December, The slowest time of the year, the Holiday Market, runs from Thanksgiving through the first couple of weeks of the New Year. This is the time of the year where the country gets pummeled by blizzards, freezing temperatures, and undrivable roads. School days are cancelled to the delight of so many children. It is no wonder that the housing market cools to its slowest season of the year; who wants to look for a home when the weather is not cooperating. And, there are not as many sellers willing to allow buyers to trapes through their homes, dragging the snow with them.
It is easy to understand precisely why housing slows for the rest of the country, but why does it occur here in sunny Southern California? Yes, it is a bit cooler than the rest of the year, but the temperature bounces around in the 60’s. There is no snow, just a little bit of rain. Regardless of the weather, housing begins to slow during the Autumn Market, after the kids go back to school. It slows further when the distractions of the holidays set in.
Below is a summary of the of the OC Orange County Real Estate Market:
• The active listing inventory decreased by 398 homes in the past two weeks, its largest drop of the year, and now totals 6,820. Last year, there were 4,323 homes on the market, 2,497 fewer than today.
• So far this year, 13% fewer homes have come on the market below $500,000 compared to last year, and there have been 26% fewer closed sales. 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, decreased in the past two-weeks by 122 pending sales, its largest drop of the year, and now totals 1,654. Last year, there were 2,082 pending sales, 26% more than today.
• The Expected Market Time for all of Orange County increased from 122 days to weeks ago to 124 days today, a slight Buyer’s Market (120 to 150 days) and the highest level since January 2011. It was at 62 days last year.
• For homes priced below $750,000, the market is a Balanced Market (between 90 and 120 days) with an expected market time of 91 days. This range represents 43% of the active inventory and 59% of demand.
• For homes priced between $750,000 and $1 million, the expected market time is 111 days, a Balanced Market. This range represents 19% of the active inventory and 21% of demand.
• For homes priced between $1 million to $1.25 million, the expected market time is 138 days, a slight Buyer’s Market.
• For luxury homes priced between $1.25 million and $1.5 million, in the past two weeks, the expected market time remained unchanged at 182 days. For homes priced between $1.5 million and $2 million, the expected market time decreased from 235 to 222 days. For luxury homes priced between $2 million and $4 million, the expected market time increased from 340 to 397 days. For luxury homes priced above $4 million, the expected market time increased from 484 to 716 days.
• The luxury end, all homes above $1.25 million, accounts for 30% of the inventory and only 13% of demand.
• Distressed homes, both short sales and foreclosures combined, made up only 1.0% of all listings and 1.7% of demand. There are only 24 foreclosures and 41 short sales available to purchase today in all of Orange County, 65 total distressed homes on the active market, down 13 from two-weeks ago. Last year there were 64 total distressed homes on the market, slightly less than today.
• There were 2,328 closed residential resales in October, 9% fewer than October 2017’s 2,553. October marked an 11% increase over September 2018. The sales to list price ratio was 96.9% for all of Orange County. Foreclosures accounted for just 0.4% of all closed sales, and short sales accounted for 0.6%. That means that 99% of all sales were good ol’ fashioned sellers with equity. For a full copy of the report click here!
Are you thinking of a move and not sure if now is the right time, or maybe you should wait until Spring. Don't hesitate to give us a call to review the market in your neighborhood along with your goals. We review Supply, Demand, Interest Rates and YOUR Goals to ensure success.
We wish you and your family a wonderful holiday season and an abundant New Year!