Are we at the top of the market?
By Ken McCord
In the Orange County real estate market, there are few questions asked more frequently, or of more importance. Forget “What is the meaning of life?” or “Is there life on other planets?” This is what we really want to know. There are experts out there more than willing to take a stab at answering this question. I will throw my two cents out there also. No charge, of course.
I took 10 years of data from June 2016 back to the wonderful market of 2006. Remember that? The zero down, one percent, bad credit, no income, no problem market. The areas/cities I looked at are Anaheim Hills, Orange, Orange Park Acres, Tustin, Villa Park and North Tustin, the ones my readers probably reside in, and where I have been an active real estate agent for the past 31 years.
Many of us have been on the OC rollercoaster real estate rides for decades. It started really going in the 1970s. The current ride has been going up for four straight years. I can almost feel the clank of the wood as the house on the coaster has been going up, sensing the upcoming crest and ultimate fall.
Inventory is still relatively low, and it is still a seller’s market. Yet In June 2016, while inventory of homes increased 17.1 percent from May 2016, sales decreased 11.3 percent and pending sales decreased by 1.1 percent.
Yes, it’s true--more homes are going on the market. And not as many are selling.
The list price for homes for sale in June adjusted down by 1.6 percent. Average sales price adjusted down a whopping 6.1 percent.
This suggests you might have a difficult time selling your property if you price above the market. No one ever does that, right?
How do we compare today versus 10 years ago? Check this out!
Today the average sold price is $697,000, vs. $721,000 in 2006. The difference is only 3.3 percent.
More curiously, the average asking price has ballooned to $998,000 vs. $829,000 in 2006, a 20.4 percent increase.
Optimism among sellers is in great supply, it appears.
So there you go, readers, a month’s snapshot into our local market. A foreshadowing of things to come? Is it time to buckle in for the pending downward ride? There are lots of factors at play. If you are thinking of selling, but waiting to get even a better price, a new question should be entering the picture: What happens if prices start going down?