Forecast: OC home prices could fall 7% next year

Home prices across Orange County could fall next year by more than 7 percent, with residential building permits expected to tumble, according to a new economic forecast.

The Chapman University forecast predicted an average home price drop of 7.3 percent in 2023 during a “mild” mid-to-late year recession, the Orange County Business Journal reported.

Residential permits in the county will fall 21 percent, from 7,100 units this year to 5,600 units in 2023, according to the annual forecast led by President Emeritus Jim Doti.

Economists at the private Orange-based university say the U.S. will be hit by a recession by mid- to late 2023. They are predicting it will likely be a “mild recession.”

The Chapman researchers forecast the U.S. economy would contract 0.4 percent next year versus an estimated 2 percent growth this year, while inflation as measured by the consumer price index will slow to 5.8 percent.

“Over the last four years, Orange County has generated fewer jobs than California,” the Chapman economists said.

OC is expected to achieve only a half-percent of job growth in 2023, they added.

Home buyers have hit the brakes in Orange County, with sales falling by a third since last year because of rising mortgage rates. Residential transactions in October slipped 35 percent from the same period last year.

— Dana Bartholomew

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