Orange County Housing Report | Is the Market Out of Control?

Do you feel like this housing market is out of control? It likely depends which side of the market you are on, buyer or seller. Many buyers have found themselves in the situation where they are overextending themselves above the asking price of a home in order to present an attractive offer, only to not hear back from the sellers at all. Even worse, they see the property status has changed to pending, meaning they've accepted another offer. What is happening here? To buyers, this market feels out of control. To sellers, this is the absolute best experience they could ask for when selling a property. There are 2 different dynamics going on. There is an emerging trend we are seeing where listing agents are setting a home's price at slightly under market value in order to garner multiple offers and create overbidding, making it extremely hard on buyers. This technique has existed for decades where inventory is scarce, such as in the Bay Area. As long as we're dealing with scarce inventory, this trend is here to stay. This market can be confusing to navigate, please reach out to me if you have any questions or need assistance. (949) 498-7711

Orange County Housing Market Summary:

• The active listing inventory increased by 150 homes, up 11%, and now totals 1,556 homes, its lowest level for this time of the year since tracking began 19 years ago. In February, there were 13% fewer homes that came on the market compared to the 3-year average prior to COVID (2017 to 2019), 416 fewer. Last year, there were 2,349 homes on the market, 793 additional homes, or 51% more.
• Demand, the number of pending sales over the prior month, increased by 89 pending sales in the past two weeks, up 4%, and now totals 2,284. Last year, there were 3,110 pending sales, 36% more than today. The 3-year average prior to COVID (2017 to 2019) was 2,517, or 10% more.
• With the inventory rising faster than demand, the Expected Market Time, the number of days to sell all Orange County listings at the current buying pace, increased from 19 to 20 days in the past couple of weeks, an insanely Hot Seller’s Market (less than 60 days). It was at 23 days last year, similar to 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 15 days. This range represents 21% of the active inventory and 29% of demand.
• For homes priced between $750,000 and $1 million, the Expected Market Time is 17 days, a Hot Seller’s Market. This range represents 22% of the active inventory and 27% of demand.
• For homes priced between $1 million to $1.25 million, the Expected Market Time is 18 days, a Hot Seller’s Market. This range represents 11% of the active inventory and 12% of demand.
• For homes priced between $1.25 million to $1.5 million, the Expected Market Time is 18 days, a Hot Seller’s Market. This range represents 9% of the active inventory and 11% of demand.
• For homes priced between $1.5 million to $2 million, the Expected Market Time is 20 days, a Hot Seller’s Market. This range represents 10% of the active inventory and 10% of demand.
• For homes priced between $2 million and $4 million, the Expected Market in the past two weeks decreased from 35 to 33 days. For homes priced between $4 million and $8 million, the Expected Market Time increased from 48 to 75 days. For homes priced above $8 million, the Expected Market Time increased from 166 to 195 days.
• The luxury end, all homes above $2 million, accounts for 27% of the inventory and 12% of demand.
• The luxury end, all homes above $2 million, accounts for 29% of the inventory and 12% of demand.
• Distressed homes, both short sales and foreclosures combined, made up only 0.1% of all listings and 0.2% of demand. There are only 2 foreclosures and no short sales available to purchase today in all of Orange County, 2 total distressed homes on the active market, unchanged from two weeks ago. Last year there were 11 total distressed homes on the market, similar to today.
• There were 1,774 closed residential resales in February, 22% less than February 2021’s 2,283 closed sales. February marked a 2% drop compared to January 2022. The sales to list price ratio was 103.7% 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.

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