I wanted to share some of Steven Thomas' report because it captures the current feeling we are seeing in the market place.
I have some agreements and disagreement.
Steven writes, "Even with home values reaching record highs, the housing market is rapidly cooling." Agreed.
"There are fewer showings, fewer multiple offers, and homes are taking longer to sell." Agreed.
"Overpriced homes are sitting." Agreed.
"The inventory is rapidly growing." Disagree.
"And price reductions are on the rise." Agree.
I still disagree about the inventory rapidly growing. In San Clemente, Dana Point and San Juan Capistrano, we are not seeing rapid growth on inventory. We are still very low in inventory, which is creating a high demand still on properties.
Some are more in demand than others. For example, single-level homes are still in high demand and seeing multiple offers.
He writes, "The bottom line: The quick rise in mortgage rates has substantially eroded home affordability and the Orange County housing market is rapidly cooling. It all boils down to the monthly payment. When the monthly payment climbs out of reach for many home buyers, demand cools. The housing frenzy is quickly coming to an end. Sellers need to be careful in navigating the new housing landscape. Carefully pricing is fundamental in order to find success."
I agree with most of his statement. We are seeing a market that is cooling but it is spotty. Some areas are still very hot while others have already cooled. I don't think anything is coming quickly to an end, but it is starting to slow for sure.
Always, if I can offer any assistance or answer any questions, please give me a call or text at 949-463-0400.
Orange County Housing Market Summary:
- The active listing inventory continued to surge higher by 245 homes, up 10%, and now totals 2,697 homes, its highest level since
December 2020. In April, there were 17% fewer homes that came on the market compared to the 3-year average prior to COVID
(2017 to 2019), 695 fewer. Last year, there were 2,251 homes on the market, 446 fewer homes, or 17% less. The 3-year average prior to COVID (2017 to 2019) was 6,370, or 136% more. - Demand, the number of pending sales over the prior month, decreased by 66 pending sales in the past two weeks, down 3%, and
now totals 2,113. Intentionally ignoring the COVID lockdowns of 2020, this is the lowest level at this time of year since 2007. Last
year, there were 3,083 pending sales, 46% more than today. The 3-year average prior to COVID (2017 to 2019) was 2,738, or 30%
more. - With supply surging higher and demand falling, the Expected Market Time, the number of days to sell all Orange County listings
at the current buying pace, surged higher from 34 to 38 days in the past couple of weeks, still an insanely Hot Seller’s Market (less
than 60 days), but rapidly cooling and the highest since January of last year. It was at 22 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 24 days. This range represents 17% of the active inventory and 28% of demand.
- For homes priced between $750,000 and $1 million, the Expected Market Time is 35 days, a Hot Seller’s Market. This range
represents 23% of the active inventory and 26% of demand. - For homes priced between $1 million to $1.25 million, the Expected Market Time is 34 days, a Hot Seller’s Market. This range
represents 13% of the active inventory and 14% of demand. - For homes priced between $1.25 million to $1.5 million, the Expected Market Time is 39 days, a Hot Seller’s Market. This range
represents 11% of the active inventory and 11% of demand. - For homes priced between $1.5 million to $2 million, the Expected Market Time is 30 days, a Hot Seller’s Market. This range
represents 10% of the active inventory and 12% of demand. - For homes priced between $2 million and $4 million, the Expected Market Time in the past two weeks increased from 54 to 61 days. For homes priced between $4 million and $8 million, the Expected Market Time increased from 106 to 146 days. For homes priced
above $8 million, the Expected Market Time decreased from 401 to 270 days. - The luxury end, all homes above $2 million, accounts for 25% of the inventory and 12% of demand.
- Distressed homes, both short sales and foreclosures combined, made up only 0.1% of all listings and 0% of demand. There are only 2 foreclosures and 2 short sale available to purchase today in all of Orange County, 4 total distressed home on the active market, up 1 from two weeks ago. Last year there were 10 total distressed homes on the market, similar to today.
- There were 2,565 closed residential resales in April, 26% less than April 2021’s 3,470 closed sales. April marked a 3% decrease
compared to March 2022. The sales to list price ratio was 107.2% for all of Orange County. There were no foreclosure sales, and
short sales accounted for 0.1% of all closed sales. That means that 99.9% of all sales were good ol’ fashioned sellers with equity.
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