Home prices across the U.S. are reaching all-time highs, prompting worry over another boom-and-bust scenario like we experienced roughly ten years ago. Yet, what is clear compared to the last extended run of price increases is that there are stronger lending standards than they were before. Incomes and assets must be verified, and a more stringent loan approval process is in place to prevent a repeat performance of the last recession. Further the overall economy is in better shape than it was a decade ago. More jobs are available, unemployment is relatively low and workers have more confidence in their wages and the potential for wage increases. Although there continues an inventory shortage in much of the country, optimism remains high for a successful summer for buying and selling homes.
For the remainder of the year it appears that we will continue to have strong housing prices due to the demand. The real housing crisis is that there is a shortage of housing and particularly affordable housing across the nation in almost all urban areas. This is also true in our own county, Orange County. As for what is at the end of this tunnel is hard to predict. Most economists are cautiously predicting that there could be an adjustment in prices in the future, but not the same scale as the implosion of a decade ago.
In Orange County CA the year over year new listings were down 4.7% for single family homes and 6% for townhouse-condo properties. Pending sales decreased 41.4% for single family homes and 47.2% for townhouse-condo units.
The median sales price was up 6.3% to $680,000 for single family homes and 8.1% to $432,500 for townhouse-condo properties. The supply of inventory remained flat for single family homes and was down 4% for townhouse-condo units.
Source: Pacific West Association of Realtors.