Orange County real estate market ‘insanely hot,’ but here’s why you can’t find a house

by davesingery on April 3, 2017

in Latest News, Orange County, real estate

Fashion Island as seen from above Corona del Mar's Begonia Park on June 11, 2015. ///ADDITIONAL INFORMATION: Slug: Over.OC.xxxx.jag, Day: Thursday, June 11, 2015 (6/11/15), Time: 11:15:26 PM, Location: Newport Beach, California - Aerial Photos ovve Orange County - JEFF GRITCHEN, STAFF PHOTOGRAPHER

It’s not really a concern about rising interest rates that’s created a sizzling housing market in Orange County, but a lack of sellers.

That’s the latest from Steve Thomas at Reports on Housing, who says two-thirds of the action is at $750,000 or less. But so far this year, 27 percent fewer homes have been placed on the market below $500,000 compared to 2016.

“That is nearly an 800 home difference, leaving buyers with a very limited supply of homes to choose from,” he says in his bi-weekly report.

In addition, Thomas says 8 percent fewer homes have been put up between $500,000 and $750,000.

“Talk to any buyer looking to purchase an affordable home right now, and they would describe the housing market as insanely hot due to a lack of options,” he said.

Homes have been continually appreciating since the housing recovery five years ago, but affordability has eroded at a steady pace, too.

In 2012, 60 percent of all homes offered for sale were below $500,000, Thomas says. There were 5,801 homes offered for sale in that price range, compared to 2,089 this year.

The effect is even obvious in the condominium market, where entry-level choices have gone up from $250,000 to $500,000.

So who’s doing ok?

“For buyers looking for a home priced above $750,000, there actually have been more choices compared to last year,” Thomas says.

So far this year, 3,920 homes have been placed on the market above $750,000 compared to 3,658 last year, or 7 percent more.

The median price of an Orange County home, or the price at the midpoint of all sales, was $645,000 in February, according to Irvine-based data firm CoreLogic. That was up $10,000 from January and up $35,000 from February 2016, a year-over-year gain of 5.7 percent.

The shortage of homes on the market is part of a national trend.

“Persistently low levels of inventory coupled with rising interest rates should concern homebuyers,” housing website Trulia said in a recent report. “However, high consumer confidence and peak home buying season may mitigate any large drops in existing home sales in the coming months.”

March 28, 2017

Updated March 29, 2017 8:05 a.m.

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