All Blog Entries by Hartanov Real Estate Team

Unexpected Slump in Demand

Higher 30-year mortgage rates are having a major impact on Orange County demand, now at levels far below typical spring

Demand Slumping

Over the past month, demand dropped by 6% when it normally rises by 4%.

In 2002, the Los Angeles Angels won the World Series for the first time in franchise history. The next year they missed the playoffs completely with a losing record. After hoisting the Commissioner’s Trophy the year before as champions of the world, they missed post season play due to a slump in wins to close out the year from July through September. The Orange County housing market is amid a similar slump in the middle of the Spring Market following the best year for local real estate since 2005.

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Orange County Housing Report: 

Housing Cracks

Even though housing is insanely hot, trends have emerged that confirm that the Orange County housing market is starting to cool.

Cracks Appearing

Trends are developing which demonstrate that the pandemic induced, insane housing run is cooling.

Incredible, relaxing, memory-filled vacations come to an end. Ski seasons come to an end.  The last pages of a good book come to an end. Binge watching a favorite television show comes to an end. Weekends come to an end. Seemingly nothing lasts forever. For the Orange County housing market, the incredible, insanely Hot Seller’s Market will eventually evolve into something completely different, and that is beginning to take place right now.

Now that…

Orange County Housing Report:

Ch-Ch-Ch-Changes

With rates inching their way up to 5%, the housing market is slowly changing and trends are emerging that illustrate a shift in the insanely hot housing market.

New Trends Emerge

As rates zoom upwards, home affordability is beginning to impact the housing market in several profound and meaningful ways.

The scent of orange tree blossoms is captivating. It is just the beginning of the slow metamorphosis from flower to fruit. After the flower blooms, it takes navel oranges seven to 12 months to mature. It is far from instant, but as the petals drop, it reveals a tiny, green fruit that will eventually become a juicy, ripe orange.

Similarly, the evolution of the housing market is far from…

Orange County Housing Report:  Out of Control

With the number of available homes to purchase at extremely low levels, there simply are too many buyers competing against each other.

An Insane Market

When the Expected Market Time drops below 40-days, the Seller’s Market shifts from “hot” to “insane,” and today it is at 20 days.

A three-bedroom, two-bathroom, 1,500 square foot home on a 10,000 square foot lot, built in 1972, was placed on the market on the first Wednesday of February at $999,000. There was a line going down the street to view the home during a three-hour window on Saturday and a three-hour window on Sunday. By Sunday evening there were more than 20 offers submitted to the listing agent. The seller countered to all offers and…

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…

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…

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…

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…

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…

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…