The Orange County inventory has been on the rise and is starting to pick up steam, unlike last year when it continuously dropped through mid-April.
More Homes to Buy
From the start of the year to today, more homes are available in every price range.
Californians have endured severe droughts, which have resulted in water restrictions, new laws, and policies aimed at curtailing the consumption of this valuable resource. Reservoirs reach record lows. Frustrated snow skiers watch the 10-day forecast, anxiously awaiting a hint of future snow. There are years when rainfall totals disappoint. But in years when it rains week after week, snow tops all surrounding mountains, and reservoirs rise, there is a sense of relief. It is a year when a drought has been abated.
From the start of the year to today, the active inventory has risen from 1,785 to 2,084 homes, a rise of 17% or 299 homes. Mortgage rates bounced between 6.63% and 7.16%. Last year, the inventory dropped from 2,530 to 2,168 homes, down 362 homes or 14%, while mortgage rates fluctuated between 5.99% and 7.1%. It was 2022 when the inventory changed the most, rising from 1,100, a record low start, to 1,556, up 41% or 456 homes. That was when mortgage rates soared from 3.29% at the beginning of January to nearly 4.5% by mid-March. The low mortgage rate environment was quickly coming to an end.
For a proper perspective, it is best to look at the 3-year average before COVID (2017 to 2019) when housing was normal and mortgage rates were in the low to mid 4% range. Cyclically, the active inventory would slowly rise during the Winter Market, then pick up steam during the Spring Market, and slowly reach a peak sometime during the Summer Market. The 3-year average rose from 4,665 to 5,286, up 621 or 13%. The percent change looks misleading because it is smaller than this year and 2022, but that is because there were already a lot of homes on the market before COVID. This year and 2022 started from chronically low, anemic levels. As a result, the percent change exaggerates what is really occurring from a buyer’s perspective. 2,084 homes today is more than the 1,785 to start this year, but it does not feel significant for buyers waiting for more homes to come on the market.
excerpt taken from Stephen Thomas
