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Sherry Swift

Orange County Housing Report:  The Inventory is Running on Empty

November 11, 2012

Orange County Real Estate active listing inventory has reached a record low

Active Listing InventoryAfter another 7% drop in just two weeks, or 11% in the past month, it is anybody’s guess as to when the unabated drop is going to stop.

At 3,753 the activity inventory of Orange County homes for sale is 24% below the prior low record established in March 2005, when everybody had a hard time navigating with just 4,912 homes on the market, making now a great time for sellers to capitalize on short supply and a time that demands a combination of quick action and patience from buyers.

South Orange County Homes for sale under $750,000 are moving especially quick and prices are trending upwards. While the sales pace for South Orange County real estate is quick the uptrend in pricing is moving at a much slower and deliberate pace, with each uptick measurable in the thousands of dollars not the tens of thousands of dollars we seen in the past. This slow and deliberate uptick is a healthy sign of market stabilization in South Orange County Real Estate and hopefully inventory increases and the uptick continues at a deliberate pace so we have a real healthy rebound.

For sellers of South Orange County real estate now is a great time to get your house sold quickly and painlessly especially if you are a traditional sale (not a short sale). The lack of inventory allows you to capitalize on the buyer pool and make your move.

For buyers of South Orange County real estate now is a time that demands you move quick so you get into a home before prices continue to trend upwards while maintaining patience and realize that the inventory is shallow right now so you likely won’t be the only offer on the table.

Most experts following Orange County real estate estimate the inventory will remain at these anemic levels for the remainder of the year and well into January 2013. Last year at this time there were 9,543 homes on the market, two and half times more than today.

Want to see South Orange County Homes for sale? Search the entire MLS

DemandDespite the drop in number of homes hitting the market, demand surprisingly increased in the past couple of weeks.

Demand in Orange County Real Estate, the number of new pending sales over the prior month, increased by 34 homes in the past two weeks, reversing the recent trend of dropping due to such a significant lack in inventory.  This helps establish how eager buyers are despite the customary slowest time of the year.  Demand is at 3,179 pending sales and as long as there are homes coming on the market, buyers will continue to trip over themselves to become the winning bidder.  Buyers know that now is a good time to buy.  Driven by great interest rates and knowledge that the housing market is becoming more and more attractive every week that goes by, demand is expected to remain strong well into 2013.

In South Orange County homes for sale we have seen the countywide trend even more intense, as multiple offers are becoming more and more the norm and homes are going under contract before buyers can get in to see them. If you are shopping for South Orange County real estate you have to move quick and remain flexible.

Distressed Market: Like the total active listing inventory, the distressed inventory has continued its unprecedented drop by shedding an additional 8% over the past two weeks.

The distressed market has dropped, unabated since the end of October last year, when it totaled 3,563.  It has dropped by 3,073 and now totals just 490.  The distressed inventory has not been this low since May 2007.  It currently represents just 13% of the total active inventory and 34% of demand.  Last year it represented 37% of the inventory and 56% of demand.  There is no shadow inventory waiting to make its way onto the market.  There are many homeowners someplace in the system working towards a short sale, modification, or foreclosures, but the numbers are going to remain relatively similar for the next several years.  The number of closed short sales and foreclosures in October of this year totaled 881 compared to 842 in October 2011.  The numbers have not changed much over the last couple of years.

In South Orange County real estate the countywide pattern above has held true. The distressed market seems to be about as stable as a distressed market can be and even becoming somewhat orderly.

Curious What about the value of your South Orange County Real Estate? Get your free home valuation emailed to you

Data and countywide analysis partially provided by Steven Thomas

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