Below are some important points to consider regarding the timing of purchasing a home in Irvine California.
This Weekend my 24 year old daughter flew down to spend the weekend with me in Orange County, CA. I was amazed at how many questions she had regarding home buying. I should mention that although Ashley has two college degree's, she is very much a late bloomer and since college has moved back home with her Mom. I mention this so you understand, she was not the type of kid to move out early and focus on rushing through her life like I was. When my daughter, being laid back begins stressing about whether or not she should buy a house, this is a wake-up call to all of us!
The morning I listened to a well respected analyst predict that housing would fall another 25%. His reasoning was solid but his conclusion was flawed. He reasoned that homes must fall 25% to get back in line with wages. What he is referring to is the "Housing Affordability Index", and yes, it is out of whack in Irvine California, and virtually every other real estate market
Keep in mind there are three drivers to this index:
Interest Rates (or buyers payments)
It is possible that home prices could stay flat for several years and allow income enough time to rise, it is also possible that rates could be SYNTHETICALLY FORCED down (a soap box for another blog). Clearly the actual price of the home is only one driver.
Also, at the end of the day, I think everyone agree's that prices will eventually rise again. They always have! In fact, since 1968 home appreciation has exceeded inflation by almost 2%! Just remember that in Real Estate Markets like Irvine CA, a measly 4% appreciation can amount to $50,000-$100,000 every YEAR!
One last consideration, there are homes that will be sold today, priced at the bottom of the market. Let me explain; if a bank or seller is desperate enough, they may in fact accept a price 10-15% below current market or list price. If that specific home sold today at the low price, it is possible it can be resold in several months at a greater price, inspite of continued decline in the market place.
As a former Wall Street Employee, we used to say, "Let's get the stocks or bonds out of weak hands and into strong hands". The same thing is happening today, the weak hands will sell at ridiculas prices and the strong hands (qualified full doc buyers) will buy. They will Buy in Irvine CA and every other Real Estate Market.
In summary, waiting could be the worst thing any buyer can do. The downside is that they pay too much, the upside is that they remain forever on the sidelines wondering what happened. The concern of not buying at the bottom pales in comparison to the fear my daughter has of sitting on the sideline.
If you would like more information on purchasing Real Estate in Irvine California, please visit my website at www.LoveNewportLiving.com
I hope to see you there!
Real Estate Broker