Santa Ana Real Estate Forecast: An Orange County Standout in 2018?

A recent forecast for the Santa Ana, California housing market suggests that home prices could rise more slowly over the months ahead.

Even so, the city could be one of the strongest performers within the broader Orange County real estate market, in terms of year-over-year home value gains.

Here are the latest predictions for the Santa Ana real estate market, extending into the first half of 2018.

Santa Ana Housing Market Forecast Through Summer 2018

According to the real estate information company Zillow, the median home price in Santa Ana rose by around 11% over the last 12 months. This was reported in July 2017. Their long-range forecast for the Santa Ana housing market calls for a more modest gain of 2.1% over the next 12 months, stretching into the summer of 2018.

This more moderate outlook mirrors the predictions being made for many cities across the country. The general consensus is that 2018 will mark a cooling trend where home prices are concerned.

To some extent, this can be viewed as a market “correction” following several years of above average price gains. Things appear to be getting back to normal in many real estate markets across the country, including those within Orange County.

Related: Are California home prices normalizing?

So, from an economic standpoint, this recent forecast for the Santa Ana real estate market is actually a good thing. Over the past couple of years, home prices have been rising much faster than wage and income growth. Over time, this kind of economic mismatch can lead to housing affordability problems.

So it’s good to see a bit of a cooling trend within the Santa Ana housing market. The home price predictions over the next year are at a more sustainable level, compared to what we have seen over the last year or so.

Strongest Performer in Orange County?

Despite a potential cooling trend, the Santa Ana real estate market could be one of the stronger performers within the broader Orange County metro area.

The housing economists and analysts at Zillow recently predicted that home values in Orange County would rise by around 1% over the next 12 months, stretching into July of 2018. Most cities within the county have a forecast that falls somewhere between 1% and 2%. Home values in Santa Ana, however, are predicted to rise a bit more than that.

Related: Orange County market trends in 2017

Based on these trends and predictions, it seems that the Santa Ana real estate scene could outperform other cities within the metro area, at least in terms of home prices.

Inventory Remains Tight

Housing inventory remains tight across the Orange County metro area. According to the national real estate brokerage Redfin, the county had about 2.4 months worth of supply in May of this year. A “balanced” real estate market has around six months worth of supply, according to economists.

So it seems that the market still favors sellers, at least where supply and demand are concerned. These sellers’-market conditions could carry over into 2018 as well.

At the national level, a recent housing forecast predicted that home prices would rise by 3.65% in 2018. This is based on a survey of more than 100 real estate economists, which was conducted in May of 2017. On average, the group predicted an increase of 4.8% for home prices in 2017, followed by another 3.65% in 2018. That’s a bit higher than the forecast for the Santa Ana housing market over the next 12 months.

Disclaimer: This article includes various predictions and forecasts related to the Santa Ana real estate market, as well as the broader Orange County metro area. These forward-looking statements were provided by third parties not associated with our company. We have gathered and presented them here as an educational service to our blog readers.