The California Association of Realtors® recently reported a three-month supply of available property, a volume estimate so low that it is creating intense competition and bidding processes and driving prices northward. Orange County housing prices are increasing at rates and to levels that haven’t been seen since 2006. Interest rates remain at historic lows and buyer confidence seems to be picking up. All of these are signs that it is time to buy, but the low inventory is making it a challenge to actually find that Fullerton home.
A number of factors are leading to low real estate inventory. The first comes from speculative buyers who purchase with the intent of converting them into rentals. As rents in areas such as Brea, La Habra and continue to increase, rental property remains a cogent investment, but the speculative activity reduces the inventory and pits average home buyers against institutional investors. Secondly, if you are anticipating a discount on homes due to foreclosures, the number of foreclosed properties is dropping precipitously, mostly due to the fact that lenders are turning to loan modifications, principle readjustments and short sales as alternatives to foreclosure. Finally, while prices are climbing, they still have not returned to a level where potential sellers are comfortable listing their properties, deciding instead to hold onto it just a little while longer to see where the market develops.
But the reduced levels of inventory doesn’t mean you should delay a Fullerton home purchase, especially in these attractive communities where both the economy and jobs market are also very promising. Demand may very well continue to climb, inviting even higher prices. There are still great finds out there, but the operative word is patience. Diligence, too.
Keep hitting those listings and of course, partner up with a respected realtor to gain insight and expertise as to your desired marketplace. On this last point, I am more than eager to help. Just give me a call!