Kristin Devlin's Orange County Real Estate Blog: DECREASING LEVELS OF INVENTORY CAUSING INCREASE IN PRICES IN ORANGE COUNTY

The active listing inventory dropped another 290 homes in the first two weeks of November and now stands at 3,753 units , 24% below the prior low record established in March 2005, when everybody had a hard time navigating with just 4,912 homes on the market. Unbelievably that was an additional 1,159 more homes than today.

These inventory lows are unprecedented and are starting to apply upward pressure on housing values. Quite simply, everything that is coming on the market below $750,000 that is priced right is flying off the shelves. Buyers are now willing to pay a few thousand dollars above the last closed sale. Closed sales are establishing higher prices throughout Orange County.

However, buyers are not going to pay an additional 10% above the last comparable sale no matter sellers desire or needs. Homes are appreciating at a very slow rate, not thousands of dollars every month. Regardless of the craziness of today’s market, buyers are still not ready to pay well above recent comparable sales.

The distressed market has also dropped, unabated since the end of October last year, when it totaled 3,563 units. It has dropped by 3,073 units and now totals just 490 units. The distressed inventory has not been this low since May 2007. It currently represents just 13% of the total active inventory and 34% of demand. Last year it represented 37% of the inventory and 56% of demand. As yet there is seems to be little sign of the much reported “shadow inventory” waiting to make its way onto the market

# posted by Kristin Shimaji-Devlin @ 8:54 AM