Orange County Housing Report:

THE HOLIDAY MARKET

D U E  T O  A L L  T H E  H O L I D A Y  D I S T R A C T I O N S ,  F R O M  T H E  W E E K

B E F O R E  T H A N K S G I V I N G   T H R O U G H  T H E  E N D  O F  T H E  Y E A R , 

S U P P L Y  A N D  D E M A N D  W I L L  P L U N G E

             That was quick! All the kids just went door-to-door trick-or-treating, filling their pillow cases full of as much candy as they could carry. Lawns were garnished with cleverly phrased tombstones, and giant spiderwebs blanketed houses and trees. There were large blowups, skeletons that stretched to the sky, and creatively carved pumpkins glowing from the candles within. In the blink of an eye, all the decorations disappeared, neatly put back into their boxes and placed back onto the shelves in the garage. Starbucks launched its next set of holiday cups, and advertisements began reminding everyone that Santa was back and the shopping season had arrived. Meanwhile, some of the neighbors started trimming their homes with lights. The holidays have arrived! 

             It is an excellent reminder that housing is about to transition from the Autumn Market to the Holiday Market, from the week before Thanksgiving through the first couple of weeks of the New Year. Without fail, the holidays are a time when inventory and demand plunge, and the Expected Market Time — the speed of the market — remains relatively unchanged. This is the season when many sellers and buyers will place their real estate goals on hold while they enjoy all of the holiday festivities. It is time to pause, celebrate, gather, and reflect. Over the past couple of years, more homeowners have decided to place their homes on the market. With demand remaining almost unchanged over the past three years, the extra "FOR SALE" signs have resulted in more homes accumulating on the market. The number of available homes was higher in 2024 than in 2023, and it was even higher this year than last year. Yet, there are still fewer homes on the market than before the pandemic. Last year, after peaking in September at 3,695 homes, the inventory dropped to 3,516 by the start of November, a 5% decrease. During the Holiday Market, the inventory plummeted by 32%, reaching 2,401 by the first week of January. In 2023, it dropped by 28% from 2,496 to 1,785. In 2022, it fell by 29%, from 3,581 to 2,530. This year, after peaking at 5,071 homes at the end of July, the inventory has decreased by 19% to 4,103 as of today. With all the holiday distractions, expect the inventory to drop by about 30% through the end of the year.

Excerpt taken from Stephen Thomas