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After an extremely slow end to 2022, buyers are returning to the housing arena, demand is already up sharply, and market times are plunging fast.
Demand jumped 38% in just the past couple of weeks, adding 361 pending sales as it climbed to 1,300. The active listing inventory decreased by 121 homes in the past couple of weeks, down 5%, and now sits at 2,415 homes. Sellers need to know that values are not climbing right now. Overpricing a home in this market will result in a lack of success and waste valuable market time. Until rates fall considerably from here to at least the mid-5s, home values will not rise.
For buyers, lowball purchase offers and looking for a “deal” will be an exercise in futility. Due to the high mortgage rate environment, the market has lined up in favor of buyers up to this point. That advantage is diminishing with the significant drop in market times. Sellers are not desperate and are not panicking to sell, unable to afford their monthly mortgage payments. Instead, carefully arriving at an offer to purchase based on a home’s Fair Market Value is a winning formula for isolating a home.
What we know:
→ Demand is rising
→ Days on market going down
→ Homes are re-listing at realistic prices
→ New listings selling quicker, demand is met
What we can expect:
→ Similar market trends to last year
→ Low inventory
→ If rates are good, prices will stabilize
Orange County Housing Market Summary:
- The active listing inventory in the past couple of weeks decreased by 121 homes, down 5%, and now sits at 2,415, the second lowest level to start February since tracking began. In January, 45% fewer homes came on the market compared to the 3-year average before COVID (2017 to 2019), 1,375 less. Last year, there were 1,270 homes on the market, 1,145 fewer homes, or 47% less. The 3-year average before COVID (2017 to 2019) was 4,695, or 94% more.
- Demand, the number of pending sales over the prior month, soared higher by 361 pending sales in the past two weeks, up 38%, and now totals 1,300, its largest two-week rise since February 2021. Last year, there were 1,683 pending sales, 29% more than today. The 3-year average before COVID (2017 to 2019) was 2,083, or 60% more.
- With demand soaring and the supply falling, the Expected Market Time, the number of days to sell all Orange County listings at the current buying pace, plunged from 81 to 56 days in the past couple of weeks. It was 23 days last year, much stronger than today.
- For homes priced below $750,000, the Expected Market Time decreased from 63 to 43 days. This range represents 24% of the active inventory and 30% of demand.
- For homes priced between $750,000 and $1 million, the Expected Market Time decreased from 59 to 41 days. This range represents 20% of the active inventory and 27% of demand.
- For homes priced between $1 million to $1.25 million, the Expected Market Time decreased from 72 to 47 days. This range represents 11% of the active inventory and 13% of demand.
- For homes priced between $1.25 million to $1.5 million, the Expected Market Time decreased from 77 to 62 days. This range represents 11% of the active inventory and 10% of demand.
- For homes priced between $1.5 million to $2 million, the Expected Market Time increased from 117 to 127 days. This range represents 12% of the active inventory and 7% of demand.
- For homes priced between $2 million and $4 million, the Expected Market Time in the past two weeks decreased from 116 to 98 days. For homes priced between $4 million and $6 million, the Expected Market Time decreased from 245 to 225 days. For homes priced above $6 million, the Expected Market Time decreased from 882 to 523 days.
- The luxury end, all homes above $2 million, account for 25% of the inventory and 10% of demand.
- Distressed homes, both short sales, and foreclosures combined, comprised only 0.3% of all listings and 0.5% of demand. There are only two foreclosures and five short sales available to purchase today in all of Orange County, with seven total distressed homes on the active market, down four from two weeks ago. Last year there were three total distressed homes on the market, similar to today.