Could 2019 Be a Year of Real Change in Costa Mesa Real Estate?
This is always one of my favorite posts of the year, trying to guess how the year will go and how the Costa Mesa real estate market will fare. I felt like in my 2018 prediction post that something has got to give, so maybe this is the year. I do feel like there will be some change in the air, so here we go with the 2019 predictions:
- No inventory is the New Norm – I read an interesting point that locally, Costa Mesa homes turn over to new owners on average in about 17 years! When I started in real estate about 16 years ago, the average time was closer to 8 years. I think our lack of inventory is the “new normal” and that will continue through the majority of 2019.
- Stock Market Bouncing Ball? – The market took a big dump at the tail end of 2018, but I wouldn’t be surprised to see it bounce back up to near last year highs in the first quarter of 2019. The economy is still too strong and unemployment too low for it not to bounce back up. I however would not be surprised if it bounced back down, then up again as the year goes on.
- OC Economy Chugs Along – The Orange County economy has been pretty stellar, and I think that trend continues which should only help Costa Mesa real estate continue to sell well.
- Interest Rates Rise Slightly – Common wisdom is saying that the Fed will raise rates 2 times this year. But I don’t think that will happen. After President Trump’s last freak out with Fed Chairman Powell, I think he puts the brakes on any other rate hikes. That should keep everything even keel for the year. Newer or nicely remodeled homes will sell fast if rates stay steady, but those that have not been recently remodeled or need significant updating will still need price improvements to sell, regardless of what rates are doing.
- Sky High Rents Continue – Higher, higher, higher… rents will not lower anytime soon. There are not enough condos or single family homes available for the renter pool, and rental rates will continue to creep up.
- Sellers Exiting California at All Time Highs – Sellers finally realize how far their dollar goes in neighboring states like Colorado, Idaho, Arizona and Texas. Lower costs of living coupled with all time Costa Mesa high prices tell them it’s time to take the money and run.
- Mortgage Creativity – Lenders will be writing less and less new mortgages, forcing them to lower their rates on 30 year fixed products, or get super creative with new mortgage products. Expect a huge push in interest only or ARM like mortgage products, wrapped with a new creative name.
- Late Summer is the New Fall – Usually we have a slowdown around September
- Shocking Prices – There will be some really nice homes, or average homes in nice locations, that will sell for what will be shocking prices. It always happens on the tail end of a hot or rising market, just you watch!
- Level and Cool – I think the market will start with low inventory, which will produce a bunch of sales early in the year and then with rising interest rates, we will have an early summer slowdown, a Aug/Sept super slow market, followed by a decent fall market. All told I think this will be a level market- up in the early part of the year, and down a bit towards the end of the year.
Do you think I got it right? What’s your take on the 2019 Costa Mesa real estate market?