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What can we expect from the real estate market in Orange County for the remainder of the year and the beginning of 2008?

Demand has continued its slow, but methodical rise over the past month as jumbo loan rates have dropped and confidence in our financial markets slowly returns. We can look for demand to continue to slowly ascend. Thus, the slowest time of the year is actually already in our rear view mirror, September and October. We can also expect the active inventory to drop as more homes are pulled off the market for the holidays. With demand on the rise and an inventory on the decline, the market time will continue to improve through the remainder of the year. With rates dropping, it will become more enticing for buyers to finally make the plunge. With the recent downturn in demand because of the financial crunch, there were not enough homes coming off of the market due to successfully placing a home into escrow. Thus, there has been a delay in the reduction of the active inventory. It appears as if we are going to start the New Year off at a very high level, around the 15,000 home level. That’s a lot of homes to start off the year. We started 2007 with a little over 11,000 homes and built up to nearly the 18,000 home mark. Starting the year at 15,000 makes the 20,000 inventory mark almost certain. Spring of this year was extremely slow due to the subprime shakeup. The Spring in 2008 will be even slower, about a 10% decrease in demand as some buyers sit on the fence a little longer and wait.