OC Housing Report

By Buying, Selling August 22, 2023

Lower Ranges Fading Away

The lower, entry-level price ranges have been slowly disappearing with far fewer closed sales and homeowners choosing not to sell their homes.  

There were an astonishing 57% fewer closed sales and 65% fewer FOR-SALE signs below $1 million this year compared to before COVID.

Thanks to inflation, everyone is paying a lot more for just about everything. From 2019, pre-pandemic, to today, a loaf of bread has increased by 55%. Milk has risen by 31%, ground beef by 34%, and potato chips and a 2-liter soda have soared by 48%. Used cars are up 41%. A Big Mac was priced at $3.79 in 2019 compared to $5.17 today. Wallets have been squeezed. While the inflation rate may be cooling, higher prices are here to stay. 

Housing is no exception. According to Freddie Mac’s Home Price Index, since the summer of 2019, the Los Angeles/Orange County metro has increased by 40%. As home prices climbed, what was considered the entry-level to homeownership slowly diminished over time.

Looking at 2013 helps illustrate how the goalposts have been moved for the lower ranges. In 2013, 48% of all closed sales were below $500,000, and 4,928 were detached. In 2019, only 23% were below $500,000, and 404 were detached. In 2023 through July, it sank to 9%, and 23 were detached. Buyers today do not expect to secure a detached home for less than half a million dollars. That price point has faded away.

The data illustrates just how severe the shortage of lower-range homes has become. In 2023, through July, 77% fewer homes were placed on the market below $500,000 compared to the 3-year average before COVID. There were 74% fewer between $500,000 and $750,000. From $750,000 to $1 million, 40% fewer homeowners opted to sell. In total, below $1 million, there have been 12,404 missing FOR-SALE signs. Overall, in Orange County, 44% fewer homes have been placed on the market. Yet above $1 million, there were 16% more sellers, an extra 1,054. Due to fewer sellers in the lower ranges, the active listing inventory has plunged to unprecedented ultra-low levels, 2,434 homes, the lowest readings since tracking began in 2004.

 

 

 

 

 

 

Excerpt taken from an article by Steven Thomas.

About the Author
Tim Morissette, REALTOR®

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.