CALIFORNIA REALTY IN LAGUNA NIGUEL
1) There will be more short sales. But prices can’t get much lower. The foreign buyers would eat us up. That’s exactly why foreclosures are federally regulated. If they all came out at once, then we would continue to decline in prices. We did that already in 2007 and 2008. Prices will remain stable, but low until all the distressed inventory is sold.
2) Prices rising 25%? That’s not going to happen next year. However, I agree that this is the bottom, of the bottom, of the bottom. We’re five and a half years into prices falling — June 2006 was our peak of the last mountain. Home prices have been relatively stable for the last 18 months, even creeping up with the low inventory over the last five months.
3) Laguna Beach will not lead the way in home sales. In home prices? Yes. But in volume, nope. People who live there now most likely will live there 40 years from now. People typically don’t like to leave heaven after they’ve arrived. The bread and butter prices are in two distinct groups: The three-bed, 2.5-bath, two-story, two-car garage for $250,000. Think affluent rental areas like Rancho Santa Margarita, Mission Viejo, Lake Forest, and Ladera Ranch — investors eat those up. The other group is the owner-occupant, with a price between $600,000 and $750,000. Just think, areas in that price range were $900,000 up to $1.5 million. The hyper-specific areas are Laguna Niguel, San Clemente, Huntington Beach, the coastal areas, where everybody really wants to live.
4) The lending market will remain tight — tight like squeezing an orange through a ping-pong net.
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