We’re deep into summertime in our Orange County market, which is usually the most active selling season of the year, but not necessarily the best time to buy or sell (like many people assume).
So is it a good time for you to buy or sell or should you wait? Let’s look at a few numbers to find out.
Over the last three to five years, inventory has been low—usually anywhere from one to three months. Lately, though, we’ve jumped into more of a two-to-six month range. A “normal” market is considered to have six months’ worth of inventory, so although we’re still in a seller’s market, things are becoming more normalized. This increase in inventory is in-line with how most economists describe the market.
This trend is also impacting home values. In the recent past, we experienced high appreciation rates, but moving forward, home prices should start appreciating at a rate of 3% to 5%.
When inventory increases and homes start taking longer to sell, it means demand is falling. Since buyers have more homes to choose from, more time to make a decision, and interest rates are still historically low, now’s a great time to buy. Three or four years ago, I remember homes going under contract a day after being listed, but that’s not the case anymore in Orange County.
“If you can negotiate a great price on the property you want (which there’s a good chance of), you’ll also get an amazingly low interest rate.”
As one of my mentors used to tell me, “In real estate, price is a one-time thing—interest rates are what affect your monthly payment.” If you can negotiate a great price on the property you want (which there’s a good chance of), you’ll also get an amazingly low interest rate. If you wait a year or two to buy, you might not get that same great rate.
Another unique statistic I’ve found is that inventory has only increased about 15% county-wide since the start of summer. Usually during this period, inventory grows by 25% to 30%. This confirms the fact that homes are taking longer to sell.
If you’re a seller, remember that there are three reasons homes sell: price, preparation, and exposure (i.e., marketing). Now more than ever, you must put an attractive price tag on your home when you list it. If it’s not compelling, it’s not selling. We’re learning that buyers don’t want to spend too much more than what the last home in your area sold for, so keep that in mind as well.
Every micro-market’s different, so if you have any questions about what’s happening in your specific neighborhood or you’re thinking of buying or selling, don’t hesitate to reach out to me. I’d love to be a resource to you or anyone you know.
Until then—happy selling!