- There are 5 trends developing in the Orange County housing market that provide some insight on where the market could be headed. I’m Tim Hamilton with StellarQuest Real Estate, and this is our Orange County housing market update for July. If you have any questions about buying or selling a home, please feel free to call, text or email me anytime. My contact information is in the description below. If you like to stay up to date on the housing market please subscribe to our channel, where we post market updates and variety of other real estate related topics.
- The first trend developing is the number of homes listed for sale. We started the year with a record low number of homes on the market, and it has been declining until about 2 weeks ago. Over the past 2 weeks inventory has grown by 8%, which is the largest gain of the year. Steven Thomas, a local economist, expects the number of homes for sale to continue to rise throughout the summer months.
- The second emerging trend is a decline in buyer demand, which is typical for the summer market. Demand typically peaks between April and mid-May. This year it peaked in early April and has dropped by 7% since that time. Demand will most likely continue to drop throughout the summer months.
- The third trend is the strong number of closed sales this year. In the first 5 months of the year there were 14,469 closed sales. This is 22% higher than the 5 year average from 2015-2019, which excludes the strange market we experienced last year. This is the highest number of closed sales we have seen since 2005. With demand remaining higher than most prior years, it looks like 2021 will be the strongest year for closed sales since the Great Recession.
- The fourth trend is fewer homeowners listing their homes for sale. With a record low number of homes for sale, many potential sellers are nervous that they will have nothing to buy if they sell their home. In April there was 10% fewer new listings compared to the 5 year average from 2015-2019, and during June it was off by 19%. Steven Thomas expects this trend to continue until
- The fifth trend is a potential increase in interest rates, which would negatively impact affordability. At the start of the year, interest rates reach their all-time low at 2.65%. On April first the reach 3.18%, and have since dropped back down to right around 3%. Steven Thomas believes interest rates will rise towards 3.5% by the end of the year, and then settle around 3.75% sometime next year. As interest rates rise, buyer demand is likely going to drop down towards a more normal level.
- If these trends continue it would likely mean a slight market shift toward a normal seller’s market. This means home value appreciation would slow, and homes would start to take slightly longer to sell. The market would still line up in favor of sellers, but buyers would have more options and gain the benefit of a less competitive market. The benefits to buyers would come at the cost of higher interest rates, which means a higher monthly mortgage payment.
- Thank you for watching our July housing market update for Orange County. If you’re thinking about buying or selling a home please feel free to call, text, or email me anytime. My contact information is in the description below. To stay up to date on the housing market please subscribe to our channel!
StellarQuest Real Estate – Lic. # 02077900
Tim Hamilton
Broker Associate – Realtor®
Lic. #01959966
(714) 486-4086
timsellsca@gmail.com
www.StellarQuest.com