Often, the Orange County real estate market statistics reported on TV and in the press are based upon data from 3 to 9 months ago. Usually this Orange County market data is reported on a quartley basis, and is based on homes that have sold and closed escrow, which means those homes were priced and placed on the market 2 months before that. So in a changing market, the press may be stating one condition of the Orange County Real Estate market, while the actual market conditions may be different. Such is that case this time.
The Orange County register recently printed an article about record breaking home prices plus continued upward momentum. But a detailed analysis of the current Months of Inventory tells a slightly different stroy. Months of Inventory is simply the amount of time (number of months) it would take to sell all of the homes curently in inventory if there were no new listings of homes added to the market. The smaller this number is, the hotter the (sellers) market is, and visa versa. 2 to 4 months is generally considered to be a sellers market, and 4 to 6 months is a neutral market, and 6 or more monhts ( which happens seldom in Orange County ) is considered to be a buyers market.
We have been tracking current Months of Inventory on a weekly basis in south Orange County since July of 2002, for 5 different price ranges. Since July of this year the market has been slowly cooling down from a very hot pace in the first half of this year. On July 5th the overall south Orange County real estate market had a 1.9 months of inventory which is a very hot sellers market. Since that time that market has slowed down a bit to a current overall leverl of 3 months of inventory for south Orange County. Still a sellers market, but a much healthier balance between supply and demand. Price appreciation has also slowed way down to the point where current sales prices are on par with what homes sold for two months ago.
What does the future hold for Orange County real estate ?…. that’s the million dolar question. Some think we have a bubble wating to burst, while other respected analysts predict strong apprecaiton in the near term… one analyst even predicted that Orange County home prices will double within 10 years ! Personally, I see a market for the next 5 years that is in the middle of these two extremes (safe bet huh?) Slightly increasing interest rates and the simple ecomincs of the average buyer not able to afford the average home price at today’s salaries, I believe will keep the appreciation rate low for the next 3 to 5 years. On the other hand, due to strong job growth, the re-birth of technology, the emergence of bio-technology, and the newly discovered The OC lifestyle, I don’t see a let up in demand, or a dearth of owners wanting to sell, which will prevent a bubble from bursting.
If you want to view all homes listed for sale in Orange County, of if you would like a free evalution of your Orange County homes value, just visit our website at: Orange County Real Estate .
Short Sale Information,