To go along with record low mortgage rates, it is the hottest start to a year since tracking began in 2004.
Hot Seller’s Market
With a record low supply of homes available to purchase and staggering demand, the market is extremely hot.
The unveiling of the new Star Wars: Galaxy’s Edge at the Disneyland Resort in Anaheim was met with throngs of eager parkgoers and the line for the Millennium Falcon on opening day was 5 hours long. Movie tickets for the initial release of Avengers: Endgame in April 2019 were extremely hard to come by. It ultimately became the number one box office hit of all time. In December 2015, Adele placed all 50 shows of her Adele Live 2016 international tour on sale at the same time, 750,000 tickets, and they sold out in just 20 minutes. These are all examples of an overpowering demand met with an exceptionally limited supply.
That is precisely what is occurring in the Orange County housing market today. There is an imbalance in supply and demand. The supply of homes is at a record low and demand is off the charts. As a result, the market has been hot from day one of 2021. The only other time that occurred was back in 2013. What 2013 and 2021 have in common are record low mortgage rates. On January 3, 2013, mortgage rates were at 3.34%, slightly higher than the record low 3.31% achieved on November 21, 2012. On January 7, 2021, according to the Primary Mortgage Market Survey conducted by Freddie Mac for the past 50-years, mortgage rates hit a 17 record low since March, dropping to 2.65%. In the past 10-months, mortgage rates continued to drop to record low territory, dropping below 3% in July for the first time ever. The further rates dropped, the more demand soared, and the hotter the market became.