THE ORANGE COUNTY REGISTER, July 30th 2012
Just how much did the local housing market heat up this spring?
Well, we’ve previously told you that it was the busiest spring quarter for Orange County homebuying since 2006, by DataQuick’s tracking of sales of all kinds of residences.
But a new metric from online housing tracker Redfin.com gives us a clue about how quickly those homes sold.
Their novel measure of housing market speed is tracking the number of homes that went into escrow within 14 days of officially hitting the market. Redfin’s fancy new statistic shows the number of these “quick sales” in Los Angeles and Orange counties doubling in the past year.
Yes, doubling! Redfin found 37.5 percent of the single-family homes listed in Los Angeles and Orange counties in the first 3.5 weeks of June were placed into escrow within 14 days of their initial listing. That compares to 35.1 percent in the previous month and 17.2 percent a year earlier. That’s a gain of 118 percent in the quick-sale rate in a year.
This quick-sale metric is part of Redfin’s new “Real-Time Home Price Tracker” that combines information from public recorded sales data as well information within brokers listing services. The tracker gives other clues why LA/OC buyers were in quick-decision mode: a shortage of choice! By Redfin’s count, June sales were up 20.9 percent in a year while inventory ran down 49.1 percent vs. 2011.
Look, high-speed buying was a Southern California theme:
• San Diego: 41 percent of the homes went to escrow within 14 days of officially listing. That compares to 37.6 percent in May and 17.5 percent a year earlier.
• Inland Empire: 37.7 percent of homes were quick-to-escrow vs. 35.9 percent in May and 15.8 percent a year earlier.
• Ventura: 42.7 percent of homes went equally swiftly vs. 37.9 percent in May and 9.9 percent a year earlier.
Redfin’s findings echo what Steve Thomas’ reports on Orange County inventory have been saying for months – thought he turned up the heat on the metaphors in his most recent analysis, writing: “The lower ranges are as hot as molten lava.”
Thomas’ signature housing measurement is his “market time” benchmark. It tracks how many months it theoretically takes to sell the entire inventory in the local MLS for-sale listings at the current pace of pending deals being made. By this Thomas logic, as of July 19 — we see …
• The market time of homes priced between $250,001 and $500,000 was merely an “eye-popping” 24 days. Thomas wrote: “With expected market times below one month, competition is so fierce that many homes generate over 10 offers. Not only do homes sell for their full asking prices, often many are sold to buyers with all-cash offers.”
• Another way to see the battle for cheaper homes: Orange County homes listed for under a million bucks have a market time of 1.19 months vs. 5.53 months for homes listed for more than $1 million. So, basically, it is 4.7 times harder to sell a million-dollar-plus residence!
• And just so you know the million-dollar market represents 30 percent of all homes listed but just 8 percent of all homes that entered into escrow in the past 30 days.
• Overall, Orange County’s market time ran at 1.54 months for buyers to gobble up all homes for sale at the current pace vs. 1.57 months two weeks ago vs. 3.91 months a year ago. That’s a 60 percent cut in market time in a year.
Still, two curious trends are hard to explain …
For one, with all the onrushing buyers, little price appreciation can be found. Redfin said L.A.-O.C.’s median price per square foot – in theory a very stable, conservative pricing measure – was up just 1.2 percent in a year for June.
And this same buyers’ rush has seemingly scared off sellers from joining the party. By Thomas’ count, the number of Orange County homes for sale on July 19 was at its lowest since March 2005.