Orange County inventory continues to be the hottest topic in the area. As of Fall 2017, the current active, or unsold inventory, is running about 5,639 homes. Compare that number to 7,200 in 2016, 7,300 in 2015 and over 8,000 in 2014. Something noteworthy is the fact that we had over 20,000 active listings prior to the real estate recession in 2008-2009 era.
Why the low inventory? Most homeowners who have owned homes since the 1980-1990’s or any homeowner who bought in the last 7-8 years, has high equity and also a very low interest rate loan. For example, if you bought a home in 2010, for $650,000 and put down 20%, you would have a loan of $520,000 with a loan rate of 3.5-4%. That home is now worth around $885,000. Most homeowners would be happy to have all that equity, along with their low monthly payment, and also be paying down the loan amount monthly too. A lot of homeowners who bought over the last 10-20 years, bought with the plans for long term hold and the longer you own real estate, the better your investment becomes.
As we move into the 3rd and 4th quarters of 2017, we will continue to see a slight decline in inventory, and that will continue to affect the amount of home sales too. As the low inventory makes for less choices, some buyers are sitting on the fence and waiting for a better time to sell and move up or sell and downsize. We are seeing a faster marketplace, and anyone in the market buying and selling typically moves quickly to snap up potential properties. This trend will most likely continue as most buyers are using technology to move faster and do more research and home to become educated about their purchases.