Happy New Year! The “unusual” definitely framed 2020 to say the least. 2021 has the hope that it may be the year of change for the better. Our living conditions changed in 2020; now the decision for many will be “how and where do you want to live” in the years ahead. Is it time to jump into the housing market, or downsize, or upsize, or “exit stage left”? You may be pondering this question with your last sips of eggnog before boxing up the holiday items.
Below my signature line is Steven Thomas’ Orange County Housing Report “A 2021 Forecast”. Low, low interest rates and a lack of housing inventory will launch the “Spring Selling Season” on January 1st this year. Having a game plan will be the key to your success…so, let’s get together and strategize your next move. I look forward to seeing you!
Wishing you a 2021 filled with good health, great hope, and many joy-filled moments as we all give thanks for each new day!
HAPPY NEW YEAR!!! Now, what does that mean for Orange County real estate?
First, let us look back at what happened in 2020 in terms of the inventory, demand, luxury properties, and the Expected Market Time.
After starting the year with very few available homes to purchase, the inventory only grew slightly, plunging to unbelievably low levels during the second half of the year.
The year started with an active inventory of 3,692 homes, only the third time it dropped below the 4,000-home threshold to start a year since 2004. Typically, the inventory continuously climbs until peaking between July and August, but not this year. After adding only 1,352 homes, it peaked at the end of May at 5,044 homes, its lowest peak since reporting began in 2004. The average peak since 2004 is 7,241.
COVID-19 suppressed the inventory in Orange County. Many homeowners simply did not want to place their homes on the market amid a pandemic. From March through June, there were 4,655 fewer home placed on the market compared to the five-year average, 29% less. The Coronavirus lost its grip on preventing homes from coming on the market from July through November. In those five months, there were 1,694 additional homes that came on the market compared to the five-year average, an extra 11%. Nonetheless, from January through November, there were still 3,150 overall missing FOR-SALE signs, 8% fewer than the five-year average.
With fewer homes coming on the market during the first half of the year and soaring demand (prior 30-days of new escrows), the active listing inventory dropped from the end of May through year’s end, shedding 2,369 homes, or 47%. It dropped below 4,000 homes in October for the first time since February 2018, and then dropped below 3,161, the lowest level since tracking began in 2004, which occurred on January 1, 2013. But it did not stop there. In the past two-weeks, the inventory plunged an additional 477 homes, or 15%, its largest drop of the year. Today it sits at 2,675 homes, an unprecedented, low level of homes to start 2021. There were 51% more homes on the market last year at this time, an additional 1,374 homes.