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O.C. housing analyst says ‘Buy now!’

July 31, 2009
housing price chart

housing price chart

Well-known Orange County real estate analyst/consultant Mark Boud has come out boldly in a letter to clients stating that local homes are a unparalleled bargain. He writes …

“We may never see this type of opportunity in terms of housing values relative to incomes in Orange County again.  If you feel secure in your job, and can make the payments, you may never see such a ‘perfect storm’ again regarding the undervaluation of housing in Orange County.”

Boud’s enthusiasm stems from his economic model showing what he sees as unprecedented affordability of local housing. The accompanying chart (click on it for a larger version) shows his view of the boom’s overvaluation of Orange County homes — and the ensuing price collapse and its creation of “undervalution.”

Here’s snippets of his letter (COPY IS HERE) that support his “Buy Now!’ thesis …

* It is, in essence, the “perfect storm” in terms of low prices, historically low fixed mortgage rates, and continued high incomes (for those who are employed).  Granted, an increasing number of unemployed workers aren’t in a position to take advantage of this historically high level of undervaluation, but for those who can afford it and do feel stable in their jobs, they may never experience this opportunity again in their lifetimes.
* With the federal and state tax credits that are currently being offered, (first-time buyers’) financially secure parents recognize that first-time buying adult children may never get a better opportunity to … purchase a home in Orange County.  Though we don’t have specific statistics to quote, we are observing and hearing about an enormous number of first time buyers who are receiving financial support from their parents for the purpose of purchasing their first home.  When the banks won’t lend, the Bank of Mom-And-Dad is the next best thing.
* The door of opportunity (or the period of undervaluation) begins to close in Year 2011, and eventually closes completely by Year 2014, when we forecast that the supportable price level (which will fall as mortgage rates climb) will meet the forecast level of median home price in Orange County.

July 30th, 2009, 11:18 am · originally posted by Jon Lansner the O.C. Register website.

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