Analyst: O.C. officially a “seller’s market”

By JONATHAN LANSNER / THE ORANGE COUNTY REGISTER June 29, 2012

Orange County housing — says analyst Steve Thomas — is now a “seller’s market.”

His latest Orange County home inventory report — data as of June 21 includes these thoughts …

Article Tab: Analysts have made it official, Orange County is now a sellers' market.Analysts have made it official, Orange County is now a sellers’ market. PAUL SAKUMA, AP

• Inventory of homes for sale fell 106 homes in two weeks to 5,626 – back at June 2005 levels. Year ago? 11,388.

• Demand, the number of new pending sales over the past month, fell by just three to 3,684 homes new to escrow – again, a pace not seen since 2005.Year ago? 3,060

• His market time benchmark – mixing inventory and supply – fell to 46 days to theoretically sell the entire inventory at current buying pace. Year ago, 112 days.

He writes: “The spread between the active inventory and demand has narrowed considerably and has not been this close since 2005. When the spread is close, it is a seller’s market. In this case, with all of the distressed activity, appreciation will not be rampant and unsustainable like it was in the mid-2000’s. But, it has the look and feel of a seller’s market with multiple, strong offers.”

Another market benchmark shows that sellers are sensing this buying surge and regaining some pricing power.

A slightly different view of the Orange County housing market from DeptofNumbers.com, formerly HousingTracker.net, trends in asking prices from brokers’ MLS system of homes for sale. In addition, DeptofNumbers breaks down its data into a pair of neat markers — the 25th and 7th percentiles — that let us see how the market’s upper crust and more modest abodes are faring.

From the June report we see at the 25th percentile — the median of the lower half of the price spectrum of local homes for sale…

•Selling price was $299,675 — that is up 2.19 percent vs. the previous month. This is the 5th consecutive month-to-month gain in pricing at the lower end.

•The latest 25th percentile price is up 0.2 percent vs. a year ago. This is the first gain at the lower end after 18 consecutive year-over-year cut in asking prices for these more “affordable” homes.

At the 75th percentile — the median of the upper half of the price spectrum of local homes for sale, we see …

•Selling price was $699,000 — that is up 2.31 percent vs. the previous month and up 4.0 percent vs. a year ago. This is the 5th straight monthly gain and the 3rd straight year-over-year increase since a run of declines started after March 2010.

•The overall Orange County median listing price, by this math, was $438,675 — that is up 1.6 percent vs. the previous month and up 2.0 percent vs. a year ago.

Of course, the curious wrinkle is that ever-shrinking presence of distressed properties in the market.

By Thomas’ math, Orange County distressed properties are so scarce that buyers snapping them up at a pace equal to selling in just 20 days as of June 21.

He writes: “The distressed inventory dropped another 6 percent in the past two weeks. In Orange County, the active distressed inventory, both short sales and foreclosures combined, continued to drop, shedding an additional 58 homes, or 6 percent. This segment of the housing market is by far the hottest, representing only 18 percent of the active inventory but 41 percent of all pending activity. Thus far in 2012, the distressed inventory has shed 2,179 homes, and now sits below 1,000 for the first time since 2007, totaling 992 total foreclosures and short sales. In the past two weeks, the foreclosure inventory increased by only 7 homes and has an expected market time of 19 days. The short sale inventory decreased by 100 homes in the past two weeks and now totals 742. The expected market time is 20 days. Yes, short sales may take a very long time to put together with the coordination of the lender(s) approval, the removal of HOA and/or tax liens, and bringing property taxes current. With so few homes on the market, short sales are being swept up almost as fast as the foreclosure market.”

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