More Seller Competition
More homes are on the market, more homeowners are deciding to sell than in the last couple of years, and more are coming as housing makes its way to spring. The active inventory is 56% higher than last year and is at its highest mid-February level since 2020.
The cookies have arrived! It is Girl Scout season once again. There are times when there is an overabundance of young Girl Scouts attempting to sell as many boxes as humanly possible. Some go door to door, others pivot to the local grocery store, while many turn to their parents’ workplaces to increase their sales count. When too many hit the same neighborhood, the competition amplifies; for some, it is very hard to sell their cookies.
That is precisely what is happening in the Orange County real estate market. Many more sellers are hitting the market, the competition is amplifying, and it is very hard for some to sell their homes. There are currently 3,033 homes on the market, 56% more than last year’s 1,939 at this time. That is 1,094 additional homes year-over-year. It is the most homes for mid-February since 2020 when there were 4,030.
The inventory has been rising due to the higher mortgage rate environment. The Federal Reserve raised the short-term Federal funds rate 11 times from March 2022 through July 2023, and long-term mortgage rates exploded higher from 3.25% in January 2022 to over 7% eight months later in September. They have remained above 6% ever since and have been stuck, for the most part, above 7% since July 2023. Higher mortgage rates have precluded many homeowners from placing their homes on the market and selling. They “hunkered down” in their homes and opted not to sell.
Excerpt taken from an article by Steven Thomas.
