Even though much of the news regarding the local Orange County CA. real estate market is negative, I truly believe that now is a good time to buy a home in Orange County, CA.  Prices are down, interest rates are still low, the current and long term local job markets look healthy, coupled with the great quality of life… and much of the news regarding the local real estate market is negative.  Recovering technologies such as semi-conductors and Internet, new technologies such at Bio-Tech and Asian trade, are all strong employers here in Orange County which will keep the job market strong and relatively high paying.

Let’s look at the price and sales data.  We have been gathering market data on a weekly bases since July of 2002′  Since we began gathering this data, we are now at a point of the largest number of homes listed on the market for sale at 4,597.   As an interesting comparison, south orange county had just 500 homes on the market for sale in February of 2004’.  Also, at that time (February 2004’) there were about 1,500 homes sold in escrow, whereas today there are only 763 homes sold in escrow.  

There have been some new recent articles quoting a recent Dataquick report, that the Median Price of homes in Orange County has only dropped by $1,000 from April of this year compared to April of last year, which represents just about a  0.15% drop in prices, which essentially is no drop in prices at all.  That calculation may be true, but if you have been active in selling real estate in this market, like I have, you know this not to be true, so how can this be ?   Our data gathering and analysis give us the answer.    

Dataquick basis there estimates on Median home prices which is the price in the middle in which half the homes sold for a higher price, and the other half sold for a lower price.  This calculation compares small low priced entry level homes, with larger multi-million dollar ocean view estates, and everything in between.  Our graphs have shown that for several years, the sub $400K market was always the hottest market with the lowest months of inventory.  But in the past 5 months or so, this has not been the case, and now the sub $400K is one of the softest markets with one of the highest months of inventory (currently at 9.8 months).  What this tells us is there are now more buyers purchasing larger and higher priced homes as compared to lower priced entry level homes.  This phenomenon then skews the Median Price (and Average Price) calculation to the higher end of the price spectrum. 

According to our calculations which looks at price per square foot for specific product types, prices have actually dropped about 10% nominally since the peak in pricing in May of last year… I predict that this softness in the market will continue throughout the remainder of this year and begin to strengthen next year.