I received this email from a lender I work with, Jay Carr. Good info about the California Real Estate market so I’m sharing with you all. Enjoy and let me know if you have any questions.
I’m passing along a chart you may find interesting. It’s OC Median Home Price Over Time .
With home values increasing year over year since the big downturn in 2008 I was curious what the overall improvement in values has been over a long period of time. I’ve been in this business for over 20 years, and prices are much higher than when I started, but I was wondering if the increases are reasonable given expectations of appreciation in Orange County of 5%-10% a year. I downloaded the median prices of Orange County single family homes since January 1990 until today from the California Association of Realtors (CAR) site and compiled a graph. Then I calculated the annual increase over the past 28 years. It is just 4.775%. That includes a pretty flat 1990’s market and includes the “bubble” from about 2002 thru 2007 – which is obvious on the graph. I also did the math from 1997 – when the market started gradually improving to today, and the annual increase was 7.1%. Then looked at the recovery from 2009 to today where we would expect the biggest increases, and that period of time was 7.8% . That period has several ups and downs which would be expected in a recovery, but it levelled out to normal in about July 2013. From July 2013 to today the annual increase is just 4.3%.
What this helped confirmed for me is that, although over a long period of time OC real estate values have increased quite a bit and have been a boon for OC homeowners, the overall market today is on track with reasonable expectations of property appreciation. That’s not to say we wont see prices level off or even drop slightly in the next 5 years before continuing their upward trend, but it does make it clear we are not in another “bubble”. I analyzed other financial market statistics that support this, and am happy to share those too. This graph I found most useful though. Median Price OC 2018.05
A video of Jay and Danae: https://www.youtube.com/channel/UC5Na3jsNcY8jrCsUvCMnW4g