The five year run-up in Southern California housing prices could be coming to an end and homeowners thinking about selling may want to act sooner rather than later, according to economists and a leading real estate broker in Orange County.
Even before the election, there had been signs the market was slowing down. But immediately after Trump's surprise victory, there was a significant development: Mortgage rates rose to their highest levels since the summer of 2015 and appear to be headed farther up as investors flee from bonds to stocks.
As a result, if you financed a home that costs the median price of $710,000 in Orange County right after the election, you would have paid $161 more per month – or $1,932 more per year – than if you had locked in a mortgage before Trump was elected, said Steven Thomas, realtor and author of the monthly Orange County Housing Report.
'I've heard from sellers – some of whom even voted for Trump – who are a little bit nervous because they've realized values now exceed 2007, which was the ultimate height,' said Thomas. 'It feels like values are topping out.'
But economists are not predicting a shift toward's a buyer's market anytime soon, mostly because inventory is still extremely tight in Southern California. Trump's proposed tax cuts could also put more money in people's pockets, which could stimulate demand.
Economists at the real estate website Zillow forecast Los Angeles home prices will rise by just 1.7 percent over the next year, compared to an increase of 7.3 percent over the past year.
'I think we're looking at more of a flat line,' said Thomas.