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Home sales momentum lost as investors purchase fewer homes

Posted by Deborah Shane on Monday, December 16, 2013 Under: Orange County CA Market Bits
So here's a little news regarding Orange County Real Estate and the recent surge in home sales in San Clemente, Dana Point and other Orange County Cities, that involves investors. Home prices carry price momentum. Once prices start moving up, or down, they tend to continue in the same direction for long periods of time. However, sustainable house price momentum propels job and income fuel. The only viable source of sustainable housing demand springs from owner-occupants who gain new jobs and increase their incomes. Job creation drives housing demand because new employees relocate to areas near work and bid up prices of available housing stock, both rental and resale. Irrespective of what may happen with financing costs or supply availability, the relentless push of increased housing demand caused by job creation spurs housing momentum. For the last few years economists believed a resurgent housing market was key to economic recovery. They posited that more housing demand would put housing industry people back to work. This in turn would create the jobs and housing demand leading to housing market momentum and ultimately to economic momentum. It hasn’t worked out that way. Since the economic problems we face are centered in housing, the economy needs an outside force or industry to jump-start demand. Housing is reactive. Housing demand will not increase until some other industry creates jobs to launch housing demand. Like other economic observations, economists understand little about how house price momentum works. This lack of understanding prompted legislators, lenders, bureaucrats, and the federal reserve to embark on innumerable market manipulations to reverse declining home prices from 2007 to 2012. Each time their policy manipulations caused prices to move up against the downtrend, the manipulators cheered the results and prayed for “escape velocity” to resist the pull of foreclosure gravity and sustain upward price momentum. The first attempts quite predictably failed. The most recent effort is working for now, but some economists suggest this latest house of policy cards may collapse as well.

In : Orange County CA Market Bits 

Tags: san clemente real estate  homes in san clemente  dana point homes  real estate in dana point  homes in orange county  orange county real estate 

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Deborah Shane Deborah Shane, Balboa Real Estate Coastal Dreamhomes team. We are ready to help you. Either to know more about San Clemente and South Orange County, or where the best parking is near the pier. We know where the great places are and would love to share! If you're thinking about buying or selling, we will provide you with the help and tools you need. Especially now in today’s fast selling housing market. We are so happy to answer any questions you may have about our awesome beach village of San Clemente. Or if you want to buy or sell in South Orange County, we are here for you... We have years of experience helping buyers and sellers reach their goals! Don't be shy, reach out to us! Deborah Shane, Realtor, Balboa Real Estate, Inc. LS# 01293004 ~ Mobile: 949-426-9188 Email:

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