Realtor eyes stabilizing housing in ‘08

It’s not been a fun year for local Realtors, who’ve had a front-row seat for a market turning from hot to cold seemingly overnight. Bill Nelson, ‘07 president of the 14,000-member Pacific West Association of Realtors, was kind enough to tell us what his eyeball is seeing out there …

Eyeball: Your outlook for the O.C. housing market for 2008?
Bill: Homeownership has historically been an excellent long-term investment, providing both equity and tax benefits over time, and we see no change in that outlook. 2007 will be the fifth best housing year on record, despite public apprehension about the real estate market. In fact, 2007 practically mirrors the home sales and price gains experienced in 2002, when consumers were very confident about the market. Realtors believe that investors and first-time buyers taking advantage of today’s market opportunities will bolster both the pace of the market and home values in 2008.

Eyeball: Chances we’ll see a bottom in 2008?
Bill: We believe the market will stabilize in 2008. Pent-up demand, coupled with an abundance of safer mortgage products will lead to market improvements. Further, conditions are ideal for buyers. Prices have moderated and interest rates are approaching 40-year lows. It’s the belief that many economists that foreclosures will slow dramatically by the third quarter of 2008. As that inventory is absorbed, we anticipate stabilization of the market.

Eyeball: What events might change your outlook, pro or con?
Bill: The market would receive a big boost if, as part of FHA reform, the confirming loan limits were raised to a point more commensurate with home prices, allowing more new buyers to enter the market. Additionally, the Mortgage Debt Relief Act could significantly slow mortgage loan defaults, thus reducing inventory. Real estate is a supply and demand business. Less inventory tends to stabilize and even increase prices. The market would be hurt if the proposed “fixes” fail to materialize.

Eyeball: Any “off-beat” economic indicator you’re watching now for signs of recovery?
Bill: At the Pacific West Association of Realtors, we can tell what’s happening in the market based upon what products are selling in our real estate store. When the open house signs get dusty and sold signs start flying off the shelf, we’ll know the shift is upon us.

Eyeball: What might be the housing surprise we’ll be talking about a year from now?
Bill: The major surprise a year from now could be that we are back in a period of rapid housing appreciation, and buyers who are now on the fence regret not taking advantage of the tremendous opportunities of 2008. A year from now, home buyers and sellers understand that buying a house is a long term investment, not a substitute ATM machine. They understand the facts about homeownership.

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