Time Magazine ended last week with a commentary that could foreshadow how this year’s Costa Mesa housing market might differ from years past. Author Bill Saporito identified a mismatch in the housing market that could bode well for empty nesters. Whether or not the implications will be a perfect fit for our Costa Mesa housing outlook, the “Big Picture” assessment does seem to gel with a lot of what we’re hearing and reading.
Time’s housing market “mismatch” begins with the national assessment that the U.S. is experiencing an annual shortage of as many as 700,000 new homes. Even though the latest economic outlook is refreshingly encouraging, new home builders are only now beginning to build the capacity to expand operations. As a result, “they haven’t banked as much land” or filed enough permits to keep pace. It’s also possible that the new administration’s crackdown on illegal immigrants may materially tighten labor availability.
The upshot is to create a scenario where demand for existing homes rises, putting current homeowners in “prime position” when they decide to list. Bolstering that proposition are some national statistics which peg the supply of existing homes at a scant 3.6 months—and it’s been more than a decade since the supply was that low.
What that probably means for our local Costa Mesa housing prospects is what you expect when demand outpaces supply. When those greater conditions combine with the more immediate local factors, the overall takeaway should be good news for empty nesters (and downsizers in general). In addition to the extra energy that arrives with real estate’s traditional spring selling season, this year, in addition to the shortage of supply, the specter of rising Costa Mesa mortgage costs acts as an extra prod. Time quotes the chief economist of one global group on that score: “…buyers are beginning to realize you might as well get in now.”
The good news for baby boomers, empty nesters, and downsizers of all stripes is that the new housing starts are now disproportionately being designed with them in mind: high service, luxury condos leading the pack. What that means is even fewer new single-family homes are in the pipeline—further raising demand for their existing properties, if and when they decide to list.
If you have been considering any of the opportunities unfolding in today’s Costa Mesa housing market, I’ll be delighted to discuss ways I can help you take advantage of them. Call me for a consultation—of course it will be obligation-free.