The “supply problem” that everybody talks about is due to heightened buyer demand fueled by historically low mortgage rates matched with an inventory that was already trending lower prior to COVID. The inventory crisis is so acute that it has limited the number of closed sales in Orange County. There is plenty of excess demand from buyers unable to isolate a home to purchase.
At the beginning of the year, demand for Orange County homes (the number of pending sales over the prior month) was up 32% compared to the start of 2020, prior to COVID impacting housing. Demand was at the hottest levels since 2013 for the first six-months of the year but dropped below 2020 readings by the end of June.
True demand is a lot higher yet is impossible to gauge. The throngs of showings for just about every home that hits the market combined with the sheer volume of multiple offers generated illustrates that there is a vast pool of buyers looking to secure a home.
