Don’t fret about the housing market

STEVE SMITH

Having written extensively about Orange County housing for several

years for another publication, I am occasionally asked, based on my

research, whether housing prices are going to go up or down.

As if I know.

My advice to these people is to be more aware of the clues we all

have at our fingertips. Put the pieces of the puzzle together, and

you will come to the right conclusion.

Here’s what I see: More banks may offer 40-year mortgages. Houses

are selling quickly, and prices are still creeping up. Even the

threat of higher mortgage rates has not dampened enthusiasm.

Nor should it. When considering mortgage rates, it is important to

have a long memory. When my wife and I bought our first home in 1987,

we secured an adjustable mortgage with a rate we felt fortunate to

have. Even the escrow officer remarked on the good rate when we were

signing our lives away. The rate then was 10.15%.

I’m not a housing expert, and I don’t have any inside information,

but my informed opinion is that home prices will not fall anytime

soon and are not likely to drop dramatically in at least the next 10

years.

But things could change. I’m still waiting to see the effect of

the permanently higher gas prices on the cost of an airline ticket.

Before very long, the low fares we’ve been seeing will give way to

“reality” fares, i.e., fares that have to move up in line with fuel

prices so airlines can maintain a profit.

When that happens, people will fly less on their vacations.

Businesses will fly less as they develop more efficient ways to have

meetings and make presentations. The technology already exists, and

it’s far beyond the outdated telephone conference call.

The higher gas prices could finally send a wake-up call to the

business world to get on the telecommuting bandwagon. For millions of

Americans, there is no need whatsoever to get in a car, travel to an

office and work.

Many administrative and sales functions can be done from home, and

they can be done more efficiently than in an office.

Reliable studies have shown that telecommuters often work more

than an eight-hour day, even though they are paid for only eight.

They are interrupted a fraction of the times they would be

interrupted in the office, which is a major drain on productivity.

Telecommuters also report much higher job satisfaction, not because

they’re getting away with murder, but because they do not have the

travel stress. Plus, for them, the savings of the commute is like a

pay raise.

Kids like it, too, because they get more time with mom or dad.

Businesses win because they need less office space, equipment and

insurance.

But things could change. Despite the always rosy outlook of

whatever administration happens to be in the White House, this

economy does not have the foundation it needs to sustain the

long-term growth that will create meaningful jobs and reduce our

deficit. The economy could go south in a hurry, and that will put the

brakes on the hot Orange County housing market in a hurry.

Still, we in Orange County have an edge. Ours is a very desirable

place to live, particularly our neck of the woods here in

Newport-Mesa. Between the beaches, the South Coast Metro area with

its shopping, restaurants and performing arts venues, plus a fabulous

climate, we’re sitting pretty.

None of that is likely to change.

But there is one more very important reason for people everywhere

to love this area. It’s the Orange County Fair.

We made our third trip to the fair Thursday night, staying briefly

before and after seeing Don Henley at the Pacific Amphitheatre. That

night, Cay and I shared a “Blooming Onion” for dinner, and it was

delicious.

The Blooming Onion was one of the few foods we had not tried in

all the years we’ve been going. This year, there were no “10-Pound

Buns” and no Apple Crisps, one of Cay’s favorites. Turns out that the

Apple Crisp booth got moved to Siberia, traffic fell, and they moved

on. Rumor has it that they found more people at Triangle Square than

they did at their new spot at the fair.

But that’s life at the fair. Booths come and go. People eat too

much. Kids go on dates. Shoppers buy stuff they don’t need. People

get sick on rides and lose money on the midway.

At the fair, everything costs $6. The blooming onion was $6, as

was the beer with which I washed it down. The better rides are $6.

Two ears of corn are $6, and so is the bratwurst that I ate as an

entree. And that 50-cent stuffed centipede I won by tossing ping-pong

balls into small bowls cost me $6 to play.

Yes, we’ve got it all here, including some good cardiologists,

whom I think about while I’m wolfing down my cinnamon roll with cream

cheese.

* STEVE SMITH is a Costa Mesa resident and a freelance writer.

Readers may leave a message for him on the Daily Pilot hotline at

(949) 642-6086.