ORANGE COUNTY HOUSING REPORT: There is not a lot of steam left in the best time of the year to sell a home and get it under contract. Last Call: In order for sellers to cash in on the most lucrative time to sell a home during the year, they better open up escrow soon.
It is that time of the year for the family vacation. That includes airports, long lines at the TSA checkpoint, connections, and a bit of stress and anxiety. Inevitably, countless travelers with kids in tow will find themselves running to their connecting flight. The sense of urgency is intense. As if to mock the situation, the flight crew announces, “LAST CALL for flight 93!” Frantically many will barely make it, gasping for air while boarding the plane. Still others will arrive at the gate only to find that the “cabin door has been closed.”
This is also the time of year when many sellers come on the market thinking they have an ample amount of time to market their home to take advantage of the Summer Market, but that simply is not the case. Yes, summer has just begun, but the Summer Market for housing already started in May. The housing market shifts away from the Spring Market with the distractions of the end of the school year, especially graduations. From there, the distractions of summer and the family activities take hold: family vacations, trips to the beach, trips to the pool, family reunions, summer camps, and picnics. Life gets in the way for many that are looking to purchase a home. As a result, housing downshifts from the best time of the year to sell, the spring, to the second-best time of the year, summer.
Right around the corner is the Autumn Market. For housing, that begins as soon as the kids go back to school, which is the end of August. As soon as school starts, it is no longer the most advantageous time of the year to move a family. As a result, many buyers put searching for a home on hold until the following year. Once school starts, it is just too disruptive for a family move. Changing schools is out of the question for too many families; it is just too disruptive. So, buyers want to close escrow by the end of August. Most escrow are between 30 to 45 days, meaning they need to open escrow by the end of July.
For sellers to take advantage of the second-best time of the year to sell, they need to open escrow by July 31st, six weeks from now. Pricing a home correctly is absolutely fundamental to cash in on the housing market and find success. This year, similar to 2018, the market is a bit different compared to what everybody has heard. The ultra-hot Southern California housing market with rapid appreciation, zillions of offers, and only days on the market before opening escrow are in the rearview mirror. That was the housing markets of 2012 through 2017.
Orange County housing today is characterized by a bit more inventory, 23% more than last year, and muted demand, 20% less than 2012 through 2017. The local housing market feels a lot more sluggish. Sellers need to keep in mind that they are still fetching record prices, but they cannot get away with stretching their asking price like prior years. For the sellers that overprice, even slightly, expect to sit on the market with less activity and no offers.
Many sellers enter the housing fray in July, thinking they have plenty of time to cash in on the Summer Market. What they do not understand is that they need to close escrow by August 31st. They have an extremely limited amount of time to isolate a buyer, negotiate the sell, and then open escrow. They are down to a few short weeks. For those sellers that are late to the housing party, they certainly better be priced right on the money. Starting off overpriced means that they will have to reduce their asking price to be successful. That reduction may come too late, mid-August. That’s when demand is already dropping and so are their chances of achieving their goal in selling.
LAST CALL to take advantage of the second-best time of the year to sell a home!!