Orange County home selling and buying strayed from normal patterns and stayed hot during the summer.
Orange County home buying surprised prognosticators and didn’t slow down much during time of summer distractions – such as school graduations, fun in the sun, kids out of school, family vacations, trips to the beach, surf and sand, dips in the pool, picnics in the park, playtime and otherwise.
Summer 2016 housing market has been the hottest summer since the heydays prior to 2007.
Orange County experienced a different buyer demand, which increased by 5% during July 2016 – not like a typical summer downturn.
Market demand, the number of new pending sales over the prior month, increased from 2,783 to 2,935 during July 2016. Compare that to last year 2015 when demand decreased by 2% from 2,810 to 2,762 (6% less than today’s level).
Why did the Orange County housing market stay warm this summer 2016?
- Orange County housing has healed.
- Foreclosures and short sales are things of the past and now make up less than 3% of all closed sales (During 2012 foreclosures and short sales represented 31% of the market).
- Now that Orange County housing has been restored and number of distressed properties is low, the Orange County market is expanding.
- Rock bottom interest rates and those for mortgage home loans, even lower than last year, inspires a recipe for strong demand.
- This year, like every year since 2008, fewer homeowners are opting to sell. There are 30% fewer homes on the market compared to 2000 through 2007. People are staying in their homes longer and not moving. On average, the current turnover rate for homeowners is 23 years (which is much longer that prior to 2007).
- With low supply of homes and strong buyer demand, Orange County housing stayed warm.
- There are now 19% fewer homes on the market below $500,000 compared to last year at this time. As home values go up, this low price range is vanishing.
Orange County housing market price ranges:
- For homes priced below $750,000, the market is hot with an expected market time of just 50 days. (This range represents 45% of active inventory and 67% of demand).
- For homes priced between $750,000 and $1 million, the expected market time is more balanced, about 84 days (a slight seller’s market),
- For luxury homes priced between $1 million to $1.5 million expected market time of 114 days (buyer’s market).
- For homes priced between $1.5 million to $2 million, expected market time is at 159 days (a buyer’s market).
- For luxury homes priced above $2 million expected market time is now at 304 days (a buyer’s market).
- For all Orange County homes, expected market time is now at 75 days (a slight seller’s market).
From now through October, pace of Orange County home selling is expected to slow down, and buyers will get some better opportunity – when housing moves towards a balanced market.
Best approach for sellers when market moderates this fall: Don’t overprice your listing. When buyer traffic is down and market time is rising, you need to be careful with list pricing, which is fundamental to achieve your seller success.
Best approach for buyers when market moderates this fall: Focus on buying at Fair Market Value price.
By Harrison K. Long, Professional real estate representative and REALTOR®. Real estate broker – CALBRE #01410855. Broker associate, HomeSmart Evergreen Realty. Honored as “REALTOR® of the Year 2016” by the Orange County REALTORs®. Attorney member of CA State Bar Association #69137.
One of our goals is to provide the best and up-to-date real estate market information for buyers, sellers and investors. Source of some information is CRMLS multiple listing service and ReportsOnHousing.com (including graphic) and is for homes sold by all brokers and Realtor agents.
“Will the Orange County CA real estate market 2016 heat wave continue?”