Demand for O.C. homes at 7-year high

April 30th, 2012,  

OC Register

Soaring demand and tight inventory means — by one measure — Orange County homes take 4 fewer days to sell at the current buying pace in the past two weeks and 59 less days in a year.

The latest Orange County home inventory report from Steve Thomas and — data as of April 26 includes these thoughts …

Back in the early 2000’s, buyers zealously bought homes without regard to someday becoming sellers. Contrast that with the subsequent, unprecedented downturn, the housing market transitioned into a deep six year hibernation. The sleeping giant, housing, has awakened. The most fascinating aspect of this latest shift in the market is that absolutely nobody forecasted this major step in a housing recovery. The current statistics are staggering: Listing Inventory is at its lowest point since June 2005; Demand is at its highest level since June 2005; The expected market time is at its lowest level since June 2005; Closed sales have not been this low since October 2006 (May 2010 was at a similar level, but only temporary due to the expiration of the first time home buyer tax credit); The distressed property inventory is at lows not seen since September 2007.

Thomas’ signature housing measurement is his “market time” benchmark. It tracks how many months it theoretically takes to sell all the inventory in the local MLS for-sale listings at the current pace of pending deals being made. By this Thomas logic, as of April 26 — we see …

  • Market time of 1.51 months for Orange County buyers to gobble up all homes for sale at the current pace vs. 1.63 months two weeks ago vs. 3.49 months a year ago vs. 2.45 months two years ago.
  • Of the 8 Orange County pricing slices Thomas tracks, 7 had faster market time vs. 2 weeks ago; and 7 improved over a year ago.
  • Orange County homes listed for under a million bucks have a market time of 1.23 months vs. 5.47 months for homes listed for more than $1 million.
  • So, basically, it is 4.5 times harder to sell a million-dollar-plus residence!
  • And just so you know, the million-dollar market represents 25% of all homes listed and 7% of all homes that entered into escrow in the past 30 days.

Here’s the recent data for listings; deals pending; market time in months; latest vs. 2 weeks earllier, a year ago and 2 years ago. Color coding for market time is red (slowed by 5%-plus in year); green (sped up by 5%-plus in year); and yellow (in between!) Note: k=thousand; m=million …

Slice Listings Deals Market Time (months) 2 week ago 1 yr. ago 2 yr. ago
$0-$250k 901 812 1.11 1.27 2.83 1.64
$250k-$500k 1,711 1,811 0.94 1.04 2.82 1.62
$500k-$750k 1,277 832 1.53 1.64 3.48 2.62
$750k-$1m 685 275 2.49 2.68 4.38 3.39
$1m-$1.5m 514 170 3.02 3.48 6.14 6.50
$1.5m-$2m 307 58 5.29 6.04 9.85 7.89
$2m-4m 447 42 10.64 9.57 14.22 13.49
$4m+ 248 7 35.43 42.00 26.82 38.44
All O.C. 6,044 3,992 1.51 1.63 3.49 2.45

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