For the second biweekly report in a row, the Orange County residential real estate numbers moved in favor of buyers, rather than sellers. It is still a sellers market in the lower ranges—below $1 million—but during the last four weeks, demand has fallen while supply has increased. We run the numbers for the two weeks ending May 28, 2010.
The number of homes on the market in Orange County has been on a steady upward climb since hitting a low of 7,293 on January 7, 2010. During the earlier parts of this year, that appeared to be a normal seasonal expansion as we moved into the prime spring selling season. For the most part, demand also increased to keep up with the expanding supply of homes for sale.
As of May 28, 2010, the inventory totaled 9,839, an increase of 283 in two weeks. This change comes on top of an increase of 205 two weeks ago, or an increase of 488 during the last four weeks. In the same period, demand (new pending sales during the last 30 days) fell by 676. It dropped by 209 homes in the previous report and by another 467 for the two weeks ending May 27, 2010.
The combined affect of more supply and less demand is that market time (average time a home might remain on the market) has gone up. For the two weeks ending April 29, 2010, market time was 2.35 months. It went up to 2.53 for the two weeks ending May 13 and up again to 2.98 for the two weeks ending may 28. While market time at these levels still suggests a seller’s market, it is moving in the direction of favoring buyers.
“The Orange County housing market has gone over a speed bump and has slowed considerably,” reports Steven Thomas, Altura Real Estate. “This could be the result of the end of the tax credit, with first time home buyers rushing to purchase with the end of the tax credit on April 30th. Cyclically, there is a small lull in the market due to the graduation season, but never to this level. The speed bump in demand has affected every price range.”
Also moving toward favoring buyers is the number of distressed properties (foreclosures and short sales) in the active inventory. As demand has been falling, and total actives have been growing, the number of distressed homes in inventory has been increasing. For the most recent two weeks, the number of distressed properties in the active listing increased by 97, to 2,991 units. It increased by 104 for the previous report, bringing the four week increase to201 homes.
At the beginning of this year, the number of distressed homes on the market in Orange County stood at 2,555. The gradual increase in this statistic to the current level of 2,991, runs contrary to Orange County’s improving job market (see related article below). There are more people working in Orange County than anytime during the last 11 months, but that has not yet translated into a drop off of distressed homes on the market.
This upward trend in distressed homes on the market appears to be restraining price, but the OC real estate market is really two separate markets depending on the price range. Thomas reports “the lower price ranges are still incredibly hot. Homes priced below $1 million have an expected market time of 2.52 months. That is off from 2.12 a couple of weeks ago, but still incredibly hot. Buyers can expect multiple offers and a tremendous amount of competition. The upper end, homes priced above $1 million have an expected market time of 8.19 months, the higher the price range, the slower the market.”
In this biweekly 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 biweekly series is intended to provide information about general countywide trends in supply and demand. See Related articles below for more detailed stories about specific West Orange County neighborhoods.
All real estate data in our biweekly countywide real estate trend articles are from reports published by Steven Thomas of Altera Real Estate. These reports appear on www.OC180NEWS.com every other Monday.
