Happy New Year! It’s that time again, when yours truly tries to figure out what the heck is going to happen in Costa Mesa real estate for the coming year. If you haven’t already seen my last post this week, looking back to how I did on my 2019 predictions, check it out here.
Alright! Here we go. After a strong 2019 showing on my predictions, I expect to see the 2020 Costa Mesa real estate market look like this:
- Something’s Gotta Give – It’s been an unprecedented run with real estate and the economy that we have been on lately the past 7 years. Even since 2010 and 2011, we have seen increases in the real estate market. I thought a couple of years ago the North Korea friction would lead to some change, or some kind of change to the economy and concurrently the Costa Mesa real estate market. That didn’t happen. This year, I have to think something will change. I am not saying we will see a huge shift, but it feels as if this Costa Mesa real estate market might have wound out as far as it possibly could. Economic change? Political change? Not sure what is out there, but it feels as if something has got to change. I can’t imagine the Costa Mesa real estate market getting higher unless interest rates dipped below 3.25%.
- Prices?? – Sorry, but prices have got to give with my last prediction too. I would expect we see prices continue their slow march upward but then start to recede ever so slightly as the year progresses.
- Low Inventory – People just love living in Costa Mesa. I love it too!! It’s a great place to live for young and old alike. And guess what? People aren’t moving like they used to. I think the days where we had more than 400 homes on the market are probably past us. The new norm is not much for sale. If you see a home you like, you had better buy it.
- Low Rates – I think that the government will actually push to lower rates by mid year. Last year they raised interest rates, but with this being an election year, Trump will push the Fed hard to keep rates lower than they are today at 4.25%. I would expect to see rates in the 3.5% – 3.75% by the time we get near the election to help the Costa Mesa real estate market continue at it’s current pace.
- Flipper’s Get Stuck – I think as prices start to recede, the market will show it’s teeth and catch a few flippers holding homes at prices that are too high to make a good profit. They will get out of the homes, but not at the profits they expect.
- Local Economy Steady – I think the local economy will stay steady this year. OC has been one of the best economies in the US and the world for that matter. I would expect a continued trend to low unemployment.
- Times Up For School – A big trend on the west side of Costa Mesa has been for parents to utilize the closely neighboring Huntington Beach schools for their kids, elementary through high school. By all appearances that is going to change. Late in 2019 the Huntington Beach Unified SD has noticed that revenue could very well be higher switching to a tax based revenue rather than a kids in the seat. I predict HBUSD finally gives up and switches to the same tax based system that Newport Mesa Unified uses, effectively leaving a ton of kids without a school. Estimate more than 150 kids effected, that should have some effect on the Westside market with some people moving to stay in HB and Fountain Valley schools.
- Remodeled Gold Mine – People will continue to pay big bucks for the remodeled home, even for more than they should be selling for now. The fixer is quietly becoming a thing of the past.
How’s that? That’s my take. Curious about what the OC Register thinks, check out their forecast here.
Can I help you with Costa Mesa real estate? Connect with me by email or my cell at 714.743.9882. Have a great year! Colin D.