May 14th, 2012, Jon Lansner
Orange County’s housing market is back at 2005 intensity, according to one report, with multiple offers for homes commonplace.
Click to see what $35 million would buy you in Newport!
Below $500,000 range is NUTS. Homes priced at or near their market value are generating an avalanche of multiple offers. A home in this range is placed on the market and, within moments, cars filled with buyers are touring the home. Realtors leave their business card behind so that the listing agent and seller know that the home has been shown. In the first couple of days of hitting the market, there are already stacks of business cards on the counter, a leading indicator that this home is not going to last. Upon writing an offer, buyers quickly find that they are one of many, sometimes over ten, offers on the home. Suddenly it becomes a battle of wills. In the end, the seller factors the highest price with the largest down payment. I know, you are thinking, “What about the appraisal?” In many instances, shrewd sellers and Realtors are leveraging the competition to drop the appraisal contingency and require the buyer to make up the difference between the appraisal price and the purchase price, IF there is an appraisal problem. This is precisely what a buyer is experiencing. Now, let’s take a look at the economic principles at play by zeroing in on the irrefutable data. Supply has dropped to levels not seen since June 2005. Demand is at levels not seen since June 2005. The expected market time for all of Orange County is 1.5 months, or six weeks. It is four weeks for homes priced below $500,000, 22 days for short sales, and 19 days for foreclosures.
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 May 10 — we see …
- Market time of 1.53 months for Orange County buyers to gobble up all homes for sale at the current pace vs. 1.51 months two weeks ago vs. 3.68 months a year ago vs. 2.53 months two years ago.
- Of the 8 Orange County pricing slices Thomas tracks, 5 had faster market time vs. 2 weeks ago; and 8 improved over a year ago.
- Orange County homes listed for under a million bucks have a market time of 1.23 months vs. 5.17 months for homes listed for more than $1 million.
- So, basically, it is 4.2 times harder to sell a million-dollar-plus residence!
- And just so you know, the million-dollar market represents 26% of all homes listed and 8% 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|