Among the victims of the economy has been Orange County real estate—and all those involved with that field.Brokers, realtors, buyers, sellers, renters, inspectors, and investors, for example, have been caught in a fluctuating, unpredictable, and sometimes unforgiving market for the last few years now.Most have stayed the course, waiting for conditions to improve.And things are, indeed, looking brighter.New housing starts are up, interest rates remain low, home prices are beginning to stabilize, and mortgage applications are increasing.
And then gas prices began to soar, possibly derailing any progress that has been made.How will this latest assault impact the Orange County real estate market?Although some experts believe that the higher prices at the pump will not deter potential buyers who are mentally and financially secure in their plan to purchase a home, others take a less rosy view.According to economist Chris Cagen, “I think higher gas prices will impact home buying this year, particularly at the lower end. It isn’t just the tightening of money. Higher gas prices affect people’s mood on a direct and frequent basis. They send a signal about the economy and about what the future itself may be like. This makes people more cautious and will hold some people back from buying.
”Location of purchased Orange County real estate will also become a factor.In a recent Coldwell Banker survey of its brokers and agents, three-quarters of respondents said the recent jump in gas prices had influenced where their clients chose to live. The main client concern was commute time to work: 89 percent of respondents said buyers look for homes closer to work, and 93 percent said a continued rise in gas prices would prompt more homebuyers to choose to live where commute times are shorter.
There is even one study done by economists at the University of California, Berkeley, and Oregon State University which suggests that the U.S. housing crisis that started in 2007 and eventually led to a worldwide financial crisis was triggered by rapidly rising gas prices.Their paper makes for very interesting reading.