Turning Up the Heat

The housing market will soon heat up as a result of an increase in demand and a decrease in market times now that the holidays are behind us and all of the other potential distractions have been cleared away.

The Winter Market

The Winter Market is identified by slowly increasing supply, soaring demand, and a decline in market times.

It can be difficult to get into a car in the thick of winter. The chairs are chilly. It's freezing behind the wheel. Most significantly, even in sunny Southern California, the air feels as though it is below zero. When you first put on the heat, chilly air comes out of the vents. After moving down the street, the temperature immediately begins to warm, putting an end to the chilly realities of winter. Similar to how housing quickly warms up and shifts to the winter market, where demand soars higher, the supply slowly expands, and market times shorten, after striking its slowest period of the year throughout the holiday market.

Orange County Winter Market

The 3-year average inventory increased by 12%, or 547 more properties, from 4,739 to 5,286. Demand exploded, increasing by a significant 47%, or 808 more pending sales, from 1,710 to 2,517. Over the course of the Winter Market, 23 days were subtracted from the 3-year average Expected Market Time, which decreased from 86 to 63 days.

Supply and Demand

Recent weeks have seen an increase of 6 homes in the active listing inventory, which is now at 2,536, the second-lowest figure in mid-January since monitoring began. Comparing December to the 3-year average prior to COVID (2017 to 2019), there were 483 fewer properties listed for sale, a 32% decrease. 1,456 fewer properties, or 57% fewer, were on the market last year with 1,080 homes available. Prior to COVID (2017 to 2019), the 3-year average was 4,640, or 83% greater. Demand, based on the number of pending sales compared to the previous month, rose by 39 pending sales in the last two weeks, or 4%, to reach 939. 1,426 pending sales were recorded last year, which is 52% more than today. Before COVID (2017 to 2019), the 3-year average was 1,349. This was an increase of 50%.

Luxury End

The luxury market has improved over the past couple of weeks.

The Expected Market Time for properties valued between $2 million and $4 million dropped from 144 to 116 days during the last two weeks. The Expected Market Time for properties ranging between $4 million and $6 million increased from 238 to 245 days. The Expected Market Time climbed from 518 to 882 days for houses priced over $6 million. A seller would be looking at escrow closing on their home around June 2025 at 882 days.