Completely contrary to what I said a few weeks ago about how inventory is down and demand remains strong, yet prices were not rising – prices are now suddenly rising. The dam has burst.
Even during the 11 days between when Steven wrote this report and today, there has been a marked and conspicuous increase in demand and prices have responded. Homes priced at or below $500,000 (condos included) are selling within a couple of weeks with multiple offers, when priced with the market. Under-priced homes are selling virtually immediately, with multiple competing buyers often driving the prices right back up to match the marketplace.
One of my buyers saw three homes last Sunday and by Tuesday morning, two of them were in escrow with backup offers. The heat is on. It is NOT a Buyers market and low ball offers don’t even get a response.
This seasonal spike in demand for residential housing units, coupled with recent reports that rates will probably not increase in the short term likely spells another surge in home prices. This does NOT mean that sellers can price their homes 10-20% above the last highest sold price. It does mean that they can likely match the most recent highest sold price, rather than looking at the average of recently sold prices. This can mean a 2-4% increase above the average sold prices a few months ago.
According to Steven Thomas, OC’s go to quantitative economist, “At first, it seemed as if the Orange County housing market’s slow start was tied to Wall Street and the worldwide economic turbulence. Regardless of the reason, it doesn’t matter now. The housing market has turned the corner and revved its powerful engine. In the past two weeks, demand jumped 22% with more buyers and sellers signing on the bottom line. The active inventory has been climbing as well, despite more pending transactions (when homes are changed to pending, they no longer count as part of the active listing total). More homeowners are taking advantage of the low, anemic inventory levels and entering the fray.”