Orange County’s housing market is ‘normalizing’ – Spectrum News 1 | Wordy Zone

LAGUNA BEACH, Calif. – After two hectic years in Orange County real estate, Suzanne Seini finally breathes a sigh of relief.

A year ago, Seini, the CEO and partner of Active Realty in Irvine, wrote several offers on behalf of her client buyers, only to see them either outbid or rejected by the seller.

what you need to know

  • Some real estate agents are enjoying the slower pace of the current housing market
  • Orange County’s housing market is normalizing as more homes are on the market and market time increases
  • The 30-year fixed-rate mortgage rate is 5.2%, Freddie Mac reported
  • More and more buyers are pulling out, but there’s still demand in Orange County

Orange County’s real estate market has changed over the past few months, Seini told Spectrum News.

“It’s a little fairer now,” Seini said. “In recent years we have seen many buyers experience heartbreak. So many were trying hard and had to be placed in homes due to life changes or growing families and they couldn’t. They are in a better position now.”

Although mortgage rates and inventories have risen and house prices have stabilized, real estate agents are welcoming the current housing market’s slower pace despite fewer buyers.

Josh Schroeder, a sales rep at Pacific Sotheby in Laguna Beach, compared the real estate market at the start of the pandemic to a speeding car on the freeway.

“Here we are [pre-pandemic] We were driving down the freeway and exceeding the 65 mph speed limit, and then when the pandemic struck, everyone was driving 165 mph,” Schroeder said. “The cop – the Feds have caught up – and the real estate industry is hitting the brakes. Now we’re going about 75 miles an hour.”

“There’s nothing wrong with that kind of normalization happening,” Schroeder said.

The coronavirus pandemic has created a violent real estate market over the past year and a half. Lured by historically low mortgage rates, buyers are outbidding each other, driving up house prices and emptying the home inventory.

But as the US Federal Reserve curbs inflation and raises interest rates, many buyers have backed away on fears of a looming recession.

The market is on the move.

Consumers across the country continue to express pessimism about home buying conditions, according to the Fannie Mae Home Purchase Sentiment Index, released Monday. The poll found that only 17% of respondents think it’s a good time to buy a home.

“Adverse mortgage rates are increasingly being cited by consumers as a key reason for a growing perception that it is a bad time to buy and sell a home,” Doug Duncan, senior vice president and chief economist at Fannie Mae, said in a press release. “As home price growth slows and is expected to slow further, we believe consumer reaction to current housing conditions is likely to be increasingly mixed: some homeowners may choose to list their homes earlier to get away from perceived high prices to profit, while some prospective homebuyers may decide to postpone their purchase decision because they believe house prices could fall.”

Data suggests the Orange County market is slowing, albeit slightly.

According to Reports on Housing, the pendulum is still swinging in favor of home sellers.

Expected market time – the time between listing the home for sale in escrow is 67 days in Orange County. A regular market lasts 90 to 120 days. Anything under 90 days is considered a seller’s market. Meanwhile, a buyer’s market lasts anything that lasts 120 days or more.

In Orange County, market time has dropped from 72 to 67 days in the past few weeks.

“Surprisingly, Orange County’s housing market got a little hotter,” said Steven Thomas, chief economist at Reports on Housing, a data company that analyzes the Southern California housing market. “It looks like this year’s increase in market time has halted and will remain a slight seller’s market for the remainder of the year.”

Thomas said Orange County’s current active population is about 4,069, its highest since October 2020. However, it’s still well below the three-year average of 6,750 before the pandemic. So there is still a shortage of housing in the region and prices have yet to come down.

The median home price in Orange County is $1.025 million, up nearly 14% year over year.

And while mortgage rates are rising, with Freddie Mac’s primary mortgage market survey reporting the 30-year fixed rate at 5.2% as of Aug. 11, there’s still strong demand for homes in Orange County, particularly along the coast. said Schroeder.

“It’s still a good time to buy and sell,” Schroeder said. “Buyers see all of that [sensational] Headlines that the market is about to collapse, but fundamentally it’s still as strong as ever.”

Schroeder said people need to stop thinking about the sudden spike in home price increases in recent years and how quickly homes have been selling during the pandemic.

He said buyers and sellers need to be realistic in this current market.

“Gone are the days of 20% or 30% price increases that we experienced during the [early part of the] pandemic,” he said. “We will still see a price increase, but it will be normal.”

And sellers, he said, should be patient.

“Houses are not sold on the first weekend. It will take longer but eventually it will be signed,” he said.

For Seini, she also advises her salespeople to adapt to her mentality and have realistic expectations.

“You’re not going to see 30 offers or $100,000 more than the request,” she said. “It’s really important for them to educate them about the market today.”

For buyers, Seini said, they have more options. Yes, prices are higher and affordability is an issue. But those who can afford their own home have many more options.

She urges buyers to take care of the homes they want.

“Marry the house, not the rate,” she said. “You can always refinance later.”

She recalls helping a family secure a home in Aliso Vijo after being outbid and foreclosed on last year.

“Last year they couldn’t afford to be competitive, so now we fast-forward a year and the market is doable,” she said. “You hold the cards now. They were able to bid below the asking price and ended up buying a home at the list price. They had that negotiating space to buy a house and didn’t have to give their firstborn to get it.”

Leave a Comment