How is our spring 2018 real estate market doing right now? Historically, this is the time of year when more homes start selling than in previous months. Typically, inventory begins to grow through this time as well.
If you’ve been following the market, whether you’re a buyer, seller, investor, or curious homeowner, you’ve probably heard about our recent low inventory levels. Actually, we’re in an inventory crisis right now. To give you an example, there are only 70 active listings available in Tustin right now.
This leaves buyers with very few options. In fact, buyers in Tustin may only be able to find two to three homes that meet their search criteria right now. This is because when inventory is low, the demand for property rises. This also causes prices to go up over time. Currently, we’re expecting prices to continue rising for between 12 to 18 months.
Of course, we can’t really predict what will happen after that point. When people ask me, “How’s the market?” This is difficult to answer for a couple of reasons:
1. Every area in Orange County is different. We call these various areas “micro markets.” These can be broken down to specific cities, specific areas in a city, or even specific neighborhoods.
2. Every person is different. It is difficult to tell people how the market is because the answer will change depending on their wants and needs.
There are so many different factors that go into the current market condition that it’s almost impossible to give people a clear answer. But, as I’ve said before, inventory is low and demand is high.
Today, though, I’d like to go over a few statistics in particular.
In the city of Irvine, which is where I live and where my team runs its business, we have 361 homes available for sale. The number of pending homes is 292, which means there’s currently about 1.3 months of inventory available in Irvine.
This figure is called the absorption rate. It essentially means that if no new homes came on the market, it would take 1.3 months for all current inventory to sell.
As I mentioned earlier, Tustin has just 70 homes available. On top of that, 75 homes already went under contract in Tustin this month. This means the city has less than one month of available inventory.
In contrast, there are 300 homes available for sale in Newport Beach and only 100 are currently under contract, meaning Newport Beach currently has three months of inventory.
Someone looking for a home in Irvine will have a much different experience than someone searching in Newport Beach. This just goes to show why it’s so difficult to answer people who ask how the market is doing.
If you have any other questions, would like more information, or want to have a discussion about the market in relation to your specific needs, feel free to give me a call or send me an email. I look forward to hearing from you soon.