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Orange County Inventory: Early Peak in 2017

Orange County Inventory: Early Peak in 2017

Active Orange County Inventory: Has been low for years but this year it has been even more exceptionally low.

Orange County inventory has been a frustrating one for homebuyers as unless you have cash it is difficult to get an offer accepted. Offers that are submitted subject to lending are finding it very difficult to get their offers accepted. This month there were 7% fewer Orange County homes listed for sale which is also much lower than the demand for buying Orange County real estate.

The high demand with slowing Orange County inventory has left the housing market steadily rising since 2012. If you look at July 2017 compared to July 2016, the Orange County median sales price has increased as much as 5.5% while rising an astounding 80% since 2012. While rising prices can make it harder to become a homeowner, the constant low-interest rate environment has left the dream of homeownership a reachable and realistic goal for many Orange County residents. If you ask most Economists, you will discover that the consensus is we will remain in a low-interest rate environment for the foreseeable future.

The Orange County inventory has remained so low that housing prices will inevitably continue to rise until supply and demand can find a more happy medium. Orange County home buyers will continue to face limited options with only the strongest offers getting taken seriously. Homes in Orange County priced at $750,000 and lower will experience the most extreme case of this type of seller’s market. According to the numbers, inventory levels peaked in July at 6,000 homes which is several months earlier than we typically see the peak in Orange County inventory. To put that in perspective, the active Orange County inventory needs to remain above 8,000 homes consistently for the housing market to move from a seller’s market to a more balanced market regarding supply and demand

The active Orange County inventory now totals 5,877 homes which is a decrease of 90 homes in just the past few weeks. The peak of the market for 2017 had 22% fewer homes for sale compared to the peak in 2016. The difference between demand vs. supply of homes is substantial in certain areas like in Anaheim where there are 28% fewer homes for sale versus last year. Simply put, there just aren’t enough homes available for sale in Orange County.

The peak in the Orange County inventory is at the lowest number on record since 2004. The question now becomes, what is in store for the future of the Orange County housing market? Due to having already experienced the peak in the 2017 inventory we expect the number of homes on the market to continue to decline through the remainder of the year.

The top of the market for Orange County inventory came so early and at such a low number that you can expect the beginning of the 2018 market to be slow if not anemic. Keep an eye out for the number to dip so low it might drop to the levels of 2013 at which time only 3,161 homes were for sale to start the year. This decline in inventory is one of the major factors that are resulting in the high demand creating the environment for bidding wars in certain neighborhoods throughout Orange County. This deep seller’s market is expected to continue in part because the low-interest rate environment is helping keep buying power.

Demand: Demand for homes in Orange County increased by 2% in the recent weeks.

Demand is the number of homes that have offers accepted and enter into escrow. This number has decreased by 2% or 55 pending homes. The new total number of pending homes sits at 2,890. Demand is either near the same or considerably higher in every price range except for properties priced below $500,000. With 41% fewer Orange County homes available below $500,000 compared to this time last year, it is no wonder that demand is off by 20% year over year in this range.

Last year at this time, demand was at 2,935 pending sales, 45 more than today. The expected market time was at 75 days. The current expected market time dropped from 63 days two weeks ago to 61 today. At 61 days, the market is not quite a HOT seller’s market, but a tepid seller’s market with muted appreciation (60 to 90 days).

Michael and Anabel Simpson Sell Anaheim

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simpsonrealty

Michael and Anabel Simpson have over 16 years of experience helping the community buy and sell real estate in Orange County, Los Angeles County, and Riverside County with a special emphasis on Anaheim and the surrounding area. In addition to being licensed Realtors, they are Short Sale and Foreclosure certified. Ask Michael and Anabel Simpson about the different techniques they use to sell homes, including 3D video, social media marketing and more. Contact Michael and Anabel Simpson today.

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