Orange County Housing Report
September 30, 2010

It is officially the autumn market, and as is typical for this time of year, the active listing inventory is now, finally dropping. Active Listing Inventory: For the first time this year, the listing inventory decreased. Up until this week, the inventory has been increasing. Even with increased demand at the beginning of the year, the inventory grew. The inventory is now decreasing, but not because of an increase in demand. Instead, more sellers have come to the conclusion that the spring and summer markets are behind us and we are going into a slower selling season, and thus are removing their homes from the market. As well, some sellers who had hopes of selling their homes during the spring frenzy for prices significantly above surrounding comparables, realize that the prices increase were, to a large extent, an illusion, and have now decided to remove their homes from the market rather than to sell them at current market value. There were 11,892 homes on the market two weeks ago, representing the high mark for 2010, today there are 88 fewer homes on the market for a total of 11,804 homes for sale, with an expected market time for all of Orange County of 4.28 months. Last year there were 3,887 fewer homes on the market, with an expected market time of 2.42 months.

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Typically this time of year demand drops. Instead, demand, the number of new pending deals over the past month, increased by 2%, adding an additional 66 homes compared to two weeks ago, now totaling 2,756 pending sales. Perhaps, buyers are beginning to focus on the low mortgage interest rates. Last year at this time demand was at 3,270 pending sales. However, last year's demand was artificially stimulated by an earlier first time home buyer tax credit that was set to expire in November 2009.

The active distressed inventory increased by only 13 homes over the past two weeks and now totals 4,039 total foreclosures and short sales. The distressed inventory now represents 34% of the current active inventory. Last year at this time, there were 2,319 distressed homes on the market, 1,720 fewer than today. The number of foreclosed properties within the active listing inventory decreased by 10 homes in the past two weeks, and now totals 698, in all of Orange County. The expected market time for foreclosures is 1.96 months, still an exceptionally HOT seller's market. Short sales, where a homeowner attempts to sell a home for less than the total outstanding loans against a home, increased by 23 homes over the past two weeks and now total 3,341. The expected market time for short sales is 3.28 months, much slower than 1.53 months posted this past April.

Source: Steven Thomas, President, Altera Real Estate