OC Housing Report 9.24.18 – Cracks in the Market
The current active inventory continues to rise and has not yet reached its peak. Typically, the active listing inventory peaks in the summer months sometime between July and August. This year, it does not look like it will reach a peak until October, around the middle of autumn. The delay is occurring because there continues to be more homes coming on the market than those that are selling. In the past month, 459 more homes were placed on the market compared to this time last year – that’s a 15% increase. Active inventory is also increasing because demand has slowed down to its lowest levels since 2007.
A delayed inventory peak is a strong indicator of a much slower spring the following year. With the top to the 2018 inventory expected to occur sometime around mid-October, inventory will not have enough time to adequately drop by year’s end. This means there will be more homes to start the 2019 housing market, creating more seller competition.
The Expected Market Time spiked from July through September. Typically, the Expected Market Time (the amount of time it would take to place a home in escrow) flattens during the summer and autumn markets and remains flat for the rest of the year. Similarly, demand drops a bit during the summer and autumn as people spend more time vacationing and transitioning back to school. Usually, the decrease in homes coming on the market and the decrease in demand offset each other. That is not the case this year as a substantial drop in demand combined with a consistently growing active listing inventory piled up to create a spike in the expected market time. That time has grown from 80 days in July to 100 days today. At 100 days, the housing market has transitioned from a Seller’s Market to a Balanced Market; a market that does not favor a buyer or seller, and is moving towards a Buyer’s Market for the first time in years.
Of course, real estate trends tend to be hyper-local. Please contact us for a specific analysis of your property.