Orange County Housing Report: Pedal to the Metal
January 27, 2020 / By Steven Thomas
With the holidays in the rear-view mirror, the 2020 Orange County housing market is revving its massive engine.
Getting Hot: Strong demand and a low supply of available homes is allowing the market to accelerate fast.
Drag racecars are loud. After a quick burn of the tires to get them hot and ready to go, the cars back up behind the starting line and wait for the race to begin. The drivers are ready, and the initial light goes on. The yellow flashes next indicating that the start is moments away. It is quickly followed by a green light… it is GO TIME!! The racecars accelerate down the track at a mind-blowing speed.
The 2020 housing market is looking a lot like a drag race. The green light just went on and the market is already propelling down the racetrack at an amazing speed. It was just a year ago that housing was moving along at a much slower pace. Buyers were taking their time and it definitely was not a race to purchase. Mortgage rates were at 4.5%, eating into a buyer’s motivation to find a home.
Flash forward a year later and there is no lingering inventory from the prior year. Interest rates are at 3.75%. The low interest rate environment is the rocket fuel that is propelling the market down the dragstrip. Multiple offers are once again the norm. Homes that are priced well and in good condition are selling quickly. In most cases it is the winning bidder who finds success.
Everything priced below $1 million is experiencing a HOT market.
The only thing holding back demand right now is that it is only January and not that many homes are coming on the market. Even in California it is still winter. Demand will continue to climb as more and more homes come on the market, peaking between April and May. Carefully pricing a home according to its Fair Market Value, taking into consideration condition, location, and upgrades, will result in selling quickly and at, or even slightly higher, than the asking price. Stretching the price too much will result in wasting the most valuable market time, the first few weeks after coming on the market.
For homeowners waiting to place their homes on the market in the spring, there will unquestionably be more buyers looking to purchase; however, there will also be a significant increase in the number of sellers coming on the market. The Expected Market Time typically starts to rise in April as the number of new FOR SALE signs outpaces the rise in demand. One thing is for certain, right now is a really good time to place a home on the market, just as the housing market is putting the “pedal to the metal.“
Active Inventory: The current active inventory increased by 3% in the past two-weeks.
Demand: In the past two-weeks demand increased by 19%.
Luxury End: Luxury demand exploded upward in the past two-weeks.