THE ORANGE COUNTY REGISTER
Homebuying in Orange County is running at a pace last seen in 2006 – just about the end of the “Good Old Days.”
Don’t expect prices to get anywhere near as exciting – if some recent forecasts are to be believed.
For example, value-tracker Veros Real Estate Solutions predicts that Orange County home values will squeak out a tiny gain – 0.7 percent — by June 2013.
Eric Fox of Santa Ana-based Veros notes that local inventory of homes for sale is down approximately 35 percent from the peak, “which is going to allow pricing to begin to trickle upwards. However, before significant price increases can occur, inventory must decline some more. Affordability, although better than it has been in a long time, is still pricey compared to many other markets which are recovering more significantly at this time.”
Orange County will fare slightly better than the national market, by Veros’ forecast. U.S. values will fall 0.26 percent in a year, by Veros’ estimates.
“Overall, the gradual recovery in the housing market is forecast to continue from the previous quarter,” Fox said. “We are definitely seeing a flattening for the first time in years at a national level instead of overall depreciation, which is a positive sign that the anticipated recovery is upon us.”
Phoenix is the major market with Veros’ highest projected gain in the coming year, up 6.4 percent. Then comes Boise, up 3.8 percent; Boulder, Colo., up 3.6 percent; Bismark, N.D., up 3.5 percent; and Denver, up 3.3 percent.
The projected five weakest nationwide? Inland California and Nevada markets continue to struggle and make up eight of the 10 bottom markets. Reno, down 5 percent, is seen as the worst in the coming year followed by Fresno, down 4.9 percent; Bakersfield, down 4.7 percent; Modesto, down 4.6 percent; and Stockton, down 4.3 percent.
Another price tracker – Clear Capital – predicts that home prices in Los Angeles and Orange counties should rise 2.6 percent by year’s end.
By this math, Clear Capital found the region’s home prices up 1.5 percent in the June quarter, leaving L.A.-O.C. values up 0.1 percent for the 12-month period.
Again, we see that local values are by no means alone in this meager rebound.
National home prices were up 1.7 percent in the June quarter — U.S. values are also up 1.7 percent for the year — and Clear Capital forecasts another 2.5 percent gain for the U.S. market through the end of the year.
In the 50 biggest markets, Clear Capital found 43 markets with price gains in the June quarter. Columbus, Ohio, led the way with a 13 percent gain in three months. Next came Phoenix (up 8.7 percent); Seattle (up 8.4 percent) and San Jose (up 8.1 percent.) In 2012′s second half, Clear Capital sees price gains in 42 of the Top 50 — with Seattle (up 14.4 percent) and Phoenix (10.4 percent) projected to enjoy the biggest appreciation.
Alex Villacorta of Clear Capital on the nation scene: “June home price trends provided further evidence that housing has turned the corner, with the momentum of the recovery picking up speed. Looking forward over the rest of 2012, we expect to see national, regional, and most metro markets improve by varying degrees. And while it’s encouraging to see broad-based advancements coupled with positive forecasts, we remain cautiously optimistic. The current strength in housing fundamentals remains vulnerable to domestic and global economic challenges. But right now the market is the strongest it’s been since the start of the downturn, and barring a major economic meltdown, we expect to see this organic growth sustain and strengthen through the end of the year.”
Perhaps the most bullish was in Chapman University’s recent Anderson Center for Economic Research forecast. Chapman economists saw the average median price of an existing Orange County house up 2 percent this year, followed by a 7.1 percent leap in 2013.
The Register’s Jeff Collins noted that Chapman said its forecast more reflects a change in the mix of homes that will sell over the next 18 months rather than a big increase in overall home values.
Yet Chapman economists concluded: “The combination of job recovery and high housing affordability is gradually improving housing demand … Over the long-run, pent-up demand for housing in Orange County will lead to broad-based increases in home prices.”