Orange County CA Real Estate

There is lots of worry in the residential marketplace today in Orange County, Ca. Prices have dropped about 30% to 35% from their peak values that occurred in the summer of 2006'. But I see some signs that we may be reaching the bottom of this pricing downturn. How you may ask ?

First sign... I have been tracking the internal market stats for residential real estate in south Orange county, CA since July of 2002' on a weekly basis. I’ve been charting Months of Inventory, Active vs Pending and Price per Square Foot using our own proprietary indicators which are more time responsive by about 4 to 6 months then what is published by the traditional sources.(ie: Major Banks, Title Co's).   The Months of  Inventory is a very sensitive indicator that is a leads the movement of prices by about 6 months.  The Months of Inventory dramatically dropped about 4 months ago, and if the rate holds, I expect prices to bottom out by the end of this year.  Now this indicator does not have any long term predictive powers, and if interest rates where to dramatically rise, of the lending markets where to freeze up and become illiquid then all bets are off.   (See Chart Below)

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Today, foreclosed REO homes and Pre-Foreclosure (Short Sales) make up a large percentage of the Listings and Sales in Orange County, CA.  This severe market correction started in the summer of 2006', and probably has 6 to 12 more months to go. Currently, there are 15,046 homes and condos Active for sale (Listed in the MLS).  Of this total, 29.5% are Short Sales and 6.3% are bank owned REO's.  This represents a total of 35.8% of all inventory is a financially distressed property on the market for sale.  Below is a table showing these results as well as how these percentages of distressed listings range from City to City.  

As can be seen in the table below, this market correction is affecting the lower priced markets much more severely then the highest priced markets.  For example, 64% of Santa Ana's inventory of homes for sale are either foreclosed REO's or Short Sales.  While only 4.4% of the inventory or properties for sale in Laguna Beach, CA are bank owned REO's or Short Sales.   

City	Listings	Short Sales	Short Sale  %	REO	REO %	% Total Distressed
Anaheim	1207	615	51.0%	157	13.0%	64.0%
Huntington Beach	699	121	17.3%	18	2.6%	19.9%
Laguna Beach	343	12	3.5%	3	0.9%	4.4%
Mission Viejo	448	159	35.5%	28	6.3%	41.7%
Orange	667	211	31.6%	53	7.9%	39.6%
Rancho SM	367	131	35.7%	28	7.6%	43.3%
San Clemente	528	88	16.7%	15	2.8%	19.5%
Santa Ana	1595	815	51.1%	207	13.0%	64.1%
Yorba Linda	426	67	15.7%	14	3.3%	19.0%
Orange County	15046	4432	29.5%	951	6.3%	35.8%

Looking at the number of properties sold in the past 90 days reveals some other interesting facts.  There are 951 Bank Owned REO properties currently on the market for sale, and 986 REO's sold and closed escrow in the past 90 days.  This results in just 2.9 Months of Inventory which is a Sellers Market !   For those of us working in the field, this chives with experience in which many REO listings are selling rapidly and many with multiple offers.  The other interesting fact to not is that there are 4,432 short sales actively listed for sale, but only 556 closed in the past 90 days.  This represents 24 Months of Inventory.   What is actually going on here is that the Short Sales are actually selling at a much higher rate, but these sales have a high failure rate for many inexperienced Listing Agents are having hard time getting them approved by the Banks in order to close.  The moral of this story is that if you are interested in purchasing a Short Sale, make sure you are working with an experienced agent who has a track record of success with these types of purchases.

City	Sold Past 90 Days	Short Sales	Short Sale %	REO	REO %	% Total  Distressed
Anaheim	337	44	13.1%	118	35.0%	48.1%
Huntington Beach	364	31	8.5%	34	9.3%	17.9%
Laguna Beach	49	2	4.1%	2	4.1%	8.2%
Mission Viejo	226	22	9.7%	52	23.0%	32.7%
Orange	223	25	11.2%	45	20.2%	31.4%
Rancho SM	189	40	21.2%	33	17.5%	38.6%
San Clemente	157	21	13.4%	24	15.3%	28.7%
Santa Ana	306	41	13.4%	130	42.5%	55.9%
Yorba Linda	134	12	9.0%	12	9.0%	17.9%
Orange County	5370	556	10.4%	986	18.4%	28.7%

Here is another way of looking at it.  There are 4 times as many short sales listed for sale as compared to bank owned foreclosures (REO).  But when it comes to actual closed sales, there are twice as many Bank REO closed sales are there are short sale closings. 

Why you may ask ??  Here is what's going on....Short Sales are receiving offers to purchase at a much higher rate, but these transactions are experiencing a high failure rate for many inexperienced Listing Agents are having hard time getting them approved by the Banks in order to close.  The moral of this story is that if you are interested in purchasing a Short Sale, make sure you are working with an experienced agent who has a track record of success with the Short Sale. 

If you have any questions regarding Bank REO's or Short Sales in Orange County, contact us at:  949-388-3396 or drop us an email at:  Info@OCBankREO.com    Also, we just opened a new website for Banks who have REO properties for sale in Orange County, Ca. 

Currently there are 221 detached homes for sale in Ladera Ranch, CA.  these homes range in price from $465,000 for a 3 bedroom, 2 bath, 1,812 square foot home in the Tarleton tract on Rinehart road.  On up to $5,995,000 for a 5 bedroom, 7.5 bath, 8,700 square foot estate property in Covenant Hills on Bell Pasture Road.  The median priced home is $989,900, and the average priced home is $1,309,576.  The average days on market is 96 days and the average price per square foot is 376/SqFt.

Today, there are 24 detached single family homes that are under contract Pending in escrow.  These homes range in price from $524,900 for a 3 bedroom, 2.5 bath, 1,775 square foot home on Livingston Place in the Westcott tract.  The maximum home in escrow, is $3,395,000 for a 5 bedroom, 5.5 bath, 4,923 square foot estate home in Covenant Hills on Mission Ridge.  The median priced home is $989,000 and the average priced home in escrow in Ladera Ranch is approximately $1,250,000.  The average price per square foot is $324/SqFt and the average days on market is 80 days.

For homes that have sold and closed in the past 90 days in Ladera Ranch, there  were 42 such detached homes that sold.  These homes range in price from $479,900 for a 3 bedroom, 2.5 bath, 1,600 square foot on Amy Way in the ??? tract.  The highest priced home sold was for $4,350,000 for a 4 bedroom, 5.5 bath, 7,820 square foot estate San Jose street in Covenant Hills.  The median priced home is $824,900 and the averaged priced home is $931,606.  the average price per square foot is $320/SqFt and the average days on market is 81 days.

Comparing these home Sold statistics to the same 90 day period of time last year we find the following.  1 year ago, there were 83 homes that sold and closed escrow in the same 3 month period of time.  The median priced home sold 12 months ago was $835,000 and the  averaged priced home was $1,037,505.  The average price per square foot was $359/SqFt and the average days on market was 81 days.  Below is a table of the results.

Price	2007'	2008'	% Change
Median	835,000	824,900	-1.21%
Average	1,037,505	931,606	-10.21%
$/SqFt	359	320	-10.86%

As can be seen, prices have dropped about 10% in the past year in Ladera Ranch.   This  presents a very good buying opportunity for interest rates are still extremely low, and some properties in Ladera Ranch that are Bank owned REO's or pre-Foreclosures (Short Sales), can sometimes be purchased for 20% to even 30% less then what comparable homes were selling for about 2 years ago.  For a list of bargain homes for sale, please visit our website at:  www.OCBargainHomes.com

San Clemente Ca. has been going through a real estate slow down in the past 12 months.  The rate of sales is at a multi-year low, and prices have dropped about 10%.  Below is a table  showing  the Median, Average and  Price per Square Foot for  San Clemente and Talega homes and condos that are currently Active for Sale and Sold this year and last year:

San Clemente Detached Homes currently Active for Sale:    
Number detached Homes for Sale:  245  
Median Asking Price:  $1,089,000
Average Asking Price:  $1,410,918
Price per Square Foot:  $543/SqFt

San Clemente Detached Homes Sold in the Past 90 Days:    
Number detached Homes Sold:  71  
Median Sold Price:  $838,000
Average Sold Price:  $1,100,093
Price per Square Foot:  $520/SqFt

San Clemente Detached Homes Sold in 3 month period last Year (Oct, Nov, Dec):
Number detached Homes Sold:  82  
Median Sold Price:  $975,000
Average Sold Price:  $1,130,673
Price per Square Foot:  $483/SqFt

San Clemente Attached Condos currently Active for Sale:    
Number attached Condos for Sale:  100  
Median Asking Price:  $579,000
Average Asking Price:  $757,207
Price per Square Foot:  $510/SqFt

San Clemente Attached Condos Sold in the Past 90 Days: 
Number attached Condos for Sale:  27  
Median Sold Price:  $489,000
Average Sold Price:  $652,703
Price per Square Foot:  $456/SqFt

San Clemente Attached Condos Sold in 3 month period last Year (Oct, Nov, Dec):
Number attached Condos for Sale:  16  
Median Price:  $499,000
Average Price:  $615,231
Price per Square Foot:  $506/SqFt

Talega Detached Homes currently Active for Sale:    
Number detached Homes for Sale:  123  
Median Asking Price:  $1,037,000
Average Asking Price:  $1,181,376
Price per Square Foot:  $352/SqFt

Talega Detached Homes Sold in the Past 90 Days:    
Number detached Homes Sold:  30  
Median Sold Price:  $880,000
Average Sold Price:  $1,019,567
Price per Square Foot:  $319/SqFt

Talega Detached Homes Sold in 3 month period last Year (Oct, Nov, Dec):
Number detached Homes Sold:  36  
Median Sold Price:  $937,500
Average Sold Price:  $1,230,209
Price per Square Foot:  $372/SqFt

Talega Attached Condos currently Active for Sale:    
Number attached Condos for Sale:  30  
Median Asking Price:  $499,900
Average Asking Price:  $554,649
Price per Square Foot:  $355/SqFt

San Clemente Attached Condos Sold in the Past 90 Days: 
Number attached Condos for Sale:  7  
Median Sold Price:  $520,000
Average Sold Price:  $514,285
Price per Square Foot:  $309/SqFt

San Clemente Attached Condos Sold in 3 month period last Year (Oct, Nov, Dec):
Number attached Condos for Sale:  13  
Median Sold Price:  $542,000
Average Sold Price:  $618,222
Price per Square Foot:  $390/SqFt

If you would like to view all homes and condos listed for sale in San Clemente, Ca. visit our website at:  San Clemente Real Estate.

There is much confusion and accidental mis-information about the current state of  Home and Condo Prices in Orange County, CA.   Part of the confusion results in the unique market conditions we are now in in which the lower end of the house pricing spectrum is more negatively impacted then the higher end.  The accidental mis-information comes into play by the established organizations that report on housing prices (ie: DataQuick, Major Banks, Major Title Companies) who rely on Average and Median prices, versus Average Price per Square foot.  When you couple to two events together, you wind up with some confusing housing price information. 

We'll illustrate the conflicting numbers, and then hopefully give some clarity to the subject.  But first some basic definitions.   The Average for homes prices, is simply the sum total of the sales prices of all homes sold in a certain area (ie: Orange County, Santa Ana) during a certain period of time (ie: 12 months, 6 months, 3 months), and then dividing by that total number of homes sold. 

The Median is determined by taking the same list of sold homes, and calculating the sales price at which half of the homes sold were below this price, and half of the homes sold were above this price.  Although the Median is a bit harder to calculate, it is considered to be a bit more accurate representation, since the Average can be more easily skewed to the high side by a few very high priced homes sales during the period.  Both of these calculations though, can give mis-leading representations when you have a change in buyer habits... which is exactly what is happening now in Orange County. 

As an example of the confusion caused by Averages and Median in a changing market, take a look at this recent DataQuick report by the Orange County Register reporting Median home prices for all cities in Orange County.  Buena Park is showing a 20% drop in prices, while Cypress is showing a 6% increase in the same time period.  Dana Point shows a 21% increase in prices, while the adjacent city of Laguna Niguel shows a 10% drop during the same period.  What gives ?  Logic dictates that something is wrong with this type of statistical analysis.  The misleading statistics are a result of looking at Median and Average prices, instead of Price per Square Foot, and also combining Condo sales with detached Home sales. 

Below is a table of statistics that we gathered for the Average, Median and Price per Square Foot for the Past 3 months (Sept, Oct, Nov), and the same calculations for the same 3 month period 1 Year ago, for various Cities throughout Orange County, for detached Homes only (not including condos).  As can be seen, some Cities show only a small drop in Average home prices, and others yield an increase in the Average price, but a decrease in the Median price... while a few other cities are actually reporting an increase of almost 17% to 35% in the past year in Average or Median prices.  For instance, Dana Point and San Juan Capistrano are showing large increases in the Average or Median prices in the past 12 months.  But ask anyone on the street, and they tell you this is preposterous.  The actual truth about home pricing in these two cities (and the rest for that matter) are more closely revealed by looking at the Price per Square Foot which shows a 5.8% drop in Dana Point and a 10.5% drop in San Juan Capistrano.

Sept, Oct, Nov  2006'

City	Average	Median	Price per SqFt
Anaheim	600,565	585,000	416
Orange	763,933	690,000	404
San Juan Capistrano	936,449	766,000	421
Costa Mesa	826,849	743,500	488
Mission Viejo	737,033	689,900	378
Laguna Niguel	1,085,506	905,000	419
Fullerton	713,397	629,000	394
Dana Point	1,516,212	980,000	644
Irvine	953,457	800,000	431

Sept, Oct, Nov  2007'

City	Average	Median	Price per SqFt
Anaheim	514,599	495,000	341
Orange	722,213	607,000	348
San Juan Capistrano	1,236,999	1,039,925	377
Costa Mesa	759,597	720,000	443
Mission Viejo	730,547	639,000	347
Laguna Niguel	987,340	860,000	386
Fullerton	690,645	627,000	363
Dana Point	1,784,459	1,300,000	608
Irvine	974,121	760,000	413

Percent (%) Change in Past Year

City	Average	Median	Price per SqFt
Anaheim	-14.3%	-15.4%	-18.0%
Orange	-5.5%	-12.0%	-13.9%
San Juan Capistrano	32.1%	35.8%	-10.5%
Costa Mesa	-8.1%	-3.2%	-9.2%
Mission Viejo	-0.9%	-7.4%	-8.2%
Laguna Niguel	-9.0%	-5.0%	-7.9%
Fullerton	-3.2%	-0.3%	-7.9%
Dana Point	17.7%	32.7%	-5.6%
Irvine	2.2%	-5.0%	-4.2%

How can this be you may ask ?  In the past 12 months, there have been fewer entry level buyers purchasing lower price detached homes using low down payment financing in Dana Point and San Juan Capistrano.  While there has been a relativity larger percentage of higher income buyers purchasing larger - higher priced homes, but at sales prices substantially lower then they were 1 year ago.  

The major reporting agencies (DataQuick, Banks, Title Companies) have relied upon  Averages and Median prices for years since this data is easier to gather then Price per Square Foot, and is also easier for the average consumer to relate too.  A newspaper Headline that reads "Average Home prices in Irvine have now reached $800,000" is a lot more eye catching then to say "Average Price per Square Foot in Irvine has now reached $433"...   But as can been seen by the above tables, Averages and Medians can offer some very mis-leading conclusions about home prices during times of change in a marketplace.

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.   

As most everyone is aware, the residential real estate market here in Orange County is going through a significant correction.  Mortgage loan delinquencies and Foreclosures are at record breaking levels, with no relief in sight for the near term.  In August 9th of this year we evaluated  the number of distressed properties for sale per population for each city in south Orange County.  That report showed that the beach cities were experiencing a much lower percentage of distressed property sales, compared to the newer and lower priced inland cities of south Orange County.  On October 20th, we reported the ratio of distressed properties for sale compared to the overall number of homes for sale in south Orange County was 14%.

Here, we will examine the ratio of Distressed Properties for sale compared to ALL properties for sale for south Orange county and for each city.  A distressed property that is listed for sale is one in which the property is a Bank Owned REO, or homes still owned by a person that are in Foreclosure or are a Short Sale.  The table below  is a tabulation or our findings for this date of November 14, 2007'. 

Again the higher priced beach cities are holding up well and have a very low percentage of distressed properties for sale (less then 3%), while the inland cities have a much higher rate of 25% or more.  The overall south Orange County region has 18% of the listings which are distressed properties, compared to a ratio of 14%  in October 20th of this year.

The significantly higher distressed property listings in the inland cities is due to several factors.  Compared to the beach cities, the inland cities contain a much higher percentage of lower priced homes and condos that were purchased first time home buyers.  In order to afford the high cost of local housing, many of the first time buyers use highly leveraged financing, some of which with adjustable rate mortgages, and many of these homeowners are finding it now impossible to keep up with their mortgage payments after several interest rate reset increases.   

City	Distressed Properties for Sale	All Propeties for Sale	Ratio ( % )
Newport Coast	0	157	0.0%
Laguna Beach	4	280	1.4%
Corona Del Mar	3	142	2.1%
Newport Beach	12	536	2.2%
Dana Point	25	349	7.2%
Coto De Caza	17	162	10.5%
San Clemente	59	564	10.5%
Irvine	125	1069	11.7%
Laguna Niguel	100	520	19.2%
Ladera Ranch	73	340	21.5%
Tustin	108	479	22.5%
Mission Viejo	143	570	25.1%
San Juan Capistrano	78	310	25.2%
Aliso Viejo	110	434	25.3%
Laguna Hills	77	235	32.8%
Rancho Santa Marg.	163	496	32.9%
Lake Forest	208	567	36.7%
south Orange County	1305	7210	18.1%

On a more positive note, our statistical analysis has shown that the Inventory of homes Active for sale in south Orange County has been slowly decreasing in the past several months, while the number of homes sold In Escrow has increased slightly in the past month.  Also on a more grass roots level, we have seen numerous distressed properties priced well below market, sell within a week with multiple offers from buyers with very large cash down payments, which may be an indication that some of these bargain priced homes represent the bottom of the pricing cycle. For more information about Foreclosures and Short Sale properties, please email us at:  Info@OCShortSaleTeam.com or visit our website at:  www.OCShortSaleTeam.com

As most everyone knows by now, the Orange County Real Estate market has been taking a beating in the past 12 months.  The rate of sales is at it's lowest level in 20 years. And, unlike the mis-information reported elsewhere, prices have already dropped by 10% or more...  But there may a ray of hope. 

As shown above, we have been charting the Months of Inventory since July of 2002'.  A significant drop in the months of inventory just occurred for the first time since May of this year.  This is due to the number of homes active for sale slowly and steadily decreasing since August, and more importantly, there has been an increase in the number of homes Pending In Escrow in the past two weeks (See chart at the bottom). Home prices started to decline starting back in June of last year (2006’), and a few more buyers are jumping off the fence and purchasing homes at this low prices. --- For FULL Article, CLICK HERE --->   more »

There is now doubt about it... the south Orange County real estate market is going through a market correction... But some market segments are being hit harder then others.  This correction is effecting the entry level market much harder then the older and staid move up markets.  To illustrate this point, we conducted market analysis of distressed properties for sale in the cities of Laguna Beach, Irvine, Dana Point, San Clemente, Laguna Niguel, Mission Viejo, Aliso Viejo, Rancho Santa Margarita, Ladera Ranch and Lake Forest.  This analysis comprised of counting the number of properties currently listed for sale that are either Bank Owned (REO), in Foreclosure, or  Short Sales, for each city.  We then took these numbers and divided by the Cities population (and then multiplied by 1,000).   This gives us a simple ratio of distressed properties for sale per 1,000 population for each city. 

This analysis illustrates that the entry level market is being hit much harder then the move up market.  The result of our analysis is shown in the chart below:   

CITY	Distressed Rate
Laguna Beach	0.10
Irvine	0.23
Dana Point	0.31
San Clemente	0.57
Laguna Niguel	0.65
Mission Viejo	0.80
Aliso Viejo	1.01
Rancho Santa Margarita	1.28
Ladera Ranch	1.55
Lake Forest	1.67

The coastal communities consisting of more expensive and older properties, have a much smaller percentage of distressed properties for sale compared to the more affordable and newer inland communities.  For example, Lake Forest has a 16 times higher rate of distressed properties  (bank REO, foreclosure, shore sale) for sale then Laguna Beach.    The reasons for this are several.  A higher percentage of the homes in Ladera Ranch, Rancho Santa Margarita, Aliso Viejo and Lake Forest (including Portola Hills, Foothill Ranch) are newly built in the past 15 years and geared towards entry level or first time move-up home buyers.  Compared to Laguna Beach, Dana Point, and Laguna Niguel which have a higher percentage of older properties that were targeted for move-up and estate buyers. A higher percentage of the newer entry level buyers who bought in the inland communities used lower down payment financing, some with adjustable rate mortgages, and some of these home owners have no equity or negative equity (short sale) due to the recent pull back in property values.  Whereas many of the home owners in these coastal communities bought long ago, or recently purchase with large down payments which shelters them from market corrections such as this one, in case they have to sell and move. 

Another angle to this analysis is the following.  We have been tracking the months of inventory for the south orange County real estate since July of 2002'.  The entry level price range of "Less Then $450K" has always been the hottest market segment until recently.  Now this price range  is the softest market segment at 10 months of inventory. 

It is hard to know how long this correction will last, but I guesstimate that the recovery will occur sometime in mid 2008', which actually makes this a good time to be thinking seriously about buying a home.  For more information about the orange County real estate market please feel free to contact us at:  949-388-3396 or email us at:  Info@SearchOCHomes.com    To view any home for sale, please visit:  south Orange County Real Estate

The local market here is south Orange County is soft, but I see signs that we may be  approaching a bottom in pricing. Currently we are at about 8.5 months of inventory in Orange County, which is a solid Buyers Market (greater then 6 months is considered a buyers market).  First, to clear some definitions.  The Months of Inventory is not just the inventory of homes for sale, but is essentially a ratio of the number of homes for sale, divided by the rate at which homes have been currently selling.  This is the true indication of the strength or weakness of any given real state market.  If I said there were 20 homes for sale in  Maryland, Ohio, one may get the impression that's a tight market, but if you later learned that only one home sold in Maryland all of last year, you would soon learn that that is a terrible market for it would take about 20 years to sell the current inventory of homes for sale...    As can be seen by the below graph, the south Orange County residential real estate market has been hovering around 8.5 months since about July of last year (2006'), which means that it would take about 8.5 months to sell the current inventory of homes for sale.  Also of interest, the Months of Inventory dropped substantially early this year, and just after the sub-prime lending meltdown and the associated bad press, the Months of Inventory shot back up to around 8.5 months... the same level as last year.  



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I saw the Borat movie the other day and I couldn't help but use that 'NOT' phrase... There has been lots of talk in the past 12 months about a real estate Bubble here in Orange County CA... As a professional real estate Broker I don't see it, but then again, maybe I'm just biased. So I brushed of the dust from my old College Engineering books and decided to do some unbiased statistical analysis to shed some light on the current state of the real estate market here in Orange County.

First set of statistics that I look at, that are often quoted, is the Months of Inventory. This figure is published by the major banks and title companies but the data is usually a 4 to 6 months behind the current market conditions and covers a very large area of the marketplace (ie: California). So I started tracking my own version of the Months of Inventory back in July of 2002'. The data I have been gathering is on a weekly basis for just the south Orange County real estate market. Also, I use homes under contract (In Escrow) instead of homes that have sold and closed in the previous 3 months. This makes for a much more time sensitive up-to-date barometer as to what is currently going on in our marketplace. In July of last year (2005') we were in a super Hot Sellers market at 1.5 months of inventory. Since that time the market has be slowing down to a level of 9 months of inventory about a month ago. Recently the market has shown signs of gaining just a little bit of strength as the months of inventory has dropped back to 8 months. Below is a Graph showing the Total number of homes Active for Sale versus the Total number of Homes sold In Escrow. The ratio of these two figures is representative of the Months of Inventory.    more »