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Orange County Housing Report:   Crash Coming?


 

With housing values soaring like they did prior to the Great Recession coupled with recent inflation news, many are calling for a correction in housing.

No Crash Coming

Housing data illustrates that there is not a housing crash on the horizon.
Once again, housing is soaring upward with seemingly no end in sight. Buyers are tripping over each other, willing to pay tens of thousands of dollars above the asking price. Throw in the news of rising inflation and the potential of drastically higher mortgage rates, the madness must come to a screeching halt soon, right? Even though so many are anticipating and reporting that a housing crash is eminent, it simply is not going to occur, not now, not…
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Orange County Housing Report: On the Endangered List

The lower price ranges are disappearing with far fewer homes available to purchase, and it is impacting the number of affordable closed sales.

Vanishing Lower Ranges

A mind-blowing 29% fewer homes have come on the market below $750,000 so far this year.

In the first quarter of 2012, there were 5,553 closed sales below $750,000, 87% of all sales. It was 71% of all sales in 2016, and 51% last year. In 2021, only 41% of all sales were below $750,000 in the first quarter. As home prices have appreciated over the years, the lower price ranges have dwindled and became a smaller percentage of the housing stock. It is not merely the fact that fewer homeowners within these more affordable price…

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 Orange County Housing Report:  Extra!  Extra!  Inventory Rising!

 

 Now that the Spring Market has finally arrived, a new trend has emerged, a rising active listing inventory.

A Rising Inventory

After continuously dropping since last October, the active listing inventory rose by 6%. 

Other than the luxury end, every price range experienced a rise in the number of homes available. The largest increases occurred in the hottest price ranges. Home priced between $500,000 to $750,000 increased by 41 additional homes, up 13%. From $750,000 to $1 million, there were 86 additional homes, up 25%. Below $500,000 and between $1 million and $1.25 million, the price ranges increased by 4%. That may not be a lot of extra homes, but for buyers, it is…

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 Orange County Housing Report: A Market Shift

 

As mortgage rates continue to rise, eventually the housing market will evolve from its current crazy pace to one that is much more tolerable.

The Coming Change

The sharp rise in mortgage rates from 2.65% during the first week of January to 3.09% today is just the beginning of rising rates.

Housing is in the midst of its own playoff run and has been a Hot Seller’s Market since June of last year, 9-months straight. It is the longest since the 16-month streak that ran from March 2012 through July 2013. What happened in the summer of 2013 to end the run? The market decelerated because of higher mortgage rates.


The Orange County active inventory in 2013 had reached its lowest level since…

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Orange County Housing Report: More Homes Coming

In a couple of weeks spring will arrive and that is when more homeowners place their homes on the market than any other time of the year.

New FOR-SALE Signs

Nearly a third of all homes that enter the fray during the year come on the market over the course of the next three months.

Spring is not only a season of flower blossoms, butterflies, and new life, it is a time when more real estate activity occurs than any other time of the year. It is when the inventory rises and demand surges and peaks. Many mistaken the summer as the best time of the year for real estate, but it is second to spring. During the spring, more homes are listed, there are more new escrows, and there are more closed…

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Orange County Housing Report: No Top in Sight

Many buyers wonder if they are overpaying as real estate prices continue to soar to record levels, yet that is not what the data shows.

 

Values Rising
The market velocity is extremely fast, and it is a Hot Seller’s Market where values are rising swiftly and multiple offers is the norm.

At the start of 2020, prior to any lockdown measures and the beginning of the pandemic in the United States, mortgage rates had dropped from 3.75% to 3.5%, an excellent level that had only been reached a few times since 2013. Throw in an increase in buyer demand due to the strongest demographic patch of prime first-time home buyers, 32-year-olds, in 26 years (which will continue for the next 4 years), it was no…

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Orange County Housing Report:  Bidding War 

When a home hits the market, it is greeted with throngs of buyers and so many offers to purchase that a bidding war.

 

Multiple Offers

It is not uncommon for homes marketed FOR-SALE to procure 5, 10, 15, or even more offers to purchase within a few days of coming on the market.

There are a lot of reasons the market is exceptionally hot today. The leading factor is record low mortgage rates. The monthly and annual payment savings are jaw dropping and has been the catalyst to a tsunami of buyer interest. Another factor is the lack of available homes to purchase. There are fewer homes coming on the market right now because it is still the Winter Market. The vast majority of homeowners opt to “wait…

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Orange County Housing Report: Boiling Over

Fierce demand, throngs of buyer tours, bidding wars, rapid appreciation, and limited available homes to purchase are all due to historically low rates.

Insatiable Demand

With a record low supply of homes available to purchase and staggering demand, the market is extremely hot. 
When a commodity drops to a price that is too good to pass up, everybody flocks to purchase. That is precisely what is occurring in housing. It is not that home values have plunged by 40%; instead, it is historically low mortgage rates that are the catalyst to surging demand. As a result, buyers are coming out in droves to purchase. It is too good to pass up. For a $700,000 mortgage at last year’s 3.6% fixed rate, the…
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Orange County Housing Report: Blazing Beginning 

To go along with record low mortgage rates, it is the hottest start to a year since tracking began in 2004.

 

Hot Seller’s Market

With a record low supply of homes available to purchase and staggering demand, the market is extremely hot.

There is an imbalance in supply and demand. The supply of homes is at a record low and demand is off the charts. As a result, the market has been hot from day one of 2021. The only other time that occurred was back in 2013. What 2013 and 2021 have in common are record low mortgage rates. On January 3, 2013, mortgage rates were at 3.34%, slightly higher than the record low 3.31% achieved on November 21, 2012. On January 7, 2021, according to the Primary…

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Orange County Housing Report: A 2021 Forecast

HAPPY NEW YEAR!!!  Now, what does that mean for the 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 very few available homes to purchase, the inventory only grew slightly, plunging to unbelievably low levels during the second half of the year.

COVID-19 suppressed the inventory in Orange County. Many homeowners simply did not want to place their homes on the market amid a pandemic. From March through June, there were 4,655 fewer home placed on the market compared to the five-year average, 29% less. The Coronavirus lost its grip on…

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