It is time to embrace the season. Festive cups are back at Starbucks. Holiday ads abound, especially new car commercials (apparently a lot of us are in the market for a new car). It’s nearly time to get all of the holiday decorations down from the attic.
The season is here, whether you like it or not. What does that mean for the OC Housing Market? Will the market come to a screeching halt? For all of those buyers expecting the Holiday Market to be the best time of the year to purchase, you are wrong. There are no holiday specials, no holiday discounts, no deals.
You cannot put in a Promo Code for the holidays to save money on the purchase of a home. It’s just not going to happen. Instead, buyers can expect slim pickin’s during the holidays and the first month of the New Year. What is really at play here is that there are still plenty of buyers who want to purchase, yet fewer homes are coming on the market and many homeowners who have been on the market for quite some time are giving up and throwing in the towel in anticipation of the holiday season.
The active listing inventory drops like a rock. And will continue to through the end of the year. Don’t get me wrong, demand, the number of new pending sales, will drop from Thanksgiving through the end of the year as well as many buyers will be on the sidelines enjoying the season. Also at play is that with such a limited inventory of available homes, the number of escrows will drop. Some buyers will be forced to sit on the sidelines until homes start coming on the market by the end of January 2018.
The number of new pending sales from Thanksgiving through the end of the year will be at its lowest level of the year. December is known for the fewest new escrows. But, that does not mean that the market will be sluggish. The expected market time, the amount of time it would take to place a home on the market and then open up escrow, is at its lowest level for this time of the year since 2012, the start of the housing recovery. The expected market time takes into consideration both supply and demand. Supply drops like a rock and so does demand.
But, when both supply and demand drop, it’s almost a wash. The market feels nearly the same throughout the holiday season. The only exception to this is the last couple of weeks of the year, but at that point, everybody takes a quick breather. Right now, today, buyers are feeling the pinch, as the number of homes on the market is evaporating before their very eyes.
For the sellers that do remain, open houses are still packed, there are plenty of showings, and attractively priced homes in great condition are entertaining offers within hours of installing the FOR SALE sign in their yards. It is frustrating to be a buyer and glorious to be a seller. It may be the season of yuletide greetings, but it’s going to be hot during the holidays.
For the latest Orange County housing pulse, subscribe to my report. I am Steven Thomas with ReportsOnHousing.com.