OC Housing Report

Sluggish, Yet No Slide Ahead

With sky-high rates and a collapse in home affordability, many wrongly conclude that there will be a wave of foreclosures and  it is just a matter of time before the housing market crashes. Collectively, homeowners across the U.S. are healthier than ever before, which will prevent distressed sales and a housing crash.

Fear. Worry. Uncertainty. These words describe how many people feel about today’s housing market. Home values surged higher since 2022, and within the past couple of weeks, mortgage rates have climbed to heights not seen in 23 years. With home affordability at record lows, many argue that when the economy cools or slips into a recession, housing will collapse, and foreclosures will rise. After all, isn’t that how the Great Recession unfolded? 

The general public often jumps to conclusions without looking at all the facts and trend lines. They remember the burn from 2008 through 2011.  Everybody was burned or knew someone hurt by the collapse in home values. The economy ground to a halt, and unemployment grew to levels last seen at the beginning of the 1980s. Thus, everyone is jumping to the worst-case scenario in their collective minds: housing must suffer.

It is imperative to immediately point out that just because mortgage rates have climbed towards 8% does not mean that values must go down, and many homeowners will lose their homes due to foreclosures or short sales. The Great Recession was fueled by a credit bubble inflated by loose lending standards, including subprime mortgages, pick-a-payment plans, teaser adjustable rates, zero down, and plenty of fraud. These high risk borrowers were susceptible to any adjustments in their rates or changes to the economy. Thus, a wave of foreclosures ensued.

Today, only four foreclosures and two short sales are available to purchase in Orange County; that is only six total distressed listings. Distress demand, the number of new pending sales over the prior month, is at one. Foreclosures and short sales represent only 0.3% of the active listing inventory and 0.07% of overall demand. Compare that to January 2009, when there were 5,104 distressed listings, 44% of the inventory, and distressed demand was at 1,428 pendings, 67% of total demand.











Excerpt taken from an article by Steven Thomas.

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.