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Housing is much different this year compared to last year, with more FOR-SALE signs, more OPEN HOUSE directional arrows, and longer market times.
Many times, there is a big difference between expectations and reality. Sellers are now coming on the market expecting a boatload of activity, throngs of buyers touring their homes, and instantaneous success after sifting through multiple offers. Yet, the market has evolved. A telltale sign that the market has changed is the growing number of OPEN HOUSE directional arrows that adorn busy intersections. It is now common to see the same OPEN HOUSE for multiple weekends in a row. The hot, high-paced, instant housing market has transformed into something completely different, throttling back and slowing from week to week.
The Orange County housing market was insanely hot just a few months ago. The Expected Market Time (the number of days it takes to sell all listings at the current buying pace) grew from 37 days in March to 57 days today, the highest level for this time of year since 2019. An incredible 28% of all active listings have reduced their asking price at least once. 48% of available homes have been on the market for 30 days or more, and 25% have been exposed to the market for at least 60 days.
ATTENTION SELLERS: Carefully arriving at the Fair Market Value by scrutinizing the most recent comparable and pending sales is essential to be successful. You need to meticulously consider the condition, location, upgrades, and amenities. Accurate pricing is absolutely crucial. Overzealous sellers who require future price reductions will procure fewer interested buyers, fewer offers to purchase, and, ultimately, will net less money.
ATTENTION BUYERS: While the market is slower than at the start of the year, it is NOT a Buyer’s Market where prices are crumbling lower. Upgraded, nicely appointed, in good condition, and appropriately priced homes will fly off the market with plenty of activity and multiple offers. The longer a home has been on the market, the more willing a seller is to negotiate.
What we're seeing:
→ More open houses on the market
→ Properties taking longer to sell
→ Showing numbers down
→ More competition
→ June gloom slowed things down
→ Sellers trying to get ahead of the curve
What we can expect:
→ Sellers will get more feedback for meeting demand
→ This trend will continue through the summer
→ Demand will trail off in August
Orange County Housing Market Summary:
- The active listing inventory in the past couple of weeks jumped by 262 homes, up 9%, and now sits at 3,048, its highest level since December 2022. In May, 36% fewer homes came on the market compared to the 3-year average before COVID (2017 to 2019), 1,497 less. 358 more sellers came on the market this May compared to May 2023. Last year, there were 2,281 homes on the market, 767 fewer homes, or 25% less. The 3-year average before COVID (2017 to 2019) was 6,633, or 118% extra, more than double.
- Demand, the number of pending sales over the prior month, decreased by 25 pending sales in the past two weeks, down 2%, and now totals 1,615. Last year, there were 1,602 pending sales, 1% less. The 3-year average before COVID (2017 to 2019) was 2,679, or 66% more.
- With supply 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 51 to 57 days in the past couple of weeks. It was 43 days last year, faster than today. The 3-year average before COVID (2017 to 2019) was 75 days, slower than today.
- In the past two weeks, the Expected Market Time for homes priced below $750,000 increased from 38 to 42 days. This range represents 17% of the active inventory and 23% of demand.
- The Expected Market Time for homes priced between $750,000 and $1 million remained unchanged at 33 days. This range represents 14% of the active inventory and 23% of demand.
- The Expected Market Time for homes priced between $1 million and $1.25 million increased from 34 to 39 days. This range represents 9% of the active inventory and 13% of demand.
- The Expected Market Time for homes priced between $1.25 million and $1.5 million increased from 42 to 45 days. This range represents 11% of the active inventory and 13% of demand.
- The Expected Market Time for homes priced between $1.5 million and $2 million increased from 48 to 55 days. This range represents 13% of the active inventory and 13% of demand.
- In the past two weeks, the expected market time for homes priced between $2 million and $4 million increased from 86 to 104 days. For homes priced between $4 million and $6 million, the Expected Market Time increased from 167 to 197 days. For homes priced above $6 million, the Expected Market Time increased from 476 to 715 days.
- The luxury end, all homes above $2 million, account for 36% of the inventory and 14% of demand.
- Distressed homes, both short sales and foreclosures combined, comprised only 0.2% of all listings and 0.2% of demand. Only three foreclosures and two short sales are available today in Orange County, with five total distressed homes on the active market, down two from two weeks ago. Last year, seven distressed homes were on the market, similar to today.
- There were 2,127 closed residential resales in May, up 5% compared to May 2023’s 2,030 and up 8% from April 2024. The sales-to-list price ratio was 100.3% for Orange County. Foreclosures accounted for 0.1% of all closed sales, and short sales accounted for 0.1%. That means that 99.8% of all sales were good ol’ fashioned sellers with equity.