Orange County Housing Market News Josh Alexander

Little has changed over the last month in the housing market, yes supply went up by a few homes, and demand dropped slightly, but overall if you are buying or selling a home today compared to a few weeks ago, you probably won’t feel the difference. School is either out, or almost out and Summer 2021 is about to start. What does this mean for the housing market? We will continue to see demand decrease as the distractions of Summer set in. Buyers, probably more than usual this year due to restrictions finally being lifted, will go on vacation, have family and friends over for BBQ’s, go the the beach, etc. and because of this they are traditionally less aggressively pursuing a home during the next 3 months. At the same time, Sellers are placing their homes on the market in larger number to try to get their home sold to then go and purchase a new one before the Fall semester starts up again. Less demand, more supply, the hot seller’s market is finally coming to an end! Well, don’t get too excited if you’re a buyer or too worried if you’re a seller. The inventory is so low right now that it is going to take months if not years to climb out of this shortage. Just to give you a quick example to illustrate how bad it is, using the years 2015-2019(not using 2020 for obvious reasons) Orange County ended the month of May with and average of 6,363 homes on the market. Can you guess how many homes we have on the market right now? 2,255, which means we typically have 182% more homes on the market going into Summer than we do this year. Very hard to make those kind of numbers up quickly enough to cause any significant shifts in the housing market. On top of that, interest rates are still hovering right around 3%, keeping the demand inflated as buyers try to take advantage of these extremely low rates to lock in the lower monthly payment before rates start to go back up again. We will continue to see homes appreciate this Summer at a quicker than normal pace even as the market cools slightly by the end of Summer.

Sellers: The likelihood that inventory drops any more is very low, in fact you should start seeing it rise more significantly over the next 3 months, at the same time, interest rates seem to have bottomed out right around 3% and will be heading up as we get further into the year. What does this mean for you? Higher supply and lower demand, we are shifting out of the peak Spring selling season and into the Summer season where buyers will have slightly more to choose from. Rising interest rates will also take some buyers out of the market. If you have been waiting for the peak, it has already happened, especially in the luxury home segment, and although we won’t be out of a hot seller’s market anytime soon, lower competition will lead to less offers and the crazy bidding wars will cool down slightly. Because we are in the hottest seller’s market in my lifetime, the transition into a normal hot seller’s market will take time but the longer you wait at this point the further your ability to dictate the terms of your homes sale will erode. If you are looking at purchasing a new home with the proceeds from the sale of your current home, this is especially important because right now buyers are willing to give you months to find a replacement property after your home closes, it won’t be that way forever so take advantage of it now so you don’t have to stress about not being about to find a new home quickly enough once yours sells.

Buyers: Inventory should continue rising over the Summer which is great news for you but don’t get your hopes up too much, it will still be a very competitive market all the way through Summer due to the extreme lack of inventory, There are just not enough homes to go around to satisfy the demand created by these historically low interest rates. However, PLEASE don’t throw in the t

It's hard enough for buyers to get into escrow right now, make one mistake and you could lose out on your dream home. In today's episode I discuss the top 5 mistakes I see buyers make and how to avoid them to give yourself the best shot at getting into the home of your dreams in this crazy seller's market.

Inventory has finally started to rise in Orange County as well as the rest of Southern California. Inventory bottomed out in March which means we are now in the Spring market for housing so from here through the end of Summer/early Fall we should see available homes continue to rise. On the demand side, we did see a slight drop over the last few weeks which is due to 1) The typical housing cycle where demand flattens out this time of year 2) Interest rates were climbing though the month of March which lead to more buyers sitting on the sidelines and not entering the market. So what does this mean for May’s housing market? Interest rates have actually decreased again during April so although I expect this to be a temporary drop, it should lead to a slight bump in demand as buyers try to take advantage of what is most likely the last time they will see interest rates under 3% for the rest of the year(this prediction for demand increase is also supported by the data showing mortgage applications are again on the rise after 6 weeks of declines). By the end of May I expect interest rates to continue their climb upwards again as long as the economic news continues to be positive.

7 things to know about the current housing market in Orange County:

1. Supply has increased by 6% over the last two weeks
2. Demand has decreased by 3% over the last two weeks
3. Interest rates have fallen in April and are currently hovering at an average of 2.97% for a 30-year fix mortgage loan
4. 2/3 of all homes sold right now are closing above asking price
5. Expected market time has gone from 21 to 23 days
6. After 6 weeks of declines, mortgage applications are up again by 8.6% this week
7. Covid cases in OC are currently at 3 per 100,000 residents and OC has a positive test rate of only 1.4% which is a new low since tracking begin last year.


Josh Alexander
THE brokeredge
JoshAlexanderRealEstate@gmail.com
714.366.2186
DRE#:01974435

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Spring Orange County Housing Market Update - Sellers beware, the Spring shift is here

30-year fixed mortgage rate: 3.09%(was 2.65% at the beginning of the year)

Inventory in Orange County dropped by about 1% in the last few weeks

Demand in Orange County increased by about 5% in the last few weeks

Median Sale price in Orange County is up 10% since last year(In all of Southern California it’s up by 15%)

Mortgage applications have dropped for three strait weeks now

Over the next 8 weeks we will typically see the largest increase in inventory on a per week basis that we see all year. When we look at the unhealthy appreciation that has been happening all year(almost 1% per month at this point) as well as the steady increase of interest rates(from 2.65% on Jan 1st to 3.09% today), homes are now becoming more unaffordable, which leads to demand dropping slightly. Future demand, although still very strong, has started to decrease slightly for the last three weeks as reflected by the dip in mortgages applications over that same time period. As some buyers pull themselves out of the market, and more homeowners start placing their homes on the market, the housing will start to trend in a more healthy direction. Although the current market, which is the hottest seller’s market we have been in since at least the 80’s, is great for sellers, it’s unhealthy and unsustainable for much longer. The slight slow down is something I as a real estate agent am rooting for to help get us back to a healthy seller’s market instead of an overheated seller’s market. Yes, you read that right, we will still be in a seller’s market as we enter the Summer months as the supply and demand curves just have too much ground to make up to really get anywhere close to transitioning us to a balanced market anytime soon.

Buyers:

At last! The first good news for buyers all year, inventory should start to increase at a quicker pace for the next two months giving you more options to choose from and reducing some of the pressure. However, sellers will still have the upper hand in this market, multiple offers over asking are still going to be common place so it’s important that you understand this as you continue to search for a home.

At the beginning of the year most economic experts were predicting that interest rates would most likely finish this year somewhere in the 3.1%-3.5% range. I am now seeing many of those experts revising their predictions slightly to somewhere in the 3.4-3.9% range. When you take this into account along with appreciation predicted to continue for the remainder of the year, if you are planning on buying a home this year, the sooner you do so the better you will end up being. Homes will just get more unaffordable from here through the rest of the year. But how are you supposed to compete with so many buyers and what are some strategies you can use to put yourself in the best possible position to get your offer accepted? I’m glad you asked, check out the last two episodes where I spend a total of about 50 minutes going over all of the no, low, and higher risk strategies you have available to you as a buyer to give you the best shot at getting into escrow ASAP.

Sellers:

The shift to the Spring market is here, supply has bottomed out and will start to rise as we head into April and May, future demand also looks to be slowing down slightly as well due to the quickly increasing interest rates and overall affordability of homes. If you are planning on selling your home this year and don’t already have it on the market, you have a few weeks left before the leverage you have as a seller peaks and starts going the other direction. By the end of April we will most likely be in a market that will still heavily favor the seller but will start to trend out of the insane, never before seen, seller’s market, and close

We are currently in the hottest seller’s market we have seen in my lifetime, unfortunately this also means buyers are finding it almost impossible to get their offers accepted right now. In part 2 of the series of “How to get my Offer Accepted in this HOT Seller’s Market”, I will be covering the risker strategies buyers can use to get their offer accepted. Non of these strategies are without risk but knowing the pros and cons of these risker strategies will hopefully give you the knowledge you need to calculate the risk based on your specific situation and will enable you to make decisions from a place of knowledge vs. letting your emotions get the best of you when trying to buy a home right now.



Josh Alexander

THE brokeredge

JoshAlexanderRealEstate@gmail.com

714.366.2186

DRE#:01974435



Follow me on Facebook at: https://www.facebook.com/joshalexanderrealestate/



Follow me on Instagram at: https://www.instagram.com/josh_the_real_estate_dad/



Follow me on LinkedIn at: https://www.linkedin.com/in/joshalexanderrealestate/



LinkTree: https://linktr.ee/joshtherealestatedad



ClubHouse: @realestatedad

In this episode I will go over some of the things you should be doing to built the best team around you before even starting the process of looking for a home. What does having a good team around you have to do with making your offer more competitive you ask? This episode breaks it down and gives you simple questions to ask when choosing your real estate agent, lender, and home inspector to make sure you are giving yourself ever chance possible to beat out other buyers in today’s market.

Josh Alexander
THE brokeredge
JoshAlexanderRealEstate@gmail.com
714.366.2186
DRE#:01974435

Follow me on Facebook at: https://www.facebook.com/joshalexanderrealestate/

Follow me on Instagram at: https://www.instagram.com/josh_the_real_estate_dad/

Follow me on LinkedIn at: https://www.linkedin.com/in/joshalexanderrealestate/

LinkTree: https://linktr.ee/joshtherealestatedad

ClubHouse: @realestatedad