It's still a seller’s market, but buyers are much more cautious.
We're talking about what we in the real estate industry call a change in the market. Below is the latest from the Orange County Housing Report. For the most up-to-date market data, please Sign Up Now to receive real-time housing reports. We deliver the full/downloadable market reports and charts to your inbox every month.
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ORANGE COUNTY Housing Report | June 2018
Tug-of-War in Orange County Housing
Orange County Housing is like a big game of tug-of-war. During the Great Recession, buyers dominated and called the shots. Prices dropped from 2007 to 2011. Since 2012, sellers have been dominating with multiple offers and buyers tripping over themselves. Prices escalated reaching record levels.
Now, in the tug-of-war between buyers and sellers, buyers are beginning to pull back. Let’s take a look at the biggest culprits in this Orange County Housing shift.
Why the caution?
Values have increased significantly. From April 2017 to April 2018, the median sales price was up nearly 6%. It’s been a hot seller’s market since 2012, six solid years of home price appreciation. The median price has risen 73% from 2012 to 2018.
2. Interest Rates
At the end of May 2017, interest rates were 3.95%. Today they are at 4.66%, an 18% increase in a year. Buyers still want to buy but - with higher values and higher mortgage rates - they don’t want to pay much more than the recent comparable sale.
3. Price Reductions
Sellers who are not priced close to Fair Market Values are not finding success. Homes are sitting on the market for longer because buyers are not willing to write offers. A huge indicator of overpricing is the number of price reductions. Currently, 11% of the homes on the market reduce their asking price every single week.
Buyers are tugging the rope harder in every single price range except homes priced between $1.5 million to $2 million. However, in this price range, expected market time is 123 days and only represents 6% of the demand.
Now, let’s talk numbers…
Orange County Housing Report:
Active Inventory: The active inventory increased by 3% in the past 2 weeks.
Current Demand: Demand has peaked for 2018, falling by 2% in the past 2 weeks.
Luxury End: Luxury demand decreased by 3% in the past 2 weeks.
It may still be a seller’s market, but seller’s must carefully price their homes to be successful in this evolving Orange County Market. In the tug-of-war between buyers and sellers, buyers are starting to pull back so seller’s beware!
If you want to receive real-time Orange County Housing Reports to your inbox every month – for the full/downloadable market reports and charts – Sign Up Now!
The Swan Team | OC Real Estate
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