ORANGE COUNTY HOUSING REPORT: The start to 2019 is unlike the last 6-years, paving the way for a much different year. There are a lot more homes, demand is down, and the Expected Market Time is at its highest level since January 2011.
The holiday decorations have been taken down, placed in their appropriate boxes, and carefully tucked away in the attic. Everybody is slowly coming out of the fog after enjoying the festive season full of so many distractions. It is already two weeks into the New Year. This is when the housing market awakens and starts to thaw. Yet, something is different this year.
Orange County housing is starting off on a completely different foot and it is all due to the shift in the market in 2018. The shift was a move away from the theme of “not enough homes on the market” to “not enough demand.” For years, the story was that housing was suffering from a supply problem, but that morphed into a demand problem last year. It is good old fashioned supply and demand from Econ 101. These shifts caused the market to change.
Since 2012, housing has had very little supply and plenty of demand, which favors sellers. But, in 2018, as the supply increased, and demand dropped, the market shifted from a Seller’s Market to a Balanced Market to a slight Buyer’s Market. That is precisely where housing is starting 2019, a slight Buyer’s Market. Sellers are no longer calling the shots. A slight Buyer’s Market does NOT mean that prices are falling like a rock. Low ball offers are a waste of time and indicate that a buyer is not in touch with reality. Instead, it is a market where buyers no longer have to trip over each other to purchase. They can take their time and call more of the shots in the purchase contract. They are in control.