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Orange County Housing Report:  Coming Up… Spring

 

Many mistaken the Summer Market as the busiest time of the year for housing,  yest it is the Spring Market that is home to the most real estate activity year in and year out.

The Spring Market

More homes come on the market during the spring than any other time of the year and demand reaches a peak. 

Spring is just around the corner. The days are growing longer, temperatures are slowly rising, trees that had lost their leaves are blanketed with new buds about to burst to life. Spring officially begins on Saturday, March 20th, and it is also the start to housing’s Spring Market, the busiest time of the year for housing. 

More homes are placed into escrow during the Spring Market than any…

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Orange County Housing Report: Going, Going, GONE!

When a record low number of available homes is matched with fierce pent-up demand, it results in an auction where homes sell immediately and for more than their asking prices.
 
Selling Above the Asking Price

It is common for homes that are just placed onto the market to receive dozens of offers to purchase, pushing up home values at a rapid pace.

For over a century, the predominate way to sell a home in Australia has been by auction. The appeal of an auction is that homeowners believe they can get a higher price by forcing buyers to compete against each other in a bidding war. An auctioneer is hired to conduct the bidding process. The more that participate, the higher the price. It has been…

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Orange County Housing Report: Rising Rates Vs. No Inventory

 

There are two opposing economic forces impacting the housing market right now, rising mortgage rates and a record low supply of homes available to purchase.

Opposing Forces

There simply are not enough homes available for buyers and rising rates have not yet had an impact on the insanely hot housing market.

The supply chain problems have been well documented across the United States and around the globe. One of the hardest hit industries is new cars. The supply of available new cars has dwindled down to record lows. As a result, dealers are adding a “market adjustment fee,” a line-item cost above the MSRP. The fee ads anywhere from a few thousand dollars to as much as $20,000…

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Unprecedented Start

Even with a rising mortgage interest rate environment, it is the hottest start to a year since tracking began in 2004 by a landslide.

 

Insanely Hot Seller’s Market

With a ridiculously record low supply of homes available to purchase matched with strong demand, the housing market is white hot.

The COVID-19 pandemic has severely disrupted the supply of goods and commodities. Initially, back in March 2020, there was a relentless run on toilet paper when people stood in long lines for hours as new shipments arrived. As the pandemic evolved, so did the impact on the supply of computer chips, which ultimately hit the automobile industry the hardest. Flash forward to today and new car lots are empty, there is a COVID premium…

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HAPPY NEW YEAR!!! 

Now, what does that mean for Orange County real estate?
First, let us look back at what happened in 2020 in terms of the inventory, demand, luxury properties, and the Expected Market Time.

 

Active Inventory

After starting the year with a record low number of available homes to purchase, the inventory did not increase like it typically does, and ultimately plunged to new record lows.

The year started off with an active inventory of 2,522 homes, the lowest level to start a year since tracking began in 2004. Typically, the inventory continuously climbs until peaking between July and August, but not this year. The inventory peaked on January 8th at 2,633 homes, dropped to 2,214 at the start of June, and then climbed…

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Orange County Housing Report: Not About the Price 

Everyone is intensely focused on the prices of home when the real focus should be the ability to write a check for the monthly mortgage payment.

 

Monthly Mortgage Payment
The low mortgage rate environment has resulted in substantially smaller payments, allowing home prices to rise considerably as well.

Everyone is acutely aware that home prices have been soaring for the past year-and-a-half. They have far exceeded the runup in values prior to the Great Recession. This has many people on edge, wondering how values can continue to rise beyond their current record highs. In focusing just on prices, it is no wonder they fear an end to the pandemic housing run. 

In analyzing today’s housing…

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Orange County Housing Report:  Inventory Catastrophe

 
For years, there have not been enough homes on the market, but the trend has only grown worse with COVID and the historically low interest rate environment.
Inventory Running on Empty: The inventory is at an all-time low and it is only going to drop from here

In climbing into the family car to run errands, there are times when the fuel gauge light is on, a reminder that gas is needed as soon as possible. At this point some people decide to wait to and save a few minutes and get the job at hand completed. Watching the “miles remaining” dwindle on the instrumental panel can be unnerving. When it reaches zero, panic sets in and pushing it any further becomes a gamble. Finally, after waiting…

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Orange County Housing Report:  November Housing Heat Wave
With an astonishingly limited supply of available homes to purchase matched up with blistering hot demand due to record low mortgage Rates, the overall housing market in Orange County is insanely hot.

Hot November Housing

With an Expected Market Time of only 23 days, the Orange County housing market is hotter than it has ever been for this time of the year. 


Housing has been dealing with an unrelenting heat wave of its own since last year. After coming out of the COVID lockdown protocols, the inventory dropped, demand soared, and housing reached record breaking temperatures from July through the end of 2020. It never cooled. In fact, the 37-day Expected Market Time reached in…

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Orange County Housing Report:  Housing Insanity: When Will It End?
The residential resale housing market has been at an unrelenting, torrid, insane pace since July of last year, and, seemingly, nothing will slow it down.
 

Interest Rates Juicing the Market

Historically low rates have led to the Expected Market Time dropping to 23 days, the lowest level for this time of year since tracking began in 2004.

For buyers waiting for the market to slow and turn more favorably towards the home shopper, there seems to be no light at the end of tunnel. Housing has lined up in favor of sellers since 2012. Many thought that the pandemic would slow housing, create a deep recession, and erode home values, giving buyers that much desired edge. Instead,…

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Orange County Housing Report:  Luxury Soars


 

Luxury housing emerged from the lockdowns of COVID-19 with unbelievable strength and has reached unprecedented levels.

 A Hot Luxury Market:  In 2021, one in six closed sales were luxury.


In 2021, the real estate marked evolved further, from red hot to white hot. Overnight, the real estate industry had become accustomed to throngs of showings, multiple offers, and homes selling for more than their asking prices. A surprising twist was that the luxury housing market surged right along with the lower price ranges and at a record pace.

What sparked the wave of luxury sales? The run-up on Wall Street has certainly helped. After the S&P plunged 32% at the beginning of the pandemic in March 2020,…

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