Orange County Real Estate Report, A Look Back at 2012
As the New Year kicks into gear it’s a good time to take a look back at what we saw in 2012 and which of those trends we expect to carry over into this New Year.
Active Inventory – The year ended with less than half the available properties it began with. There was a steady decline in available inventory as fewer homes we on the market from week to week. Hopefully this trend ends with the holiday season being over and more owners having positive equity. At the current record low inventory we are often seeing multiple offers, over asking in days on our listing. We need an increase in inventory just to meet existing demand.
The Bottom- From the looks of it we reached the bottom of this market in February. From that point sales and prices continued a steady climb establishing a solid trend. We expect both to continue to increase this year with prices improving by somewhere in the 7% range.
Demand – Demand really popped in February and continues to rise through the rest of the year a significant amount of that demand is coming from investors who are looking to snatch up available homes under $750,000 as prices continue to rise at a rate much better than any other investor. Investors are looking everywhere; we are getting regular emails and even met a few at a recent open house. If the trends continue and the bottom truly was hit in February than what better investment can there be right now than real estate? Appreciation, record low interest rates and climbing rental rates throughout Orange County.
Distressed Properties – The constant speculation about a “shadow inventory” wave of distressed homes about to storm the beaches ended up being much to do about nothing. There were 23% fewer foreclosures sold in 2012 and 19% more short sales compared to 2011. Short sales also got a lot more orderly as banks seemed to really streamline their processes (at least compared to the past few years). Active distressed inventory dropped almost 90% from the beginning of the year to the end a very good sign that the worst truly is behind us.
Expected Market Time – As a side effect of the increased demand and shallow inventory time on market feel in a major way as the year came to a close. Across the market expected time to sell fell by around 70% a major drop and another great sign for 2013.
Here is to a great 2013. For our complete 2013 real estate predictions click here.