As we roll into 2019, a number of forecasts have come out for the real estate market. Overall, the forecast for Orange County is looking promising for both buyers and sellers. Here’s some of the trends you can expect to see in the New Year:
Median Home Prices are Up
While the first half of 2018 showed declining home prices throughout Orange County, much of California seemed immune. Overall, the median home price in Orange County rose 1.1% and is expected to grow again in 2019. Nationally median home prices are expected to increase 7% in 2019. Orange County is expecting a growth of only 3-5%, though that is still triple of its 2018 increase. This is good news for both buyers and sellers, as it indicates consistent and growing home equity.
Baby Boomers Are Beginning to Downsize
On average, stats are showing that the largest group of sellers are in the 55+ age group. Research indicates that baby boomers are moving out of larger single-family homes and heading for the less upkeep seen in Condos and retirement communities. This is doing two things – increasing the inventory of single-family homes, while decreasing the inventory of available condos.
Construction On The Rise
Construction of new single and multi-family dwellings increased in 2018 over the previous year and is forecasted to do so again in 2019. While multi-family dwelling construction is down from its peak in 2015, many areas are still seeing growth in this area.
Climbing Interest Rates
With the Fed vowing to raise interest rates again in 2019, there is the potential for home sales to slow. However, rates are still at historic low, and many people who were putting off home ownership are now taking a second looking at it. Some lenders in Southern California have reported an increase of finance pre-qualifications in the second half of 2018. This is good for the market as it means there are potentially more people looking to buy before the rates increase.
Buyers Are Looking at Communities
One of the largest trends in recent years will continue into 2019, and that is with buyers looking for homes in full-service communities. With the average consumer now desiring a commute of 10 minutes or less to goods and services, communities that offer dining, shopping, and recreational areas are seeing the best growth. Home buyers want convenience, a nice setting, good schools, and accessible health centers. Many of the master-planned communities are expected to see the best demand as they can more easily “check the box” on the list of buyer’s must-haves.
Overall, though the real estate market in Orange County is expected to stay mostly flat. 2019 is still looking like a good year for both buyers and sellers. The current market doesn’t look like it will favor either sellers or buyers, but rather offer opportunity to both. Prices are not expecting to rise or decrease substantially, inventory appears solid in existing homes, and plenty of new construction is available.