As we enter spring of 2016 we are still pondering where the mysterious “El Nino” storm could have wound up. Either way without a doubt over the next month we will see Orange County housing demand increase to the highest level this year. With significantly favorable interest rates at borrowers disposal, it is still a slight sellers market as demand increases and the trend of a recession becomes less apparent. Each year after the NFL Super Bowl we see the OC real estate market take charge. This year it took charge but demand was off by about 10-11% in February compared to last year. There were about 300 homes less in escrow in the beginning of February but towards the end that number cut in half. Perhaps politics or the extremely low oil prices were a distraction for some. This year started with an average expected market time of 81 days but it decreased to 61 days towards the end of February and is continuing that direction. When a realtor states that there are not enough homes on the market they are correct. The long term 25 year average of homes on the market in OC sits at roughly 8700 homes. OC currently is at an inventory of roughly 5300 homes for sale.
Todays buyers want to capitalize on low mortgage interest rates. They realize that for the average OC home, a mortgage rate increase from 4% to 5% would result in an increase of roughly 300 dollars a month or 3600 a year in interest. The average difference over 30 years in OC would be roughly $108,000.00 dollars over the term of the fixed loan. Also with home prices within 6% of all-time highs, OC buyers are having heartburn paying anything more than fair market value for a home. The fair market value is determined by analyzing the most recent comparable property that sold. It’s time for us to sit back and let our country become great once again. Incomes and money circulation in our local economy need to increase to help toss this OC real estate market salad.