Subdued Summer

HOUSING IS IN THE MIDDLE OF THE SUMMER MARKET WHEN SEASONALLY, THE INVENTORY RISES, DEMAND SLOWLY DECLINES,
AND MARKET TIMES GROW LONGER FROM WEEK TO WEEK.

Summer is here with all of its many distractions. It is time to pack the suitcases and take a much-needed family vacation. An easy answer to the blistering heat is to head to the pool, lake, or beach and splash around until the sun goes down. Parents are busy Ubering their kids to summer school, camps, and movies. Many additional extracurricular activities are on the calendar, from museums to amusement parks to day hikes. Summertime is chock full of interruptions to everyday daily life. It is no wonder that the housing market is evolving and downshifting a bit from the heated pace of spring. Cyclically, in nearly every market across the country, including Orange County, spring is the hottest time of the year for housing. Buyers transact year-round, but their preference, especially families, is to pull the trigger on isolating a home during the spring that ultimately closes in the summer. That is when the kids are out of school, the perfect time for a household move. Even if it requires a school change, the best time is when they are transitioning between grade levels. Throw into the mix the list of summer activities, including travel, and the goal of purchasing a home often takes a back seat to all the fun. As a result, demand drops from its Spring Market peak. In Orange County, demand, a snapshot of the number of new pending sales over the prior month, peaked at the start of May at 1,759 homes. Since then, it has dropped by 8% or 135 pending sales and sits at 1,624 today. It was at 1,560 last year, 4% less or 64 fewer pending sales. Compared to normal markets before COVID, the 3-year average between 2017 and 2019 was 2,582, 59% higher or 958 additional pending sales.

Excerpt taken from Stephen Thomas