The housing market in March 2023 showed signs of growth in Orange Home sales experienced a notable jump of 41% month-over-month, and sales prices rose by 3% for the same period. This positive trend can be attributed to the dip in mortgage rates early in the year that incentivized homebuyers to enter the market. However, low inventory remains a challenge, with just 1.7 months' supply of existing homes at the beginning of March, well below the balanced market supply of 4 - 6 months.
April Market Stats for Orange County
Closed Sales
The number of transactions grew for the second consecutive month to 1,789 in March. Although 41% is a significant increase, it's important to note that sales were still muted compared to last year. Down 32% from March 2022. Affordability continues to sideline many would-be buyers, as they cannot find suitable properties at the price they can afford.
As rates start to dip throughout the year, expect sales to continue to increase month-over-month until a peak in summer later this year.
Inventory & Days on Market
The inventory levels in Orange County remain at historic lows reaching just 3,015 active listings in March. This rise represents a 3% increase since last month and 4% higher than the previous year's. For context, the active listing count was 8,068 in March 2019 (pre-pandemic) and 14,779 in 2009.
The median days on the market (the time it takes for a listing to sell) dropped for the second straight month from 25 to just 15 days. This is fast. It was just six days in March 2022, which is much quicker, but it still represents a clear indicator of the market's competitiveness for buyers. This is consistent with what we are experiencing with our clients. Almost all listings that are priced well are getting multiple offers because there need to be more options for buyers.
Sales Price
Sales Prices in March 2023 showed positive gains, with both Single Family and Townhouse-Condo homes experiencing an increase in median sales prices month-over-month. The median sales price for Single Family homes rose 6% to $1,217,500, while the median sales price for Townhouse-Condo homes increased by 0.45% to $725,000. This upward trend can be attributed to several factors, including solid buyer demand and limited inventory. Despite the limited supply of homes, higher sales prices indicate that potential homebuyers are willing to pay a premium for their desired properties. It is also important to note that both single-family homes and townhouse condos are down slightly from their peak prices in 2022, down 4.8% for single-family homes and 1% for townhouse condos.
Conclusion
For Buyers
My recommendation for buyers remains the same from the previous month as long as you plan to live in the property for the next 3-5 years. I recommend that you act sooner rather than later. While we predict that mortgage rates will fall, the effect will likely accelerate the market, making it more challenging to find the right home at a fair price.
For Sellers
Luckily for sellers, despite fewer buyers entering the market, we are still very much in a seller's market. Why? It is due to low inventory offsetting that decreased demand. One thing that has remained consistent for sellers considering entering the market is that homes that look great and are priced accurately still sell quickly and with multiple offers. On the other hand, overpriced, under-marketed, and poorly documented homes are sitting on the market. Sometimes for months.
