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Your October 2016 Market Update

The weather is changing, and the days are getting shorter. As the seasons change, so does the housing market. The Autumn Market runs from the end of August through mid-November. Typically during the autumn transition, active listing inventory drops along with demand, as a result the expected time on the market does not change much. Up until now the Orange County real estate has been right on track and it looked like business as usual.

However, this year the Autumn surge in buyer activity is occurring earlier than past years. It will be interesting to see if the current strong pace in demand can continue with a rapidly dropping inventory. The inventory will continue to drop for the remainder of the year. There just are not enough homes on the market to satiate the strong buyer demand. Historically low interest rates are boosting demand right now. Today’s rates are nearly a half a point cheaper than last year at this time. Rates around 3.5% are a total gift. Buyers do their homework and realize that these ultra-low rates cannot last forever. Buyers are out in full force attempting to cash in on this exceptional deal.

Sellers on the market today, or those just about to enter the fray, understand that they have about a month-and-a-half to take advantage of the additional activity, aiming for a December closing. To find the most success and highest return in their sale, it is imperative for sellers to be priced as close to their Fair Market Value as possible. This is not a time to test the market and stretch the asking price. Overpricing a home today, might result in not being able to find success until the 2017 Spring Market.

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The active inventory dropped by 254 homes, the largest drop so far this year. A drop in the inventory is typical for the Autumn Market, but there has not been this significant of a drop since 2012 when the market was sizzling. For proper perspective, there were 4,676 homes on the market back then, significantly fewer than today.
Demand, the number of new pending sales over the prior month, increased from 2,719 to 2,812; that’s 93 more homes, or 3%. Demand is considerably stronger than last year at this time when there were 275 fewer pending sales that totaled 2,537.
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