Orange County Housing Report | The Neutral Zone
After three months of a slight Buyer’s Market, Orange County housing has moved back to a Balanced Market
Back to Balance: With rising demand, the housing market transitioned to a Balanced Market.
Let’s paint a picture. It is the end of the school year and time for thousands to graduate from college and embark on the next chapter in their lives. Arenas and stadiums across the country will bestow degrees to young adults eager to make their mark on the world. Their heads are filled with the highest expectations: instant job offers, the job of their choice, and an attractive salary. Then, reality sets in. They move back in with their parents. Their résumé is distributed to a myriad of companies, but there is no instant offer. Finally, after months of looking, they stumble upon an entry level position that pays very little. It all boils down to unrealistic expectations.
Similarly, sellers in 2019 are experiencing the plight of unrealistic expectations. Many are coming on the market expecting a Seller’s Market in the spring like 2012 through 2018: instant offers, instant success, full price offers, and buyers tripping over themselves to purchase their home. That is just not the Spring Market in 2019. Like college graduates, it all boils down to unrealistic expectations.
Orange County Housing Market Summary:
The active listing inventory decreased by 22 homes in the past two weeks and now totals 6,100, almost unchanged. Last year, there were 3,981 homes on the market, 2,119 fewer than today. There are 53% more homes than last year.
In January, 2% fewer homes came on the market below $500,000 compared to 2018, and there were 19% 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, soared in the past two-weeks by 356 pending sales, up 25%, and now totals 1,791, its lowest level for this time of the year since 2008. Last year, there were 2,286 pending sales, 28% more than today.
The Expected Market Time for all of Orange County decreased from 128 days two weeks ago to 102 days today, a Balanced Market (between 90 to 120 days) and the highest level for this time of the year since 2011. It was at 52 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 80 days. This range represents 44% of the active inventory and 56% of demand.
For homes priced between $750,000 and $1 million, the expected market time is 79 days, a slight Seller’s Market. This range represents 17% of the active inventory and 23% of demand.
For homes priced between $1 million to $1.25 million, the expected market time is 112 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 185 to 144 days. For homes priced between $1.5 million and $2 million, the expected market time decreased from 305 to 209 days. For luxury homes priced between $2 million and $4 million, the expected market time decreased from 314 to 241 days. For luxury homes priced above $4 million, the expected market time decreased from 794 to 582 days.
The luxury end, all homes above $1.25 million, accounts for 31% of the inventory and only 14% of demand.
Distressed homes, both short sales and foreclosures combined, made up only 1% of all listings and 1.6% of demand. There are only 18 foreclosures and 41 short sales available to purchase today in all of Orange County, 59 total distressed homes on the active market, up 3 from two-weeks ago. Last year there were 39 total distressed homes on the market, slightly less than today.
There were 1,461 closed residential resales in January, 19% fewer than January 2018’s 1,800 closed sales. January marked an 18% drop from December 2018. The sales to list price ratio was 96.7% for all of Orange County. Foreclosures accounted for just 0.8% of all closed sales, and short sales accounted for 0.6%. That means that 98.6% of all sales were good ol’ fashioned sellers with equity
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