Contact University Realty to request the entire Report with complete written analysis and data charts for every month.

OC April 2018 Summary Report:

The active listing inventory increased by a staggering 436 homes in the past two weeks, up 9%, and now totals 5,144. Expect the inventory to increase from now through mid-Summer. Last year, there were 5,263 homes on the market, 119 more than today.

This year, 19% fewer homes have come on the market below $500,000 today compared to last year, and there have been 28% fewer closed sales so far this year. Fewer and fewer homes and condominiums are now priced below $500,000. This price range is slowly vanishing.

Demand, the number of pending sales over the prior month, increased in the past two-weeks by 38 pending sells, up 1%, and now totals 2,640. Last year, there were 2,981 pending sales, 13% more than today.

The average list price for all of Orange County dropped from $1.8 million to $1.7 million over the past two weeks. This number is high due to the mix of homes in the luxury ranges that sit on the market and do not move as quickly as the lower end.

For homes priced below $750,000, the market is HOT with an expected market time of just 36 days. This range represents 34% of the active inventory and 55% of demand.

For homes priced between $750,000 and $1 million, the expected market time is 45 days, a hot seller’s market (fewer than 60 days). This range represents 18% of the active inventory and 23% of demand.

For homes priced between $1 million to $1.25 million, the expected market time is 71 days, a slight seller’s market (between 60 and 90 days).

For luxury homes priced between $1.25 million and $1.5 million, the expected market time increased from 95 days to 104. For homes priced between $1.5 million and $2 million, the expected market time decreased from 155 to 129 days. For luxury homes priced between $2 million and $4 million, the expected market time increased from 187 days to 208 days. For luxury homes priced above $4 million, the expected market time increased from 313 to 386 days.

The luxury end, all homes above $1.25 million, accounts for 39% of the inventory and only 14% of demand.

The expected market time for all homes in Orange County increased from 54 days to 58 in the past two weeks, a hot seller’s market (fewer than 60 days). The expected market time is knocking on the door of a slight seller’s market (from 60 to 90 days).

Distressed homes, both short sales and foreclosures combined, make up only 0.4% of all listings and 0.4% of demand. There are only 22 foreclosures and 21 short sales available to purchase today in all of Orange County, that’s 43 total distressed homes on the active market, up four in the past two weeks. Last year there were 89 total distressed sales, 107% more than today.

There were 2,613 closed residential resales in March, down by 6% from March 2017’s 2,792 closed sales. March marked a 44% increase from February 2018. The sales to list price ratio was 97.6% for all of Orange County. Foreclosures accounted for just 0.5% of all closed sales, and short sales accounted for 0.6%. That means that 98.9% of all sales were good ol’ fashioned sellers with equity.

The 2018 Orange County, California Housing Forecast: More of the same.

There have not been many changes to the U.S. economy. No shocks to the economic engine. That all changed with the new tax bill that was signed into law on December 22nd. The mortgage interest deduction was lowered from $1 million to $750,000. Equity lines of credit are no longer deductible. State and local property taxes deductions are capped at $10,000. The cards seem to be stacked against Californians and, more specifically, Orange County residents. Yet, with a chronically anemic inventory and demand juiced by historically low interest rates, the tax bill will not have a major impact on the local housing market, like so many fear.

Here is the 2018 forecast:

Interest Rates – even with the Federal Reserve raising the short-term rate three times in 2017, interest rates continue to float around the 4% level. The Federal Reserve meets eight times per year and it will most likely pull the trigger on further increases three more times in 2018. Yet, these changes in the short-term rate will not have much of an impact on long-term rates. They do not move together. By year’s end, expect interest rates to stretch only to 4.25%.

Active Inventory – the year will begin with an extremely anemic inventory, around 3,500 homes, that will translate to a very hot start for housing. Just as in 2017, the theme of 2018 will be not enough homeowners opting to place their homes on the market. As a result, the active inventory will not reach the long-term 8,000 home average. Expect the inventory to peak in July between 6,500 to 7,000 homes.

Demand –with an anemic inventory and buyers anxious to cash in on historically low rates (many wrongly see the Federal Reserve increases in the short-term rate as a precursor to higher mortgage rates), demand will be strong throughout the Spring and Summer Markets. Buyers will be willing to stretch slightly in price compared to the most recent sale; so, expect appreciation around 4 to 5% for the year. Demand will be strongest, and most appreciation will occur, from April through August, and then will downshift during the Autumn and Holiday Markets.

Housing Cycle – the housing market will follow a normal housing cycle. The strongest demand coupled with plenty of fresh inventory will occur during the Spring Market. This will be followed by slightly less demand and a continued new supply of homes in the Summer Market. From there, demand will drop further along with fewer homes entering the fray in the Autumn Market. Finally, all the distractions of the Holiday market will be punctuated with the lowest demand of the year and few homeowners opting to sell.

Closed Sales – the number of successful, closed sales will be similar to 2017, just over 31,000. There will be slightly more “move-up” sellers, which will prove to be a wise decision as mortgage rates rise down the road and affordability starts to erode.

Luxury Market – luxury sales will increase slightly from 2017’s record. The Spring Market will be the strongest for luxury, and the second half of the year will be quite a bit more sluggish.

Distressed Inventory – the distressed inventory will remain low with a very similar level of successful short sales and foreclosures, representing just less than 2% of all sales.

The bottom line, 2018 will fill a whole lot like 2017 with not enough homes on the market and buyers tripping over each other to purchase. Multiple offers will be the norm for homes priced below $1 million. Once again, the market will heavily favor sellers and buyers will have to pack their patience to isolate their piece of the American Dream. 


PREVIOUS OC HOUSING REPORT SUMMARIES:

July 2017 Orange County Housing Report: A Mid-Year Checkup(Contact us to receive the entire report with graphs and breakdowns by price, area, etc.):

With half of 2017 in the rear view mirror, it is helpful to take a look at where housing has been, where it is now, and where it is heading.

Housing Checkup: Every once in a while, it is helpful to take a step back and evaluate the overall health of the current housing market and the latest trends.

The Orange County housing market has been hot for a very long time. It is working on its sixth year of continuous appreciation. Home values have surpassed record heights reached in June of 2007. There have not been enough homes on the market, buyers continue to trip over each other in pursuit of their piece of the American Dream, and multiple offers are the norm. That adequately describes the first half of 2017, so where do we go from here? Will it be more of the same or will the market evolve?

Let’s take a step back from the relentless real estate market for a moment. With a stethoscope, thermometer, and blood pressure cuff in hand, here are the latest trends and current heartbeat of the Orange County housing market:

2017 has been the year of the extremely lean active inventory. The year started with only 4,071 homes on the market, the lowest level since 2013. Since then, the active inventory has grown, but at a much slower pace than normal. It has been slim pickings. There have been 6% fewer homes placed on the market so far this year compared to 2016. In the past month alone, 11% fewer homes have entered the fray, resulting in an active inventory that only grew by 78 homes. It seems as if the housing market has already peaked, yet the inventory has not quite reached the 6,000 home mark. The inventory needs to be at 8,000 homes for it to move away from a seller’s market to one that is balanced, not favoring a buyer or seller; but that is not going to happen anytime soon. Today’s inventory is 18% lower than last year. It will remain at about 6,000 homes through the rest of the Summer Market and then will start to fall during the Autumn Market as unsuccessful homeowners throw in the towel, realizing that both the Spring and Summer Markets will be in the past.

Demand has been hot this year, but has been muted a bit due to a lack of inventory. With fewer homes coming on the market this year, demand has not reached its full potential. In spite of that, it has reached levels similar to last year, surpassing 2016 for the first couple of months. From there, it has fallen slightly short of last year’s levels. The latest reading has demand surpassing 2016 slightly. From here, demand will slowly drop as summer progresses. It will continue its descent throughout the Autumn Market and will reach the lowest levels of the year during the Holiday Market, Thanksgiving through January 2018. With demand slowing a bit due to all of the summer distractions, carefully pricing is fundamental in order for sellers to find success. That will hold true for the remainder of the year.

The expected market time is on the rise, but the overall market is a lot hotter than last few years. Supply (the inventory) and demand (recent pending sales) determines the expected market time. That is the amount of time it will take for a newly listed home to be placed into escrow. When it drops below 2 months, it is a HOT seller’s market. From February through the mid-June, the market was HOT, two months longer than last year. Since then, the market has exceeded 60 days, indicating a tepid seller’s market. In a tepid seller’s market, carefully pricing is essential and appreciation slows. Sellers were getting away with stretching the asking price and home values were appreciating swiftly. With the Summer Market rolling along, the pace has slowed a bit. For all of Orange County, it has risen from 51 days in the heart of the Spring Market to 63 days today. All price ranges are slowing, but it is still HOT below $750,000. It is important to note that the higher the price, the longer it takes to find success. The market will continue to slow throughout the summer. As the market downshifts, buyers move away from a willingness to pay any price to obtain a home, to a strong desire to pay the Fair Market Value for a home, a value determined by the most recent pending and closed sales. It will remain a tepid seller’s market for the remainder of 2017.

Closed sales are slightly higher than last year and it looks as if that will not change for the remainder of the year. Through the first half of the year, there have been 15,658 closed sales compared to 15,219 last year, 3% more. With slightly higher demand for the remainder of the year, closed sales will remain a bit higher than last year.

Luxury home sales have surpassed last year’s record pace, but there is still a lot of seller competition to overcome in order to find success. The luxury market is best defined as the top 10% of closed sales, or $1,250,000 and higher. For the first six months, there have been 1,864 closed luxury sales compared to 1,532 last year, 22% more. That is a record number of luxury sales in Orange County. However, as of today there are 2,089 active listings above $1,250,000, more than have sold in the first half of this year. Today, the expected market time for luxury homes is 190 days. For proper perspective, that would mean that escrow would open up at the end of January of next year. Keep in mind, the expected market time is even longer in the higher price ranges. For homes priced above $2 million, the expected market time is 269 days, opening escrow in April 2018.

In spite of the Federal Reserve raising the short-term rate, interest rates have slowly inched their way back below 4%. The Federal Reserve has been talking a big game for a few years now about raising the short-term rate. After years of bluffing, they have backed up all of the talk and have raised rates three times, including the one last December. Yet, rates have not been behaving at all like expected by economic experts or prognosticators. After the presidential elections in November, interest rates climbed significantly at the prospect of inflation and reached 4.375% by the end of 2016. However, with the realization that the new presidential administration’s inflationary policies may take years to implement, long-term interest rates have floated back down to below 4%, reaching 3.91% in June. As international economic uncertainty continues, everybody is seemingly “parking their money” in US Treasuries as a “safe haven,” ultimately insuring that the low interest rate environment continues. Interest rates will not change much for the remainder of the year and they will continue to stoke the flames of demand.

OC June 2017 Summary Report:
The active listing inventory increased by 134 homes, or 2%, in the past couple of weeks, and now totals 5,757. Last year, there were 6,603 homes on the market, 846 more than today.

There are 35% fewer homes on the market below $500,000 today compared to last year at this time and demand is down by 22%. Fewer and fewer homes and condominiums are now priced below $500,000. This price range is slowly disappearing.

Demand, the number of pending sales over the prior month, dropped by 10 pending sales in the past couple of weeks and now totals 2,904. The average pending price is $842,204.

The average list price for all of Orange County remained at $1.6 million. This number is high due to the mix of homes in the luxury ranges that sit on the market and do not move as quickly as the lower end.

For homes priced below $750,000, the market is HOT with an expected market time of just 38 days. This range represents 38% of the active inventory and 60% of demand.

For homes priced between $750,000 and $1 million, the expected market time is 54 days, a hot seller’s market (less than 60 days). This range represents 18% of the active inventory and 21% of demand.

For homes priced between $1 million to $1.25 million, the expected market time is at 71 days, a seller’s market.

For luxury homes priced between $1.25 million and $1.5 million, the expected market time increased from 90 to 108 days. For homes priced between $1.5 million to $2 million, the expected market time decreased from 162 to 144 days. For luxury homes priced above $2 million, the expected market time increased from 235 to 256 days.

The luxury end, all homes above $1.25 million, accounts for 35% of the inventory and only 12% of demand.

The expected market time for all homes in Orange County increased from 58 days to 59 in the past couple of weeks, a solid seller’s market (less than 60 days), but about to transition into a normal seller’s market (60 to 90 days). From here, we can expect the market time to slowly rise throughout the Summer Market, moving from a seller’s market to a slight seller’s market.

Distressed homes, both short sales and foreclosures combined, make up only 1.3% of all listings and 1.9% of demand. There are only 32 foreclosures and 44 short sales available to purchase today in all of Orange County, that’s 76 total distressed homes on the active market, 8 more than two weeks ago. Last year there were 148 total distressed sales, 95% more than today.

There were 3,143 closed sales in May, an 18% increase over April 2017 and a 4% increase over May 2016. The sales to list price ratio was 97.8% for all of Orange County. Foreclosures accounted for just 1.1% of all closed sales and short sales accounted for 1.7%. That means that nearly 97.2% of all sales were good ol’ fashioned equity sellers.

May 2017 Summary Report:
The active listing inventory increased by 236 homes, or 4%, in the past couple of weeks, and now totals 5,623. Last year, there were 6,267 homes on the market, 644 more than today.


There are 35% fewer homes on the market below $500,000 today compared to last year at this time and demand is down by 26%. Fewer and fewer homes and condominiums are now priced below $500,000. This price range is slowly disappearing.

Demand, the number of pending sales over the prior month, dropped by 3% in the past couple of weeks, shedding 98 pending sales and now totals 2,914 , dropping below 3,000 a bit earlier than the past couple of years. The average pending price is $859,899.

The average list price for all of Orange County remained at $1.6 million. This number is high due to the mix of homes in the luxury ranges that sit on the market and do not move as quickly as the lower end.

For homes priced below $750,000, the market is HOT with an expected market time of just 37 days. This range represents 38% of the active inventory and 60% of demand.

For homes priced between $750,000 and $1 million, the expected market time is 55 days, a hot seller’s market (less than 60 days). This range represents 19% of the active inventory and 20% of demand.

For homes priced between $1 million to $1.25 million, the expected market time is at 65 days, a seller’s market.

For luxury homes priced between $1.25 million and $1.5 million, the expected market time increased from 89 to 90 days. For homes priced between $1.5 million to $2 million, the expected market time increased from 134 to 162 days. For luxury homes priced above $2 million, the expected market time increased from 198 to 235 days.

The luxury end, all homes above $1.25 million, accounts for 35% of the inventory and only 12% of demand.

The expected market time for all homes in Orange County increased from 54 days to 58 in the past couple of weeks, a solid seller’s market (less than 60 days), but about to transition into a normal seller’s market (60 to 90 days). From here, we can expect the market time to slowly rise throughout the Spring and Summer Markets, moving from a deep seller’s market to a slight seller’s market.

Distressed homes, both short sales and foreclosures combined, make up only 1.2% of all listings and 2.5% of demand. There are only 31 foreclosures and 37 short sales available to purchase today in all of Orange County, that’s 68 total distressed homes on the active market, 13 fewer than two weeks ago. Last year there were 141 total distressed sales, 107% more; that’s more than double.

There were 2,663 closed sales in April, a 5% decrease over March 2017 and a 3% decreased over April 2016. The sales to list price ratio was 98.6% for all of Orange County. Foreclosures accounted for just 0.8% of all closed sales and short sales accounted for 1.4%. That means that nearly 98% of all sales were good ol’ fashioned equity sellers.

April 2017 Summary Report:
The active listing inventory increased by 300 homes, or 6.4%, in the past couple of weeks, its largest rise since January 2014. It now totals 5,016, eclipsing the 5,000 home mark. Last year, the inventory hit this milestone in mid-February. While, this year has had a slower start in terms of inventory coming on the market, that all changed two weeks ago. The trend of fewer homeowners coming on the market compared to last year has ended.

There are 41% fewer homes on the market below $500,000 compared to last year at this time and demand is down by 23%. Fewer and fewer homes and condominiums are now priced below $500,000. This price range is slowly disappearing.

Demand, the number of pending sales over the prior month, exploded by 11% in the past couple of weeks, increasing by 293 and now totals 2,957, knocking on the door of 3,000 pending sales, typically a sign that the hottest time of the year has arrived. Today’s demand is 1% lower than last year when it totaled 2,999. The average pending price is $865,446.

The average list price for all of Orange County dropped from $1.7 million two weeks ago to $1.6 million today. This number is high due to the mix of homes in the luxury ranges that sit on the market and do not move as quickly as the lower end.

For homes priced below $750,000, the market is HOT with an expected market time of just 31 days. This range represents 37% of the active inventory and 61% of demand.

For homes priced between $750,000 and $1 million, the expected market time is 48 days, a seller’s market (less than 60 days). This range represents 19% of the active inventory and 20% of demand.

For luxury homes priced between $1 million to $1.5 million, the expected market time is at 81 days, decreasing by 5 in the past couple of weeks. For homes priced between $1.5 million to $2 million, the expected market time decreased from 116 to 110 days. For luxury homes priced above $2 million, the expected market time decreased from 235 to 202 days.

The luxury end, all homes above $1 million, accounts for 44% of the inventory and only 19% of demand.

The expected market time for all homes in Orange County dropped from 53 days to 51 in the past couple of weeks, a solid seller’s market (less than 60 days). From here, we can expect the market time to slowly rise throughout the Spring and Summer Markets.

Distressed homes, both short sales and foreclosures combined, make up only 1.6% of all listings and 2.6% of demand. There are only 30 foreclosures and 48 short sales available to purchase today in all of Orange County, that’s 78 total distressed homes on the active market, 1 less than two weeks ago. Last year there were 151 total distressed sales, 94% more.

There were 2,792 closed sales in March, a 49% increase over February 2017 and a 9% increase over March 2016. The sales to list price ratio was 97.9% for all of Orange County. Foreclosures accounted for just 1.5% of all closed sales and short sales accounted for 1.5% as well. That means that 97% of all sales were good ol’ fashioned equity sellers.

March 2017 Summary Report:
The active listing inventory increased by 111 homes in the past couple of weeks, a 2% rise, and now totals 4,571. There are 11% fewer homes that have come on the market so far this year compared to 2016. Within the prior month, 15% fewer homes have come on the market compared to last year. The inventory should start to rise as the market transitions into the spring and will most likely peak in mid-August.

There are 50% fewer homes on the market below $500,000 compared to last year at this time and demand is down by 16%. Fewer and fewer homes and condominiums can now be found priced below $500,000. This price range is slowly vanishing.

Demand, the number of pending sales over the prior month, decreased by 3% in the past couple of weeks, dropping by 75 and now totals 2,576. Today’s demand is 4% lower than last year when it totaled 2,671. The average pending price is $823,575.

The average list price for all of Orange County is $1.7 million, up from $1.6 million two weeks ago. This number is high due to the mix of homes in the luxury ranges that sit on the market and the recent influx of luxury listings.

For homes priced below $750,000, the market is HOT with an expected market time of just 31 days. This range represents 37% of the active inventory and 64% of demand.

For homes priced between $750,000 and $1 million, the expected market time is 55 days, a seller’s market (less than 60 days). This range represents 19% of the active inventory and 19% of demand.

For luxury homes priced between $1 million to $1.5 million, the expected market time is at 87 days, increasing by 13 in the past couple of weeks. For homes priced between $1.5 million to $2 million, the expected market time increased from 129 to 133 days. For luxury homes priced above $2 million, the expected market time increased from 227 to 252 days.

The luxury end, all homes above $1 million, accounts for 44% of the inventory and only 17% of demand.

The expected market time for all homes in Orange County increased slightly in the past couple of weeks from 50 to 53, a solid seller’s market (less than 60 days).

Distressed homes, both short sales and foreclosures combined, make up only 1.7% of all listings and 3.6% of demand. There are only 25 foreclosures and 52 short sales available to purchase today in all of Orange County, that’s 77 total distressed homes on the active market, 8 fewer than two weeks ago, a drop of 9% and its lowest level since the start of the Great Recession 10 years ago. Last year there were 144 total distressed sales, 87% more.

There were 1,879 closed sales in February, a 1% drop from January, but more than the 1,847 closed sales posted in February 2016. The sales to list price ratio was 97.3% for all of Orange County. Foreclosures accounted for just 1.2% of all closed sales and short sales accounted for 1.9%. That means that 96.9% of all sales were good ol’ fashioned equity sellers.

February 2017 Summary Report:
The active listing inventory increased by 12 homes in the past couple of weeks, a 0% rise, and now totals 4,460. There are 8% fewer homes that have come on the market this year compared to 2016. The inventory should start to rise in March and peak in mid-August.


There are 44% fewer homes on the market below $500,000 compared to last year at this time and demand is down by 7%. Fewer and fewer homes and condominiums can now be found priced below $500,000. This price range is slowly vanishing.

Demand, the number of pending sales over the prior month, increased by 10% in the past couple of weeks, adding an additional 248 and now totals 2,651. Today’s demand is 3% higher than last year when it totaled 2,584. The average pending price is $835,152.

The average list price for all of Orange County is $1.6 million, identical to two weeks ago. This number is high due to the mix of homes in the luxury ranges that sit on the market.

For homes priced below $750,000, the market is HOT with an expected market time of just 34 days. This range represents 39% of the active inventory and 65% of demand.

For homes priced between $750,000 and $1 million, the expected market time is 54 days, a seller’s market (less than 60 days). This range represents 19% of the active inventory and 18% of demand.

For luxury homes priced between $1 million to $1.5 million, the expected market time is at 76 days, dropping by 4 in the past couple of weeks. For homes priced between $1.5 million to $2 million, the expected market time decreased from 153 to 129 days. For luxury homes priced above $2 million, the expected market time decreased from 252 to 227 days.

The luxury end, all homes above $1 million, accounts for 42% of the inventory and only 17% of demand.

The expected market time for all homes in Orange County dropped in the past couple of weeks from 56 to 50, a solid seller’s market (less than 60 days).

Distressed homes, both short sales and foreclosures combined, make up only 1.9% of all listings and 3.2% of demand. There are only 18 foreclosures and 67 short sales available to purchase today in all of Orange County, that’s 85 total distressed homes on the active market, 18 fewer than two weeks ago, a drop of 17% and its lowest level since the start of the Great Recession 10 years ago. Last year there were 152 total distressed sales, 79% more.

There were 1,905 closed sales in January, a 33% drop from December, but more than the 1,859 closed sales posted in January 2016. The sales to list price ratio was 97.3% for all of Orange County. Foreclosures accounted for just 0.9% of all closed sales and short sales accounted for 2.3%. That means that 96.8% of all sales were good ol’ fashioned equity sellers.

Contact University Realty to request the entire Monthly OC Housing Report with complete written analysis and data charts. Note: This is a proprietary report for non-real estate industry individuals only.