Orange County Housing Report | Buyers’ Gamble
Many buyers are sitting on the fence waiting for interest rates to fall, but don’t know when to cash in their chips.
Gambling on Rates: Interest rates have fallen to 4.25%, the lowest level in over a year.
So many potential buyers are just like the young gambler, they simply don’t know when they should walk away from the fence they are sitting on and cash in their chips. They are waiting to make the plunge into home ownership but are trying to “time the market.” Unfortunately, so many of these buyers, and homeowners waiting to refinance, have been sitting on the sideline and have already missed prior opportunities to cash in on excellent interest rates. Fortunately, rates are excellent once again
Last week was a huge week for interest rates. The last several months have been huge for interest rates. Since November 2018, interest rates have dropped dramatically from 5% to 4.25%, a substantial difference that helps on the homebuyer affordability front. Today’s rate of 4.25% is the lowest since February 2018.
Orange County Housing Market Summary:
The active listing inventory increased by 166 homes in the past two weeks, up 3%, and now totals 6,532. Last year, there were 4,609 homes on the market, 1,923 fewer than today. There are 42% more homes than last year.
So far this year, 4% fewer homes came on the market below $500,000 compared to 2018, and there were 15% fewer closed sales. Fewer and fewer homes and condominiums are now priced below $500,000. This price range is continuing to vanish.
Demand, the number of pending sales over the prior month, increased by 78 pending sales in the past two-weeks, up 3%, and now totals 2,350, its lowest level for this time of the year since 2014. Last year, there were 2,538 pending sales, 8% more than today.
The Expected Market Time for all of Orange County decreased from 84 days two weeks ago to 83 days today, a slight Seller’s Market (between 60 to 90 days) and the highest level for this time of the year since 2011. It was at 54 days last year.
For homes priced below $750,000, the market is a slight Seller’s Market (between 60 and 90 days) with an expected market time of 64 days. This range represents 42% of the active inventory and 54% of demand.
For homes priced between $750,000 and $1 million, the expected market time is 66 days, a slight Seller’s Market. This range represents 18% of the active inventory and 22% of demand.
For homes priced between $1 million to $1.25 million, the expected market time is 85 days, a slight 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 95 to 103 days. For homes priced between $1.5 million and $2 million, the expected market time increased from 140 to 146 days. For luxury homes priced between $2 million and $4 million, the expected market time decreased from 245 to 230 days. For luxury homes priced above $4 million, the expected market time decreased from 650 to 562 days.
The luxury end, all homes above $1.25 million, accounts for 32% of the inventory and only 16% of demand.
Distressed homes, both short sales and foreclosures combined, made up only 0.8% of all listings and 1.8% of demand. There are only 19 foreclosures and 30 short sales available to purchase today in all of Orange County, 49 total distressed homes on the active market, down two from two-weeks ago. Last year there were 39 total distressed homes on the market, slightly less than today.
There were 1,543 closed residential resales in February, 15% fewer than February 2018’s 1,820 closed sales. February marked a 6% increase from January 2019.The sales to list price ratio was 97.4% for all of Orange County. Foreclosures accounted for just 0.3% of all closed sales, and short sales accounted for 0.6%. That means that 99.1% of all sales were good ol’ fashioned sellers with equity
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