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Orange County Housing Report | Blazing Beginning

 

Hot Seller’s Market: With a record low supply of homes available to purchase and staggering demand, the market is extremely hot.

There is an imbalance in supply and demand in the Orange County housing market today. The supply of homes is at a record low and demand is off the charts. As a result, the market has been hot from day one of 2021. The only other time that occurred was back in 2013. What 2013 and 2021 have in common are record low mortgage rates. On January 3, 2013, mortgage rates were at 3.34%, slightly higher than the record low 3.31% achieved on November 21, 2012. On January 7, 2021, according to the Primary Mortgage Market Survey conducted by Freddie Mac for the past 50-years, mortgage rates hit a 17th record low since March, dropping to 2.65%. In the past 10-months, mortgage rates continued to drop to record low territory, dropping below 3% in July for the first time ever. The further rates dropped, the more demand soared, and the hotter the market became.

Today, there are 2,633 homes available to purchase, an ultra-low supply of homes that shattered the prior record low achieved in January 2013, at 3,161. That is 17% lower. To put it into proper perspective, last year there were 3,901 homes, 48% more. Two years ago there were 5,911, 124% more. Current demand (a snapshot of the last 30-days of new escrows) is at 1,895 pending sales, slightly lower than 2013’s 2,031. Yet, it is 32% higher than last year’s 1,434 level, and 63% higher than the 1,165 pending sales reached in 2019.

Orange County Housing Market Summary:

  • The active listing inventory decreased by 42 homes in the past two-weeks, down 2%, and now totals 2,633, its lowest level to start a year since tracking began in 2004. COVID-19 is not suppressing the inventory despite the surge in cases. In December, there were 24% more homes that came on the market compared to the prior 5-year average. Last year, there were 3,901 homes on the market, 1,268 additional homes, or 48% more.
  • Demand, the number of pending sales over the prior month, decreased by 300 pending sales in the past two-weeks, down 14%, and now totals 1,895, its strongest start to a year since 2013. COVID-19 has no effect on demand. Record low rates are fueling today’s exceptional demand. Last year, there were 1,434 pending sales, 24% fewer than today.
  • The Expected Market Time for all of Orange County increased from 37 days to 42, a Hot Seller’s Market (less than 60 days). It is the strongest reading to start a year since tracking began in 2004. It was at 82 days last year, much slower than today.
  •  For homes priced below $750,000, the market is a hot Seller’s Market (less than 60 days) with an Expected Market Time of 29 days. This range represents 32% of the active inventory and 47% of demand.
  • For homes priced between $750,000 and $1 million, the Expected Market Time is 26 days, a hot Seller’s Market. This range represents 15% of the active inventory and 25% of demand.
  • For homes priced between $1 million to $1.25 million, the Expected Market Time is 51 days, a hot Seller’s Market.
  • For homes priced between $1.25 million to $1.5 million, the Expected Market Time is 55 days, a hot Seller’s Market.
  • For luxury homes priced between $1.5 million and $2 million, the Expected Market Time decreased from 57 to 55 days. For luxury homes priced between $2 million and $4 million, the Expected Market Time increased from 120 to 124 days. For luxury homes priced above $4 million, the Expected Market Time increased from 304 to 373 days.
  • The luxury end, all homes above $1.5 million, accounts for 37% of the inventory and only 13% of demand.
  •  Distressed homes, both short sales and foreclosures combined, made up only 0.3% of all listings and 0.2% of demand. There are only 4 foreclosures and 5 short sales available to purchase today in all of Orange County, 9 total distressed homes on the active market, down 6 from two-weeks ago. Last year there were 45 total distressed homes on the market, more than today.
  • There were 3,091 closed residential resales in December, 25% more than December 2019’s 2,469 closed sales. December marked a 9% increase compared to November 2020. The sales to list price ratio was 98.7% for all of Orange County. Foreclosures accounted for just 0.2% of all closed sales, and short sales accounted for 0.3%. That means that 99.5% of all sales were good ol’ fashioned sellers with equity.

To request to read/download the full report and charts, please email info(at)echelberger(dotted)com.

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