With a housing market that is seemingly hot, there are still some trends to consider that confirm and point to a noticeable cool down. These trends are showing us that the six-year housing cool off has started in Orange County beach-side communities of Huntington Beach, Fountain Valley, Westminster and Newport Beach. The news shows that there are not enough homes for sale and buyers are struggling to find a property in the location they want. This issue has been going on for the last six years, but we can now see some key indicators that there is a cooling market on the horizon.
An increase in active inventory
The year started with a very weak active inventory but there was an increase of 15% of new listings in just the last month. The active inventory for Orange County has started to surge and this has resulted to over 700 houses being added in within 4 weeks. The trend indicates an increasing active inventory.
There are more homes on the market
There are now about 50 more homes on the market than what we saw at this time last year. The active inventory that is monitored year after year had been much lower for 20 months in a row, but that has now changed.
Low demand levels
The demand has hit the lowest numbers since 2008 and this means that we are seeing a huge drop in the amount of pending sales. The point is that there is a much lower number of pending sales now than what we saw just a few years back. This is a difference that has been quite strong in the past month and a half.
Asking price has been reduced
An incredible 11% of the active listings have actually reduced their asking price in the last 7 days. A listing agent may be scrambling to get showings as the trend continues. Our multiple listing service is seeing more and more red arrows that point down and indicate a lower price is being asked for a specific property than when was asked when originally listed. The number of red arrows has increased this year without a doubt when compared to the last few years.
Southern California has also been affected
We can see the same trend in Real Estate of more homes being available and a significant reduction in demand in the entire Southern area of California which includes Westminster, Huntington Beach, Irvine, Newport Beach, Costa Mesa, and Santa Ana. The active inventory has now been increased and this is not only affecting some cities, but a majority of them in Orange County.
Final thoughts
There is no way to deny that these are all important signs to consider, but the market remains a seller’s market without a doubt. The difference is that it has cooled down when compared to what we had in the Spring of 2017.
Ryan Byrne, Realtor 714-540-1744
Home Selling Specialist
Serving Orange County Beach Communities