Are we finally seeing an end to the housing bubble? Orange County, one of the hardest hit counties in the country, has been struggling to get back to better days for years. We will see a hint of improvement here and there, but so far nothing major and nothing permanent. So, 4 years after the house-price crash in 2007, could we have finally hit the bottom in housing prices in Orange County and afar?
Analysts are stating that we might actually be nearing a bottom this time. Why? Because, after falling nearly 35% from their 2007 peak, nationwide house prices are finally approaching “normal” levels on two key valuation measures: The “price-to-rent ratio,” which measures house prices relative to what the houses might rent for, and the “price-to-income ratio,” which measures house prices relative to average incomes. Using each ratio, we probably have a little ways to go until we actually hit bottom.
Goldman Sachs economists give us another year or two before home prices in Southern California and across the country begin to level out. At the same time, they wisely manage expectations by telling us they aren’t strong signs that housing prices will quickly shoot back up, especially not to inflated prices.
Overall, this is good news. And reinforces that now is the time to buy, whether for investment purposes or because you are ready for a new Orange County home.
For more information on buying and selling in Orange County, contact Cheryl Marquis today.