OC Housing Report | Nope No Bubble

Many buyers are sitting on the sidelines in anticipation of a major housing downturn even though the facts illustrate
it simply is not going to happen.

No Bubble: Housing data illustrates that there is not a housing bubble on the horizon.

It has happened to just about everybody. Driving down the road, unaware of your current speed, a look in the rearview mirror reveals there’s a police car with sirens blazing pulling you over. After receiving the ticket and driving away, for quite some time your driving habits change. You are more cautious, more aware of your surroundings, anticipating at any moment that, inevitably, you will be pulled over again. Similarly, so many buyers and homeowners are mentally preparing for the next housing bubble to pop. Everybody knows somebody that was affected by the Great Recession when values dropped substantially, and countless homeowners lost their homes to foreclosures or short sales. With values surpassing record levels, isn’t housing a bubble again? Even though so many are anticipating another bubble, the answer is simple: NOPE. The Great Recession was prompted by the housing market where anyone could purchase a home regardless of their true qualifications. Zero down payment loans, fudged loan documents, negative ARM’s, cash out refinancing, and subprime lending contributed to the run-up in values that filled the housing bubble that ultimately burst in 2007. As a result, the housing market collapsed, and home values plummeted. The writing was on the wall prior to the collapse. Housing data illustrated market conditions that were lining up in favor of buyers. The inventory ballooned while demand crumbled. As a result, the Expected Market Time (the time between hammering in the FOR SALE sign to opening escrow) rose to ridiculous heights. The numbers were off a year prior to the subprime meltdown, which occurred in March 2007. In 2006, the Expected Market Time surpassed 150 days, a Deep Buyer’s Market, in June. It grew to 225 days by year’s end for ALL of Orange County. In 2007, it surpassed 150 days in March and by July, surpassed 290 days. By year’s end, it reached an Expected Market Time of 451 days.




About the Author

Tim Morissette, also known in the community as Mr. Foothill Ranch, offers over 46 years of real estate experience which has given him an established reputation and unmatched market knowledge. He is joined by his wife, Michele and sons Matt and Jeff, as they continue to offer personal service with an emphasis on achieving his clients’ real estate goals.  This unique combination of traits has led to his proven track record of referral and repeat business. This can be witnessed by the trust of homeowners in Foothill Ranch where he has sold twice as many homes and represented three times more buyers than the next-leading real estate agent for the last 26 years.

As residents of Foothill Ranch since 1994, Tim and Michele are actively involved in the community by fundraising for Foothill Ranch Library, Make-a-Wish Foundation, Cancer Society, Homes for Habitat, Relay for Life, South County Outreach, and the local church and schools. Tim enjoys sponsoring community-wide garage sales, paper shredding and e-waste recycling event, an Easter egg hunt, & a Meet Santa Event.

Tim and Michele are dedicated to their family of four sons, daughter-in-laws, and grandchildren. As a family, they enjoy many outdoor activities which include camping, spearfishing, mountain climbing and exploring the miles of hiking and equestrian trails in Foothill Ranch and the Whiting Ranch Wilderness Park. Tim and his sons are also avid snowboarders and enjoy mountain biking and lobster diving. Family is a top priority in the Morissette household. They look forward to helping more families achieve their dreams of homeownership.