The market velocity is extremely fast, and it is a Hot Seller’s Market where values are rising swiftly and multiple offers is the norm.
There are not enough homes on the market to keep up with today’s intense buyer demand. There is a run-on housing. Homes are flying off the market faster than they are coming on, and the inventory has been dropping further as the year has progressed. Housing’s momentum lines up strongly in favor of sellers. In looking closely at the housing economic model of supply, demand, mortgage rates, affordability, buyer demographics, and market velocity, the data illustrates that the current trajectory of the housing market is not going to change anytime soon.
With mortgage rates remaining below 3%, a level never reached prior to last year, today’s housing market is one of the strongest on record, and it has everything to do with supply and demand. The current number of available homes to purchase is less than the current demand readings. The active inventory today is at 2,438 homes, and demand (last 30- days of new escrow activity) is at 2,863 pending sales.
There are 425 fewer homes available to purchase compared to current demand.
Homes are flying into escrow as quickly as they are coming on. The Expected Market Time is at 26 days, less than one month, the lowest level since tracking began in 2004.
A Tip to Sellers: In competing against a multitude of offers, sharpen your pencil, make the offer as agreeable as possible, and pack your patience.
Sometimes an offer above the listed price is necessary to be the winning bidder. Stretching an offer by an additional $10,000 may be enough to get past the finish line. At today’s 2.81% mortgage rate, the additional $10,000 means that the monthly payment goes up by $41.14 and the down payment slightly rises as well. Remember, only one buyer wins the bidding war. For everybody else, it is back to the drawing board.
Click on the image below the Read the Orange County Housing Report.