Orange County Housing Report

Boiling Over

Fierce demand, throngs of buyer tours, bidding wars, rapid appreciation, and limited available homes to purchase are all due to historically low rates.

In heading to Baskin Robbins on the 31st of any month with 31 days, there are lines out the door. Normally a scoop of ice cream is $2.79, but not on the 31st. On those seven days of the year, a scoop drops to $1.70, a 40% savings. For a large family with a bunch of kids, this is the day to make the pilgrimage to Baskin Robbins. And that is precisely what families do. As a result, there are long lines, and a long wait, to get that discounted scoop of deliciousness.

When a commodity drops to a price that is too good to pass up, everybody flocks to purchase. That is precisely what is occurring in housing. It is not that home values have plunged by 40%; instead, it is historically low mortgage rates that are the catalyst to surging demand. As a result, buyers are coming out in droves to purchase. It is too good to pass up. For a $700,000 mortgage at last year’s 3.6% fixed rate, the payment would have been $3,183 per month. With today’s 2.77% rate, the payment drops to $2,865, a $318 per month savings, essentially a 10% discount. Comparing today to November 2018 when rates nearly hit 5%, the savings jumps to $893 per month, a 24% savings. It is not a one-time savings either. This savings is every single month for 30-years.

Orange County Housing Report

 

Excerpt taken from an article by Steven Thomas.

About the Author

Tim Morissette, also known in the community as Mr. Foothill Ranch, offers over 40 years of real estate experience which has given him an established reputation and unmatched market knowledge. He is joined by his wife, Michele, 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 20 years.