Top 5 Housing Trends: With nearly half of 2021 in the rearview mirror, there are noticeable trends that have developed.
It seems as if everyone has an opinion about the future of the housing market. “It’s a bubble.” “The market has peaked.” “I am going to wait for values to come crashing down.” “Housing will continue to be hot for a very long time.” In the end, there is way too much noise that is not supported by facts, ignoring the data. It is time to step aside from the uproar and look at the trends that have surfaced in 2021.
1. The number of available homes to purchase is finally starting to rise. The unprecedented, ultra-low inventory has been the story for over a year now. At the start of last year, there already were not enough homes on the market, and then COVID-19 made things worse when many homeowners opted to not sell their homes. Ultimately, that led to this year’s anemic historically low level of available homes. In fact, today’s inventory is 64% less than the 5-year average of 6,702 homes (from 2015 to 2019 excluding 2020 due to COVID skewing the data). Yet, finally, now that summer has arrived with all of its normal, cyclical distractions, the inventory is on the rise, adding 174 homes, up 8%, within the past couple of weeks, its largest gain of the year. This new trend will continue throughout the summer months.
Watch the above video for my report on the market or send us an email (below) to request the full report for free.
Orange County Housing Market Summary:
- The active listing inventory increased by 174 homes in the past two weeks, up 8%, and now totals 2,388, its largest increase of the year and its highest level since February. From June 1st through June 15th, there were 19% fewer homes that came on the market compared to the 5-year average between 2015 to 2019 (2020 was skewed due to COVID-19), 405 less. Last year, there were 4,710 homes on the market, 2,322 additional homes, or 97% more.
-
Demand, the number of pending sales over the prior month, decreased by 151 pending sales in the past two weeks, down 5%, and now totals 2,906, its largest decrease of the year and its lowest level since February. Mortgage rates remain at historically low levels, maintaining demand’s current brisk pace. Last year, there were 2,992 pending sales, 3% more than today. It was the first time the prior year was higher than the current year dating back to June 2020.
- With an increase in the supply and a drop in demand, the Expected Market Time, the number of days to sell all Orange County listings at the current buying pace, increased from 22 to 25 days in the past couple of weeks, its highest level since February, but still an extremely Hot Seller’s Market (less than 60 days). It was at 47 days last year and rapidly getting hotter as 2020’s delayed Spring Market had begun.
- For homes priced below $750,000, the market is a Hot Seller’s Market (less than 60 days) with an Expected Market Time of 18 days. This range represents 28% of the active inventory and 38% of demand.
- For homes priced between $750,000 and $1 million, the Expected Market Time is 20 days, a Hot Seller’s Market. This range represents 21% of the active inventory and 26% of demand.
- For homes priced between $1 million to $1.25 million, the Expected Market Time is 18 days, a Hot Seller’s Market.
- For homes priced between $1.25 million to $1.5 million, the Expected Market Time is 24 days, a Hot Seller’s Market.
- For homes priced between $1.5 million and $2 million, the Expected Market Time increased from 28 to 29 days. For homes priced between $2 million and $4 million, the Expected Market Time increased from 44 to 57 days. For homes priced above $4 million, the Expected Market Time increased from 134 to 144 days.
- The luxury end, all homes above $1.5 million, accounts for 35% of the inventory and 15% of demand.
- Distressed homes, both short sales, and foreclosures combined, made up only 0.4% of all listings and 0.3% of demand.
- There are only 5 foreclosures and 5 short sales available to purchase today in all of Orange County, 10 total distressed homes on the active market, no change from two weeks ago. Last year there were 29 total distressed homes on the market, slightly more than today.
- There were 3,237 closed residential resales in May, 134% more than May 2020s 1,386 closed sales. May marked a 7% decline from April 2021. The sales to list price ratio was 100.7% for all of Orange County. Foreclosures accounted for just 0.1% of all closed sales, and short sales accounted for 0.1%. That means that 99.8% of all sales were good ol’ fashioned sellers with equity.
To request to read/download the full report and charts, please email [email protected].