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January 2006 newsletter – OCBuyersMarket.com ORANGE COUNTY HOUSING PRICES BACK NEAR PEAK… The median sales came in at $616,000 for November (the most recent numbers available) and that is just $1,000 shy of August’s record. Early indications forecast that more gains will likely come in when December numbers are available. (Axicom/Dataquick)
SALES VOLUME HAS DECREASED… According to both the LA Times and the OC Register, volume slipped 1.7% in November; the second monthly drop in a row and the lowest level since March. Some analysts see this as a prime indication that the nation’s “highflying housing market is losing altitude.” Numbers released by the National Association of Realtors show that November’s sales of existing homes – single-family, town homes and condominiums, totaled a seasonally adjusted annual rate of 6.97 million units. However, sales were just 0.1% below the level of November 2004. (LA Times)
CALIFORNIA STILL HAS SOME KICK LEFT... California expects to hit 635,000 units sold for 2005. That number will be up 1.8% from 2004, which was also a record breaking year. Leslie Appleton-Young, California Association of Realtors’ chief economist, predicts just a 2% loss in volume for 2006. That’s roughly 14,000 homes spread throughout the state. When you consider there are “boom” areas that do not have the infrastructure and job base that we have here in Southern California, it can be argued that Orange County and outer areas will be less affected than elsewhere in the state. (CAR and LA Times)
WHAT WERE THE ACTUAL NUMBERS… The total number of sales for November was 3,503. That was down 3.1% from October. The median price overall was $616,000. The median price for a single-family resale was steady at $670,000 (up .8% from October and up 16.5% for the year over year November comparison). There were 422 units sold under $400,000. The $400,000 to $500,000 range had sales of 522. The number jumps to 690 for the $500,000 to $600,000 prices and also stayed steady for the $600,000 to $700,000 range at 610. Not surprisingly, the greatest number of sales was the over $700,000 category with 1,244. In fact, if you need over 2,500 square feet of living space the median price is $977,500.
WHAT DOES THE FUTURE HOLD FOR 2006… Wouldn’t it be nice if we all had a crystal ball? Projections run from the ultra conservative UCLA with a forecast of 6% appreciation this year, to Gary Watts, broker and economist, who sees 15% for 2006. Leslie Appleton-Young has projected 10% appreciation. According to the OC Register, we can expect a 5.6% rise in rents which will be spread out geographically. Some areas will have vacancies while others exhibit a tight renters market. INTEREST RATES WILL HOLD THE KEY. In December the Register had a roundtable panel on housing. Part of the discussion was concerning interest rates. If you would like a copy of that article, give me a call. However, rates remain the big question mark. Higher rates will shut down price increases as buyers are simply priced out of the market. Chris Cagan of First American Real Estate Solutions, part of the roundtable suggests we are not in a bubble. Most economists concur, but caution that a leveling out and cooling off period is quickly approaching. Make no mistake; Orange County will continue to lead the country and state in housing on all fronts: affordability issues, volume, pricing, and desirability.
EXPECT MORE FROM ME… I am constantly working to add to my resources that will add to the quality of service to you. We are entering a market where sellers are going to have more competition. The way your property is marketed will make all the difference in the world. Buyers will need expert assistance with negotiations. Every market is tricky, but the upcoming market will be so much so because of conditions. Call me for any updates or additional information. Your referrals are appreciated.
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