After a three year market "correction," economists think that Orange County's real estate industry may be in recovery with signs, like consumer reaction to the grand opening of the Irvine Company's Woodbury and Woodbury East development, showing that demand for housing is back.
On Jan. 30, the Irvine Company sold 70 of its new Woodbury and Woodbury East houses and condos, the largest Irvine Ranch sale on record since around the peak of the housing bubble in 2006.
More than 10,000 people visited open houses at the Woodbury grand opening on Saturday and Sunday, and the development attracted more than 700 prequalified buyers for its 685 new homes.
To meet demand, the Irvine Company has already begun to sell the 56 homes for the next construction phase in the Woodbury development, the company's first major residential project since halting construction for more than three years after the housing market collapsed.
"The response has been tremendous," said Dan Young, Irvine Company President of Community Development, "We're more than pleased, this is a great opportunity to buy a new home. We're back."
This demand has been driven, according to Dr. Esmael Adibi, Director of the Anderson Center for Economic Research at Chapman University, by significant improvements in house affordability and the job security of potential homebuyers.
"Recession is healthy," Adibi said, "driven by easy lending practices, higher prices made (purchasing a home) extremely difficult for a potential buyer. (The recession) lowered prices and affordability has improved."
The real estate recovery will be fueled by consumers purchasing houses that fall below the median Orange County home price, said Adibi. The prices for these homes, less than Orange County's $430,000 median, have bottomed out and are more stable than their costlier counterparts.
The cost for the new Woodbury homes range from the low $300,000's to around $900,000, and Adibi thinks that it may be wise for builders to continue to focus on constructing less expensive homes in the near term.
With the Irvine Company indicating that it may begin building more houses soon, Building Industry Association of Orange County CEO Kristine Thalman is optimistic that job growth is on the way.
Reported by The Orange County Register (Feb. 2, 2010)
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