The Orange County Real Estate Market Report for July 2014
Here’s what’s happening in the Orange County real estate market. The first half of 2014 is in the rear-view mirror and this year is very different from prior years. In 2013 the market was crazy. The inventory dropped to a ridiculously low level and there were not enough homes for sale. Buyers and investors wanted to take advantage of the incredible values and historically low interest rates which drove prices up. The appreciation slowed by the summer of 2013. Suddenly homeowners no longer got away with overpricing their homes and they began to sit on the market. By August of 2013 buyers were no longer willing to more than the fair market value for a home and this paved the way for 2014 which has seen a relentless increase in the active inventory. After starting the year at 4,733 active listings, the inventory has increased by 60% and now sits at 7,550 and is still climbing. The long term average for Orange County is about 8,500 homes and it's within site. Even if that level is not reached this year, the added inventory has created a lot of breathing room for buyers. Many homes are still overpriced so a buyers sense of urgency has almost vanished. The majority of sellers will learn the hard way that overpricing is a front row ticket to sitting on the market without success.
With an increasing inventory and less demand, the expected market time has been much higher than the last few years - currently it is at 90 days. Compare that to last year’s 49 days and the overall feel in the streets is different. At three months, it is still a seller’s market, but not like 2012 and 2013. Double digit year over year appreciation has been replaced with 3-5% annual appreciation, meaning that any appreciation from month to month is almost undetectable. In other words, sellers can no longer get away with over-zealously pricing their homes. It’s a seller’s market where they get to call all of the shots and may get a few thousand dollars more than the last comparable sale if they price their homes realistically. From here, we can expect more of the same, an increasing inventory through the end of summer, an increase in the expected market time, and a slow move away from a seller’s market to a balanced market.
Click here to see ALL the active listings in Orange County.
Thinking about selling? You can get an estimate of your homes value right here.
Excerpts and charts for this post are from Reports on Housing by Steven Thomas. Reports on Housing has been utilized by the Orange County Register, Wall Street Journal, Los Angeles Times, and ABC, CBS and NBC television reporters. If you'd like to receive the Orange County Housing Report via email every month, please contact me today. Thank you for reading my blog, and call me at 562-225-6602 if there's anything I can help you with. Paul Armstrong REALTOR®
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