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Oct 25

The Newport Beach Real Estate Market And The Credit Crunch

The credit crunch has slowed down the housing industry in many states, but how has it affected high-end markets like Newport Beach? As one of the most expensive cities in Southern California, the Newport Beach real estate market has a lot to offer–but also a long way to fall down. If you’re thinking of buying real estate Newport Beach this year, it pays to get to know the credit market and housing trends, and make more educated decisions.

Fortunately, even with 2009 being one of its slowest years on record, Newport Beach realty seems to be picking up and even leads Orange County in the list of most stable markets. In the first few weeks of 2010, there seemed to be a stable demand for Newport Beach real estate, with both home sales and home prices going up on a year-over-year basis. But will the improvements last?

It depends mostly on the market activity to come in the next few months, which in turn depends on buyers’ purchasing power. With more and more borrowers defaulting, banks have started imposing stricter standards, and fewer buyers can get the kind of financing typically needed for real estate Newport Beach. With home prices averaging over $1 million, the average family will need a jumbo mortgage–loans exceeding the limit of roughly $750,000–to afford Newport Beach realty.

Also affecting the Newport Beach real estate market is the mounting volume of distressed home sales. Throughout 2009 and so far for much of 2010, foreclosures and short sales have made up a considerable portion of market activity. Short sales, where the lender agrees to let the buyer sell the property and accept less than the total amount owed on it, can cut home Newport Beach realty prices by as much as 40%. The same holds true for foreclosures. Although there are risks to buying distressed homes, they are a popular choice for first-time home buyers who do not have the purchasing ability for million-dollar homes.

So is Newport Beach real estate still a good investment, despite the credit crunch? Experts say it is–after all, it’s a proven fact that beachfront properties are among the most stable in terms of property value. That means that credit crunch or not, values for real estate Newport Beach will continue to rise in the long run. If you’re thinking of investing in real estate this year, Newport Beach realty should definitely be on your list.

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