2011 Orange County, CA Housing Predictions Based on 2010

dicted OC real estate prices would rise 16% in 2010. Obviously ambitious. Conversely, Cal State Fullerton's prediction of 2-3% seems absurdly low. What is actually happening? Orange County is on target for 8% appreciation. This is a fairly moderate number in between the two predictions, but a robust enough number to dissuade one from being morbidly pessimistic about "the recovery."

UCLA recently forecast that O.C. home prices will rise 49% over the next 6 years. Sometimes forecasts do not come true. Sometimes they come close. Stretch that prediction to 10 years and I think you may have a winning formula. And the true formula may be this: slight appreciation for the next 2 years while jobs make their way back. Then watch for more moderate appreciation for 2 years. Finally we will hit our stride for years 5 through 10 as we hit 8% to 10%. What is the basis of this claim? Two factors are at play, really. First off are jobs. It will be hard to have a mature real estate recovery until we have a deeper well to go to for jobs. All predict (CSUF, Anderson, and Chapman reports) that 2012 will be a banner year for jobs. In fact, an early November report already shows Orange County adding more jobs than predicted, and hiring for the 4th Quarter has been busier than expected. Secondly, Orange County will have an inventory problem. We may actually see it in mid to late 2011. Have you read all the reports regarding new home construction? Indeed, there is hardly any of it. New home sales have been below 200 homes per month for months now. That's out of monthly numbers of approximately 2,500 closed sales per month for Orange County and doesn't even include Inland Empire and Los Angeles.

IF YOU WANT TO PREDICT THE FUTURE MARKET...don't forget the $600,000,000 the Treasury Depart

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