Last week’s Wall Street Journal’s “Heard on the Street” headline “Why Home Prices Have Nowhere to Go But Up” may have guaranteed attention—but at the cost of advancing a pretty iffy notion. Then again, if you have been window shopping (or is it “screen shopping”?) through the Costa Mesa listings anytime recently, the idea could well have seemed less preposterous than usual. Of course, markets go up, down, and sideways. In residential real estate, any “down” movement has a centuries-long track record of proving to be temporary. But “nowhere to go but up”? Putting aside the common wisdom that nothing is guaranteed in a free market, author Justin Lahart does lay out a reasonable argument for why today’s pattern of home price rises is peculiarly supportive of his theory. The situation sets up like this: • Consumer optimism is measurably peaking. After such a lengthy stretch of flat expectations, a wave of would-be house buyers is out there (“there are a lot of people who would like to buy a house…”). • Employment is robust—and so is the economy (“…and plenty of them can afford to”). • Since many builders dropped out during the housing bust, today’s builders face less competition. With building materials and labor costs on the rise, they have less reason to increase their pace of construction. • Inventory of available housing remains below working-age population growth. The normal course of events has it that when home sales volume falls, prices should be forced downward. That makes sense—unless the slowdown is due to a lack of homes to sell. Taken together, all the factors add up to an explanation for the rare combination of slower sales volume yielding rising prices—which is what has been happening in wide swaths of the U.S. Costa Mesa home prices may not always reflect the Journal’s national trends, but the situation actually does supply some rationality for the proposition that “home prices have nowhere to go” except up—for the moment, at least. In any event, it’s hard to disagree that today the price outlook looks propitious—as well as a good time to give us a call for a chat about how your plans can gel with today’s market!
We are built on a philosophy of Heritage & Hustle L3 is a full service real estate agency with a regional office located in the heart of #CostaMesa, offering a wide-array of custom services to meet their clients’ needs with roots in the community since 1976. It’s L3 mission to provide trusted, convenient, responsive service to ensure clients enjoy their real estate experience. L3 was originally formed to offer personal, concierge-level service as an alternative to the large, nationally based real estate companies. From its small beginnings of only two employees, L3 has grown to a full staff of 20 serving over 300 clients a year. L3 is not limited to serving just its clients; it is also committed to serving the community. Not only has L3 donated hundreds of hours to many area charities, they have also received the prestige of being named one of the #toprealestatecompaniesinCostaMesa If you’re interested in #buyingorsellinginOrangeCounty, turn to the experts. Turn to L3 and let them help you make your real estate buying or selling dreams come true. For more information or to get started on finding or selling your home contact L3 today at 714-444-4663 or email us at email@example.com