Even though 32,500 more Californians were on company payrolls during January and more homes were on the market, that did not translate to increased demand for Orange County residential real estate in the most recent two weeks. Further, February nationwide retail sales were better than most expected and the stock market ended last week on an up tick, but Orange County residential real estate demand actually decreased. At www.OC180NEWS.com, we run the numbers for the two weeks ending March 4, 2010.
The same thing happened at this time in 2009. Real Estate demand (measured by the number of new pending sales during the last 30 days) in early March 2009 fell by 195 units, a 6.9% decrease from Mid-February. Demand last year did not start its steady improvement until early April.
For the most recent reporting period—the two weeks ending on March 4, 2010, demand fell by 190 homes, a 5.9% decline. At the same time, Orange County buyers had 311 more homes to choose from, compared to the inventory as of 2/18/2010. That is 3.8% more inventory, which when combined with the 5.9% drop in demand, meant the average market time went up. Current market time (supply divided by demand) stands at 2.8 months, verses 2.5 on 2/18/2010, and 2.4 on 2/04/2010. While this uptick in market time trend probably is not a cause for serious concern, www.OC180NEWS.com will continue to closely monitor it.
Total inventory of active Orange County residential real estate listing stood at 8,446 as of 3/4/2010. Last year at this time, it was at 11,562. For the current period, 32.8% of inventory is distressed homes (those either in foreclosure or short sales). Last year that important measurement was 41.4%. At 2,769 units, distressed properties currently on the market increased by 63 homes compared to two weeks ago. But, last year at this time there were 4,784 distressed homes on the market.
According to Steven Thomas of Altera Real Estate, “At the current pace, the overall market continues to be a seller’s market without much appreciation at all. But, for those sellers in the higher ranges, DO NOT GET EXCITED about the overall numbers. In drilling down to specific ranges, the higher the price range, the slower the market. It is slow for all markets above $1 million. Above $2 million, the market is ice cold.”
Thomas added “First time homebuyers represent about 25% of all purchases and so do investors. I have also been asked where all of these first time homebuyers are coming from. Many of them are in their late twenties or early thirties and responsibly saved for a down payment, but simply could not afford to buy when prices reached their astronomical heights several years back. They were priced out of the market for years and did not jump into the market until prices dropped to a very attractive level along with interest rates. Current demand is strong. As March rolls along and the spring officially begins, we can expect more homes to hit the market and demand to increase. The listing inventory will increase slightly due to more and higher priced properties hitting the market where demand is not strong enough to keep up with the increased flow. The lower ranges will remain feverish.”
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 the circumstances of the specific neighborhood involved. This series is intended to provide information about the general countywide trends in supply and demand.
All of the 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.
