Homeowners can still expect their properties to sell in less than a month—historically very fast. But at 27 days, the average market time to sell a home in Orange County has increased 23 percent, from 22 days, in the past four weeks.
According to Steven Thomas, author of The Orange County Housing Report, demand to purchase a home “has been dropping, shedding 10 percent in the past four weeks.”
Local demand is now in line with historical averages.
The current demand to purchase a home, compared to the pre-pandemic housing market, is just 2 percent above the 2015-2019 five-year seasonal average. There have been 2,761 pending sales over the past 30 days; the five-year seasonal average for 2015 to 2019 is 2,699 homes.
Demand to purchase a home should be expected to decline as prices drop, following the law of demand from economics. The law of supply is also at work.
“The active listing inventory … now sits at 2,528 homes [in Orange County], its highest level since January. In the past four weeks, it has grown by 14 percent,” according to Thomas.
Home inventory is still low by historical standards, he added.
“The five-year average from 2015 to 2019—intentionally omitting 2020, due to COVID skewing the data—is 6,820, an extra 4,282 homes, or 170 percent more” than the county’s current sales inventory.
Charlie Oppler, president of the National Association of Realtors (NAR), said on July 15 during a virtual conference, “The U.S. housing shortage is … the result of more than a decade of severe underbuilding and underinvestment.”
The realtors’ trade group said in a statement the event was “a virtual policy forum … on research commissioned by NAR and authored by the Rosen Consulting Group, which found that the U.S. is in the midst of an ‘underbuilding gap’ of around six million housing units dating back to 2001.”
Outside Orange County
The average number of days to sell a home in Los Angeles County rose to 39 days in the most recent reporting period from 36 days four weeks ago. San Diego homes are now selling at an average period of 27 days, compared to an average of 23 days four weeks ago,
Within Southern California, only the Ventura County housing market is tighter than it was four weeks ago. In Ventura County, it now takes only 21 days to sell a home, down substantially from the 37-day average time four weeks ago.
Tim Shaler is a professional investor and economist based in Southern California. He is a regular columnist for The Epoch Times, where he exclusively provides some of his original economic analysis.
Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.