Raising the Roof on Home Values in Top 60 Markets
By any measure, the nation’s residential real estate market will sizzle for the next year or longer, with the top 60 markets expected to show overall increases in rents and values.
Orange County is no exception. Although local home values and rents are expected to grow at a slightly slower pace than last year, according to the Urban Land Institute’s 1998 Real Estate Forecast, the county still ranks 14th out of 61 markets measured nationally. For the second consecutive year, Seattle topped the list, followed by Oakland in third and Los Angeles in fourth.
But in Orange County, where developers are running out of prime land to build, lot prices could jump by the highest percentage in the country, pushing new housing costs higher.
In analyzing Orange County’s housing market for the institute, Newport Realty Advisors of Newport Beach noted:
“Consumer confidence throughout the region is at its highest level since the late 1980s and owners of existing homes have once again started putting their houses on the market. New home sales, which have been driven primarily by the more affordable entry-level housing demand over the past few years, began to show solid improvement in all segments in 1996 and 1997.
“Small-lot single-family projects continue to fuel detached sales while taking sales away from the attached market. Prices are expected to continue to increase into 1998.”
That’s already happening. In April, Orange County’s housing sales rose to their highest level in nine years. Foreclosures have declined for 18 consecutive months. And adjustable rate mortgages, a gauge of how far buyers need to stretch in order to qualify for a loan, dropped to their lowest levels in at least a decade.
With low interest rates and high job growth, prices in Orange County are expected to surge. But when polled about ranking the top three metropolitan areas that will provide the best investment opportunities through mid-1999, Orange County placed 15th while Los Angeles topped the list.
