Orange County Housing Report: The Rest of 2020
July 27, 2020 / By Steven Thomas
Even though housing came to a standstill in April, the market roared back and trends have developed that foreshadow continued strength.
Housing Trends: With a low supply and strong demand, the market has not been this hot since 2013.
It was sudden. It was unnerving. Nobody had seen anything like it in their lifetime. A pandemic unfolded before everyone’s eyes. Major sports leagues suspended their seasons. Disneyland closed its gates. Schools went online. The state of California announced a “stay at home” order. Life as everybody knew it came to a grinding halt.
That was just four months ago. Yet, slowly but surely, everyone began to adapt to a “new normal,” living with a virus. The real estate industry adapted as well with masks, gloves, physical distancing, and a myriad of contracts that outlined the proper protocols needed to sell homes.
While unemployment is still high and the overall economy is slowly crawling its way out of a forced stoppage, housing has been a bright spot with a “V-Shaped” recovery. It came roaring back and trends have emerged that pave the way to a strong finish to 2020 in Orange County:
The active listing inventory has dropped to unprecedentedly low levels. Even at the start of the year, there were not that many homes on the market. Anything that did come on the market quickly opened escrow. Today, there are only 6% fewer homes entering the fray. COVID-19’s grip on preventing homeowners from listing their homes is disappearing. Yet, the lack of new homeowners coming on the market over the last several months has substantially contributed to the current ultra-low active listing inventory, its lowest end of July level since tracking began in 2004 with only 4,590 homes today. For the rest of the year, expect the inventory to slowly drop as housing transitions to the Autumn Market in August with kids returning to another school year.
Demand is at its hottest level since 2012 In Orange County, demand typically peaks between April and May, during the Spring Market, yet that was during the “stay at home” order. Essentially, the Spring Market was postponed, and housing is currently in the middle of the strongest demand of the year and is poised to peak between now and the start of August. For the rest of the year, expect demand to remain strong, fueled by historically low rates.
The Expected Market Time is at its hottest level since June 2013. The Expected Market Time (the amount of time between hammering in the FOR-SALE sign to opening escrow) is currently at its lowest point of the year, 43 days, and has not been this low in July since 2005.
The Rest of 2020 Summary: expect the active listing inventory to remain at low levels, demand to remain strong, mortgage rates to remain low, and the Expected Market Time to remain at its lowest level in years.