The Holiday Market
The inventory will steadily drop from now through the end of the year. Fewer homeowners will place their homes on the market since 2020’s end is fast approaching. Intuitively, many will simply “wait until spring.” It is a common phenomenon that repeats itself every year. There will still be homeowners lured to enter the fray due to the public knowledge that housing is by far the strongest sector of the United States economy, yet most will opt to wait until at least March of 2021.
As a result of fewer homeowners opting to sell and unsuccessful sellers pulling their homes off the market, the active listing inventory will drop. In the past five years, it has plunged an average of 27% from now through the end of the year. It is going to be difficult for the inventory to drop an additional 27%, as it is already at a very low level, 3,944 homes, its lowest level for a start to November since tracking began in 2004. Only 2012 came close, with 4,043 homes on the market, but it still shed 800 homes by year’s end, or 20%. The bottom line: Expect the number of homes available to purchase to consistently drop for the rest of the year.
Sidelined buyers and fewer new potential purchasers will result in a significant drop in demand. In the past five years, it has fallen on average of 31% from now through the end of the year. Today’s demand is at 3,019 pending sales. That means that it will fall to around 2,075 by 2020’s end. That will be significantly lower than this year’s peak of 3,340 pending sales achieved on September 3rd. Yet, that will be demand’s highest level for a finish to a year since 2012 when it was at 2,413. For perspective, at the end of December 2019, it was at 1,590 pending sales, 23% fewer than the projected 2,075 to end 2020. The bottom line: The Holiday Market will still be quite busy with plenty of buyer activity compared to recent years.
Click on the image below the Read the Orange County Housing Report.
