ORANGE COUNTY HOUSING REPORT: Housing Thaw: After an extremely cool December, housing is starting to warm up a bit. With rising demand, the housing market is starting to move its way towards a Balanced Market.
It is a Southern California chilly morning. You climb into your car for the daily commute to the office and blast the heater, but it blows cold air because the engine is not hot yet. Your fingers are numb, and you can not wait for the temperature to start to rise. After a couple of minutes, the blowing air begins to warm. That is precisely how the housing market starts every year. Housing’s engine is cold on the first of January and takes a few weeks to heat up. This year is no exception, the market is finally starting to warm up a bit.
The housing market in 2019 started off a lot colder than everybody had been accustomed to. It was the coldest start since 2011 with an Expected Market Time of 152 days, Buyer’s Market territory (the Expected Market Time is the amount of time it would take to place a home on the market today and enter escrow down the road). But, in the past couple of weeks, the market began its annual thaw.
The active inventory rose by 4% and demand jumped by 23%, as a result, the Expected Market Time dropped from 152 days to 128. At 128 days, it is still a slight Buyer’s Market, just not as frigid as a couple of weeks ago. Last year, during the same time period, the inventory increased by 2% and demand increased by 22%, which resulted in the Expected Market Time dropping from 77 days to 64, a Seller’s Market.
This year’s market is completely different than the past seven years. From 2012 through 2018, housing moved to a Seller’s Market by the end of January. In most cases, it quickly moved to a HOT Seller’s Market with Expected Market Times below 60 days. That will not be the case for 2019. Instead, the market is moving towards a Balanced Market, one that does not favor buyers or sellers.