November Market Update-It's The Buyers Turn Now!

 

Orange County Housing Report: It's The Buyers Turn!

 

The housing market has slowed to levels not seen in nearly eight years, now strongly lining up in favor of buyers.

Buyer's Market: With an Expected Market Time of 122 days, the market has transitioned into "Buyer's Market" territory for the first time since January 2011.


Thanksgiving is just about here. Time to load our plates with turkey, ham, cranberry sauce, stuffing, mashed potatoes, sweet potatoes, string beans, Brussels sprouts, and dinner rolls. As Americans, we eat more on Thanksgiving than any other day of the year. It is all about a smorgasbord of choices.

That's exactly how it is shaping up for buyers in today's housing market, a smorgasbord of choices. Many believe the market is slowing because of the holidays or because of the mid-term elections. Yes, festive cups are back at Starbucks, but the Holiday Market does not really begin until this week when all of the distractions really set in. Presidential elections often, statistically slow the momentum of housing for a moment, but not during mid-term elections. The slowdown is not because of the holidays and it is not because of the mid-term elections. There has been a noticeable shift in the housing market since March of this year and it has not stopped evolving ever since.

Typically, during the Autumn Market, both supply and demand drop. The peak in the housing inventory predictably occurs between July and August, and then drops once the kids go back to school. This year, the peak occurred in mid-October at 7,292 homes, and today, stands at 7,218, a drop of only 1%. Since 2012, the inventory, on average, has dropped from the end of August to mid-November by 17%. From the end of August to mid-November this year, the inventory has increased by 3%. Similarly, demand, on average, has dropped by 14% since 2012. This year, it has dropped an astonishing 24%.

With a much higher supply of homes, 53% more than last year, and muted demand, 24% less than last year, the Expected Market Time (the amount of time it would take to place a home on the market today and open up escrow down the road) has not stopped climbing since August. Typically, it remains flat through the end of the year. Today, the Expected Market Time eclipsed the 120 mark for the first time since January 2011, climbing to 122 days, Buyer's Market territory. Statistically, Orange County housing is a slight Buyer's Market, ending the six-and-a-half-year market run-up. 


What does it mean to be in a slight Buyer's Market? First, home values are NOT dropping like a rock. As a matter of fact, homes that are highly upgraded, in great condition, show like a model home, and are priced right, will fly off the market within the first few weeks. Everybody else will sit and wait. There just are not enough buyers looking to purchase.

Now, more than ever, price is unmistakably the most important ingredient in order to find success. Homes that back to busy streets, homes that need a lot of work, homes with deferred maintenance, homes lacking updates or upgrades, will sit for a very long time unless they are priced appropriately. Pricing according to recent comparable pending and closed sales is crucial, adjusting for location, view, condition, and upgrades. Sellers can no longer just price a home at the last comparable sale. The price must be adjusted according to a home's features. Sellers will not have to wait very long if their homes look like a model, but the further the needle moves away from looking like a model, the more a home needs to be adjusted downward in price.

One out of every four homes on the market today will not find success in this market. Many sellers simply do not have the stomach for doing what it takes to be successful today, and it all boils down to price. Homeowners who reminisce about the housing market in March, when it was still a hot Seller's Market, and stretch their asking prices above comparable sales, will not achieve their goals in selling. Instant, multiple offers with buyers tripping over themselves to purchase is quickly becoming a distant memory.

Today, sellers must price their homes with extreme care and then pack their patience. After being exposed to the market for 45 days, sellers should sit with their professional REALTOR® (that would be me) and analyze all current data and statistics, review buyer showing and real estate feedback, and consider adjusting the price considerably in order to entice a buyer to purchase.

Attention buyers: it is finally your turn. That does not mean you are able to write offers to purchase $50,000 below the last comparable sale. Values are not falling like a rock. It is not 2007 or 2008. The slight Buyer's Market simply means that buyers have the upper hand at last. There are a lot more choices and buyers do not have to feel rushed. Arriving at a price, considering all comparable pending and closed sales, is crucial so that a buyer can find success and secure a home. Since interest rates are higher, many sellers are willing to pay points and buy down the interest rate, reducing the monthly payment. Yes, buyers, it is your turn, but you have to be realistic and approach the market with a sound strategy.

Active Inventory: The active listing inventory dropped by only 13 homes in the past two-weeks.
The active listing inventory has been bouncing around the 7,200 mark for two months. The 2018 peak has morphed into a plateau and has not really started dropping like it typically does from August to the end of the year. There's not a lot of time for the inventory to drop with only six weeks left of the year. After the New Year, the inventory starts to rise. It looks
as if 2019 is going to start with between 5,500 and 6,000 homes, a lot higher than this year's 3,397. Next year is going to be a lot different with a much higher inventory and a lot more choices for buyers.

Last year at this time, there were 4,714 homes on the market, 2,504 fewer. That means that there are 53% more homes available today. The year over year difference continues to grow every week.

Demand: Demand dropped 4% in the past two-weeks.
In the past two-weeks, demand, the number of pending sales over the prior month, decreased by 81 pending sales, a 4% drop, and now totals 1,776, the lowest level for this time of the year since 2007. With Thanksgiving upon us, housing transitions into the Holiday Market. This is the time of the year that demand drops like a rock and reaches a low within the first couple of weeks after ringing in the New Year. Expect demand to drop dramatically for the remainder of the year, reaching levels not seen for years.

Last year at this time, demand was at 2,314 pending sales, 30% more than today, or 538 additional pending sales.

The expected market time, the amount of time it would take for a home that comes onto the market today to be placed into escrow down the road, increased from 117 to 122 days in the past two-weeks, a slight Buyer's Market (between 120 to 150 days). Last year, the expected market time was at 61 days, noticeably different than today.

Luxury End: The luxury housing market slowed considerably.
In the past two-weeks, demand for homes above $1.25 million decreased by 26 pending sales, a 10% drop, and now totals 234. It dropped to levels not seen since the first couple of weeks of 2018. The luxury home inventory decreased by 19 homes and now totals 2,128, a 1% drop. The overall expected market time for homes priced above $1.25 million increased from 248 to 273 days over the past two-weeks.

Year over year, luxury demand is down by 65 pending sales, or 22%, and the active luxury listing inventory is up by an additional 456 homes, or 27%. The expected market time last year was at 168 days, appreciably better than today.

For homes priced between $1.25 million and $1.5 million, the expected market time increased from 175 to 182 days. For homes priced between $1.5 million and $2 million, the expected market time increased from 212 to 235 days. For homes priced between $2 million and $4 million, the expected market time increased from 305 to 340 days. For homes priced above $4 million, the expected market time increased from 403 to 484 days. At 484 days, a seller would be looking at placing their home into escrow around the middle of March 2020.

Orange County Housing Market Summary:

* The active listing inventory decreased by 13 homes in the past two weeks and now totals 7,218. The inventory most likely reached a peak for 2018 four-weeks ago at 7,292. Last year, there were 4,714 homes on the market, 2,504 fewer than today.
* So far this year, 13% fewer homes have come on the market below $500,000 compared to last year, and there have been 26% fewer closed sales. Fewer and fewer homes and condominiums are now priced below $500,000. This price range is slowly vanishing.
* Demand, the number of pending sales over the prior month, decreased in the past two-weeks by 81 pending sales, and now totals 1,776. Demand peaked in mid-May at 2,726 pending sales. Last year, there were 2,314 pending sales, 30% more than today.
* The Expected Market Time for all of Orange County increased from 117 days to weeks ago to 122 days today, a slight Buyer's Market (120 to 150 days) for the first time since January 2011. It was at 61 days last year.
* For homes priced below $750,000, the market is a Balanced Market (between 90 and 120 days) with an expected market time of 94 days. This range represents 44% of the active inventory and 58% of demand.
* For homes priced between $750,000 and $1 million, the expected market time is 102 days, a Balanced Market. This range represents 19% of the active inventory and 22% of demand.
* For homes priced between $1 million to $1.25 million, the expected market time is 133 days, a slight Buyer's Market.
* For luxury homes priced between $1.25 million and $1.5 million, the expected market time increased from 175 to 182 days. For homes priced between $1.5 million and $2 million, the expected market time increased from 212 to 235 days. For luxury homes priced between $2 million and $4 million, the expected market time increased from 305 to 340 days. For luxury homes priced above $4 million, the expected market time increased from 403 to 484 days.
* The luxury end, all homes above $1.25 million, accounts for 29% of the inventory and only 13% of demand.
* Distressed homes, both short sales and foreclosures combined, made up only 1.1% of all listings and 1.6% of demand. There are only 25 foreclosures and 53 short sales available to purchase today in all of Orange County, 78 total distressed homes on the active market, up 12 from two-weeks ago. Last year there were 68 total distressed homes on the market, slightly less than today.
* There were 2,328 closed residential resales in October, 9% fewer than September 2017's 2,553. October marked an 11% increase over September 2018. The sales to list price ratio was 96.9% for all of Orange County. Foreclosures accounted for just 0.4% of all closed sales, and short sales accounted for 0.6%. That means that 99% of all sales were good ol' fashioned sellers with equity.

Have a great Holiday week.

Jeff

 

Jeff Maass

Broker/Owner

Regency Real Estate Brokers

Cell      949.228.2131

October Market Update


Orange County Housing Report: Oktober-Housingfest Cancelled


October 7, 2018

Good morning!

The momentum of the housing market has paved the way for cooler
Autumn and Holiday Markets.


No End of Year Surge: There will not be a sudden surge in closed sales for the remainder of the year.
It is that time of the year. The days are growing shorter, the leaves are changing, and Halloween decorations have emerged. Autumn has arrived. Just as the seasons change, so does the housing market. The Spring and Summer Markets are officially in the rearview mirror. There’s very little of 2018 that remains.

Housing’s Autumn Market runs from the end of August through mid-November. Typically, this is the season when the active inventory drops along with demand. The Expected Market Time (from listing a home to opening escrow) does not change much. The number of monthly closed sales slows from the highs of spring and summer. They fall from September to October and drop from October to November. Some years’ experience a surge in closed sales from November to December. This surge in closed sales is because of an increase in pending sales, demand, during October, an “Oktoberfest” for housing. Yet, 2018 is shaping up to be a completely different year, and the remainder of the year will prove to be no exception.

The current momentum and market trends have paved the way for a slower end to 2018. There were 2,108 closed resales in September. That’s down a staggering 24% compared to the 2,734 closed sales last year. The last time there were fewer sales dates to 2007 when there were only 1,334. Today’s housing market looks a lot like 2006 in terms of sales.

In comparing monthly closed sales at the end of the year, December is on average down 8% compared to September. There wasn’t much of an Oktoberfest surge in 2016 and 2017. The last time there was any type of a surge dates to 2013 through 2015, when there was a sharp rise in closed sales from November to December.

The rest of 2018 will be more of the same, muted buyer demand, longer market times, a lingering supply of homes, and a large drop in closed sales compared to last year. Demand (the number of pending sales over the prior month) is down by 15% compared to last year. The Expected Market Time has risen to 105 days, the highest level since September 2011. It was at 67 days last year. And, the active listing inventory is at 7,201 homes, 34% higher than last year’s 5,382.

A falling supply of homes and falling demand normally occurs during the Autumn Market. While demand has fallen as expected, the active inventory just peaked and has not begun its usual drop. The peak in the active listing inventory predictably occurs anywhere from July to August. This year, it happened two weeks ago at 7,207 homes. It has remained at that level and has shed only six homes since, sitting at 7,201 homes today. With only demand dropping, the Expected Market Time has been climbing when normally it tends to remain the same. At 105 days, the Orange County housing market is no longer a Seller’s Market; instead, it is a Balanced Market that does not favor buyers or sellers.
Today’s sellers need to understand that housing is not going to suddenly tilt back in their favor. There will be fewer closed sales for the remainder of the year. Demand will be muted, and it will continue to fall. The inventory will start to drop a bit, but it will remain elevated with a lot more competition. It is going to take a lot longer to find success. Only sellers who are accurately priced according to their Fair Market Values, and pack plenty of patience, will achieve their goal in selling. Carefully pricing is critical. 64% of all closed sales in September reduced their asking price at least once. This is a time when sellers need to look in the mirror and be certain that they are willing to do what it takes to get their homes sold, knowing that there will not be a sudden surge in activity. There will be no Oktober-Housingfest this year.

Active Inventory: The active inventory finally peaked.
Typically, the active listing inventory peaks in July or August, but not in 2018. Instead, the inventory reached a peak two weeks ago at 7,207 homes. It has only shed six homes since and sits at 7,201 homes today, virtually unchanged. From here expect the active inventory to start to drop slowly, picking up momentum as the year continues to unwind. The late peak means that the inventory will remain elevated compared to 2017 for the remainder of the year. As a result, 2019 will start with a lot more homes on the market compared to recent years.

Last year at this time, there were 5,382 homes on the market, 1,819 fewer. That means that there are 34% more homes available today. The year over year difference continues to grow each week. The trend of more homes on the market year over year is here to stay.

Demand: Demand dropped 5% in the past two-weeks.
In the past two-weeks, demand, the number of pending sales over the prior month, decreased by 117 pending sales, a 5% drop. Demand now totals 2,050, the lowest demand reading for this time of the year since 2007. The housing market has shifted from a supply problem, not enough homes on the market, to a demand problem, not enough pending sales. Interest rates have climbed to their highest levels since 2011. Higher rates and higher values have weakened affordability, impacting demand tremendously.

Last year at this time, demand was at 2,426 pending sales, 15% more than today, or 376 additional pending sales.

The expected market time, the amount of time it would take for a home that comes onto the market today to be placed into escrow down the road, increased from 100 to 105 days in the past two-weeks, a Balanced Market (between 90 and 120 days). Last year, the expected market time was at 67 days, drastically different than today.

Luxury End: Both luxury demand and luxury supply dropped in the past two-weeks.
In the past two-weeks, demand for homes above $1.25 million decreased by 24 pending sales, an 11% drop, and now totals 279. The luxury home inventory decreased by 29 homes and now totals 2,125, a 1% drop. The overall expected market time for homes priced above $1.25 million increased from 205 to 228 days over the past two-weeks.

Year over year, luxury demand is down by 24 pending sales, or 8%, and the active luxury listing inventory is up by an additional 238 homes, or 13%. The expected market time last year was at 187 days, better than today.

For homes priced between $1.25 million and $1.5 million, the expected market time increased from 134 to 143 days. For homes priced between $1.5 million and $2 million, the expected market time increased from 164 to 170 days. For homes priced between $2 million and $4 million, the expected market time increased from 291 to 384 days. For homes priced above $4 million, the expected market time increased from 328 to 354 days. At 354 days, a seller would be looking at placing their home into escrow around the end of August 2019.

Orange County Housing Market Summary:

• The active listing inventory decreased by 6 homes in the past two weeks, almost identical, and now totals 7,201. The inventory finally reached a peak for 2018. Normally it peaks between July and August. Last year, there were 5,382 homes on the market, 1,819 fewer than today.
• So far this year, 14% fewer homes have come on the market below $500,000 compared to last year, and there have been 26% fewer closed sales. Fewer and fewer homes and condominiums are now priced below $500,000. This price range is slowly vanishing.
• Demand, the number of pending sales over the prior month, decreased in the past two-weeks by 117 pending sales, and now totals 2,050. Demand peaked in mid-May at 2,726 pending sales. Last year, there were 2,426 pending sales, 15% more than today.
• The average list price for all of Orange County remained at $1.5 million over the past two-weeks. This number is high due to the mix of homes in the luxury ranges that sit on the market and do not move as quickly as the lower end.
• For homes priced below $750,000, the market is still a slight Seller’s Market (less than 90 days) with an expected market time of 77 days. This range represents 42% of the active inventory and 58% of demand.
• For homes priced between $750,000 and $1 million, the expected market time is 98 days, a Balanced Market (between 90 to 120 days). This range represents 20% of the active inventory and 21% of demand.
• For homes priced between $1 million to $1.25 million, the expected market time is 116 days, a Balanced Market.
• For luxury homes priced between $1.25 million and $1.5 million, the expected market time increased from 134 to 143 days. For homes priced between $1.5 million and $2 million, the expected market time increased from 164 to 170 days. For luxury homes priced between $2 million and $4 million, the expected market time increased from 291 to 384 days. For luxury homes priced above $4 million, the expected market time increased from 328 to 354 days.
• The luxury end, all homes above $1.25 million, accounts for 30% of the inventory and only 14% of demand.
• The expected market time for all homes in Orange County increased from 100 to 105 days, a Balanced Market (between 90 to 120 days).
• Distressed homes, both short sales and foreclosures combined, made up only 1.1% of all listings and 1% of demand. There are only 30 foreclosures and 48 short sales available to purchase today in all of Orange County, 78 total distressed homes on the active market, up by 10 from two-weeks ago. Last year there were 81 total distressed homes on the market, 4% more than today.
• There were 2,090 closed residential resales in September, 24% fewer than September 2017’s 2,746. September marked a 25% drop over August 2018. The sales to list price ratio was 96.9% for all of Orange County. Foreclosures accounted for just 0.4% of all closed sales, and short sales accounted for 0.3%. That means that 99.3% of all sales were good ol’ fashioned sellers with equity

Have a great week.

Sincerely,
Jeff Maass
Broker/Owner

Regency Real Estate Brokers
Cell 949.228.2131

 

 

 

 


v

April's Market Update

March Market Update-Too Much Noise!

Everybody seems to have an opinion about the direction of the housing market.

Ignore the Noise: From talk of a housing bubble to speculation that the market will slow because of higher rates, the best advice is to ignore all of the noise and turn to the facts.

Wow! There is a lot of talk and speculation about the housing market these days. Some people are convinced that housing is a bubble and it will implode, dropping more than it did during the Great Recession. Yikes, interest rates have reached 4.5%, it must mean the end of the housing run is near. On a live video, one real estate professional warned that the market will turn this autumn stating that a downturn occurs every 10-years. Some speculated that the new tax law would affect the luxury market negatively.

From recent volatility in the stock market to the looming trade wars, there is a lot of uncertainty out there and it has been spilling over to housing. Is a housing downturn around the corner? Will the market finally favor buyers? The answer is simple, not anytime soon. Ignore all of the noise.

There is no major, upcoming downturn larger than the Great Recession. Interest rates would have to rise beyond 5.5% to negatively impact housing. No, real estate recessions do not occur every 10 years like clockwork. The new tax law is not impacting the luxury market. Stock market volatility and the trade war are not influencing housing. It is all just noise.

Some of the buzz may originate from wishful thinking. For others, it may be fear generated from the uncertainty that swirls around the modern economy. Yet, all of the clamor is not based on the facts. Quite simply, nobody can ignore the data. It is a seller’s market with ZERO indicators, or trends, that the market is going to turn in the buyer’s favor anytime soon.

FACT – It is a HOT seller’s market with an expected market time of 55 days. Any time the expected market time, the amount of time it would take for a home on the market today to be placed into escrow, falls below 90-days, it is a seller’s market. When it falls below 60 days, it is considered a HOT seller’s market, one that is pumping on all cylinders and leaning heavily in favor of sellers. Crowded open houses, multiple offers, buyers seemingly tripping over each other to purchase, that has become a springtime norm for Orange County housing and it is no different today.
FACT – In the past 15 years, today’s active inventory is at the second lowest level behind 2013. For the market to start tipping in the buyer’s direction, the inventory needs to rise above the long-term average of 8,000 homes for a sustained period of time. Not just exceeding 8,000 homes for a month or two; instead, it must remain elevated for years. During the Great Recession, the inventory exceeded 8,000 homes for six years. The active listing inventory is currently at 4,420 homes and does not look like it will come close to even touching 8,000.

FACT – More luxury homes have sold so far this year than ever before. Through the first two months of the year, there have been 444 closed sales above $1.25 million, a new record. Last year, the prior record, there were 430 closed sales, 3% fewer. So far, the new tax law has had zero impact on the trend in a record level of closed luxury sales.

FACT – The supply is low and demand is high. One cannot ignore basic supply and demand from Econ 101. When very little supply, a nine-year trend, is matched with very hot demand, a six-year trend, prices rise. Even though interest rates have risen to 4.5%, current rates are still low in historical contexts, making homes more affordable. This is precisely why the rise in interest rates has not adversely affected the market. Instead, it has pushed more buyers to buy before rates continue to rise.

FACT – A lack of homeowners coming on the market, especially below $750,000, is starting to eat into the number of closed sales. When there are fewer homes to purchase, sales go down. The headlines this year are going to report that sales are down and prices are up. That does not mean that the market is slowing. Instead, it means that the lack of entry-level homes coming on the market will make purchasing within this range even more challenging than prior years.

 

The bottom line is this: facts and data do not lie. Buyer, seller, and all consumer expectations should really be anchored in fact, not the noise of rumors, opinions, or uneducated guesses. The housing market is hot and it will remain a seller’s market for the long run.

Active Inventory: The active inventory increased by 6% in the past two weeks.

Across the board, in every price range, the active inventory increased. In the past two weeks, the inventory added 242 homes, a 6% increase, and now totals 4,420. Even though demand is hot and there are very few homes on the market, they are not instantly being placed into escrow. This is partly due to the fact that it takes a bit of time to market and negotiate a sale, even in a fast pace, seller’s market; HOWEVER, there are still plenty of homeowners aggressively pricing their homes, stretching the value too much. These homes are starting to accumulate on the market without success.  Today, buyers are willing to stretch in price a bit, but they are not going to get carried away, as values are already high. Alternatively, sellers should price their homes carefully, adhering to their Fair Market Value. When a home is priced right, it will procure multiple offers, allowing a seller to pit the offers again each other. This often results in a sales price at, or even above, the asking price.

Last year at this time, there were 4,571 homes on the market, 3% more than today. The year over year difference has slowly been diminishing.

Demand:  Demand dropped by 1% in the past two weeks.

Demand, the number of new pending sales over the prior month, decreased by 24 pending sales over the past couple of weeks and now totals 2,417, a 1% drop. Year in and year out, demand typically pauses for a brief moment at the beginning of March, a strange annual phenomena. After “springing forward” this weekend, there will be more daylight to work with and the Spring Market will accelerate. Demand will increase dramatically from now through April and will peak sometime between April and May. 

Last year at this time, demand was at 2,576 pending sales, 159 more than today, or 7%. The number of pending sales has dropped this year because of a serious lack of inventory of homes priced below $750,000. As a matter of fact, there have been 12% fewer homes that have come on the market below $750,000 so far this year. This lack of affordable housing has seriously undermined potential demand.

The expected market time, the amount of time it would take for a home that comes onto the market today to be placed into escrow, increased from 51 to 55 days in the past two weeks, still a hot, seller’s market. Last year at this time, the expected market time was at 53 days, very similar to today.

Luxury End:  The luxury inventory increased while luxury demand slightly decreased. 

In the past two weeks, demand for homes above $1.25 million decreased from 354 to 343 pending sales, down 3%. The luxury home inventory increased from 1,629 homes to 1,704, up 5%. From here, expect both demand and the inventory to rise throughout the Spring Market. The current expected market time for all homes priced above $1.25 million increased from 138 to 149 days over the past two-weeks.

  
For homes priced between $1.25 million and $1.5 million, the expected market time decreased from 79 to 78 days. For homes priced between $1.5 million and $2 million, the expected market time increased from 115 to 149 days. For homes priced between $2 million and $4 million, the expected market time increased from 167 days to 193. In addition, for homes priced above $4 million, the expected market time decreased from 515 to 338 days. At 338 days, a seller would be looking at placing their home into escrow around the February 2019.

Orange County Housing Market Summary:

 

  • The active listing inventory increased by 242 homes in the past two weeks, up 5%, and now totals 4,420. Expect the inventory to increase from now through mid-Summer. Last year, there were 4,571 homes on the market, 151 more than today.
  • There are 24% fewer homes on the market below $500,000 today compared to last year at this time and demand is the same as last year. Fewer and fewer homes and condominiums are now priced below $500,000. This price range is slowly disappearing.
  • Demand, the number of pending sales over the prior month, decreased in the past two-weeks by 24 pending sells, down 1%. The average pending price is $900,305.
  • The average list price for all of Orange County remained at $1.8 million over the past two weeks. This number is high due to the mix of homes in the luxury ranges that sit on the market and do not move as quickly as the lower end.
  • For homes priced below $750,000, the market is HOT with an expected market time of just 33 days. This range represents 35% of the active inventory and 58% of demand.
  • For homes priced between $750,000 and $1 million, the expected market time is 43 days, a hot seller’s market (fewer than 60 days). This range represents 17% of the active inventory and 22% of demand.
  • For homes priced between $1 million to $1.25 million, the expected market time is 82 days, a slight seller’s market (between 60 and 90 days).
  • For luxury homes priced between $1.25 million and $1.5 million, the expected market time dropped from 79 days to 78. For homes priced between $1.5 million and $2 million, the expected market time increased from 115 to 149 days. For luxury homes priced between $2 million and $4 million, the expected market time increased from 167 days to 193 days. For luxury homes priced above $4 million, the expected market time decreased from 515 to 338 days.
  • The luxury end, all homes above $1.25 million, accounts for 38% of the inventory and only 14% of demand.
  • The expected market time for all homes in Orange County increased from 51 days to 55 in the past two weeks, a hot seller’s market (fewer than 60 days). From here, we can expect the market time to remain below 60-days through May.
  • Distressed homes, both short sales and foreclosures combined, make up only 1% of all listings and 1.4% of demand. There are only 14 foreclosures and 30 short sales available to purchase today in all of Orange County, that’s 44 total distressed homes on the active market, rising by four in the past two weeks. Last year there were 77 total distressed sales, 77% more than today.
  • There were 1,820 closed residential resales in February, down by 4% from February 2017’s 1,888 closed sales. February marked a 1% increase from January 2018. The sales to list price ratio was 97.6% for all of Orange County. Foreclosures accounted for just 0.9% of all closed sales and short sales accounted for 0.7%. That means that 98.4% of all sales were good ol’ fashioned sellers with equity.

Have a great week.

Sincerely,

Jeff Maass

Cell: (949) 228-2131

What Exactly Happens After Your Home Is Listed For Sale?

Once you’ve made the decision to sell your home, it’s time to find a real estate professional to list it on the market. Listing your home requires a few key tasks: signing a listing agreement contract with your chosen realtor, coming up with an appropriate listing price according to the current market, and prepping your home for showings.

Your home will likely be placed on the local Multiple Listing Service (MLS), which essentially lets all other agents in your area know that your home is available for sale. This is a very important place to have your home listed as it will allow your agent to distribute information about your home with prospective buyers, making it a powerful marketing tool.

But once your home is officially up on the market what happens next?

Lockbox Placed

If you want to maximize the number of buyers who visit your home while it’s on the market, you should absolutely have a lockbox. These tools are essential for allowing buyer agents to show your property to their buyer clients when you are not home. Instead of relying on your presence to let buyers in, they can visit your home with their agents at any time without you being there.

This may seem distressing at first, considering the fact that complete strangers will have access to your home, but it’s recommended that sellers vacate the premises when buyers have an appointment to view a listed property. This will allow prospective buyers to freely view the home without feeling self-conscious about the seller watching or listening to them as they scope the place out. Buyers will feel more at ease and free to open all doors and make comments without being worried about how the seller might react.

Keep in mind that only buyers who are accompanied by licensed agents will have access to your home. These agents will be making appointments to your agent’s office, at which point the lockbox code will be given. This helps to control who goes in and out of your home. You can always change the code every so often in order to minimize the odds of the code getting into the wrong hands.

Lockboxes provide the flexibility for buyers to access the property with their agents without sellers always having to be available to provide the key. It’s a win-win for all parties.

For Sale Sign Planted

what-exactly-happens-after-your-home-is-listed-for-sale-sign

One of the more obvious steps when listing a home on the market is placing a For Sale sign in the front yard. This is a classic way to advertise a property for sale and helps get the attention of people who pass by. Any interested buyers will be able to take down the contact information detailed on the sign and use that information to inquire about the home if they so choose.

Open House Held

While not mandatory, it is customary to hold an open house shortly after a home hits the market. It’s during the first few days of a listing going live that interest is very high. This period of peak interest should be taken advantage of, and an open house can provide the perfect opportunity for people who may or may not have an agent to visit your home.

Open houses usually take place on a weekend, either on a Saturday or Sunday, or both days. But before this public open house takes place, your agent may want to hold a broker’s open house first, usually during business hours at some point throughout the week. This event will allow listing agents in the area to come and check out the home to see if it would be of interest to their seller clients.

Just as with scheduled showings, it’s not advisable for sellers to be present during an open house, so make some plans to be out of the house for a few hours while your agent hosts it for you. If necessary, more than one public open house may be scheduled to maximize the attention your listing gets.

Cleanliness and Tidiness Maintained

what-exactly-happens-after-your-home-is-listed-for-sale-clean

As the seller, you’ll want to make sure that your home is in pristine condition. While you may have already prepped or even staged your home for the market before listing it, it’s still important to be diligent about tidying up and cleaning.

Throughout the selling process, it’s important that your home remains clean and free of your personal belongings. You just never know when a buyer will schedule a showing, and it may be when you’re out of the house and unable to do any last-minute cleaning or tidying up before buyers arrive. This is especially important if you’ve got young children or pets.

Your Agent’s Job Behind the Scenes

While it may seem challenging to have to constantly keep your home clean and frequently vacate your home to make way for buyer showings, your agent’s got a lot to do as well. There is plenty that goes on behind the scenes while a home is on the market.

Your agent will be tasked with continuously marketing your property, scheduling and coordinating buyer showings, following up on buyer feedback, communicating with buyer agents, and making any necessary adjustments if any issues pop up.

Traffic May Slow Down After Awhile

After the first week or two, interest in a listing tends to die down. Many sellers often become distressed about this and may wonder why no offers have come in after the initial rush. If this happens, it’s important to stay patient. A slowdown in traffic is normal and shouldn’t be anything to fret about, unless the slowdown lasts for weeks with no bites.

This brings us to our next point.

If No Offers Come in …

If the initial interest and excitement of a listing have died down and no offers are coming in after weeks on the market, it’s time to take action. If you’re in a hot market, your agent might take steps even earlier.

At this point, it’s important to meet with your agent and talk about what the potential problems may be and make any necessary adjustments to your listing strategy. The market tends to change very quickly, so even after a couple of weeks, it might be time to make some changes.

The first thing that should be looked at is the listing price. Perhaps it might be time to tweak it to ensure it falls in line with what the current market dictates. You might also want to consider whether any improvements should be made to the home that would boost buyer interest.

Your agent may also want to re-evaluate the target market and focus on a different group of buyers when marketing your home. Different marketing channels may also be looked into to boost the number of eyes on your property.

The Bottom Line

The ultimate goal after listing your home is to get a handsome offer, negotiate a deal, complete escrow, and close on time. But knowing what to expect after your home has been listed on the market can help you keep your nerves at bay and take the proper steps to maximize the odds of an effective sales process. If you’re adequately prepared, you can be an active participant in the successful sale of your home.