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For homeowners looking to sell in 2022, the window of opportunity is closing as the inventory climbs, demand falls, and market times grow longer.
The inventory will unrelentingly rise from now until it peaks during the Autumn Market, demand will methodically drop for the remainder of the year, and the market time will grow longer and longer. At today’s 67-day level, it is a Slight Seller’s Market (between 60 and 90 days) where sellers get to call more of the shots, but there are fewer multiple offers and home values are not appreciating as fast as they have been over the past couple of years. The market is no longer instant and properly pricing is absolutely crucial to find success.
The Expected Market Time will grow from 67-days to over 90-days within the next couple of months, and the Orange County housing market will transition to a Balanced Market (between 90 to 120 days), one that does not favor sellers or buyers and home values are no longer climbing. Depending upon where mortgage rates are during the autumn, housing could even reach a Slight Buyer’s Market (between 120 and 150 days), where buyers get to call the shots, yet home values are still not changing much. If a Slight Buyer’s Market persists with duration, for more than four months, prices could start to slowly decline. Any declines would be small as there is a real stickiness to home values due to the strength of the housing stock. There will be very little seller desperation.
The bottom line for homeowners thinking about selling: The longer they wait, the slower and more challenging the market will be. Right now, the market is still strong. Sellers will achieve success If they price their homes according to their Fair Market Value. Opportunity is knocking.
Orange County Housing Market Summary:
- The active listing inventory continued to surge higher adding 312 homes in the past couple of weeks, up 9%, and now totals 3,803 homes, its highest level since November 2020. In June, there were 11% fewer homes that came on the market compared to the 3-year average prior to COVID (2017 to 2019), 418 fewer. Last year, there were 2,528 homes on the market, 1,275 fewer homes, or 34% less. The 3-year average prior to COVID (2017 to 2019) was 6,708, or 76% more.
- Demand, the number of pending sales over the prior month, decreased by 151 pending sales in the past two weeks, down 8%, and now totals 1,710, its lowest level at this time of year since tracking began in 2004. Last year, there were 2,761 pending sales, 61% more than today. The 3-year average prior to COVID (2017 to 2019) was 2,582, or 51% more.
- With supply soaring higher and demand falling, the Expected Market Time, the number of days to sell all Orange County listings at the current buying pace, surged from 56 to 67 days in the past couple of weeks, a Slight Seller’s Market (between 60 and 90 days). Housing is rapidly cooling, and the market time is at its highest level since May of 2020. It was at 27 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 41 days. This range represents 18% of the active inventory and 29% of demand.
- For homes priced between $750,000 and $1 million, the Expected Market Time is 60 days, a Slight Seller’s Market. This range represents 24% of the active inventory and 27% of demand.
- For homes priced between $1 million to $1.25 million, the Expected Market Time is 71 days, a Slight Seller’s Market. This range represents 13% of the active inventory and 12% 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 12% of the active inventory and 11% of demand.
- For homes priced between $1.5 million to $2 million, the Expected Market Time is 87 days, a Slight Seller’s Market (between 60 and 90 days). This range represents 12% of the active inventory and 9% of demand.
- For homes priced between $2 million and $4 million, the Expected Market Time in the past two weeks increased from 88 to 98 days. For homes priced between $4 million and $8 million, the Expected Market Time increased from 143 to 159 days. For homes priced above $8 million, the Expected Market Time increased from 353 to 625 days.
- The luxury end, all homes above $2 million, accounts for 21% of the inventory and 11.5% of demand.
- Distressed homes, both short sales and foreclosures combined, made up only 0.2% of all listings and 0.1% of demand. There are only 5 foreclosures and 1 short sale available to purchase today in all of Orange County, 6 total distressed home on the active market, up 1 from two weeks ago. Last year there were 7 total distressed homes on the market, similar to today.
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