Everybody's thinking it and most people are asking it...is a bubble coming? I can't tell you how frequently I've recently been asked this question. Economists and now mortgage insurance companies alike are saying probably not. There's only a slim chance home prices in Southern California will fall in the next two years. Arch MI found that the overall positive performance of businesses and a limited development of new homes will hold home prices firm. Of all the 100 major metropolitan areas evaluated, Orange County did have the highest risk and, even so, that is only a 4 percent chance that prices will decline in the next 2 years. So for those who say price adjustments are coming, compare that to the 28-year historical average of of 25 percent chance of falling home values.
In fact, Orange County's home prices, up 12 percent in the last 2 years, only ranks 52nd highest out of the 100 studied. This tells us that, despite being targeted for "minimal" risk, it is likely home prices won't be falling for some time. There's still some room to grow compared to Los Angeles and Bay Area markets. Even if values were to drop, it would be nominal. On the flip side, economists are projecting another 4 percent increase over the next year.
If you still don't buy it - if you're someone that thinks we're on the verge of the next big bubble and burst - let's zoom out and take a look at this on a macroeconomic scale. Nationwide the risk of decline is only 5 percent. Consider the nationwide average of a 12.5 percent increase in appreciation over the last 2 years and you'll see this is a very minimal risk, if that. The shortage of inventory across the board has kept the market tight and has led to further appreciation this year. Even recent hikes in interest rates and higher taxes haven't slowed the market.
Simply put, housing markets aren't likely to cool until the economy slows. So unless some unexpected event were to shock us all, it's quite possible housing markets will continue to rise over the next few years.
With seven consecutive years of five-star status in Orange Coast Magazine, The Kurt Real Estate Group is among the elite. No matter where they’ve gone, they’ve set record sales. Whether you’re a buyer, seller, or investor, Kurt and his team work diligently, honestly, and with the utmost professionalism and are passionate about helping you achieve your real estate goals.
Kurt is ranked among the top two percent of Coldwell Banker agents nationwide. Kurt’s experience investing in and flipping homes and his connections with the Hollywood Film Industry give him an unparalleled edge and keen insight into market trends. The opportunity presented to you in working with Kurt is why The Kurt Real Estate Group is recognized as one of the top real estate teams in Orange County.
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"Liz helped us recently with the purchase of a new house and the sale of our old one. She was exceptional throughout both transactions, always on top of things, clearly communicating progress, providing expert advice and support when needed. Liz has a very high real estate IQ and her unique approach to buy/sell strategy delivered results for us that far exceeded expectations. She also made
a potentially painful process, not only easy, but actually fun! We will definitely work with her again.