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The housing market in Orange County, California, is experiencing a unique set of circumstances that are shaping the current landscape for buyers, sellers, and real estate investors. In this blog post, we’ll examine some key facts about the market, including the record-low inventory, the decrease in new sellers, the impact of mortgage rates, and the scorching pace of the housing market.
- Record-Low Inventory:
- May has seen the lowest level of active inventory in Orange County since tracking began in 2004.
- The housing market is facing a crisis due to an alarmingly low number of available homes.
- To tip the market in favor of buyers, the inventory needs to rise to at least pre-pandemic levels, which averaged around 7,058 homes. There are only 2,139 homes available today
2. Decrease in New Sellers:
- Fewer homeowners are putting their properties on the market, exacerbating the inventory crisis.
- The number of new sellers has been significantly lower since the initial COVID lockdown and has intensified in recent months.
- Homeowners are hesitant to sell due to their existing low fixed-rate mortgages, which prevent them from moving to another house in a higher interest rate environment.
3. Impact of Mortgage Rates:
- Mortgage rates reached a height above 7% in late 2022, but they have since hovered between 6.25% and 6.75%.
- As the economy cools and unemployment rises, mortgage rates are expected to drop.
- Lower rates, potentially between 5.75% and 6.25%, will increase buyer demand by improving purchasing power and affordability.
4. Scorching Housing Market:
- The market time, the time between listing a property and it going into pending status, has dropped to 39 days, its lowest level since May of the previous year.
- Anything below 60 days is considered a hot market, indicating high demand and a quick sales process.
- Frustrated buyers are facing multiple offer situations and struggling to secure a home due to the exceptionally low inventory.
Conclusion:
The Orange County housing market is currently facing a severe inventory shortage, with record-low levels of available homes. This shortage, coupled with a decrease in new sellers and the impact of mortgage rates, has created a highly competitive and fast-paced market. As the economy cools, mortgage rates are expected to drop, potentially boosting buyer demand. However, until the inventory increases to pre-pandemic levels, buyers will continue to face challenges. For information on how best to navigate this market please feel free to contact us…
