Higher priced homes are so much harder to sell compared to the rest of the housing market.
Luxury is Slow: With an Expected Market Time for all homes above $1.25 million of 213 days, luxury is sluggish.
There is no line at the deli counter. You walk in to your favorite restaurant and get seated right away. At the grocery store, all the check stands are open yet not a soul is checking out. It is sunny with no rain in the forecast, but when you pull up to get the car washed there is no wait. That just about sums up the luxury housing market, there are simply not enough buyers compared to the number of sellers; demand is low. There is no line of buyers waiting for yet another luxury home to come on the market.
The headlines can be confusing. They seem to paint a strong housing market. They are NOT reporting on the luxury market; headlines describe the overall market. For homes priced below $1 million, Orange County real estate is much hotter and quite the contradiction compared to the upper end. Luxury housing is sluggish. Weekend open houses are not flooded with potential buyers. Multiple offers are extremely rare. It is not uncommon to go a week, or even weeks, without a single buyer touring a luxury home. There is very little buyer competition.
Orange County Housing Market Summary:
– The active listing inventory decreased by 137 homes in the past two-weeks, down 2%, and now totals 6,860. Last year, there were 7,207 homes on the market, 347 more than today.
– Demand, the number of pending sales over the prior month, downshifted considerably in the past two-weeks and decreased by 127 pending sales, down 5%, and now totals 2,401. Last year, there were 2,167 pending sales, 10% fewer than today.
– The Expected Market Time for all of Orange County remained increased from 83 to 86 days, a slight Seller’s Market (between 60 to 90 days). It was at 100 days last year, a much slower market.
– For homes priced below $750,000, the market is a hot Seller’s Market (less than 60 days) with an expected market time of 57 days. This range represents 38% of the active inventory and 56% of demand.
– For homes priced between $750,000 and $1 million, the expected market time is 72 days, a slight Seller’s Market. This range represents 19% of the active inventory and 22% of demand.
– For homes priced between $1 million to $1.25 million, the expected market time is 108 days, a Balanced Market.
– For luxury homes priced between $1.25 million and $1.5 million, in the past two weeks, the Expected Market Time decreased from 146 to 136 days. For homes priced between $1.5 million and $2 million, the Expected Market Time increased from 147 to 155 days. For luxury homes priced between $2 million and $4 million, the Expected Market Time increased from 220 to 278 days. For luxury homes priced above $4 million, the Expected Market Time increased from 527 to 555 days.
– The luxury end, all homes above $1.25 million, accounts for 34% of the inventory and only 14% of demand.
– Distressed homes, both short sales and foreclosures combined, made up only 0.8% of all listings and 1.5% of demand.
– There are only 24 foreclosures and 29 short sales available to purchase today in all of Orange County, 53 total distressed homes on the active market, up three in the past two-weeks. Last year there were 68 total distressed homes on the market, slightly more than today.
– There were 2,823 closed residential resales in August, 0.6% more than August 2018’s 2,806 closed sales. August marked a 2% drop compared to July 2019. The sales to list price ratio was 97.2% for all of Orange County. Foreclosures accounted for just 0.2% of all closed sales, and short sales accounted for 0.3%. That means that 99.5% of all sales were good ol’ fashioned sellers with equity.
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