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Housing is about to shift to the Holiday Market when both the supply of available homes and purchase demand falls to their lowest levels of the year on New Year’s Day.
With Thanksgiving next week, the diversion of family gatherings, holiday parties, plenty of shopping, eggnog, and nonstop festive music has arrived. Orange County transitions to the Holiday Market starting this week in the blink of an eye. The inventory plunges, demand plunges, and the Expected Market Time will not change much this year. This is the season where many sellers and buyers will place their real estate goals and needs on pause to enjoy the merriment.
Demand is currently at 1,223 pending sales, similar to last year’s level at the start of November. Expect demand to drop to around 900 pending sales and match the start of this year, the lowest start since tracking. The Expected Market Time will not change much from now through the end of the year and will start January at around 59 days, much faster than the 84-day start to this year.
The Orange County Holiday Market has officially arrived with Thanksgiving a little more than a week away. Many sellers, prospective sellers, and buyers will divert their attention from housing to enjoy the yuletide season.
What we're seeing:
→ Demand is slowing down
→ Active inventory slightly increasing
→ Some properties are setting record prices
→ SFR, single-level, and turnkey are hot properties
→ Luxury market in the 3 to 4 mil range cooling off
→ 2 mil and under moving quickly for the holidays
Advice for sellers:
→ Turnkey properties must be true turnkey from interior to exterior
→ As long as pricing is accurate, sellers don't have to wait until spring
→ Pay attention to trends
Orange County Housing Market Summary:
- The active listing inventory in the past couple of weeks increased by 90 homes, up 4%, and now sits at 2,496. In October, 36% fewer homes came on the market compared to the 3-year average before COVID (2017 to 2019), 1,093 less. Last year, there were 3,581 homes on the market, 1,085 more homes, or 43% higher. The 3-year average before COVID (2017 to 2019) was 5,822, or 133% more, more than double.
- Demand, the number of pending sales over the prior month, decreased by 61 pending sales in the past two weeks, down 5%, and now totals 1,223. Last year, there were 1,202 pending sales, 2% fewer than today. The 3-year average before COVID (2017 to 2019) was 2,139, or 75% more.
- With the inventory rising and demand falling, the Expected Market Time, the number of days to sell all Orange County listings at the current buying pace, increased from 56 to 61 days in the past couple of weeks, its highest level since January. It was 89 days last year, slower than today.
- For homes priced below $750,000, the Expected Market Time increased from 42 to 45 days. This range represents 18% of the active inventory and 25% of demand.
- For homes priced between $750,000 and $1 million, the Expected Market Time increased from 37 to 41 days. This range represents 16% of the active inventory and 24% of demand.
- For homes priced between $1 million and $1.25 million, the Expected Market Time increased from 35 to 46 days. This range represents 10% of the active inventory and 13% of demand.
- For homes priced between $1.25 million and $1.5 million, the Expected Market Time decreased from 48 to 46 days. This range represents 10% of the active inventory and 13% of demand.
- For homes priced between $1.5 million and $2 million, the Expected Market Time remained unchanged at 70 days. This range represents 13% of the active inventory and 12% of demand.
- For homes priced between $2 million and $4 million, the Expected Market Time in the past two weeks increased from 87 to 103 days. For homes priced between $4 million and $6 million, the Expected Market Time increased from 175 to 231 days. For homes priced above $6 million, the Expected Market Time increased from 385 to 469 days.
- The luxury end, all homes above $2 million, account for 33% of the inventory and 13% of demand.
- Distressed homes, both short sales and foreclosures combined, comprised only 0.2% of all listings and 0.1% of demand. Only four foreclosures and two short sales are available today in Orange County, with six total distressed homes on the active market, up two from two weeks ago. Last year, seven distressed homes were on the market, similar to today.