Inventory on the Rise: A Welcome Relief for Orange County Buyers

The Orange County housing market has been a rollercoaster ride in recent years. The pandemic disrupted supply chains, leading to a historic shortage of new cars and, you guessed it, homes. This pushed prices up and left buyers with limited options. Thankfully, things seem to be turning a corner.

This blog post dives deeper into the current Orange County housing market trends, focusing on the long-awaited rise in inventory and what it means for buyers and sellers.

The Inventory Upturn: Why Now?

For most of 2023, the number of homes for sale remained stubbornly low. The culprit? Homeowners, locked into incredibly low, pre-pandemic mortgage rates, were hesitant to sell. Why give up a rock-bottom interest rate to buy a new home with a significantly higher one? This phenomenon, dubbed "hunkering down," kept a lid on inventory.

However, 2024 is showing a different story. Here's why:

  • Seller Fatigue: Even with low rates, some homeowners are simply ready to move on. Empty nesters want to downsize, growing families need more space, and others may be relocating for various reasons.

  • Anticipation of Falling Rates: Many experts predict a decrease in mortgage rates later this year. This could incentivize more homeowners to list their properties, narrowing the gap between their current low rate and the prevailing market rate.

The Numbers: Inventory Growth and Beyond

Let's get down to brass tacks. Active listings in Orange County have climbed by 23% in just the past six weeks. This translates to 685 more homes available to buyers compared to the beginning of the year. While still lower than pre-pandemic levels, it's a significant and promising increase.

Here are some additional data points to consider:

  • Year-over-Year Comparison: There are currently 15% more homes for sale compared to May 2023.
  • Historical Context: Inventory remains lower than the 3-year pre-pandemic average (2017-2019) by 35%, representing a gap of 4,966 missing listings.

Demand: Holding Steady with Room to Grow

While inventory is rising, what about buyer demand? Pending sales, an indicator of buyer activity, are currently up slightly compared to last year. This suggests a continued interest in buying a home in Orange County, despite the higher mortgage rates.

Here's the exciting part: If mortgage rates do indeed drop later this year, demand is expected to rise further. This could potentially lead to a more balanced market with increased competition for properties.


Market Stats: A Snapshot of Today's Market

  • Active Listings: 2,470 (up 15% from last year)
  • Expected Market Time: 42 days (similar to last year, indicating a healthy sales pace)
  • Sales-to-List Price Ratio: 100.4% (meaning homes are selling close to asking price)
  • Distressed Properties: Very low (only 5 total distressed homes on the market, signifying a stable market)

The Luxury Market: A Unique Niche

The luxury market in Orange County deserves a special mention. Homes priced above $2 million make up a significant portion of the available inventory (38%) but represent a smaller share of overall buyer demand (16%). This suggests that high-end buyers may have more negotiating power compared to buyers in other price ranges.

Looking Ahead: A More Balanced Market on the Horizon?

The Orange County housing market is in a state of transition. High mortgage rates are still a factor, but with rising inventory and the potential for future rate drops, the market could be headed towards a more balanced point. This would be good news for both buyers and sellers, offering buyers more choices and sellers the chance to capitalize on a still-strong market.

Stay Informed and Make Smart Decisions

As always, staying informed is key. This blog post provides a snapshot of the current market trends, but it's important to consult with a qualified real estate professional who can give you personalized advice based on your specific needs and goals.

Happy house hunting (or selling)!