Happy New Year!
It’s hard to believe that we’re already a few days into 2023, but here we are. And with a new year comes a new real estate market update for Orange County, CA. How are things looking early on in 2023 compared to how the year began in 2022? So without further ado, let’s dive into the numbers and see what’s been happening in the local housing market.
How is the Orange County Real Estate Market?
2022 was a year of ups and downs in the Orange County housing market, meaning some aspects of the local market stayed strong while others began to cool. At the end of 2021, we began the year with 814 new listings on the market. We have a significant drop for the beginning of this year when there are only 465 new listings – a decrease of 42.87%.
So this means we have fewer new listings coming to the market heading into 2023 than we did this time last year. Why? For one, those that would like to buy a new home are waiting on the sidelines for interest rates to drop. For the current homeowners that would like to make a move, there isn’t much of a reason as they are most likely taking advantage of refinanced mortgage interest rates in the 2s or 3s. We’ve come to learn that homeowners are more in love with their rate than they are with their homes and that it’s been just too hard to let that rate go, even if they’d prefer a different home. So they’re staying.
Those that are selling right now have more of a need to sell than a want to sell.
One of the biggest changes in the market has been the median days on market. In December 2021, the median days on market were just 7. However, in December 2022 that number jumped up to 23 – an increase of 228.57%. Compared to what we’ve seen since 2020, 23 days seems like an eternity, but historically it’s still quite fast.
Despite this increase in the time it takes for homes to sell, the median sales price has only decreased slightly. In December 2021, the median sales price was $1,200,000. In December 2022, it was $1,148,000 – a difference of -4.33%.
The % of the original list price received (if a seller listed their home for X, what percentage of that X are they receiving) has also gone down. Heading into 2022, sellers were receiving 103% of their original asking price. So more! As we begin 2023, sellers are receiving 95% of the original list price. So now less.
The month’s supply of inventory – or the amount of time it would take to sell all the homes on the market at the current rate – has also seen a significant change. In December 2021, the month’s supply of inventory was 0.8. In December 2022, it was 1.5 – an increase of 87.50%. Now you might be looking at that % difference and think that’s significant. Well, it is, however, 1.5 months’ supply of inventory is hardly anything at all. A neutral market is more than double that. Let’s put it in a little more perspective: In 2019, the month’s supply of inventory was above 4, in 2011 it was above 7, and in 2008 it was above 12! So inventory is still really low as 2023 goes underway.
In Conclusion
With fewer new listings and a slower rate of home sales, it may be a good time for buyers to take a closer look at the market. However, with a slight decrease in median sales price, an increase in inventory, a decrease in % of list price received, and a plateau for property values, sellers may have to be a bit more patient and flexible in order to find the right buyer.
Let us know how we can help you reach your real estate goals in 2023! We are your advocates for anything real estate.
