Orange County Housing Report: It is what it is
August 26, 2019 / By Steven Thomas
Many buyers and sellers are holding out for a major shift in the market favoring their point of view, but housing is not changing anytime soon.
Status Quo: For the rest of the year, the housing market is not going to change much at all.
There is an old saying, “If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck." No matter how hard you wish it was something else, it is still a duck at the end of the day.
Today’s housing market is a slight Seller’s Market. That is when homes are not appreciating much at all, but sellers get to call more of the shots during the negotiating process. For buyers and sellers, wishing that the market was different is a complete waste of time.
Many buyers and sellers are holding out and hoping for a change in the market. Buyers want to see housing slow to a crawl like it did in the last four months of 2018 where, for a moment, they were in the driver’s seat. They would love to see prices come down, after all, aren’t values too high?
Sellers expect the housing market to behave like it did from 2012 through 2017. Boy those were HOT years!! They should once again be able to stretch their housing price and get $15 or $20,000 more than the last sale with multiple offers within the first couple of weeks, right?
This kind of thinking is stinking thinking. Neither are correct. What you see in the market today is ultimately what you are going to see for the rest of the year. More simply, it is what it is; what you see is what you get.
Here is how the rest of the year is going to play out. With the kids back in school, it is officially the Autumn Market. The Spring and Summer Markets are now in the past. The busiest time of the year for real estate is in the rearview mirror. From right now, today, the active inventory will drop for the rest of the year.
Now that it is the Autumn Market, there will be fewer new homes that enter the fray. Combine that with many unsuccessful sellers throwing in the towel and pulling their homes off the market and you have the recipe for an active inventory that will continuously drop. As the year progresses, there will be fewer and fewer choices for buyers. That is normal. Last year, the inventory grew on the backs of rising rates, which is not normal. Current rates are at a three-year low. The inventory is going to do what it normally does at the end of the year, consistently drop.
At the same time, buyer demand will drop slowly but surely for the remainder of the year. With both supply and demand dropping at nearly the same rate, the velocity of the market will not change much as well.
Buyers and sellers need to be careful with their wild expectations. They need to be based upon the realities of today’s housing market, not what they wish for… what you see is what you get.
Active Inventory: The current active inventory shed 181 homes in the past two-weeks.
Demand: In the past two-weeks, demand decreased by 2%.
Luxury End: The luxury market continued to improve in the past couple of weeks.