Forecast for growth in the OC is Phenomenal!

Regional strengths include: 1) Foreign Trade; the nation’s leading port complex. 2) Fast-growing, high-wage professional jobs, including the nation’s leading center for design and architectural jobs. 3) Tourism and entertainment; 350,000 jobs in the fast-growing film, convention and tourism markets. 4) The nation’s largest manufacturing job base. The fact that we are in for sustained economic growth is part of the affordability issue that confronts all Southern California.

Zero-Down Mortgages Get Harder to Find

It will be increasingly difficult to find a 100% financing for your home in the future. Many lenders are already cutting back on these programs and will require at least a 5% down payment investment in your home purchase. There are still no-down home loans available but they could continue to disappear. Subprime lenders who are not under federal regulation will most likely continue to offer the riskier loans with no down payment or interest only.

Anyone who is waiting for prices to tumble will have a long wait. Many buyers waited for it all of 2006 and were sorely disappointed. It was reported of last year that although we were in a correcting market, we were not in a slumping market. Slowing sales isn’t necessarily a sign of a depressed market, rather it reflects supply and demand. These are two different things. A depressed market must have other mitigating factors such as natural disaster or job loss. This was not the case in Southern California. True, housing starts fell 14.3% in January (the latest figures available) and that was the sharpest drop since October, but this bodes well for the homeowner. It means that in 1 to 3 years when these homes would have been built, they won’t be available but the demand will be. Where does that burden fall? It falls on the resale home of course. Prices have stabilized and it would appear that we are headed for a “normal” market.

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