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The insane pace of the housing market has come to an end and the instant marketplace has shifted to a much more normal, typical speed for this time of year.
The Expected Market Time reveals the true speed of the market and is based upon supply and demand, the number of available homes to purchase and the number of buyers in the marketplace writing offers. In pairing low supply with low demand, the Orange County housing market lines up slightly in favor of sellers. The Expected Market Time is at 61 days, a Slight Seller’s Market (between 60 and 90 days). It has actually improved since the end of July when it was at 72 days. Yet, it is much slower than the 19-day level reached at the beginning of March. From August of 2020 to June of this year, the market was an INSANE Hot Seller’s Market with an Expected Market Time below 40 days. At those levels, buyers lined up around the block just to see a home. There were very few open houses because homes sold too quickly.
Those days are gone. A Slight Seller’s Market means that a seller must carefully arrive at the asking price, considering the home’s condition, upgrades, amenities, location, and overall appeal. For everyone else, the further a home is away from being turnkey, in great condition, or in a great location, the longer the home is going to take to sell. Sellers need to pack their patience. The market is no longer instant. As a result, more and more homes are sitting on the market.
Buyers:
→ Sellers taking longer
→ Competition between buyers
→ Low inventory
Sellers:
→ Right price point is crucial
→ Seller pricing competition
→ Slow 4th quarter
Orange County Housing Market Summary:
- The active listing inventory in the past couple of weeks plunged by 304 homes, down 8%, and now sits at 3,726, its lowest level since June. In August, there were 30% fewer homes that came on the market compared to the 3-year average prior to COVID (2017 to 2019), 1,054 less. Last year, there were 2,289 homes on the market, 1,437 fewer homes, or 39% less. The 3-year average prior to COVID (2017 to 2019) was 6,569, or 76% more.
- Demand, the number of pending sales over the prior month, decreased by 18 pending sales in the past two weeks, down 1%, and now totals 1,831. It is still the lowest reading for a start to September since 2007. Last year, there were 2,682 pending sales, 46% more than today. The 3-year average prior to COVID (2017 to 2019) was 2,438, or 33% more.
- With the supply of homes plunging compared to the slight drop in demand falling, the Expected Market Time, the number of days to sell all Orange County listings at the current buying pace, decreased from 65 to 61 days in the past couple of weeks, a Slight Seller’s Market (between 60 and 90 days). It was at 26 days last year, much stronger 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 43 days. This range represents 20% of the active inventory and 28% of demand.
- For homes priced between $750,000 and $1 million, the Expected Market Time is 54 days, a Slight Seller’s Market. This range represents 25% of the active inventory and 28% of demand.
- For homes priced between $1 million to $1.25 million, the Expected Market Time is 52 days, a Slight Seller’s Market. This range represents 12% of the active inventory and 14% of demand.
- For homes priced between $1.25 million to $1.5 million, the Expected Market Time is 68 days, a Slight Seller’s Market. 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 is 75 days, a Slight Seller’s Market (between 60 and 90 days). This range represents 11% of the active inventory and 10% of demand.
- For homes priced between $2 million and $4 million, the Expected Market Time in the past two weeks decreased from 98 to 91 days. For homes priced between $4 million and $8 million, the Expected Market Time increased from 159 to 161 days. For homes priced above $8 million, the Expected Market Time increased from 225 to 407 days.
- The luxury end, all homes above $2 million, accounts for 21% of the inventory and 12% of demand.
- Distressed homes, both short sales and foreclosures combined, made up only 0.2% of all listings and 0.2% of demand. There are only 6 foreclosures and 2 short sales available to purchase today in all of Orange County, 8 total distressed home on the active market, up 1 from two weeks ago. Last year there were 13 total distressed homes on the market, similar to today.