Orange County Real Estate Market July 2020

The active inventory has dropped to unprecedentedly low levels.

Even at the start of the year, there were not that many homes on the market. Anything that did come on the market quickly opened escrow. Even prior to the shutdown, the inventory had only increased from 3,901 at the beginning of January to 4,159 by March 5th, an increase of only 7%.  In March, it was at low levels last experienced in 2013. During the lockdown, COVID-19 suppressed the number of homeowners coming on the market. In April, there were 54% fewer homes that came on the market compared to the 5-year average. Today, there are only 6% fewer homes entering the fray. COVID-19’s grip on preventing homeowners from listing their homes is disappearing. Yet, the lack of new homeowners coming on the market over the last several months has substantially contributed to the current ultra-low active listing inventory, its lowest end of July level since tracking began in 2004 with only 4,590 homes today. The inventory peak typically occurs anywhere between July and August, but this year it occurred at the end of May with 5,044 homes. It has dropped by 9% since. For the rest of the year, expect the inventory to slowly drop as housing transitions to the Autumn Market in August with kids returning to another school year. Families find it less advantageous to make a move during the school year. It will drop further when housing evolves into the Holiday/Winter Market, one week prior to Thanksgiving.

Here are a few FACTS about the current Real Estate Market in Orange County
  • The active listing inventory decreased by 55 homes in the past two-weeks, down 1%, and now totals 4,590, its lowest level for July since tracking began in 2004. In the past four-weeks, 6% fewer homes were placed on the market compared to the prior 5-year average. It was a 54% difference at the end of April; thus, COVID-19’s grip on suppressing the inventory is diminishing. Last year, there were 7,601 homes on the market, 3,011 additional homes, or 66% more.
  • Demand, the number of pending sales over the prior month, increased by 150 pending sales in the past two-weeks, up 5%, and now totals 3,200, its highest level since October 2012. COVID-19 currently has no effect on demand. Last year, there were 2,505 pending sales, 22% fewer than today.
  • The Expected Market Time for all of Orange County decreased from 46 days to 43, a Hot Seller’s Market (less than 60 days). It was at 91 days last year, much slower than today
  • For homes priced below $750,000, the market is a hot Seller’s Market (less than 60 days) with an expected market time of 31 days. This range represents 34% of the active inventory and 47% of demand.
  • For homes priced between $750,000 and $1 million, the expected market time is 29 days, a hot Seller’s Market. This range represents 17% of the active inventory and 26% of demand.
  • For homes priced between $1 million to $1.25 million, the expected market time is 48 days, a hot Seller’s Market.
  • For luxury homes priced between $1.25 million and $1.5 million, in the past two weeks, the Expected Market Time decreased from 60 to 53 days. For homes priced between $1.5 million and $2 million, the Expected Market Time increased from 71 to 81 days. For luxury homes priced between $2 million and $4 million, the Expected Market Time decreased from 113 to 109 days. For luxury homes priced above $4 million, the Expected Market Time increased from 249 to 274 days.
  • The luxury end, all homes above $1.25 million, accounts for 38% of the inventory and only 17% of demand.
  • Distressed homes, both short sales and foreclosures combined, made up only 0.5% of all listings and 0.6% of demand. There are only 12 foreclosures and 13 short sales available to purchase today in all of Orange County, 25 total distressed homes on the active market, down 2 from two-weeks ago. Last year there were 56 total distressed homes on the market, slightly more than today.
  • There were 2,169 closed residential resales in June, 20% fewer than June 2019’s 2,715 closed sales. The sold data is beginning to reflect the recent surge in demand. June marked a 56% increase compared to May 2020. The sales to list price ratio was 97.6% for all of Orange County. Foreclosures accounted for just 0.4% of all closed sales, and short sales accounted for 0.2%. That means that 99.4% of all sales were good ol’ fashioned sellers with equity.
The Expected Market Time is at its hottest level since June 2013.

The story is not only a “V-Shaped” recovery, its that the market has not been this hot in seven years. The Expected Market Time (the amount of time between hammering in the FOR-SALE sign to opening escrow) is currently at its lowest point of the year, 43 days, and has not been this low in July since 2005. Anything below 60-days is considered a Hot Seller’s Market, where homes are appreciating, and multiple offers is the norm. On March 5th, prior to the lockdown, it was at 48 days, the lowest start to a March since 2013. So, Orange County housing was already pumping on all cylinders. But, by mid-April, the Expected Market Time climbed all the way to 121 days, a slight Buyer’s Market. It quickly reversed course, dropping to 90 days, a Slight Seller’s Market, by mid-May. It dipped below 60 days at the start of June and has never looked back. The Expected Market Time is a statistic that is derived from both supply (the active listing inventory) and demand (recent pending sales). With an ultra-low supply combined with piping hot demand, the Expected Market Time has dropped to unprecedented levels for the middle of summer. As the market transitions into the Autumn Market next month, and both the active inventory and demand slowly drop, the Expected Market Time will gradually rise. It will remain a Seller’s Market for the balance of 2020.

Do not expect a flood of new inventory due to the first period of Forbearance coming to an end in September. Many will extend the benefit to March 2021. It is also important to note that 90% of all homes in Forbearance have more than 10% equity, and 77% have more than 20% equity. That means that if any of these homeowners are forced to sell due to a financial hardship, they can tap into their equity in order to sell.

Also, many wonder where the high level of buyer demand is coming from given the fact that there are 16.2 million continuing claims for unemployment insurance. It is important to highlight the fact that there are over 120 million people who are employed and able to make a home purchase. Additionally, a majority of the unemployed fall within the lower income levels, which could have an impact on rentals and not the residential resale market.

The Rest of 2020 Summary: expect the active listing inventory to remain at low levels, demand to remain strong, mortgage rates to remain low, and the Expected Market Time to remain at its lowest level in years.

Quick, Cheap and Easy Fixes That Add Value to Your Home

Can’t or don’t want to do a complete home remodel but want an updated look? I almost always suggest these quick, inexpensive fixes that make a big impact, add lots of value and can look great!

In the Bath: Change out the faucet for something sleek and modern and then add matching drawer and cabinet pulls. While you are at it, install a new towel bar and toilet paper holder.  Have a little extra cash? A new water-saving toilet adds value and SAVES money!  Switching out a dated light fixture adds instant style and beauty. I get lots of comments from buyers saying they hate those older light fixtures.

In the Kitchen: If you have dated or worn cabinets, painting them will bring them up to date as will new drawer and cabinet pulls. And just like in the bathroom, new faucets and lighting go a very long way to saying, “I am new and in good condition!” And if you have a little extra cash, new appliances are well worth the investment. It will look like you did a whole remodel!

Paint: I love a fresh coat of paint and so will you and so will buyers if you are thinking of selling! Paint can freshen up a tired room, lighten a dark corner and add a cohesive look throughout if you stick to one modern neutral color.

Remove and Replace: Any old or outdated details from a bygone era that don’t work for you anymore? Old chair railing or wall paper or mirrored walls are not popular or very attractive. Consider removing them. Have an old wet bar? Maybe re-purpose it by removing old glass shelving and mirrors and simplifying the space into a snack bar or coffee bar.

A new home with more appeal and use value does not have to cost a fortune or take a lot of time and effort. Enjoy!

April 2018 Orange County Real Estate Info

The active inventory increased by 4% in the past two weeks.

The active listing inventory continued to climb in the past two weeks, adding an additional 189 homes, up 4%, and now totals 4,609. The active inventory is increasing at its fastest pace since 2014. It will continue to climb as the market moves deeper into the Spring Market, and will climb through the summer, peaking sometime between July and August.

After starting the year with 674 fewer homes compared to the start of 2017, 12% fewer, the year over year difference has drastically diminished. Today, there are only 107 fewer homes compared to last year, a 2% difference.

Demand increased by 5% in the past two weeks.

Demand, the number of new pending sales over the prior month, increased by 121 pending sales over the past couple of weeks and now totals 2,538, a 5% rise. The last time demand was above the 2,500 pending sale level was back in September 2017. The Spring Market is in full bloom and demand will continue to rise, peaking sometime between April and May.

Last year at this time, demand was at 2,664 pending sales, 126 more than today, or 5%. The number of pending sales has dropped this year because of a serious lack of inventory of homes priced below $750,000. This price range is significant as it represented 62% of all closed sales in 2017. So far this year, there has been 12% fewer homes that have come on the market below $750,000. The lack of homes in the most affordable price ranges has seriously undermined potential demand.

The expected market time, the amount of time it would take for a home that comes onto the market today to be placed into escrow down the road, decreased slightly from 55 to 54 days in the past two weeks, a hot, seller’s market. Last year at this time, the expected market time was at 53 days, very similar to today.

The luxury inventory and luxury demand increased in the past couple of weeks.

In the past two weeks, demand for homes above $1.25 million increased from 343 to 353 pending sales, up 3%. The luxury home inventory increased from 1,704 homes to 1,797, up 5%. From here, expect both demand and the inventory to rise throughout the Spring Market. The current expected market time for all homes priced above $1.25 million increased from 149 to 153 days over the past two-weeks.

For homes priced between $1.25 million and $1.5 million, the expected market time increased from 78 to 88 days. For homes priced between $1.5 million and $2 million, the expected market time decreased from 149 to 142 days. For homes priced between $2 million and $4 million, the expected market time increased from 193 days to 202. In addition, for homes priced above $4 million, the expected market time decreased from 338 to 296 days. At 296 days, a seller would be looking at placing their home into escrow around mid-January 2019.

Mission Viejo Open House Gated Community

Come and see this wonderful spacious home located at the end of a cul-de-sac in the gated community of Canyon Crest in Mission Viejo. Awesome 4 bedroom, 3 bath home PLUS Bonus Room that could be fifth bedroom. One of the bedrooms is located downstairs. Home is just over 3300 sf and has been meticulously maintained and features lots of recent updates. Radiating warmth and casual elegance, the open floor plan is ideal for entertaining. The rear yard is also a great place to relax and entertain with brick patios, built-in BBQ, privacy and gorgeous easy-care landscaping. Well-priced at $1,124,900.

This residence has such a great feel! Come see for yourself. Saturday and Sunday, March 10 and 11, 2018 from 12pm-4pm.  22101 Canyon Crest Dr, Mission Viejo, Ca 92692.

This slideshow requires JavaScript.