Market Recovery: Time Line

2005-2009: CA Housing Prices (as with most of nation) plummet to record lows as garbage loans & other negative Wall Street practices explode the foreclosure rate and lead us into the Great Recession.
2009-2011: CA Housing prices struggle amid shadow inventory of bank foreclosures looming in the background which causes downward pricing pressure on market inventory. Statewide home ownership drops to approximately 50% (the state’s historic point of ownership stability is 55%).
2012-2013: CA Housing remains bumpy at best. Exuberance can be found in some local CA markets with over-bidding occurring with absolutely no economic reasoning to support it. It’s as though these buyers have learned nothing from recent events. Buying frenzies without a sound economic foundation is a recipe for disaster. Further, the CA job market while improved a bit, is still not where it needs to be, the nation still faces an economic cliff which could put the Housing Market back to where it was two years ago and the most recent consensus of most California’s that were polled said that for the interim, they would rater Rent than Buy.
2014-2015: Ahhh. Now we are in the ‘Crystal Ball” phase and anyone who tells you what is going to happen with certainty over the next 1 to 10 years is for certain someone not to listen too. What follows is not a prediction, guarantee or fact; but merely an ‘opinion’ of what ‘might’ take place given the data we currently have and projecting what is a likely scenario. Are there other more optimistic or pessimistic scenarios? You bet. That said, it “APPEARS” that barring any unforeseen economic debacle caused by the Fed government or the Fed raising home interest rates, the overall CA market will likely bottom in late 2013 in 2014-2015, witness an extremely gradual recovery due to continued low interest rates and sustained low pricing. Property prices will probably keep up with inflation at best. With so many CA homeowners now displaced from losing their homes, apartments will be in high demand.
2016-2020: Relying on the accuracy of the 2014-2015 opinion, 2016 through 2020 should see a return to pre 2005 real estate markets with home prices rising and continuing an upward trend for several years until a peak is reached whereby the market begins its cyclical decline only this time a ‘normal’ decline that has occurred ever since records of home prices have been kept. It is a market now with ‘normal’ up and down cyclical movement. But be forewarned, lessons of the past fall on deaf ears and what happened in 2005 could happen again.

Next Post: 1-16-13, “Mortgage Shopping 101”

Profile photo of Charles About Charles

Charles Sant'Angelo is a broker of 20 years with offices in the same Beverly Hills location. He has represented residential & commercial buyers & sellers in LA, Orange, Riverside & San Bernadino counties and as far away as Costa Rica. Whether you are a local or global 1st time buyer , a seasoned home buyer/seller or an investor, you will find that his professionalism & his 'Customer First' approach is the cornerstone to how he conducts business. Please visit our "About Us" page for more information or contact Charles direct at chas90210@gmail.com
-Thank You-