Demand for OC homes at 7-year high

Published on May 29th, 2012
Written by: Jon Lansner

 

Demand for local housing slipped in two weeks but is still at a 7-year high for late May.

    “Demand, the number of new pending sales over the prior month, continued a trend it picked up a couple of weeks ago, following a normal cyclical pattern for this time of year year, shedding 147 pending sales, or 4%, and now totals 3,701. That is still the best posting for the end of May since May 2005. It is 21% stronger than a year ago and 12% stronger than two years ago when the hangover effect of the end of the first time home buyer tax credit was fading. These drops during this time of year are part of the transition from the Spring to the Summer Market. With graduations, vacations and busy summer activities resuming, the market slows a bit from the highs of the spring. Demand of 3,700 is still very, very strong. With a very tight inventory and strong demand, the expected market time is a very hot 1.57 months. From here, expect demand to remain strong and at similar levels throughout the summer.”

Thomas’ signature housing measurement is his “market time” benchmark. It tracks how many months it theoretically takes to sell all the inventory in the local MLS for-sale listings at the current pace of pending deals being made. By this Thomas logic, as of May 24 — we see …

  • Market time of 1.57 months for Orange County buyers to gobble up all homes for sale at the current pace vs. 1.53 months two weeks ago vs. 3.68 months a year ago vs. 2.98 months two years ago.
  • Of the 8 Orange County pricing slices Thomas tracks, 4 had faster market time vs. 2 weeks ago; and 8 improved over a year ago.
  • Orange County homes listed for under a million bucks have a market time of 1.27 months vs. 4.85 months for homes listed for more than $1 million.
  • So, basically, it is 3.8 times harder to sell a million-dollar-plus residence!
  • And just so you know, the million-dollar market represents 27% of all homes listed and 9% of all homes that entered into escrow in the past 30 days.

Here’s the recent data for listings; deals pending; market time in months; latest vs. 2 weeks earllier, a year ago and 2 years ago. Color coding for market time is red (slowed by 5%-plus in year); green (sped up by 5%-plus in year); and yellow (in between!) Note: k=thousand; m=million …

Slice Listings Deals Market Time (months) 2 week ago 1 yr. ago 2 yr. ago
$0-$250k 814 683 1.19 1.14 2.81 2.17
$250k-$500k 1,571 1,566 1.00 0.95 2.99 2.21
$500k-$750k 1,244 854 1.46 1.50 4.00 2.89
$750k-$1m 684 293 2.33 2.31 4.61 3.70
$1m-$1.5m 533 181 2.94 3.10 5.77 5.04
$1.5m-$2m 313 77 4.06 4.35 7.35 8.76
$2m-4m 451 57 7.91 9.40 11.40 12.38
$4m+ 270 8 33.75 25.90 51.00 29.75
All O.C. 5,827 3,701 1.57 1.53 3.68 2.98

 

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