To get the complete Report and Charts, join our free Housing Report email list here.
Now that the holidays are over, it is time for housing to shift to the Winter Housing Market, when the inventory is flat, demand rises, and the pace of the market rapidly heats up.
Many buyers expect plenty of choices, less buyer competition, and a slow pace that enables them to take their time isolating a home. Yet, in Southern California during the Winter Market, from mid-January to mid-March, buyers find that the pace of housing is a lot hotter than they initially anticipated, with fewer choices and plenty of buyer competition. In addition, as winter rolls along, the market grows stronger and stronger.
Regardless of the year or economic situation, the housing market always revs its engine starting in mid-January. Demand will increase substantially from now through mid-March. Today’s 1,010 demand reading is the second lowest since tracking, only behind last year’s 939 pending sales. The pre-pandemic average was 1,710, a sizable 62% more. Nonetheless, there will be a lot more activity. An increasing number of buyers will start the process of searching for a home. The number of new prospective buyers will outpace the number of homes coming on the market, even at these muted levels.
With the inventory not changing much and demand surging higher, the Expected Market Time, will fall, and it will be a red-hot winter this year for housing.
What we're seeing:
→ Less active inventory than last year
→ Active inventory rises at this time
→ Demand is strong, buyers now looking
→ 72 actives in San Clemente
→ 44 pending escrows
→ 5 coming soon properties
→ Some houses selling at a record high
What we can expect:
→ Demand will continue to rise the next 3-4 months
→ Inventory will rise through June, July, August then it tables out
Orange County Housing Market Summary:
- The active listing inventory in the past couple of weeks increased by 115 homes, up 6%, and now sits at 1,900, still its second-lowest mid-January reading since tracking began in 2004, only behind 2022. In December, 36% fewer homes came on the market compared to the 3-year average before COVID (2017 to 2019), 532 less. Last year, there were 2,536 homes on the market, 636 more homes, or 33% higher. The 3-year average before COVID (2017 to 2019) was 4,739, or 149% extra, more than double.
- Demand, the number of pending sales over the prior month, soared higher by 149 pending sales in the past two weeks, up 17%, and now totals 1,010. Last year, there were 939 pending sales, 7% fewer than today. The 3-year average before COVID (2017 to 2019) was 1,710, or 69% more.
- With demand soaring compared to the smaller rise in supply, the Expected Market Time, the number of days to sell all Orange County listings at the current buying pace, decreased from 62 to 56 days in the past couple of weeks. It was 81 days last year, slower than today. The 3-year average before COVID (2017 to 2019) was 86 days, also slower than today.
- For homes priced below $750,000, the Expected Market Time increased from 39 to 42 days. This range represents 20% of the active inventory and 27% of demand.
- For homes priced between $750,000 and $1 million, the Expected Market Time decreased from 43 to 32 days. This range represents 14% of the active inventory and 25% of demand.
- For homes priced between $1 million and $1.25 million, the Expected Market Time decreased from 47 to 41 days. This range represents 9% of the active inventory and 13% of demand.
- For homes priced between $1.25 million and $1.5 million, the Expected Market Time decreased from 55 to 53 days. This range represents 10% of the active inventory and 11% of demand.
- For homes priced between $1.5 million and $2 million, the Expected Market Time decreased from 72 to 66 days. This range represents 12% of the active inventory and 11% of demand.
- For homes priced between $2 million and $4 million, the Expected Market Time in the past two weeks decreased from 105 to 89 days. For homes priced between $4 million and $6 million, the Expected Market Time decreased from 357 to 165 days. For homes priced above $6 million, the Expected Market Time increased from 374 to 396 days.
- The luxury end, all homes above $2 million, account for 35% of the inventory and 13% of demand.
- Distressed homes, both short sales and foreclosures combined, comprised only 0.4% of all listings and 0.5% of demand. Only six foreclosures and two short sales are available today in Orange County, with eight total distressed homes on the active market, down two from two weeks ago. Last year, 11 distressed homes were on the market, similar to today.