Ever since the Great Recession from 2008-2009, Orange County, California’s housing market still hasn’t completely come back. The number of home sales is still low, as well as employment gains.
Each kind of residential construction category continues to have challenges in this high-cost county, leaving prospective home buyers looking for more quality in existing homes for sale. Not everyone wants to buy a home and then start a home renovation project. Most of the time searching for a home is a challenging task.
As the recession in 2020 passes through, savvy and experienced agents already positioned for the slowdown in sales volume and home appreciation continue their job here in Orange County and across the state. In the next three decades, it’s estimated that mortgage rates will be rising. The reason why is because lowering interest rates is not possible anymore since we are basically at zero in early 2020.
Here’s the trends ReportsOnHousing found in the region’s counties …
Los Angeles County: Listings of 8,648 residences, a 32% drop. Escrows of 5,387 — a 12% increase. Market time of 48 days, down 31 days.
Orange County: Listings of 4,161 residences, a 35% drop. Escrows of 2,583 — a 14% increase. Market time of 48 days, down 36 days.
Riverside County: Listings of 6,762 residences, a 27% drop. Escrows of 3,140 — an 18% increase. Market time of 65 days, down 39 days.
With the Corona Virus shutting down the US economy and other countries worldwide, it goes without saying what the next few months will bring is anyone’s guess. The economic impact of the virus will be wide ranging, influencing everything from the desire to go to open houses by home buyers and real estate agents, employment rates, to whether sellers decide to list their property for sale or hold off until the economy improves.
Lots of home buyers were trying to analyze numerous factors back in 2008 as well. Home prices in the US, including California, and the stock market fell precipitously. The S&P 500 eventually lost half its value from its all-time high.
Recessions and falling home prices aren’t anything new. Housing prices took a nosedive during the Great Depression of 1929 and in hindsight, that housing recession wasn’t really a good time to buy real estate in the short term because it lasted 10 years.
Each recession on average lasted a period of 11 months.
1 A lot of these periods featured high interest rates, declining home values, double-digit rates of unemployment, and very low levels of consumer confidence. What each downturn offered was a great time to buy real estate.
It’s advised that you be well aware of the advantages and disadvantages before deciding to buy.
Buying Homes in a Housing Recession
Your thought process should not be how low will prices go in a recession. It should be before prices go back up in Orange County how much home you can afford to buy.
Advantages of Buying During a Recession
Sellers listing their homes for sale too high in a down market is not uncommon; Sometimes they are simply in denial. The local market determines the price you will sell your home.
Although, it might be a good idea if you find a home that’s been sitting still on the market for a longer than 90 or 10 days. At that time, the seller may be prepared to agree to a lower price reduction, even if their list price was basically unchanged the last few several months
Downsides to Purchasing During a Housing Recession
Not every home you find for sale is going to be a good deal. Some homes will need to have wide-ranging repairs, or the neighborhood is not acceptable. The major point when buying a home is the location, no matter the state of the current economy.