Consultants at Real Estate Economics in Irvine say they expect Orange County home prices to fall 1.7% in the next 12 months — and prices could again be appreciating within 18 months. The latest report suggests that the ailing market is turning and that such a rebound may be evident by mid-2009, based on REE’s own Orange County housing index. REE writes:

Though the index has been trending in positive market territory, the severity of the short term impact of price-slashed distressed properties, tightened credit and extremely low market psychology will continue to hinder market conditions for the balance of 2008. The over correction will eventually serve to restore buyer confidence.

Since the market has already reached equilibrium, this further decline reflects a housing market that is in the process of over correcting, due to the high foreclosure rate.

An over correction is common and lays the foundation for the next cycle. An over correction can continue for years, as it did in the late 1990s.

Mild price appreciation, within 18 months as foreclosure activity recedes and the credit crisis resolves.

As for raw land … “Overall upward price pressures will be more apparent in Orange County than in heavily oversupplied outlying real estate markets once national economic and market recoveries take hold."

Your thoughts and feedback on this topic are greatly appreciated.  Please feel free to post your comments.

Keeping you informed about the Orange County real estate market, economy and life in the OC is what I'm committed to doing.    

For more great Orange County market insight and industry news visit Laguna Niguel Real Estate or view the Orange County Market Trends at Orange County Real Estate.  

Listen to Zen's Laguna Niguel Real Estate Podcast available 24/7.

SEARCH ORANGE COUNTY'S BEST HOMES at Orange County MLS Home