Year in and year out December is notoriously the slowest month of the year in terms of demand and new sellers placing their homes on the market; yet housing is still hot.
Nobody can escape it. The holidays are here. Office gatherings, friend gatherings, and family gatherings fill everybody’s calendars. The mall parking lots are full, mailboxes are filled with season’s greetings, and the temperature is finally beginning to drop. Seemingly, one and all are dialed into the season; so, how can housing still be red hot?
Even though Orange County housing is leaning heavily in the seller’s favor, the Holiday Market has arrived and December is notoriously the slowest month of the year in terms of new pending sale activity. There are fewer and fewer homes on the market every single day. The active inventory has dropped 31% since September. As a result, demand has dropped considerably as well, 34%. This is the time of year where both the active inventory and demand (recent pending sales) hits yearly lows.
Yet, there are stories today of homes hitting the market and generating multiple offers within days. Ultimately, a bidding war ensues. It may be the holiday season, but homes that hit the market below $1 million will fly off the market as long as they are priced right and in excellent condition.
For a complete report from Steven Thomas and Reports on Housing, click here. Below is a summary by price point to give you some insight on those specifics.
· The active listing inventory decreased by 300 homes in the past couple of weeks and now totals 4,023. Expect the inventory to drop considerably for the last couple of weeks of the year. Last year, there were 4,789 homes on the market, 766 more than today.
· There are 30% fewer homes on the market below $500,000 today compared to last year at this time and demand is down by 25%. Fewer and fewer homes and condominiums are now priced below $500,000. This price range is slowly disappearing.
· Demand, the number of pending sales over the prior month, plunged by 218 in the past couple of weeks, down 10%, and now totals 1,864. The average pending price is $853,152.
· The average list price for all of Orange County remained at $1.8 million. This number is high due to the mix of homes in the luxury ranges that sit on the market and do not move as quickly as the lower end.
· For homes priced below $750,000, the market is HOT with an expected market time of just 39 days. This range represents 38% of the active inventory and 63% of demand.
· For homes priced between $750,000 and $1 million, the expected market time is 58 days, a hot seller’s market (less than 60 days). This range represents 17% of the active inventory and 19% of demand.
· For homes priced between $1 million to $1.25 million, the expected market time is 80 days, a slight seller’s market.
· For luxury homes priced between $1.25 million and $1.5 million, the expected market time decreased from 129 days to 118. For homes priced between $1.5 million and $2 million, the expected market time increased from 169 to 207 days. For luxury homes priced between $2 million and $4 million, the expected market time decreased from 246 to 227 days. For luxury homes priced above $4 million, the expected market time increased from 437 to 521 days.
· The luxury end, all homes above $1.25 million, accounts for 37% of the inventory and only 12% of demand.
· The expected market time for all homes in Orange County increased from 62 days to 65, a tepid seller’s market (60 to 90 days). From here, we can expect the market time to rise slightly through the end of the year.
· Distressed homes, both short sales and foreclosures combined, make up only 1.5% of all listings and 1.7% of demand. There are only 20 foreclosures and 40 short sales available to purchase today in all of Orange County, that’s 60 total distressed homes on the active market, dropping by 4 in the past two weeks. Last year there were 126 total distressed sales, 110% more than today.
· There were 2,421 closed residential resales in November, down by 2% from November 2016’s 2,468 closed sales. November marked a 5% drop from October 2017, normal for the Autumn Market. The sales to list price ratio was 97.4% for all of Orange County. Foreclosures accounted for just 0.7% of all closed sales and short sales accounted for 0.8%. That means that 98.5% of all sales were good ol’ fashioned sellers with equity.
As you can see the Orange County real estate market continues to be very strong and we anticipate this carrying through in 2018. However, finding the right home that meets your needs will continue to be a challenge with the low inventory, that is why it is crucial to be working with any agent that understands your goals, can react quickly, negotiate a strong offer to ensure your goals are met.
We are a bit unique, we start with an in-depth buyer's consultation, where we review your goals, discuss market numbers, review lending details and finally develop a plan to find the home you are looking for. If you need to sell before buying, we review the market in your area along with your purchasing goals and then target our marketing to bring you a buyer that provides a smooth transaction to sell and buy at the same time. Planning makes perfect, let's grab a cup of coffee and review your real estate goals!