Orange County Market – What’s going on for 2008?

Since I wasn’t blessed with a working crystal ball….or even a half accurate Magic 8 Ball, all I can do is look at the numbers.  And, the numbers are pretty telling.  The local economists and gurus all have different opinions as to what will happen in 2008….it’s all in how you interpret the numbers.  So folks, here we go.  What does this small snapshot of time say to you?  Is it a predictor of things to come?  

Some things to consider along with the raw numbers:

Forclosures are up and will continue to rise over the next several months, interest rates are down and it appears that will continue with the Fed's latest rate drop, a relief package is on the table to raise the conforming loan limit (that will certainly help here in Southern California).  Will this be enough to spark the market?  We'll have to wait and see.  

    On January 1st, there were 14,724 homes for sale, and as of now (1/10), there are 14,944 homes for sale. This represents a 7% drop since last month, but an inventory that is already growing in anticipation of a better market.
The number of homes that went in escrow (demand) dropped 34 homes in the past two weeks to 997 escrows. On January 1st, demand was at 944 escrows, so it too is already growing. Market time dropped slightly in the past two weeks from 15.05 to 14.99 months. 
    
    Last year at this time, there were 11,643 homes on the market, demand was at 1,496 escrows and the market time was at 7.78 months. The inventory last year compared to this year is very similar in almost every price range with the exception of properties listed below $500,000. Last year, there were 3,083 properties listed below $500,000 versus 6,129 today, nearly double. The subprime fallout really hits homeowners in that range.

• Over the past 4 weeks there has been a 7% DROP in the number of homes for sale
• The average market time, based on current inventory, has decreased to 14.99 months
• The active inventory – all homes for sale, has decreased to 14,944 homes
• The number of new escrows (demand) has slightly decreased to 997 homes
• Short sales and foreclosures currently represent about 25.7% of the current active inventory

What does this mean?

Cyclically this is the time that the real estate market ramps up as buyers start entering the market. By the end of January, demand is typically significantly higher with more and more sellers placing their homes on the market, in anticipation of the Spring market.
We are expecting that this Spring, however, will be similar to 2007. Last year's inventory is very similar to this year in almost every price range, with the exception of properties listed below $500,000, which is nearly double.

		Current Actives (Homes for sale)	Pending (last 30 days)	Market time ( in months)	1 year ago
	ALL OC (as of 1/10/08)	14944	998	14.97	7.78
	OC $0- $500K	6129	517	11.85	7.59
	OC $500K- $750K	4677	261	17.92	6.35
	OC $750K- $1M	1795	109	16.48	7.6
	OC $1M - $1.5M	1139	53	21.49	10.81
	OC $1.5 M - $2M	605	37	16.35	12.79
	OC $2M - $4M	664	29	22.9	13.34
	OC $4M +	218	4	54.5	18.82

Where to Get Help with Finding a Home

 Home shopping is often complicated and involves weighing out many variables. Please feel free to give us a call to sort through some of the challenges. Normally we can help you focus after just about 10 minutes on the phone with no obligation or commitment at (949) 888-6788 or TeresaMihelic@RealtyExecutives.com