As is typical this time of year, the number of active listings has started to rapidly drop. The number of homes on the market for all Orange County declined by 8% over the past two weeks, shedding 391 homes and now sits at 4,323. Since peaking in mid-July, inventory has plunged by 1,660 homes, a significant 28% drop. Welcome to the Holiday Market. Expect inventory to continue to descend for the remainder of the year. As a result, the New Year will start with fewer than 4,000 homes, the lowest since 2013. Last year at this time, there were 5,177 homes on the market, 854 or 20% more than today.
Demand, the number of active escrows, decreased by 10% in the past two weeks. This represents a drop of 232 pending sales, or 10%, and now totals 2,082. Like the active inventory, demand just experienced its biggest drop of the year. The decline will continue through the end of the month and will reach its lowest point at the start of the new year. Last year at this time, there were 2,116 pending sales, 34 more than today.
The expected market time, or the average amount of time it would take to sell a home, increased slightly from 61 to 62 days, marginally a seller’s market with mild appreciation. Last year’s expected market time was at 73 days.
Luxury demand plunged in the past two weeks. Demand for homes above $1.25 million decreased from 299 to 236 pending sales, down 21%. The luxury home inventory decreased from 1,672 homes to 1,585, a 5% drop in the past two-weeks, a smaller drop than the lower end of the market since many of these properties are not owner occupied. Both inventory and demand will continue to drop through the end of the year. The expected market time for all homes priced above $1.25 million increased from 168 days to 201.
For homes priced between $1.25 million and $1.5 million, the expected market time increased from 112 to 129 days. For homes priced between $1.5 million and $2 million, the expected market time increased from 143 to 169 days. For homes priced between $2 million and $4 million, the expected market time increased from 181 days to 246 days. Finally, for homes priced above $4 million, the expected market time decreased from 466 to 437 days. At 466 days, a seller would be looking at placing their home into escrow around the mid-February 2019.
We actually think listing a property during the holiday season is a good, counter-intuitive strategy. Yours would be a fresh listing in a market where only serious shoppers are out looking with fewer and fewer options. Please let us know if you would like to discuss this further.