Costa Mesa Real Estate 10 Year History
I saw another article published recently about Costa Mesa real estate timing and what happened with the market over the last ten years. I was kind of surprised at the inaccuracy of the timeline that was listed there, and I felt like I needed to make a correction for those that might have read it.
The good news – the author got some of it right. The current market (2012) is great for sellers and buyers have definitely gotten off the fence to buy homes again, although there is not enough inventory for them right now.
How Do You Time A Real Estate Purchase
The bad news – most of the years previous to that were off of what really was going on in the local Costa Mesa market. I know the author wasn’t working this market during many of the last years, so it can be easy to miss the numbers when you haven’t lived it. The article said that was a dramatic rise in values between 2003- 2008. What actually happened those years:
2003 – continued slow upward growth from a slow growing solid real estate market, with close to normal historic appreciation (3-4%). Introduction of Stated Income loans/Fed Easing of Money (here’s where our price escalation problem began). Prices had been slowly rising in our Costa Mesa area before that at around 4% too. You have to remember for the years that follow 2003, when you add 4% to a house that is already around say $600,000, values start escalating very quickly year over year.
2004-2006- Rapid growth, much of it fueled by Stated Income/Stated Asset loans, 0% down, and interest only adjustable rate mortgages. By the end of this period, some homes had seen as much as 50% appreciation in three years.
2007-2009 – Falling prices, adjustment to lower values, not much buying activity, sellers in trouble because of adjusting ARMs, many short sales in market, general feeling of recession in economy. Appraisals difficult because of falling market, lenders unwilling to lend money. Stated income products completely unavailable. Slow recovery showing signs towards stabilization.
2010 –gradual stabilization of Costa Mesa real estate. Appraisals difficult with market adjustments.
2011 – Normal market, stable prices for some time in Costa Mesa.
2012 – Lack of inventory fueling some sellers’ desires to get a big price for homes, buyer demand high.
Prices slowly starting to increase. Appraisal problems as appraisers are not adjusting to prices increasing again.
Where we at?
I’m not calling anyone out, I just remember those middle years being very different. 2007-2008 were dark times in Costa Mesa real estate for anyone selling and working in this market. I’m very happy that is all behind us, believe me.
Actually it is interesting to look back to about 2003 when those stated income loans came into existence, because where today’s market is now is right above where those 2003 prices left off.
Is it a good time to buy as that other author pointed out? You bet. Interest rates continue to be at historic lows and smart people are buying now. This market should be interesting as people try to get more than their homes are worth – we will continue to see new appraisal problems crop up. It is really hard and How Do You Time A Real Estate Purchase, with all of that.
Need help in Costa Mesa real estate? I’d love to help!
Call Colin at 714-743-9882 or E-mail me.