Orange County Housing Report: Last Call for Spring
With less than a month left in the Spring Market, the best time of the year to sell is about end.
End of the Spring Market: Without exception, the Orange County housing market downshifts every summer.
The window of opportunity to take advantage of the busiest time of the year for Orange County housing is closing. 2016 is flying by, and, before you know it, so will the Spring Market. For homeowners who want to sell and take advantage of the strongest buyer demand of the year, they better be on the market and priced to sell right now.
For sellers, this is not the time to stretch the asking price. It is common for sellers to get overly excited in pricing their homes during a hot seller’s market. Just because it is a hot seller’s market does not mean that buyers are willing to pay tens of thousands more than the most recent comparable or pending sale. Core Logic reported that last month’s median sales price of $645,000 matched the highest level ever in Orange County in June of 2007, but that does not mean that buyers are more inclined to overpay.
The reason the Spring Market is the best time to sell boils down to a supply and demand issue. Demand is at its highest point during the spring and there is not enough supply. When supply is low and demand is high, the market favors the seller. The end of spring is around the corner and there are already signs of the market starting to shift.
There is a cyclical downshift in buyer demand during the Summer Market. Summer is filled with distractions. That’s when the kids are out of school. Sand castles at the beach, a refreshing dip at the local pool, a picnic at the park, a trip to Disneyland, hiking in the local mountains, Southern California is overflowing with summer activities, distracting buyers from focusing 100% of their efforts on purchasing like they are able to in the spring.
Every year the Orange County housing market experiences a noticeable downshift and this year will not be an exception.
Luxury End: Above $2 million, demand dropped by 10% in the past two weeks.
Homes priced from $1 million to $2 million may not be as hot as homes priced below $1 million, but it’s not an ice cold market either.There is plenty of competition among sellers and not enough buyers to go around. Many will not find success over the remaining Spring and Summer markets. And, over the past couple of weeks, demand dropped by 10% for homes priced above $2 million, a sign that the luxury market may be cooling.
Active Inventory: The inventory increased by 2% in the past two weeks.
The active inventory increased by 267 homes in the past two weeks and now total 6,267, its highest level since October of last year. The inventory will continue to climb through the end of the Spring Market and will pick up steam as demand slows a bit during the summer.
Demand: In the past two-weeks demand decreased by 2%.
Demand, the number of new pending sales over the prior month, decreased by 52 homes in the past couple of weeks, now totaling 3,144, a 2% drop. Two weeks ago, demand had reached a height for 2016 and was the highest level since October 2012. Demand may have already peaked, but it will remain at the current elevated level through the end of spring.