As a result of everyday life grinding to a halt, demand dropped by 55% in the past month, from 2,398 pending sales to 1,080. These demand levels were last seen in 2007. Since the “stay at home” order on March 19th, the number of homes placed on the market dropped by 52% compared to the prior 5-year average. The $500,000 to $750,000 price range for condominiums is balanced. All other condominium ranges, including those below $250,000, favor buyers. For attached above $1 million, the market is extremely slow.
WARNING TO BUYERS: There is very little price movement within the overall Orange County housing market; do not expect a deal. From the real estate trenches, some prospective buyers are expecting values to drop 10%, 20%, or even 30% like they did during the Great Recession. The current Expected Market Time for Orange County is 121 days, a slight Buyer’s Market, a market where buyers get to call more of the shots, but values are not changing much at all. During the Great Recession the Expected Market Time climbed to nearly 500-days for all of Orange County. Only at those levels will values drop substantially.
WARNING TO SELLERS: Until the shelter in place order is lifted expect meager buyer activity, showings, and offers. Even with real estate being reclassified as an essential service, it really has not moved the needle in terms of demand. Expect demand to remain at its current, inherent levels and the active inventory to continue to slightly grow, ultimately slowing the market further until the economy is unlocked. Across the board, the broad housing market has been interrupted and the disruption will continue. Even when the governor opens economic activity, it will not be a light switch flipped to “on;” instead, it will be more like a dimmer. Demand will slowly thaw as more homeowners opt to place their homes on the market. It will be a slow, gradual evolution and there will not be a sudden spike in either supply or demand.
• The active listing inventory increased by 161 homes in the past two-weeks, up 4%, and now totals 4,344. In the past four-weeks, 52% fewer homes were placed on the market compared to the prior 5-year average. Last year, there were 6,933 homes on the market, 2,589 more than today, a 60% difference.
• Demand, the number of pending sales over the prior month, decreased by 504 pending sales in the past two weeks, down 32%, and now totals 1,080. In the past 5-years, demand has increased an average of 4%. The drop is due to the Coronavirus. Last year, there were 2,724 pending sales, 152% more than today.
• The Expected Market Time for all of Orange County increased from 79 days to 121, a slight Seller’s Market (between 120 and 150 days). The increase is due to the Coronavirus. It was at 76 days last year, much better than today.
• For homes priced below $750,000, the market is a slight Seller’s Market (between 60 and 90 days) with an expected market time of 77 days. This range represents 36% of the active inventory and 56% of demand.
• For homes priced between $750,000 and $1 million, the expected market time is 96 days, a Balanced Market (between 90 and 120 days). This range represents 19% of the active inventory and 24% of demand.
For homes priced between $1 million to $1.25 million, the expected market time is 185 days, a Buyer’s Market (greater than 150 days).
• For luxury homes priced between $1.25 million and $1.5 million, in the past two weeks, the Expected Market Time increased from 120 to 205 days. For homes priced between $1.5 million and $2 million, the Expected Market Time increased from 140 to 252 days. For luxury homes priced between $2 million and $4 million, the Expected Market Time increased from 323 to 363 days. For luxury homes priced above $4 million, the Expected Market Time increased from 903 to 1,118 days.
• The luxury end, all homes above $1.25 million, accounts for 35% of the inventory and only 13% of demand.
• Distressed homes, both short sales and foreclosures combined, made up only 0.9% of all listings and 1.7% of demand. There are only 18 foreclosure s and 23 short sales available to purchase today in all of Orange County, 41 total distressed homes on the active market, down 4 from two-weeks ago. Last year there were 59 total distressed homes on the market, slightly more than today.
• There were 2,383 closed residential resales in March, 5% more than March 2019’s 2,277 closed sales. March marked a 17% increase compared to February 2020. The sales to list price ratio was 98.4% for all of Orange County. Foreclosures accounted for just 0.4% of all closed sales, and short sales accounted for 0.5%. That means that 99.1% of all sales were good ol’ fashioned sellers with equity