Housing Supply and Demand Not Expected to Stabilize Until 2012
In the first quarter of the year we saw a steady increase in home sales here in Orange County. However, with reasonable expectations because of the tax credit. The $8,000 tax credit for first time home buyers showed a boom in the smaller end home sales, but with the end of the tax credit in April, recent reports have shown that nationally there are 1.8 million more vacant homes than what is expected.
Lenders have shown they are becoming even less willing to work with distressed home owners, and homeowners who failed to qualify for Home Affordable Modification Program (HAMP) has increased the number of foreclosures on the market, thus increasing the supply drastically. This is expected to continue into 2011, due to the trends of lenders actions. With lenders repossessing at record high numbers, housing supply here in Orange County will continue to rise and prices will continue to drop until lenders are able to take the excess number of real estate owned properties off of their balance sheets.
The number of empty homes has reached 7.7 percent of the total housing market. It will take a boost in job recovery to find new home owners. However with strict underwriting standards and a large number of households with impaired credit it will put a strain on rebuilding the Orange County housing market. Good news, experts expect this to self correct as the job force begins to rebuild, credits will stabilize and lenders will loosen up. The supply will begin to slow as investors begin to purchase the bank repossessions, first time home buyers begin to buy at record low interest rates, and builders slow down on new home developments, we should begin to see the Orange County housing supply and demand balance out by 2012. Patience.
Will any questions on the Orange County housing market, give Kevin Simshauser, your local real estate consultant a call.