15July2008

Recession, Pricing and the Future

Posted by staceysloan under: Housing and Economy; Housing Recovery; Life in Orange County.

There was an Associated Press article whose headline read, “US Housing Slump a Prelude to Recession“.  It was a brief article and had 3 main points:  1) if history is any guide, a recession is most likely around the corner because a recession followed 6 of the last 7 housing downturns.  2) Housing stats are at all-time lows since after WW II.  3) After the recession ended, housing starts typically rebounded strongly after inventory fell and home sales picked up. 

What I would add to this equation for Southern California in general and Orange County specifically should inspire hope.  I’m not trying to be naïve.  I know we are months from a full recovery.  Obviously we have economic woes beyond housing, i.e. food and gas, to name just two.  However, let me add that the Associated Press also noted that immigration growth would be a key factor in rejuvenating the market.  We also have tremendous economic diversity that is currently being overshadowed by the mortgage meltdown but won’t be forever.  Prices falling every month mean more buyers that can enter the market each month.  All these first time buyers are planting the seeds for the first true move up market in almost a generation.  We need these buyers to start the cycle in a recovering housing market.  Finally, generation “Y” is the first generation to be as big as the boomers.  Expect them to fuel a housing market as they turn 25 to 35 in the coming years.  With mortgage practices returning to normal, money should be available to those who qualify and expect a return to normal appreciation.  With as much trepidation as the next year may bring, it will also bring the same level of opportunity for many.  I am always here to answer any questions you may have.

15February2008

BELT-TIGHTENING, BUT NO COLLAPSE, IS FORECAST IN TECHNOLOGY SPENDING

Posted by staceysloan under: Buying a Home.

Why include this direct New York Times headline in a real estate newsletter?  Because it does bode well for the general economy.  Only your darkest prognosticators believe we are headed to a full blown recession.  Perception is everything when it comes to a recession.  It would appear that business spending in the technology sector, import/ export and commercial leasing is hanging in there.  The job report was better than expected and personal income is projected to go up 4 ½% this year.  Although the economy has taken a hit as consumers draw back, there is no recession in the wings as yet.  Much of the spending pull back is no more equity line spending.  But that doesn’t mean that consumers aren’t still charging and spending.