No Housing Collapse in 2023
Southern California focused Housing Reports by Steven Thomas argues against any drastic housing implosion in 2023. This view is consistent with most housing economists. It is based on the high equity position of homeowners coupled with the comparatively low housing inventory that is still behind the demand.
Mr. Thomas offered this comparison of our last housing decline. Orange County housing inventory peaked in 2006 at 16,006 homes for sale, with it growing to 17,898 in 2007 preceding the late 2007 mortgage melt down. Compare this to our current cycle. The peak number of homes on the market in 2021 was only 2,537. This increased significantly in 2022 but only reached a quarter of the peak inventory for the pre-mortgage crash – 4,069. Added to the supply argument against an implosion is the reasonable mortgage payments for most homeowners who have a fixed rate below 4%. These point to a very different market than what had preceded the last housing recession and implosion.
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