With the holidays in the rearview mirror, the 2020 Orange County housing market is revving its massive engine.
Getting Hot: Strong demand and a low supply of available homes is allowing the market to accelerate fast.
Drag racecars are loud. After a quick burn of the tires to get them hot and ready to go, the cars back up behind the starting line and wait for the race to begin. The drivers are ready, and the initial light goes on. The yellow flashes next indicating that the start is moments away. It is quickly followed by a green light… it is GO TIME!! The race cars accelerate down the track at a mind-blowing speed. The 2020 housing market is looking a lot like a drag race. The green light just went on and the market is already propelling down the racetrack at an amazing speed.
It was just a year ago that housing was moving along at a much slower pace. Buyers were taking their time and it definitely was not a race to purchase. Mortgage rates were at 4.5%, eating into a buyer’s motivation to find a home. Flash forward a year later and there is no lingering inventory from the prior year. Interest rates are at 3.75%. The low interest rate environment is the rocket fuel that is propelling the market down the drag strip. Multiple offers are once again the norm. Homes that are priced well and in good condition are selling quickly. In most cases it is the winning bidder who finds success.
Everything priced below $1 million is experiencing a HOT market. It all boils down to supply and demand. Current demand is extremely strong, and the active inventory is at exceptionally anemic levels. Compared to last year, there are 34% fewer homes on the market right now, and demand (new pending sales over the prior month) is up by 19%.
This inventory challenge can also be seen in Irvine, the number of New Listings in December 2019 was 129, down -40.6% from 217 last month and down -21.3% from 164 in December of last year. Check out the latest homes to hit the market at https://ir-vine.house/AllIrvine