Hello there, it’s me, Steven Thomas, with ReportsOnHousing.com.
You know how the Orange County housing market has been on fire all year long and I have been touting how the inventory has been ultra-low with fewer homeowners placing FOR SALE signs in their yards?
That’s not going to change for the rest of the year. The supply of homes is only going to fall from here.
We have officially started the Autumn Market right here in the beautiful OC. I understand that Fall Equinox does not really arrive until Friday, September 22nd, but it has already arrived in terms of our local housing market. Why? The kids are back in school!!! [JUMP UP AND DOWN]
Why am I so excited? I have 8 kids… 3 in college, 1 in high school, 1 in middle school, and 3 in elementary school. There’s something to be said about eating lunch with my wife at home and being able to hear the hum of the refrigerator and the ticking of the kitchen clock. Ahhhhh.
Don’t get me wrong, I love my kids, but summer is LONG!! Now I have time to myself, time to think and focus on housing.
I’m not alone. Homeowners, buyers, and sellers start to behave a bit differently now that we are changing seasons.
#1 – fewer homeowners will opt to place their homes on the market. This will cause the supply of homes to fall.
#2 – many sellers who have been a bit overzealous and overpriced, unwilling to adjust their asking price down to where their home will sell, will decide to throw in the towel and wait until the Spring Market. This too will cause the supply of homes to fall.
#3 – some buyers will back off their search for a home now that their kids are back in school. It’s hard to uproot the kids after school starts. This will cause demand, the number of pending sales to drop.
With a drop in both the supply and a demand, the overall pace of the market, the amount of time it will take to sell a home and place it in escrow, will cool down only slightly for the rest of the year.
The pace is what I refer to as the Expected Market Time. It takes into consideration both the supply of homes and demand, the number of recent pending sales. As the supply drops and demand drops, the expected market time does not change much.
Let me be clear though. With interest rates back down to below 4%, everything priced below $500,000 is hotter than MOLTEN LAVA. Everything priced between $500,000 and $750,000 is as hot as fire. For homes between $750,000 and $1 million, sellers better be priced on the money. Above $1 million, be extremely careful in terms of price and then pack your patience.
We could use a few more homes priced below $750k. It remains a HOT seller’s market for these price ranges and they account for 38% of the current inventory and 58% of demand. Remember, I refer to demand in terms of recent pending sales. Since there aren’t enough homes on the market, the TRUE demand is beyond the moon and back.
To wrap this all up: the Autumn Market will be hot, luxury will not, the supply will drop, and pending sales will drop.
P.S., if you are a seller and you have been on the market for quite some time with fewer and fewer buyer showings with no offers, it’s your price.
For the latest Orange County housing pulse, subscribe to my report. I am Steven Thomas with ReportsOnHousing.com.