Many buyers mistake the end of the year as THE best time to purchase. They know that it is no longer the hottest time of the year for real estate, so they believe they can get a “deal” during the slower months. That is not the case. Instead, the market will remain the same until ringing in 2022. With both the inventory and demand dropping at similar rates, the overall feel of the market, will not change. This results is a Market Time that remains almost unchanged.
In looking at the 5-year average from 2015 through 2019 (excluding 2020 due to COVID-19 skewing the data), the supply of homes has decreased by 16% from the end of August to the second week of November. On average, demand dropped by 16%, and the Expected Market Time increased by 1 day. That would be a decrease in the supply of available homes from 2,528 two weeks ago to 2,123 homes by mid-November. Demand would drop from 2,694 pending sales to 2,253. With both supply and demand falling, the Expected Market Time would rise from 28 to 29 days, the highest level since the start of February.
An Expected Market Time below 40 days is nothing short of insanity. It is when there are plenty of showings, sellers get to call the shots during the negotiating process, multiple offers are the norm, and home values are rising rapidly. With the Orange County housing market stuck well below 40 days through the end of the year, what you see is what you get. Even with demand falling along with inventory, the overall feel of the market for buyers will not change much at all.
For sellers, the only perceivable change will be slightly fewer showings and slightly fewer offers due to a smaller number of buyers in the marketplace. A home that may have garnered 100 showings in a few days back in the Spring Market could see 50 during the Autumn Market, 10 offers compared to 20. The result will still be the same, homes that sell fast with plenty of offers and sales prices above their asking prices.
For buyers, there may be fewer buyers participating in the marketplace, but there are diminished opportunities with not as many homes coming on the market. With fewer choices, the remaining buyers will still be bumping into each other when something new hits the market. Buyers should not expect anything to change anytime soon, especially with interest rates that remain at record low levels.
Now that the Autumn Market is here, there will be fewer homes coming on the market, demand will decrease, and housing will not change much. The calm of autumn means less activity and a cyclical change to housing.