Here are excerpts from the “California Economic Forecast” article by Mark Schniepp. It has the most uplifting outlook on the Southern California Housing market that has been published in a long time.
Following are some of the reasons that Mr. Scnhiepp outlines for the recovery to occur.
Expected Timeline for Recovery:
- Home prices are stabilizing as foreclosures
decline this year.
- Selling values will begin rising again, no less than
one year following the end point (month) of the general
recession in California.
- The general economic recovery in California will lag
the nation by one quarter. Consequently, recovery occurs no later than the winter of 2010, with more convincing evidence by the spring of 2010.
- Home sales are rising now in Southern Santa Barbara
County for condominiums and for lower priced single family homes. In the Santa Maria Valley, sales are soaring, largely due to fire-sale priced distressed homes. This is also true in the Inland Empire, the Antelope Valley, and Northern Orange County.
- More broad-based participation by all price ranges of
the housing market will occur in 2010, providing mortgage rates and credit market conditions remain favorable.
- The likelihood that mortgage rates will remain compet-
ive into 2010 is high. The Federal Reserve will unlikely increase
rates over the next 9 months, to insure that the recovery
evolves into a firm expansion of economic activity.
- The likelihood that credit market conditions will con-
tinue to ease is very high. They are already easing now. Mortgage rate spreads have narrowed and bank lending standards are no longer tightening. Consumers are saving.
There is less leverage in the economy.
- The likelihood that the economic stimulus will be
impacting the economy is very high by the end of 2010.
- The likelihood that the trauma in labor markets is over
by early 2010 appears highly probable, and job creation is forecast to be positive in California during calendar 2010.
Mr. Schniepp sums up his projection article with the following:
By mid-2012, selling values return to 2004 levels, a gain of approximately 30 percent from the lowest levels recorded earlier this year.
The complete article may be read here.