Orange County Housing Report:

Top 3 Trends 

As we near the end of 2024, clear trends are emerging in the Orange County housing market despite the noise from various narratives.

1. Impact of Mortgage Rates: When mortgage rates dipped below 6.5%, demand surged, increasing pending sales by 13% from September 12 to October 10. However, as rates rose to 7% in October due to strong economic indicators, the market began to cool, with the Expected Market Time rising from 69 to 78 days.
2. Inventory Trends: The peak inventory for 2024 was delayed, growing from 3,052 homes in July to 3,694 by mid-October. This increase is linked to the higher mortgage rates limiting buyer activity. The inventory is now expected to decline as fewer homes will be listed in the upcoming months.
3. Buyer-Friendly Market: The current environment is the most favorable for buyers since late 2022, with 35% of listings reducing their asking prices. The median price has decreased by 4.43%, indicating more negotiation power for buyers.

It's essential to focus on these emerging trends rather than the fluctuating narratives. Understanding the data will help set realistic expectations in the changing market.

Orange County Housing Summary

• The active listing inventory in the past couple of weeks decreased by 54 homes, down 1%, and now sits at 3,640, its lowest level since August. It appears as if Orange County reached its annual peak at 3,694 homes two weeks ago. In September, 25% fewer homes came on the market compared to the 3-year average before COVID (2017 to 2019), 743 less. Yet, 323 more sellers came on the market this September compared to September 2023. Last year, there were 2,406 homes on the market, 1,234 fewer homes, or 34% less. The 3-year average before COVID (2017 to 2019) was 6,010, or 65% extra.
• Demand, the number of pending sales over the prior month, decreased by 26 pending sales in the past two weeks, down 2%, and now totals 1,572. Last year, there were 1,284 pending sales, 18% fewer. The 3-year average before COVID (2017 to 2019) was 2,180, or 39% more.
• With supply and demand falling at a similar pace, the Expected Market Time, the number of days to sell all Orange County listings at the current buying pace, remained unchanged at 69 days in the past couple of weeks. The 3-year average before COVID (2017 to 2019) was 85 days, slower than today.
• In the past two weeks, the Expected Market Time for homes priced below $750,000 decreased from 53 to 52 days. This range represents 17% of the active inventory and 22% of demand.
• The Expected Market Time for homes priced between $750,000 and $1 million remained unchanged at 46 days. This range represents 14% of the active inventory and 21% of demand.
• The Expected Market Time for homes priced between $1 million and $1.25 million increased from 48 to 52 days. This range represents 11% of the active inventory and 15% of demand.
• The Expected Market Time for homes priced between $1.25 million and $1.5 million increased from 56 to 57 days. This range represents 11% of the active inventory and 13% of demand.
• The Expected Market Time for homes priced between $1.5 million and $2 million decreased from 86 to 76 days. This range represents 15% of the active inventory and 14% of demand.
• In the past two weeks, the expected market time for homes priced between $2 million and $4 million increased from 103 to 113 days. For homes priced between $4 million and $6 million, the Expected Market Time increased from 194 to 240 days. For homes priced above $6 million, the Expected Market Time decreased from 444 to 346 days.
• The luxury end, all homes above $2 million, account for 32% of the inventory and 15% of demand.
• Distressed homes, both short sales and foreclosures combined, comprised only 0.2% of all listings and 0.1% of demand. Only six foreclosures and one short sale are available today in Orange County, with seven total distressed homes on the active market, up two from two weeks ago. Last year, four distressed homes were on the market, similar to today.
• There were 1,622 closed residential resales in September, down 2% compared to September 2023’s 1,647 and down 14% from August 2024. The sales-to-list price ratio was 98.9% for Orange County. Foreclosures accounted for 0.1% of all closed sales, and there were no short sales. That means that 99.9% of all sales were good ol’ fashioned sellers with equity.

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