With an expected market time of 98 days for all of Orange County, sellers really need to pack their patience.
Current sellers have heard about how great the housing market was, generating instantaneous, multiple offers. For years, up until May of this year, sellers had been selling their homes at or near their list prices, and sometimes fetched even more. Yet, the housing market has evolved. The hot seller's market is in the past and is not coming back anytime soon.
In looking at the expected market time, the amount of time it would take to place a home on the market today and open up escrow down the road, it has grown from a low of 51 days at the end of February, to 98 days today. Anything above 90 days is a balanced market, one that does not favor sellers or buyers.
In light of this, sellers need to temper their expectations. First, the best "bait" that is working to bring buyers in today is price. Pricing at or extremely close to a home's fair market value is critical to a timely sale. Sellers also need to pack their patience, as slowing demand and rising supply is giving way to a market that is not delivering instant success regardless of how well a home is priced.
A warning to buyers: it is still not a buyer's market, so paying at or very close to a homes fair market value is vital in securing a home. Buyers writing offers below recent comparable sales are not making an effective use of everyone's time. The market is balanced; there are more choices than before, but there is not a surplus to be seen. Today's inventory has not even reached the long-term average of 8,000 homes and is about to peak for the year. Seller's are not desperate and are not going to cave to a buyer looking for a deal.
The bottom line is that the market is shifting. Sellers need to adjust their expectations and buyer's should not get ahead of themselves.
Amanda, Pamela & Jace Horton provide a comprehensive source of information and services for anyone buying or selling property. Their services are of the highest quality, guaranteed with proven results.
Contact us for a personalized perspective on the market and how it pertains to your possible sale or purchase! Here is an article we found of interest this month. Source: Reports on Housing: Orange County, July 29th, 2018:
Orange County Housing is Moving from Seller's Market to a Balanced Market
The housing market has favored sellers for years now. That good old-fashioned metal balance scale has been leaning heavily in favor of sellers with very few homes on the market and tremendous demand. Yet, with more homes coming on the market and falling demand, that metal balanced scale has slowly but surely been moving away from that hot seller’s market to a balanced market, one that does not favor sellers or buyers.
Everybody has been talking about not enough homes on the market, dating back to 2012. That lack of supply has fueled the frenzied real estate market; that is, until 2018. The supply problem has evolved into a demand problem. While the supply of homes has increased quite a bit this year, it still remains below the long term average. The real issue is not that there are way too many homes on the market, as in prior slowdowns; instead it is the fact that housing demand has dropped precariously.
Demand was a staggering 18% higher in July of last year, and mortgage rates are now at their highest rate since 2011. With prices and mortgage rates rising as they have been for nearly a decade, it's no wonder that buyers are not jumping as quickly to purchase.
This does not mean the current market favors buyers, it is still an extremely slight seller’s market. The current expected Market time is 85 days. In a balanced market, homes stay on the market between 90-120 days. The difference now is that there are more choices now. The typical home is no longer flying off the market. Buyers no longer need to trip over themselves to purchase, and can approach the market methodically and at a more relaxed pace.
Sellers: Accurate pricing is fundamental in order to find success. Ignore the recent headlines of record median sales prices. That does not mean that homes are continuing to appreciate TODAY. Demand has dropped considerably, meaning fewer showings and fewer potential offers. Pricing at or close to the Fair Market Value is the wisest formula for success.
In the past two weeks, demand for homes above $1.25 million decreased by 17 pending sales, down 5%, and is now at its lowest level since the end of January. The overall market time for homes priced above $1.25 million is now 210 days, up 27% compared to last year. Year over year, luxury demand is down 16%, while inventory is up 6%. See the graph below for expected market time across specific price ranges.
Just Sold in Newport Beach $3,950,000 Represented Buyers
New Listing in Laguna Beach $1,475,000 3 bedroom, 1350 sq ft remodeled ocean & canyon view home
Amanda Horton, Pamela Horton and Jace Horton provide a comprehensive source of information and services for anyone buying or selling property. Their services are of the highest quality, guaranteed with proven results.
Thank you for reading our newsletter. This month instead of real estate news we decided to share festival news! Enjoy your summer and the many fun events going on in town. As always, we look forward to being a resource for all of your real estate needs. All the Best, Amanda, Pamela & Jace