It is the telling of two different markets, the incredibly hot lower price ranges due to low inventory versus the sluggishness of the luxury market and longer market times. The Los Angeles Times detailed how “Southern California home values near record despite the high cost of borrowing.” CNBC touts that “Home prices kept rising even as mortgage rates surged.” Yahoo Finance describes “Why the current housing market is a ‘seller’s paradise.'” It is understandable how luxury sellers have high expectations. The trouble is that these headlines describe the overall market and not luxury. Luxury today is a much different segment of housing.
The headlines can be confusing. They seem to paint a strong housing market for all price ranges. They are NOT reporting on the luxury market. The housing market is split between luxury and the rest of the market.
- The active listing inventory in the past couple of weeks plunged by 129 homes, down 6%, and now sits at 2,180, its lowest level since May. In November, 33% fewer homes came on the market compared to the 3-year average before COVID (2017 to 2019), 743 less. Last year, there were 3,182 homes on the market, 1,002 more homes, or 46% higher. The 3-year average before COVID (2017 to 2019) was 4,988, or 129% extra, more than double.
- Demand, the number of pending sales over the prior month, decreased by 60 pending sales in the past two weeks, down 5%, and now totals 1,113, its lowest December level since tracking began in 2004. Last year, there were 1,133 pending sales, 2% more than today. The 3-year average before COVID (2017 to 2019) was 1,774, or 59% more.
- With supply and demand dropping at similar rates, the Expected Market Time, the number of days to sell all Orange County listings at the current buying pace, remained unchanged at 59 days in the past couple of weeks. It was 84 days last year, slower than today. The 3-year average before COVID (2017 to 2019) was 87 days, also slower than today.
- For homes priced below $750,000, the Expected Market Time increased from 41 to 45 days. This range represents 19% of the active inventory and 26% of demand.
- For homes priced between $750,000 and $1 million, the Expected Market Time increased from 38 to 42 days. This range represents 16% of the active inventory and 22% of demand.
- For homes priced between $1 million and $1.25 million, the Expected Market Time decreased from 44 to 36 days. This range represents 10% of the active inventory and 16% of demand.
- For homes priced between $1.25 million and $1.5 million, the Expected Market Time decreased from 44 to 39 days. This range represents 8% of the active inventory and 12% of demand.
- For homes priced between $1.5 million and $2 million, the Expected Market Time decreased from 68 to 65 days. This range represents 12% of the active inventory and 11% of demand.
- For homes priced between $2 million and $4 million, the Expected Market Time in the past two weeks increased from 115 to 122 days. For homes priced between $4 million and $6 million, the Expected Market Time decreased from 240 to 213 days. For homes priced above $6 million, the Expected Market Time decreased from 444 to 372 days.
- The luxury end, all homes above $2 million, account for 35% of the inventory and 13% of demand.
- Distressed homes, both short sales and foreclosures combined, comprised only 0.4% of all listings and 0.2% of demand. Only five foreclosures and four short sales are available today in Orange County, with nine total distressed homes on the active market, up one from two weeks ago. Last year, 12 distressed homes were on the market, similar to today.
- There were 1,632 closed residential resales in October, 5% less than October 2022’s 1,726 closed sales. October marked a 1% drop compared to September 2023. The sales-to-list price ratio was 98.9% for all of Orange County. Foreclosures accounted for 0.1% of all closed sales, and there were no closed short sales. That means that 99.9% of all sales were good ol’ fashioned sellers with equity.