OC Housing Report

Housing Starting to Flex

After an extremely slow end to 2022, buyers are returning to the housing arena, demand is already up sharply, and  market times are plunging fast.  Pending sales are surging higher as housing bounces back from very low levels.

Getting to a movie theater early, sitting in the pews of an empty church with plenty of time until the service begins, and being seated immediately at a popular restaurant before the dinner rush are all examples of moments in time where it seems as if very few are going to show up. Yet, in the blink of an eye, the theater is packed, the church pews have been filled, and there is an hour-long waitlist at that favorite restaurant. That is precisely what is occurring right now in housing. A month ago, open houses were empty, showings were light, and there was little real estate activity as everyone’s collective brains were still in a holiday fog. Seemingly overnight, buyers have returned, demand has surged higher, and market times have plunged. 

Demand, a snapshot of the last 30 days of pending sales activity, jumped 38% in just the past couple of weeks, adding 361 pending sales as it climbed to 1,300. It was the largest two-week rise since February 2021 and the strongest demand reading since October. The current level surpassed the low readings during the initial lockdowns of COVID in April 2020. Demand was lower than the lockdowns in December and January. 

It is crucial to keep in mind that demand is still at shallow levels for this time of year. It is 23% below last year at the start of February and 38% below the 3-year average before the pandemic (2017 to 2019). Due to affordability constraints, the high mortgage rate environment still precludes many would-be purchasers from isolating a home. Demand would be much stronger if rates dropped to the mid-5s. 

Demand is also muted due to the lack of available homes to purchase. From the first week of January to today, the inventory dropped by 5% and now sits at 2,415 homes. It usually rises by 13%. The 3-year pre-COVID average was 4,695, 94% higher than today. Feeding into this inventory crisis is that fewer homeowners are listing their homes. In January alone, there were 45% fewer sellers than the 3-year average, with 684 missing FOR-SALE signs.  Fewer sellers mean there are fewer pending sales and less demand.












Excerpt taken from an article by Steven Thomas.

About the Author

Tim Morissette, also known in the community as Mr. Foothill Ranch, offers over 46 years of real estate experience which has given him an established reputation and unmatched market knowledge. He is joined by his wife, Michele and sons Matt and Jeff, as they continue to offer personal service with an emphasis on achieving his clients’ real estate goals.  This unique combination of traits has led to his proven track record of referral and repeat business. This can be witnessed by the trust of homeowners in Foothill Ranch where he has sold twice as many homes and represented three times more buyers than the next-leading real estate agent for the last 26 years.

As residents of Foothill Ranch since 1994, Tim and Michele are actively involved in the community by fundraising for Foothill Ranch Library, Make-a-Wish Foundation, Cancer Society, Homes for Habitat, Relay for Life, South County Outreach, and the local church and schools. Tim enjoys sponsoring community-wide garage sales, paper shredding and e-waste recycling event, an Easter egg hunt, & a Meet Santa Event.

Tim and Michele are dedicated to their family of four sons, daughter-in-laws, and grandchildren. As a family, they enjoy many outdoor activities which include camping, spearfishing, mountain climbing and exploring the miles of hiking and equestrian trails in Foothill Ranch and the Whiting Ranch Wilderness Park. Tim and his sons are also avid snowboarders and enjoy mountain biking and lobster diving. Family is a top priority in the Morissette household. They look forward to helping more families achieve their dreams of homeownership.