Shift in supply and demand sweeping the nation
A host of factors influenced the CFOs to predict positive outlooks for the near term: Builders have become more efficient and can generate gross margin off of lower prices; redesigned and more energy-efficient homes are more attractive to consumers versus existing product; the economy is slowly improving; household formations are increasing; and homes are more affordable than they have been in decades.
In addition, a lot of competitive existing-home product has been removed from the market; 37 states now have more demand than supply of resale homes.
"With interest rates for mortgages incredibly low and home prices at a point people haven't seen in their lifetime, based on nothing but economics, this is a really good time to buy a house," Friedman said.
My buddy in Orange County isn't moving anytime soon, but when he reads that new luxury condos are going to be built in nearby Newport Beach, which will carry price tags of $1.4 million to $3 million, he guesses that bodes will for his condo.
He figures, since the bottom of the market, his condo has regained abut 40 percent of its lost value, which isn't too bad considering Orange County was one of the California markets hit extremely hard by the recession. After all, Orange County was home to the subprime mortgage industry, and that was thousands and thousands of jobs that disappeared. I guess you reap what you sow.
Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "Growing Up Levittown: In a Time of Conformity, Controversy and Cultural Crisis," is now available for sale on Amazon.com.
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