We have been tracking the Months of Inventory in south Orange County, Ca. along with Active versus Pending sales, and Price per Square statistics, since July of 2002'. As most everyone is aware, the real estate market here is southern California has slowed down substantially compared to 2 years ago. Homes are setting on the market for sale much longer, prices has decreased substantially, and mortgage loan delinquencies have resin dramatically.
But in the midst of all of this bad press, we have noticed a very interesting trend... albeit a short term one. For the past 7 weeks, the number of homes Pending in escrow has been steadily increasing for homes priced less then $450,000. On October 8, 2007 there were 84 homes under contract in escrow in this price range in south Orange County, Ca. That number has steadily increased and now stands at 150 homes pending in escrow. That's an increase of 21% in the midst of all of the negative press, and the traditional seasonal holiday slow down in the local marketplace.
What is this due to one may ask ? Well it is certainly NOT due to "not ready for prime time" home buyers who are using zero down, stated income purchase money loans, for those loan programs essentially have been deleted from the marketplace. What we do see is the drop in home prices by about 10% to 15% that has occurred in the past 10 months, has resulted in seasoned prospective home buyers and investors now seeing some true values in the marketplace who are increasingly making offers to purchase. Will this continue throughout next year ? Well it may be too soon to draw any type of long term conclusions, but I think that this is a good early indicator.
Our charts of Price per Square foot for both detached SFR's and Condo's, has shown that the peak in home pricing occurred in May of last year at about the $407/SqFt level for detached homes. Prices have been slowly decreasing since that time to a level of $356/SqFt today for detached single family homes. This represents a decrease of 12.5%, and since closed sales prices are always a lagging indicator, and given the recent sales that I have seen in certain areas, I predict this number will show prices having already fallen to a level of 15% to 20% for certain areas and product types.
For more information about the local real estate market here in Orange County Ca., please feel to call us at: 949-388-3396 or drop us an email at: Info@SearchOCHomes.com or Text Message us at: (949) 283-4679.
