Modest rebound eyed for O.C. condos in ‘11 – Irvine Real Estate – Irvine Homes for Sale

by Robert Mack on December 27, 2010

in Buyers, Latest News, Sellers

The overall condo resale market in Orange County for 2010 performed slightly better than 2009. Almost all measurements improved from 2009 to 2010. The number of condos sold in 2010 was down 1%, while average sale prices and price per square foot were up around 2.5% — a number that is closer to normal appreciation. The drivers behind the improvement in 2010 were the tax credit, lower interest rates and some loosening of the loan guidelines.

The high-rise market declined again in 2010, driven by the increase in distressed sales, lack of loan products and availability of new high-rise rental product that made renting more attractive than buying. These factors, along with the higher carrying costs, and increased number of distressed condos have continued to give consumers concern and are not likely to change in 2011. It is my belief that we will continue to see price erosion in this market segment as consumers take a “wait and see” approach.

For the majority of the market, especially affordable condos, I expect 2011 to be a better year overall for the first-time buyer market because of low interest rates, better loan guidelines than a couple years ago and a lot of enthusiasm to purchase.

Us: What will be the 2011 drivers of real estate change for condos, good or bad? Why?

Veronica: There will be three basic drivers in condo sales for next year. We will continue to see a steady flow of short sales and foreclosures, if not an increase. 76% of condos currently under contract today are distressed sales. The increase will affect prices and encourage other nearby homeowners to consider a short sale option. Projects that have been put on the sideline will affect the market until their fate is known. Astoria of Central Park West is a great example of this. The uncertainty of not knowing what will happen is keeping buyers on the sideline. It has been taken off the market and buyers are waiting to see what is going to happen to that building. Availability of low down payment mortgage products and interest rates will be a big driver in the condo market. If new low down payment mortgage products are available, buyers will take advantage of those programs.

Although condo home sales are down roughly 1%, the average sales price is up 2.5% this year!

Posted on Irvine Orange County Real Estate Market News

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