CSUF Analysis Predicts OC Home Prices Will Rise Up to 12% in 2 Years

Orange County house prices will rise between 4 percent and 6 percent next year and the year after, a Cal State Fullerton forecast predicted.

If accurate, the median price of an existing single-family home will climb to $751,000 to $765,000 in 2016, up from the $722,170 median home price reported by the California Association of Realtors in July.

That’s less than $10,000 below the the all-time high of $775,424 for a single-family home reached in June 2007, according to state Realtors.

The median is the price at the midpoint of all homes sold.

“Given the substantial price increases in the last few years, the expected increase in interest rates and moderate to good (but not great) growth in jobs and output, we believe that this is a reasonable expectation,” Anil Puri, dean of CSUF’s Mihaylo College of Business and Economics, said Monday in an email to the Register.

Earlier, Puri issued CSUF’s annual forecast predicting Orange County will add 37,700 new jobs in 2016, compared to an increase of 40,100 this year. In 2017, job growth could slow even more, he said.

Unemployment, the forecast predicts, will drop only slightly – from an average of 4.4 percent in 2015 to 4.3 percent in 2016.

Puri said the Orange County house-price forecast, issued separately this week, is based on CSUF’s Orange County Business Expectations survey and on its analysis of the housing market.

The forecast is only for the median price of a existing single-family home. But if the all-home price reported by CoreLogic grows at that same 4 percent and 6 percent pace, the median would surpass the June 2007 record by $9,700 to $22,000, reaching a new peak of $654,680 to $667,270.

On the other hand, Orange County home values still will remain well below peak values when taking inflation into account.

The Realtors’ June 2007 peak price of $775,424 for a single-family home is equal to almost $890,000 after taking inflation into account.