There is a definite shift happening in the housing market here in Orange County, CA. Seller's that have priced their homes above "Fair Market Value" are experiencing price reductions and longer marketing times. What used to be an extremely "hot" seller's market where the sky was the limit and asking prices soared, has cooled down a bit. With roughly 15% more inventory coming on the market and interest rates slowly edging up to the 5% range, the market is actually starting to head more into somewhat of a stabilization. With that being said, parts of the luxury market (anything over $2.5 million) has had to reduce their prices. Average marketing times currently for the luxury market is anywhere from 140 - 200 days. Homes below the $2 million range still will go quicker, (marketing times 70 days and below) especially if they are priced right and some homes actually go over asking price. There is still low inventory, especially in the price range of $600,000 - $1,000,000 and they still tend to sell fairly quickly.
With the current market and now heading into summer, the trend should continue. Still unsure of when the Fed will raise the interest rate, I am not really seeing that it will have much bearing on the Orange County housing market. The desire to live in Orange County far outweighs slight shifts in the interest rates. Who it will affect are any buyers sitting on the fence waiting to purchase. Some are seemingly awaiting a downturn, which realistically isn't going to happen and 2008 was an unprecedented time that was fueled over many years. Loan programs coming out are allowing for slightly less strict parameters on the lending side, opening up an arena for more buyers. After being in this business for over 25 years and being through 3 downturns I have seen each occur under different parameters, but I also started in the business when interest rates were in the 10% range. Orange County has a very strong real estate market and as long as everything is priced fairly, the demand for living here should perpetuate a continuing healthy housing market. For buyers who are waiting, do the numbers. Even if there were a price reduction let's say of 20%, the rates would have most likely gone up over 1.5% and when you calculate it out, your monthly payment would actually be higher even though your tax basis may be a bit cheaper. It's all a numbers game, but it actually boils down to owning a home which most people strive to do and that in itself....... is priceless.
For questions about buying or selling, please contact me at (949) 500-9752