A Powerful Market: With a low supply and extremely strong demand, the Expected Market Time is at its lowest level to start October since tracking began in 2004.
The lighthouse is a perfect metaphor for something that is powerful, strong, and resilient. It is a great metaphor for the current Orange County housing market. It too is extremely strong and is at a powerful level that will endure for quite some time. The momentum and force of housing will push through the current pandemic and economic turbulence. At the root of housing’s strength is simple supply and demand. The active listing inventory is currently at 4,153 homes, its lowest level for a start to October since tracking began in 2004. Only 2012 came close with 4,400 homes. All other years had at least an additional 1,200 homes. In fact, there were 6,616 homes to start October in 2019, an extra 2,463 or 59% more.
The record low interest rate environment is fueling unprecedented demand. Rates have reached 9 record lows so far this year. With mortgage rates below 3%, current demand is off the charts. Demand, the number of pending sales over the prior 30-days, is at 3,254. The last time it was this high was in 2012 when it reached 3,255 at the start of October, yet there were 1,167 short sales and foreclosures embedded in those numbers, 36% of demand. Since short sales required lenders agreeing to take less, many of those short sales never closed. Today there are only 13 short sales and foreclosures included in demand, 0.4%. Last year demand was at 2,311 pending sales, 943 fewer or 29% less.
Orange County Housing Market Summary:
- The active listing inventory decreased by 60 homes in the past two-weeks, down 1%, and now totals 4,153, its lowest level for a start to October since tracking began in 2004. COVID-19 is not suppressing the inventory; in September there were 21% more homes that came on the market compared to last year. This trend evolved in August when there were 14% more homes year over year. Last year, there were 6,616 homes on the market, 2,463 additional homes, or 59% more.
- Demand, the number of pending sales over the prior month, decreased by 2 pending sales in the past two-weeks, nearly unchanged, and now totals 3,254. COVID-19 currently has no effect on demand. Record low rates are fueling today’s exceptional demand. Last year, there were 2,311 pending sales, 29% fewer than today.
- The Expected Market Time for all of Orange County decreased from 39 days to 38, a Hot Seller’s Market (less than 60 days). It was at 86 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 28 days. This range represents 34% of the active inventory and 47% of demand.
- For homes priced between $750,000 and $1 million, the expected market time is 27 days, a hot Seller’s Market. This range represents 18% of the active inventory and 26% of demand.
- For homes priced between $1 million to $1.25 million, the expected market time is 37 days, a hot Seller’s Market.
- For luxury homes priced between $1.25 million and $1.5 million, in the past two weeks, the Expected Market Time increased from 47 to 48 days. For homes priced between $1.5 million and $2 million, the Expected Market Time decreased from 63 to 61 days. For luxury homes priced between $2 million and $4 million, the Expected Market Time decreased from 106 to 100 days. For luxury homes priced above $4 million, the Expected Market Time increased from 234 to 315 days.
- The luxury end, all homes above $1.25 million, accounts for 39% of the inventory and only 17% of demand.
- Distressed homes, both short sales and foreclosures combined, made up only 0.4% of all listings and 0.4% of demand. There are only 8 foreclosures and 8 short sales available to purchase today in all of Orange County, 16 total distressed homes on the active market, up 2 from two-weeks ago. Last year there were 54 total distressed homes on the market, more than today.
- There were 3,153 closed residential resales in August, 12% more than August 2019’s 2,823 closed sales. August marked a 5% increase compared to July 2020. The sales to list price ratio was 98.8% for all of Orange County. Foreclosures accounted for just 0.2% of all closed sales, and short sales accounted for 0.2%. That means that 99.6% of all sales were good ol’ fashioned sellers with equity.