Both the demand and inventory for residential homes in Orange County has spiked recently. With the recent decrease in oil prices and increase of world issues the stock market has taken a few low blows. Perhaps much needed after our few years of heavy gains that many have enjoyed riding such as the S&P 500 financial index. It seems the start of this year had everybody at a stand-still. Things have recently changed though as we enter the second month of this New Year.
I would strongly expect inventory (amount of homes going on the market) and the demand (people seeking a home to purchase) to increase, as we wrap up super bowl weekend and enter into another beautiful spring market. Demand did drop for the first 2 weeks of this year which was something that hasn’t been seen in the County of Orange in over ten years.
The recent increase to the short term rate actually caused mortgage rates to slightly drop recently but as the feds continue to raise the short term rate it will eventually transfer over to the longer term rates and have a direct effect on OC housing. Long term mortgage interest rates are tied to the treasury bonds which have been an attractive place for worldwide investors to pump money into as a safe investment.
The OC housing market has officially turned the sharp corner and boosted towards more buyers signing on the bottom line. Demand has boosted 22% in just the past 2 weeks with more buyers and sellers. With interest rates so low, now is a great time to purchase or sell a OC home and take advantage of these historically low mortgage rates. The average interest rate is 6.7% since 1990 or 8.6% since 1972. It would appear that the rates will remain this low until at least the first half of this year due to the worldwide economic instability. Home ownership with rates at low levels help keep homes affordable and a balanced market.
The months of April and May will typically yield the highest demand increases and there is less competition today then there will be at that time. Homes are no longer appreciating rapidly as they have been this past few years. It makes sense to take advantage of the current less competition, low inventory and low rates. Buyers are seeking FAIR MARKET VALUE and are not overly excited to pay more than the last sale price of a home as they have been just a short time ago.