Bruce Norris, president of The Norris Group, which hosted the event “I Survived Real Estate” that drew to 450 ticket-holders and more than 85 tuning into a live webcast and raised $90,000 for Make-A-Wish and St. Jude’s Children’s Research Hospital, said he feels optimistic about where Inland Southern California will land price-wise in 2013 and 2014.
“For those of us that owned real estate, for the first time in awhile there were aggressive price increases,” he said. “It caught a lot of people by surprise.”
With underwater levels dropping by California Association of Realtors statistics to 15 percent, Norris said he thinks more people will hang tight and keep their house from going into default. Despite having 3.1-months of inventory as of August, Norris said, “Motivation for strong upward movement in price still exists in 2014, as it did in 2013.”
Last year, Norris correctly predicted price gains of 20 percent in a Southern California market that was still somewhat hobbled by the recession.
No percentages were cited by Norris this year.
He told the audience he is still asking questions about changes in the California’s mix of sales. “When you are at three months of inventory, shouldn’t you have price depression?” he asked rhetorically, and said: “We believe the demand still exists, and it’s landing on inventory that’s half of what it could be, so we will have price aggression.”
More equity sellers are heading into the mix. Delinquency and foreclosure rates are improved. The pool of international buyers is growing. On the other side of the equation, Norris said he is mindful that: First-time buyers are being squeezed out of the market. New home construction could be a game-changer.
“The percentage of first-time buyer sales in 1995 and 1996 was 50 percent,” Norris said. “Now, it’s at 28 percent. They are getting beat out by cash buyers, or they can’t qualify. That’s the missing link to me.”
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