A sudden spike in the inventory is an ominous sign for sellers to approach the market carefully. An Inventory Spike: In the past two weeks, the active inventory had its largest increase since July 2013. The script for the Orange County housing market has been the same for quite some time now. The year starts with very few homes on the market. The inventory rises slowly, peaking sometime during the summer. The long-term average for the active listing inventory is 8,000 homes; yet, it cannot even hit that level for a day, falling astonishingly short year after year. The headlines have been the same: “Not Enough Homes on the Market” and “Buyers are Tripping Over Themselves to Purchase.” Suddenly, something has changed. More homes are coming on the market, a lot more homes.
The active listing inventory increased by a staggering 436 homes in the past two weeks, up 9%, and now totals 5,144. Expect the inventory to increase from now through mid-Summer. Last year, there were 5,263 homes on the market, 119 more than today.
• This year, 19% fewer homes have come on the market below $500,000 today compared to last year, and there have been 28% fewer closed sales so far this year. Fewer and fewer homes and condominiums are now priced below $500,000. This price range is slowly vanishing.
• Demand, the number of pending sales over the prior month, increased in the past two-weeks by 38 pending sells, up 1%, and now totals 2,640. Last year, there were 2,981 pending sales, 13% more than today.
• The average list price for all of Orange County dropped from $1.8 million to $1.7 million over the past two weeks. 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 36 days. This range represents 34% of the active inventory and 55% of demand.
• For homes priced between $750,000 and $1 million, the expected market time is 45 days, a hot seller’s market (fewer than 60 days). This range represents 18% of the active inventory and 23% of demand.
• For homes priced between $1 million to $1.25 million, the expected market time is 71 days, a slight seller’s market (between 60 and 90 days).
• For luxury homes priced between $1.25 million and $1.5 million, the expected market time increased from 95 days to 104. For homes priced between $1.5 million and $2 million, the expected market time decreased from 155 to 129 days. For luxury homes priced between $2 million and $4 million, the expected market time increased from 187 days to 208 days. For luxury homes priced above $4 million, the expected market time increased from 313 to 386 days.
• The luxury end, all homes above $1.25 million, accounts for 39% of the inventory and only 14% of demand.
• The expected market time for all homes in Orange County increased from 54 days to 58 in the past two weeks, a hot seller’s market (fewer than 60 days). The expected market time is knocking on the door of a slight seller’s market (from 60 to 90 days).
• Distressed homes, both short sales and foreclosures combined, make up only 0.4% of all listings and 0.4% of demand. There are only 22 foreclosures and 21 short sales available to purchase today in all of Orange County, that’s 43 total distressed homes on the active market, up four in the past two weeks. Last year there were 89 total distressed sales, 107% more than today.
• There were 2,613 closed residential resales in March, down by 6% from March 2017’s 2,792 closed sales. March marked a 44% increase from February 2018. The sales to list price ratio was 97.6% for all of Orange County. Foreclosures accounted for just 0.5% of all closed sales, and short sales accounted for 0.6%. That means that 98.9% of all sales were good ol’ fashioned sellers with equity.
So what does this all mean to you. Give us a call tor review the current market in your neighborhood. We will review in details current sales, pending demand, your homes condition and develop a plan that brings you results. Even if you are not planning on selling your home in the near future!