Lack of Supply: From March through today, one-third fewer homes were placed on the market.
Many homeowners think that now is not a good time to sell because of COVID-19, that “June gloom” has shrouded the Orange County housing market due to the virus. With reports calling for prices to drop, many have come to believe that the market favors buyers and that it is exceedingly difficult to sell. After all, how can you sell a home in this environment, in the midst of a pandemic? These homeowners have their wires crossed and they could not be further from the truth.
Today’s Orange County market is a Hot Seller’s Market with an Expected Market Time (the amount of time between hammering in the FOR-SALE sign to opening escrow) of only 59 days. It is the hottest June since 2013. Homes new to the market are being met with a flood of showings, multiple offers are the norm once again, and sellers are fetching very close to, and often even more than, their asking prices. As far as the housing market is concerned, it is sunny and the water is perfect, a missed opportunity for those homeowners who think otherwise.
Orange County Housing Market Summary:
- The active listing inventory decreased by 94 homes in the past two-weeks, down 2%, and now totals 4,950. Since March, there have been 33% fewer homes that have come on the market compared to the prior 5-year average. That is 4,580 fewer FOR-SALE signs. COVID-19 is still suppressing the supply of homes. Last year, there were 7,493 homes on the market, 2,543 more than today, a 51% difference.
- Demand, the number of pending sales over the prior month, increased by 494 pending sales in the past two-weeks, up 24%, and now totals 2,529. It has grown by 56% in only 4 weeks. COVID-19’s effect on housing has vanished. Last year, there were 2,529 pending sales, 5% more than today.
- The Expected Market Time for all of Orange County decreased from 74 days to 59, a Hot Seller’s Market (less than 60 days). The drop was due to the surge in demand and a subsequent drop in the supply. It was at 84 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 41 days. This range represents 35% of the active inventory and 50% of demand.
- For homes priced between $750,000 and $1 million, the expected market time is 42 days, a hot Seller’s Market. This range represents 18% of the active inventory and 25% of demand.
- For homes priced between $1 million to $1.25 million, the expected market time is 70 days, a slight Seller’s Market (between 60 and 90 days).
- For luxury homes priced between $1.25 million and $1.5 million, in the past two weeks, the Expected Market Time decreased from 98 to 89 days. For homes priced between $1.5 million and $2 million, the Expected Market Time decreased from 116 to 96 days. For luxury homes priced between $2 million and $4 million, the Expected Market Time decreased from 258 to 175 days. For luxury homes priced above $4 million, the Expected Market Time decreased from 455 to 315 days.
- The luxury end, all homes above $1.25 million, accounts for 36% of the inventory and only 16% of demand.
- Distressed homes, both short sales and foreclosures combined, made up only 0.5% of all listings and 1% of demand. There are only 9 foreclosure s and 15 short sales available to purchase today in all of Orange County, 24 total distressed homes on the active market, down 14 from two-weeks ago. Last year there were 53 total distressed homes on the market, slightly more than today.
- There were 1,386 closed residential resales in May, 53% fewer than April 2019’s 2,941 closed sales. This is entirely due to COVID-19 suppressing both supply and demand. May marked a 19% drop compared to April 2020. The sales to list price ratio was 95.4% for all of Orange County. Foreclosures accounted for just 0.6% of all closed sales, and short sales accounted for 0.4%. That means that 99% of all sales were good ol’ fashioned sellers with equity.
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