This past summer was indeed a hot one in Orange County and I see the home sale heat beginning to wind down. It seems that this is the time of year when buyers wonder how much price drop potential there could be. The median price of an Orange County home is within 5 to 6% of the June 2007 figures. At that time the average OC home sold for around 650,000.00 dollars. The lowest point of the OC market in the past decade was in January of 2009 when the average property closed for about 369,000.00 dollars. Could a price correction be near? Home sellers may begin to give in and reduce their price depending on their life circumstances. Not only do the OC homes for sale inventory typically decrease, demand does as well. I am beginning to see and hear about fewer buyers getting into a bidding battle for a home that’s for sale. Nearly 7 years ago Orange County home sale prices were about 43% lower than todays. Buyers feel current asking prices are too high and many may feel that the OC home prices are on course to drop. Don’t count on it.
The amount of homes going into escrow each day does not support the fact that a housing correction will occur in Orange County anytime soon. There are approximately 7000 homes listed with an agent for sale in Orange County today. OC homes are going into escrow and closing at the rate of about 2200 homes a month. Our OC homes for sale inventory is about a 2.8 month supply. I would say that it is still a slight sellers market at this rate. When expected market time increases 4 or greater months, I would consider it to be a buyers market. Orange County has not seen a home buyer market since early 2011. At that time there was around 10,500 homes on the market with a demand similar to todays. About 60% more than the amount of homes available for sale in Orange County today. When the supply increases, so can the demand. A better priced home will always sell much faster. There was a point in 2007 when there was 18,000 homes for sale in Orange County. At that time prices plummeted quickly.
It seems the demand and supply with both slow down simultaneously as we exit summer and enter fall of 2015 and winter of 2016. I do not see any changes or drastic trends anytime soon in the Orange County real estate market. It seems next year may be a similar year to this year as individuals incomes continue to increase and the homes available for sale in the county of Orange stay below the long term supply average of 8500 homes. I would strongly expect Orange County market supply will continue to decrease until the turn of the next year. After the new years the supply should begin to increase once again.
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SoCal Capital Real Estate Brokerage
15801 Rockfield Blvd Ste G
Irvine, CA 92618