The Active Listing Inventory: For
the first time this year, the active listing inventory is less than one year ago.
Last year, the active listing inventory continued to increase through
September. Not this year. Instead, the active listing inventory began to
decrease a month ago and the decrease is accelerating. In the past two weeks,
the active listing inventory decreased by 217 homes, or 2%, to 11,103 homes for
sale. Last year, at this time, the inventory grew by 179 homes. There were 311
more homes on the market compared to today. From here we can expect the active
inventory to continue to decrease through the end of the summer, and into the
fall and winter markets. The peak in inventory for 2011 occurred on June 23rd at
11,388 homes, 285 more than today.
Median Sales Price Expectations:
The lower price ranges are hotter this year compared to last, which will skew
the median sales price in the months to come.
Be prepared for year over year decreases in the median sales price. These
expected decreases are not necessarily pinned to decreases in the actual market
value of homes. Instead, there is a shift in demand this year compared to last.
There is an increase in demand for homes priced less than $500,000, an overall
12% increase, or 221 additional pending sales. For homes priced above $500,000,
with the exception of the $2 million to $4 million range, demand has decreased
by an overall 13%, or 148 pending sales. This portends a year over year may
decrease in the middle value. The median value is the absolute middle value,
where one half of the homes sold for less, and one half of the homes sold for
more.
This phenomenon illustrates the inherent flaw in utilizing the median sales
price as a true indicator of depreciation or appreciatio.
The Distressed Market:
The distressed inventory has decreased to its lowest level since August of last
year.
The active distressed inventory decreased by 98 homes in the past two weeks
and now totals 3,615. This is not only the lowest level of the year, it’s the
lowest level since the first week of August 2010, when there were just 40 fewer
distressed homes on the market compared to today. The distressed inventory has
decreased by more than 500 homes so far this year. There are 662 foreclosed
homes on the market today with an expected market time of 1.53 months, a very
HOT seller’s market. Buyers can expect tremendous competition. There are
currently 2,953 short sales on the active market, representing 27% of all active
listings in Orange County. The expected market time for short sales is 2.57
months. For the remainder of the year, we can anticipate little change in the
distressed inventory.
