It’s that time! Time to take a Look Back on 2017 Costa Mesa real estate predictions! This is certainly one of my favorite posts of the year, when I take a pause and look back at how my predictions fared for the year.
Without further ado, here we go, looking at my 2017 Costa Mesa real estate predictions:
- Lack of Inventory – Nailed this one – unfortunately. The spring was another disastrous start to a year with little to no inventory. It eased a bit towards summer, but homes and condos under $750k were snatched up quickly through most of the year.
- Rising Rates – I got two of the hikes right as predicted, but the late year hike was not in my forecast. The roaring economy necessitated another rate hike to keep inflation at bay. It was surprising, however, that as rates did go up it did not start to stall the new mortgage application rate. I supposed we will finally see that change in 2018?
- Trump Bump – The predicted bump went as expected, and everything in the economy rose along with the rising tide. Jobs were great, unemployment at all time lows, and housing got off the charts expensive as I predicted this past year.
- Feel Good Economy – Orange County was one of the brightest stars in the American economy this past year. It looks like that trend will continue well into 2019 as predicted.
- New Housing – The rise of the small and tall locally! There were lots of new small in-fill development that happened in old large lots where builders dropped in tall/skinny single family houses – and as many as they possibly could. Density increased because it needed to. We are still in a significant housing shortage and that will not change anytime soon.
- Rise of Millenials – The class that should be buying homes did last year, and 34% of purchases were from the Millenial group. In the OC, just over 28% bought last year and that fit into my prediction model.
- Sky High Rents – Nailed it. Unfortunately. I wish rents were not so high, but again we have a lack of rental inventory. I also wish more renters would see the wiring on the wall and realize that purchasing is truly more affordable than renting.
- Creative Financing – More and more I got emails as the year went on touting “new” and “different products for interest only loans, 7/1 ARMs and more creative “Asset-only Verification Loans”. As much as people try to get creative with new products, the underwriters for the banks still are combing through the applications and want hard and secure numbers and employment to provide loans.
- Flopped – I have to say – surprisingly – I probably got this one wrong. I did see a few flips sit on the market a bit longer, and I don’t know what the owners put into them, but there were not that many flops out there. A few reverted to rentals rather than selling, and those were flops, but the “retail floppers” managed to get out this year unscathed.
- Summer Swoon – Ultimately, the summer swoon hit us a bit later than expected. The market slowed a bit in August and September, but the slower period around November and December really slowed the upper tier of the market above the $1 million mark.
Ok! How did I do? I say I got a solid “B” on predictions. The one factor that did not hit as hard as I thought were #2’s rising rates. More of the lack of rising rates in this case, and it feels to have had a spill over effect into #8’s and #10’s category. Sooner or later this market has got to give a bit!! Look for this year’s Costa Mesa Real Estate Predictions for 2018 this week too!!