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NEWPORT BEACH, CA, UNITED STATES, November 30, 2020 /EINPresswire.com/ -- How about neither. The impact of Covid-19 is causing a massive increase in demand for homes in Orange County, especially in the Newport Beach real estate market. Many regard Orange County’s coastal cities as cleaner, safer and more attractive than its counterparts in Los Angeles.

Is Newport Beach the new Beverly Hills?

When comparing key real estate industry metrics, you can see how Newport Beach has become the new Beverly Hills of Orange County. The real estate market in Newport Beach includes Newport Coast homes for sale and Corona del Mar homes for sale, sometimes referred to as adjacent communities within Newport Beach.

Key Metric Beverly Hills Newport Beach

Days on Market: 105 Beverly Hills, 83 Newport Beach

Average Price per Square Foot: $1,052 Beverly Hills, $1,080 Newport Beach

Active Listings: 324 Beverly Hills, 431 Newport Beach

Homes In Escrow: 39 Beverly Hills, 167 Newport Beach

Sold over past 30 days: 36 Beverly Hills, 140 Newport Beach

Months of Inventory: 9 Beverly Hills, 3 Newport Beach

In every category, Newport Beach surpasses Beverly Hills. If you consider the beautiful beaches and gorgeous views, you can understand why Newport Beach is finally being recognized as one of the world’s greatest destinations to live and work.

One other key benefit of living in Newport Beach is the community is very, very safe. While homes in Beverly Hills may have high security (gates, guards, etc., Newport Beach has these too), the city is surrounded by higher crime areas such as Hollywood, Santa Monica, Culver City, and Los Angeles. Newport Beach is surrounded by Costa Mesa, Irvine (Safest City over 250,000 in America), and Laguna Beach.

Some of the most notable attractions in Newport Beach are Pelican Hill Resort and Golf Club, Fashion Island Mall, Crystal Cove State Park and the Newport Beach Harbor.

The luxury market continues to show strength with the highest ever sales prices being recorded. In October, 15 Del Mar in Newport Coast sold for $61,000,000. It is an 18,717 square foot home on a 39,184 square foot lot. That is $3,259 per square foot…well above the average of $1,080.

We have successfully found homes for our clients through our private network of professional agents, as well as our own inventory. More than ever, today’s hyper competitive market requires the skills of an experienced agent.

For more information about Newport Beach homes and the Newport Beach real estate expert, visit us at www.trivistarealestate.com.

TriVista Real Estate is a team with Compass lead by industry veteran, Tim Robertson, DRE#01413500. TriVista Real Estate can be reached at (949) 436-7050 or info@trivistarealestate.com.

Steven Lockhart

TriVista Real Estate

+1 949-436-7050

info@trivistarealestate.com

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Let’s begin with the obvious. Higher unemployment (usually above 13%) leads to lower home prices. It makes sense because we see more people unable to afford homes, higher foreclosures, and less people able to purchase new homes. And, inflation is defined as a general increase in prices and fall in the purchasing power of money.

Known Factors:

• Inflation is fairly homogeneous across the United States.
• The Fed focuses more on unemployment then inflation.
• The Fed increased money supply 20% in 2020.
• Unemployment affects home values above 13%.
• Areas which currently have “relatively low unemployment” typically see smaller upticks in unemployment during a recession.
• Areas which currently have “relatively high unemployment” we typically see a larger increase in unemployment during a recession.
• In stable unemployment, inflation naturally affects home prices more than small changes in unemployment.

Let’s examine two different home markets.

New York City, NY Unemployment Rate (October, 2020) = 13.2%

Newport Beach, CA Unemployment Rate (October, 2020) = 6.6%

As unemployment rises across the country, we see unemployment rise by more percentage points in New York City compared to Newport Beach. We also see home prices have flatten (some may even suggest depreciated) in New York City, while Newport Beach continues to see price appreciation.

There is a strong correlation between inflation and house prices (typically, housing prices trail inflation). In particular, you will see periods of inflation are followed by increasing periods of price appreciation especially for homes in Newport Beach.

Data:

• New York City unemployment rates from 2019 to 2020 have moved from 3.9% to 13.2%.
• Newport Beach unemployment rates from 2019 to 2020 have moved from 2.5% to 6.6%.
• New York City is in a buyer’s market with 7+ months of inventory.
• Newport Beach is in a seller’s market with 2 months of inventory.

Our estimations:

• Inflation (nationally) should move back above 3%, maybe to 5%.
• Unemployment for both cities should remain steady at the current levels.
• New York City home prices will remain flat through 2021 and may oscillate +/-2% from 0% price appreciation.
• Newport Beach home prices will remain strong and may oscillate +/-2% from +6% price appreciation.
• The Fed will be forced to keep interest rates low in 2020.

The real losers here will be banks who finance loans at 2-3% if inflation pushes higher than 4%, so expect to see their lending rates creep up to combat inflationary pressures.

For the charts, Home Values are year over year change in percentage, based on data from Zillow. Unemployment numbers are from the Bureau of Labor and Statistics.

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