By Eric Engelbert
Welcome to this week's real estate market report.
In comparison to last year, when housing inventory experienced a steady 5% weekly climb, this year we find ourselves in a unique situation. The spring market has brought about an unexpected trend of stagnant or even decreasing inventory levels, which is quite uncommon.
For over a decade, the months of March through May have traditionally represented the pinnacle of new listings throughout the year. Back in 2008, Orange County had 4,847 new listings recorded in March. Two years later, in March 2010, the number remained impressively high at 4,751, and this trend persisted with the peak consistently surpassing 4,000 listings until 2019. However, March of 2023 witnessed a significant shift, with only 2,096 new listings, amounting to a mere 43% of the peak seen in the past 15 years.
Several factors contribute to this scarcity of new residential listings. Firstly, over 50% of homeowners in Orange County enjoy mortgage rates of 4% and below. Given the favorable interest rates, it becomes less appealing for these homeowners to sell their existing properties in order to acquire another home and incur a higher interest rate of over 6%.
Another significant reason contributing to the scarcity of new listings is the unprecedented appreciation that homeowners have experienced. The substantial increase in property values has transformed their homes into valuable assets, further disincentivizing them from selling and relinquishing the benefits of this remarkable appreciation.
And that is a motivating factor for the high buyer demand that we have seen. Buyers have recognized that they can comfortably afford mortgages, even with higher interest rates. Additionally, they anticipate future opportunities for refinancing, making homeownership more affordable in the long run.
If you are looking to purchase a home in Orange County take a look at our market report video below and peruse all the residential listings in Orange County at this link: https://www.ocrealestateinc.com/
If you are considering selling your home in Orange County ask us these critical questions.