Housing Trends: With a low supply and strong demand, the market has not been this hot since 2013.
While unemployment is still high and the overall economy is slowly crawling its way out of a forced stoppage, housing has been a bright spot with a “V-Shaped” recovery. It came roaring back and trends have emerged that pave the way to a strong finish
to 2020 in Orange County.
The active listing inventory has dropped to unprecedentedly low levels. Even at the start of the year, there were not that many homes on the market. Anything that did come on the market quickly opened escrow. Even prior to the shutdown, the inventory had only increased from 3,901 at the beginning of January to 4,159 by March 5th, an increase of only 7%. In March, it was at low levels last experienced in 2013. During the lockdown, COVID-19 suppressed the number of homeowners coming on the market. In April, there were 54% fewer homes that came on the market compared to the 5-year average. Today, there are only 6% fewer homes entering the fray. COVID-19’s grip on preventing homeowners from listing their homes is disappearing.
Orange County Housing Market Summary:
- The active listing inventory decreased by 55 homes in the past two-weeks, down 1%, and now totals 4,590, its lowest level for July since tracking began in 2004. In the past four-weeks, 6% fewer homes were placed on the market compared to the prior 5-year average. It was a 54% difference at the end of April; thus, COVID-19’s grip on suppressing the inventory is diminishing. Last year, there were 7,601 homes on the market, 3,011 additional homes, or 66% more.
- Demand, the number of pending sales over the prior month, increased by 150 pending sales in the past two-weeks, up 5%, and now totals 3,200, its highest level since October 2012. COVID-19 currently has no effect on demand. Last year, there were 2,505 pending sales, 22% fewer than today.
- The Expected Market Time for all of Orange County decreased from 46 days to 43, a Hot Seller’s Market (less than 60
days). It was at 91 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 31 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 29 days, a hot Seller’s Market. This range represents 17% of the active inventory and 26% of demand.
- For homes priced between $1 million to $1.25 million, the expected market time is 48 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 decreased from 60 to 53 days. For homes priced between $1.5 million and $2 million, the Expected Market Time increased from 71 to 81 days. For luxury homes priced between $2 million and $4 million, the Expected Market Time decreased from 113 to 109 days. For luxury homes priced above $4 million, the Expected Market Time increased from 249 to 274 days.
- The luxury end, all homes above $1.25 million, accounts for 38% of the inventory and only 17% of demand.
- Distressed homes, both short sales and foreclosures combined, made up only 0.5% of all listings and 0.6% of demand. There are only 12 foreclosures and 13 short sales available to purchase today in all of Orange County, 25 total distressed homes on the active market, down 2 from two-weeks ago. Last year there were 56 total distressed homes on the market, slightly more than today.
- There were 2,169 closed residential resales in June, 20% fewer than June 2019’s 2,715 closed sales. The sold data is beginning to reflect the recent surge in demand. June marked a 56% increase compared to May 2020. The sales to list price ratio was 97.6% for all of Orange County. Foreclosures accounted for just 0.4% of all closed sales, and short sales accounted for 0.2%. That means that 99.4% of all sales were good ol’ fashioned sellers with equity.
To request to read/download the full report and charts, please email info(at)echelberger(dotted)com.
We respect your time and we value your business. We know you could go anywhere for your real estate needs, and appreciate having the opportunity to serve you the best way we can.