OC Housing Report | What a Difference a Year Makes

The housing market is a lot hotter than many think and 2020 is going to line up heavily in favor of sellers.

A Warm December: With an Expected Market Time of 70 days for all of Orange County, this is the warmest December since 2017 when housing was hot.

So much can change in the course of a year. From one year to the next, professional sports teams can go from the bottom of the standings to playing in the playoffs, babies go from crawling to running, and kids go from picking up an instrument for the first time to playing in the school orchestra. It’s not an immediate change; instead, it is a slow evolution. That is precisely how the Orange County housing market has evolved, going from a slight Buyer’s Market last year to a slight Seller’s Market today. December is the slowest time of the year in terms of new escrows and the number of homes that pop on the market. Both buyers and potential sellers divert their attention from housing to enjoying the holiday season. Yet, despite all of the holiday distractions, it has been a slight Seller’s Market every December since 2012 other than two years, 2014 and 2018. Many intuitively think that because it is the slowest time of the year that housing lines up in favor of buyers; it is just not true. While it may be true that demand drops to its lowest point of the year by the end of the month, so does the active inventory. The muted demand is offset by a drop in supply. And, this year the inventory has dropped by 40% since July, shedding 3,055 homes. Demand (last 30-days of pending sales) dropped by only 22%, 556 escrows. As a result, the Expected Market Time (the amount of time it would take from hammering in the FOR SALE sign to opening escrow) dropped from 91 days in July to 70 days in the middle of December. Housing is actually hotter today than it was in July! What happened? How is housing hotter today than July? With mortgage rates dropping all year, the housing market slowly thawed. The thaw continued through the Autumn Market as rates reached their lowest levels of the year and remained between 3.5% and 3.75%. Demand climbed and the housing inventory dropped. That is the recipe for a Seller’s Market where housing stands today. Year over year, the differences are staggering. The active listing inventory is down by 36% compared to December 2018.

 

 

About the Author

Tim Morissette, also known in the community as Mr. Foothill Ranch, offers over 43 years of real estate experience which has given him an established reputation and unmatched market knowledge. He is joined by his wife, Michele and son Matt, 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 23 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, as well as sponsors Paper Shredding and E-Waste Recycling events twice a year.

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.