Orange County CA Home Selling Market Forecast for 2015

• Overzealous sellers will be challenged by buyers who only are willing to pay the perceived fair market value during 2015.
• The FED might increase the Federal Fund Rate this year, and if that happens, mortgage rates will rise, and home affordability will go down.
• As more overzealous, optimistic homeowners get their overpriced homes on the market, some of them returning after unsuccessful selling in 2014, the inventory of homes for sale will rise to about 9,000, peaking by the end of August.
• Buyer demand will remain subdued, similar to 2014, since buyers will continue to patiently wait to pay only Fair Market Value for a home.  Many buyers will sit on the fence and wait until the market turns more to their buyer’s favor.
• For the first half of the year, expect mild price appreciation from 1 to 3%. By year’s end, that appreciation will be all but wiped away, and year over year appreciation by the end of December will be close to zero.
• The housing market will follow a normal cycle.  The strongest buyer demand coupled with a lot of fresh inventory will occur during the Spring, followed by slightly less demand and a continued fresh supply of homes in the Summer, then another drop in supply and fewer new listings in the Autumn Market.  Finally, the distractions of the Holiday market will present lowest demand of the year and few homeowners opting to sell.
• The number of successful, closed sales will be similar to that from last year 2014 levels.
• There will be an increase in the number of “move-up” sellers during 2015.
• The distressed homes inventory will remain low with a very similar level of successful short sales and foreclosures, representing just a few percent of all sales by year’s end.

Even though rates have remained low for several years, they have remained at these levels due to the FED’s manipulation of the monetary system.  The secondary mortgage market is now functioning.  If the FED starts increasing the Federal Fund Rate, that will result in higher mortgage rates perhaps toward range of 5%.

By Harrison K. Long, Realtor, real estate broker, and professional real estate representative at Orange County CA.   Source of some information is ReportsOnHousing.com and Steven Thomas housing forecast for 2015. 

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