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Orange County Housing Report The Sky Is Not Falling

Buyer demand may not be as hot as prior years, but the Housing market is not collapsing either. 

No Housing Collapse: The underlying housing fundamentals have stabilized significantly compared to last year’s slide. 

Last year, major cracks in the housing market emerged. The HOT market continued from 2012 through the start of 2018, until the underlying fundamentals quickly eroded. From May through August of last year, the active inventory climbed by 17%, demand dropped by 10%, and the Expected Market Time (the amount of time it would take from hammering in the FOR SALE sign to opening escrow) rocketed upward. The Expected Market Time continued to soar by climbing an additional 56% from August through the end of the year, compared to a 7% average from 2012 through 2017.

This year, from May to the start of August, the active inventory has remained unchanged, demand has only dropped by 2%, and the Expected Market Time increased by only 1%. Housing is not grinding to a halt. The sky is not falling. Typically for this time of the year, the Summer Market, the active inventory rises, demand drops slightly, and the Expected Market time slowly increases. This year, there has not been much change at all. 

Orange County Housing Market Summary:

  • The active listing inventory decreased by 113 homes in the past two-weeks, down 1%, and now totals 7,488. The inventory most likely reached a peak for the year of 7,601 two weeks ago. Last year, there were 6,893 homes on the market, 595 fewer than today. There are 9% more homes than last year.
  • Demand, the number of pending sales over the prior month, increased by 101 pending sales in the past two-weeks, up 4%, and now totals 2,606. Last year, there were 2,394 pending sales, 9% fewer than today.
  • The Expected Market Time for all of Orange County decreased from 91 days two weeks ago to 86 days today, a slight Seller’s Market (between 60 to 90 days). It was at 86 days last year.
  • For homes priced below $750,000, the market is a hot Seller’s Market (less than 60 days) with an expected market time of 58 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 70 days, a slight Seller’s Market. This range represents 19% of the active inventory and 24% of demand.
  • For homes priced between $1 million to $1.25 million, the expected market time is 109 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 147 to 130 days. For homes priced between $1.5 million and $2 million, the Expected Market Time increased from 240 to 244 days. For luxury homes priced between $2 million and $4 million, the Expected Market Time decreased from 288 to 280 days. For luxury homes priced above $4 million, the Expected Market Time decreased from 500 to 404 days.
  • The luxury end, all homes above $1.25 million, accounts for 34% of the inventory and only 13% of demand.
  • Distressed homes, both short sales and foreclosures combined, made up only 0.8% of all listings and 1.4% of demand. There are only 20 foreclosures and 37 short sales available to purchase today in all of Orange County, 57 total distressed homes on the active market, up one in the past two-weeks. Last year there were 88 total distressed homes on the market, slightly more than today.
  • There were 2,871 closed residential resales in July, 5% more than July 2018’s 2,734 closed sales. July marked a 6% increase compared to June 2019. The sales to list price ratio was 98.3% for all of Orange County. Foreclosures accounted for just 0.5% of all closed sales, and short sales accounted for 0.24%. That means that 99.3% of all sales were good ol’ fashioned sellers with equity.

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We respect your time and we value your business. We know you could go anywhere for you real estate needs, and appreciate having the opportunity to serve you the best way we can.