My New Blog

I have been a very active appraiser throughout the southern California area, specifically in the counties of Los Angeles, Orange, Riverside, and San Bernardino. My experience with falling values has not reflected the sugar coated reports coming from the Federal government, state economic reports, and other soothsayers in the real estate environment like Chapman University and UC-Irvine. 

I would expect biased reports to come out of entities like the CA Association of Realtors but I do not understand why the others are under reporting the real estate downturn. The aforementioned state and local agencies have gone on record as reporting year to date market value losses on Single Family Residences in the Los Angeles and Orange County areas of approximately 3-6%. My experience says this loss in market value should be more like 10-15%, even in coastal neighborhoods made up of high dollar homes that are supposedly holding their values.

I work closely with many owner/developers and several realtors and when you shake them down for an honest answer, their assessment is much like my own. My experience comes not only from research related to several hundred appraisals within the past year, but also from my personal investment properties. I've seen and experienced an approximate 20-30% loss in property values in the Inland Empire since mid 2006, and a loss of 10-12% in Orange County, more specifically the City of Huntington Beach.

It is this appraiser's humble opinion that the future values in SoCal will experience much of the same. Expect the current real estate property value losses to double by the end of 2008. Unless something drastic changes on the horizon, values in 2009 and 2010 will probably be flat and then slow increases upward. I expect that property values will not return to the high values of early 2006 until about the year 2011-2012.

I wish I was wrong, but I think not. There's lots of opportunities for investors out there, but you would be smart to wait until the fall of 2008. There's lots more foreclosures waiting in the wings for 2008.