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The market is extremely hot in many price ranges, but the luxury end is the biggest exception.
An extensively upgraded luxury home is placed on the market with an entertainer’s yard and panoramic canyon views and is listed at $2.5 million. Seven different buyers tour the home in the initial week. Quite a few people come through the weekend open house. The first week’s activity is solid, yet no offers are generated. It is not until after surpassing the two-month mark that the sellers entertain their first offer. There had been some interest prior, but nobody was ready to step up and write an offer to purchase. A few days later, after back-and-forth negotiations, the seller comes to an agreement and accepts an offer at $2,325,000 that closed in 60 days, $175,000 less than the list price.
These two scenarios are both taking place right here in Orange County and are typical for their specific price ranges. Yes, the market is HOT, but the higher the range, the longer it takes to sell a home. The “FLAVOR” of the market depends upon a home’s price point.
What we know:
→ Balance as we head into June
→ 97 active listings, flat market this year
→ Volume is low, but things are balanced
→ 1.2 and under in South OC is still hot- multiple offers, selling quickly
→ Single levels have set record prices with all cash offers
→ Turnkey is selling quickly
→ Consistent buyer pool
What we can expect:
→ Rise until August, then taper off
→ High competition for single levels
→ Turnkey homes priced right will sell quickly
Orange County Housing Market Summary:
- The active listing inventory in the past couple of weeks increased by 51 homes, up 2%, and now sits at 2,190. It is the lowest level for the end of May since tracking began in 2004. In April, 49% fewer homes came on the market compared to the 3-year average before COVID (2017 to 2019), 1,983 less. Last year, there were 2,697 homes on the market, 507 more homes, or 23% higher. The 3-year average before COVID (2017 to 2019) was 6,370, or 191% more, nearly triple.
- Demand, the number of pending sales over the prior month, increased by five pending sales in the past two weeks, nearly unchanged, and now totals 1,665, the lowest level for the end of May since tracking began in 2004. Last year, there were 2,113 pending sales, 27% more than today. The 3-year average before COVID (2017 to 2019) was 2,738, or 64% more.
- With supply and demand not changing much, the Expected Market Time, the number of days to sell all Orange County listings at the current buying pace, remained unchanged at 39 days in the past couple of weeks. It was 38 days last year, similar to today, but was rapidly cooling with skyrocketing rates.
- For homes priced below $750,000, the Expected Market Time increased from 26 to 27 days. This range represents 19% of the active inventory and 28% of demand.
- For homes priced between $750,000 and $1 million, the Expected Market Time remained unchanged at 25 days. This range represents 15% of the active inventory and 24% of demand.
- For homes priced between $1 million to $1.25 million, the Expected Market Time increased from 26 to 28 days. This range represents 10% 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 34 to 33 days. This range represents 10% of the active inventory and 12% of demand.
- For homes priced between $1.5 million to $2 million, the Expected Market Time decreased from 47 to 46 days. This range represents 13% of the active inventory and 11% of demand.
- For homes priced between $2 million and $4 million, the Expected Market Time in the past two weeks decreased from 81 to 79 days. For homes priced between $4 million and $6 million, the Expected Market Time increased from 113 to 149 days. For homes priced above $6 million, the Expected Market Time decreased from 368 to 267 days.
- The luxury end, all homes above $2 million, account for 33% of the inventory and 12% of demand.
- Distressed homes, both short sales and foreclosures combined, comprised only 0.6% of all listings and 0.1% of demand. Only five foreclosures and nine short sales are available today in Orange County, with 14 total distressed homes on the active market, up four from two weeks ago. Last year there were four distressed homes on the market, similar to today.