OC Housing Report: The Sky is not falling
The current economic environment has amplified the noise: surging interest rates, the highest inflation since 1981, and a volatile stock market. This will definitely have an impact on the economy and housing. However, the sky is not falling. Instead, housing is in the midst of transitioning from an insane, unhealthy velocity to a much more normal, methodical, “steady as she goes” pace.
Today’s missing ingredient that would lead to falling home values is SUPPLY. The number of homes on the market today is far below averages prior to the start of the pandemic when values were still rising, but at a much more methodical pace.
The housing market has already digested 5% plus rates and there are still plenty of buyers looking to purchase at these higher rates. The recent rise is indicating that demand has indeed become more stable and has found its footing.
Expected Market Time (How long it takes to sell):
As the inventory rises and demand remains stable, the expected market time will continue to slowly rise. It will remain a Seller’s Market this year, but it will take longer for sellers to find success, especially as the year progresses. Sellers will no longer get away with overpricing their homes.
Active Inventory (Supply):
Demand by Price Range:
For Sellers: It will remain a seller’s market this year, but it will take longer for sellers to find success, especially as the year progresses. Sellers will no longer get away with overpricing their homes. To find success, sellers will have to carefully arrive at their asking prices, taking into consideration the most recent comparable pending and closed sales.
For Buyers: Interest rates and appreciation are projected to go up the rest of the year. Now is NOT the time to sit on the fence if you want to purchase a home.