more painful, so if you are considering buying or selling a home don’t wait till the “ideal” time get your deal done while the timing is good is always better than waiting for a better time that may not come, especially when your in the fragile early stages of a slow recovery.

If you have any questions feel free to contact me I am here to help.

Sherry Swift

  • Twitter
  • Digg
  • Facebook
  • Technorati
  • Reddit
  • StumbleUpon

Providing the highest level of personal service in South Orange County Real Estate. Helping buyers and sellers in the 949 since 1999! Google

Posted in for buyers, for sellers, OC real estate
One comment on “South Orange County Real Estate 2013 Predictions
  1. cs says:

    bookmarked!!, I like your web site!

1 Pings/Trackbacks for "South Orange County Real Estate 2013 Predictions"
  1. [...] For our complete 2013 real estate market predictions click here [...]

Get our Google Feed
Join us on Twitter
Find us on Google+