California Home Buyer Recovery Timeline – do you agree???

Posted on May 25, 2012. Filed under: Home Seller Tips, Informed Investor Alliance, Orange County CA Foreclosures, Orange County Real Estate, Orange County Short Sales | Tags: , |

ImageHappy Memorial Day!!  We hope you have a nice and relaxing long weekend planned 🙂  Here’s an interesting email we received about homebuyer recovery from the folks at FirstTuesday.us and Barry Zanck, one of our preferred lenders.  What do you think?

California Home Buyer Recovery

2005-2009 California economic development stagnates.

2007-2009 The Great Recession

2009-2010 The Federal Reserve takes direct control of long-term interest rates – all new mortgages are Fed funded by bonds.

2009-2016 The Lesser Depression, characterized by persistent slow job growth and low demand from home buyers, while dominated by speculators.

2010-2015 Home sales remains on a “bumpy plateau” recovery approximating their 2010 numbers. The state’s homeownership rate drops below 55% (state’s historic point of stability) to near 50%. Collectively, short sales, foreclosures sales and REO resales remain high.

2012-2013 The most likely bottom for home sales volume to users, followed by an extremely gradual sales volume recovery for lack of user demand. Apartment construction begins to rise noticeably in response to tenant demand.

2014-2015 Prior low pricing and low interest rates spark a bounce in home sales volume. This bounce is short-lived, as the Federal Reserve raises rates to control the pace of recovery and prevent momentum buying. Property prices keep pace with the rate of consumer inflation. Speculators holding SFRs acquired two or three years earlier begin to dump them

2014-2016 Home sales stabilize. Shortsales, foreclosures, bankruptcies and REOs remain high. 300,000-400,000 new jobs are created annually for a return to the December 2009 peak level. Generation Y begins to come of age and buy homes.

2016-2017 Full recovery mode for employment, home sales, then pricing. SFR construction rises, though no where near Boom-time heights.

2017-2018 Interest rates rise again.

2018-2020 Excess inventory of vacant homes finally returns to pre-recession levels. Generation Y begins to pick up homebuying activity en masse. Homeownership in California is at 50%.

2020-2025 Negative equity homeowners who refused to strategically default finally work their way out of debt and return to a stable financial status, the poorer for it.

2025+ Home prices return to peak levels of 2006. The lessons of the Great Recession forgotten, and home sales hedonism returns. The mistakes of the past are repeated and the cycle continues.

We agree that we are probably at the bottom right now, as we’re already seeing an uptick in California homebuyer interest, and a decrease in inventory.  We disagree that interest rates will stay low until 2017…..although wouldn’t that be nice???!  We also agree (unfortunately) that the lessons of the past will be forgotton by 2025, and the market will again cycle.  It always does!

What do you think?  Please comment below or tweet us @angieweeks or @weeksteamShould you be interested in buying ‘at the supposed bottom’, please call us at 877-230-3211, and we’re happy to show you homes over this Memorial weekend!

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