Unprecedented Start
January 11, 2022
Even with a rising mortgage interest rate environment, it is the hottest start to a year since tracking began in 2004 by a landslide.
Insanely Hot Seller’s Market
With a ridiculously record low supply of homes available to purchase matched with strong demand, the housing market is white hot.
As the inventory dropped, housing has grown hotter and hotter. Today, there are only 1,100 homes available to purchase, an unmatched, ultra-low supply of homes that shattered the prior record low achieved in January 2021, at 2,633 homes. Last year’s start crushed the 2013 record start of 3,161 homes. The active inventory had been dropping prior to COVID, but the pandemic further disrupted housing and intensified the inventory crisis. The crisis had evolved into a catastrophe by the end of 2021 as the fewest number of homes come on the market in December and the second fewest occurs in November. That set up the unprecedented start to this year.
When the inventory is this low, just about everything that is placed on the market is thrown into escrow after being exposed to the marketplace for less than a week. As a result, the Expected Market Time (the time between hammering in the FOR-SALE sign to opening escrow) started this year at 25 days, shattering last year’s record 42-day start. At 42 days, Orange County housing is a Hot Seller’s Market (less than 60 days). At 25 days, it is an Insane Seller’s Market (less than 40 days) where buyers trip over each other to see every home that enters the fray, sellers call the shots, multiple offers and bidding wars are the norm, and home values are skyrocketing. As the market time reaches lower and lower levels, falling further below the 40 day “insanity” mark, there are more showing, more multiple offers, and higher sales prices.
