More homes came on the market in Orange County during the last two weeks then at any other time since the supply build up began back in January of this year. At the same time, demand for homes, which had been declining continuously since April, finally held steady during the most recent two weeks. Distressed homes on the market, the other key OC residential real estate statistic we track here at www.OC180NEWS,.com, showed no sign of slowing its relentless growth. We run the numbers for the two weeks ending July 22, 2010.

The number of homes on the market in OC as of July 22, 2010 increased by 418 units, just under 4%, to a total of 11,235 homes. “The inventory has grown unabated by 54% so far this year,” reports Steven Thomas of Altera Real Estate. “The market has not breached the 11,000 mark since the beginning of April 2009. Last year at this time the inventory was at 8,895 homes, 2,340 fewer than today. The inventory has not stopped growing at all this year as more and more pent up homeowners have opted to place their homes on the market at unrealistic levels.”

Despite media reports about higher prices and more sales, the OC residential real estate market has been sliding toward a buyer’s market since April of this year. That is when the federal tax credit expired and demand peaked at a whopping 3,979 homes. Last year demand, measured by the number of new pending sales in the last 30 days, did not hit the high point of 3,652 units until early June. This year, demand has declined in every biweekly reporting period from April until now. Demand inched up by 10 homes for the two weeks just ended to 2,870.

“From here, demand typically rises slightly and peaks at the end of August before slowly deteriorating for the remainder of the year,” said Thomas. “Last year at this time demand was at 3,306 pending sales, 436 more than today.”

But, the increase in homes on the market means the average time a home can be expected to wait for a sale goes up. “After bottoming in April, the expected market time for OC homes has increased by 66%,” reports Thomas. “With an increase in the active listing inventory and almost no change in demand, the expected market time increased from 3.78 months two weeks ago to 3.91 months today. The overall market is still a “seller’s market, but it is moving in the wrong direction.”

That is, the wrong direction if you are a seller. If you are a buyer, it’s moving in your favor. “Homeowners need to be aware of current demand, a snapshot of the most recent pending activity,” said Thomas. “In doing so, they will realize that demand is down 28% since peaking back on April 29th.”

While demand stabilized – that is, stopped shrinking, the number of distressed homes on the market continued to expand. “Over the past two weeks the active distressed inventory has grown the most this year,” said Thomas. “The active distressed inventory grew by 150 homes over the past two weeks and now totals 3,457 total foreclosures and short sales, levels not seen since May of 2009. The active distressed inventory started the year with 2,555 homes and has since grown by 35%. The distressed inventory now represents 31% of the current active inventory. Last year at this time, there were 2,616 distressed homes on the market, 841 fewer than today.”

These biweekly OC180NEWS reports on countywide OC residential real estate consider the most current supply and demand data available. “Newspapers and the nightly news report on SOLD data,” said Thomas. “Rarely do they talk about current demand, homes placed into pending status. As more and more homeowners hear about the incredible SOLD statistics, they get excited to hear about an increase in the median sales price and an increase in the number of closed sales. The data is very accurate, BUT is a snapshot of activity 45 to 60 days back when the buyers first wrote the offer to purchase, springtime. Homeowners are making decisions based upon what is happening in the rearview mirror.”

In this article series we report on the numbers for Orange County in total. Real estate is very local and any buying or selling decisions should be based on circumstances of specific neighborhoods. This series is intended to provide information about general countywide trends in supply and demand.

All real estate data in this article is from a report published by Steven Thomas of Altera Real Estate.

This report appears on www.OC180NEWS.com every other Monday.