Market Talk with Vickie: Dec 2017
This month on “Market Talk with Vickie,” we will review the market data through December 2017, and evaluate the real estate market with the 12-month averages in 2017 to 2016. For a deeper review on the financial indicators described below, please refer to this post from October 2017.
Is it a buyer’s or seller’s market?
December closed with a significant drop in Months Supply of Inventory (MSI) with 2.0 MSI for detached homes and 1.5 MSI for attached homes. Orange County is currently in a strong seller’s market, where we continue to face a shortage of inventory month after month. Compared to 2016, 2017 ended with an average of 2.8 MSI (a 15.3% decline) and 1.9 MSI (a 21.7% decline) for detached and attached properties, respectively.
How long will it take for my home to sell?
The December Days on Market (DOM) remained steady since the prior month with detached properties in the mid 40s and attached properties in the mid 30s. The average for 2017 is 46 DOM (detached) and 37 DOM (attached). Compared to 2016, sellers are benefiting from a 30.8% (detached) and 38.5% (attached) reduction in time before they receive an offer. This is great news for sellers, and also means that buyers need to act fast once they find a house that they like.
How much of my asking price will I get?
For the month of December, detached homes in Orange County sold for 97.0% of their original listing price while attached homes sold for 98.0% of the original price. Aliso Viejo, Fountain Valley, Irvine and Lake Forest are a few cities in Orange County where homes sold for 100% of the listing price in December. The 12-month average for 2017 is 97.3% and 98.2% for attached and detached properties, respectively. Compared to 2016, sellers are profiting between a 0.4% and 0.6% increase! To remain competitive, buyers should write their initial offer closer to the listing price.
Are prices continuing to increase?
In December 2017, the Median Sales Price (MSP) for detached homes was $792,000, and attached homes was $475,000. The peak MSP in 2017 was in September at $800,000 (detached) and $490,000 (attached) and the average MSP in 2017 was $787,000 (detached) and $473,000 (attached). The 2017 12-month average represents a 6.3% (detached) and 7.1% (attached) increase from 2016, culminating after almost 6 years of continual rising home prices.
How affordable is the market?
For detached homes in December, only 51% of households were able to afford to purchase the median priced home in Orange County, an all time low since 2007. For attached homes, December was at 94% affordability, which was also a historical low since mid-2008. Between 2008 and November 2016, the affordability index for attached properties had been above 100%. The average 2017 affordability index is down 2 points from 2016 for both detached and attached homes, ending the year with 51% and 95%.
If you are interested in learning more about a particular city in Orange County or neighborhood in Irvine, send me a message and I’d be happy to share more information with you. All the statistics I mentioned are important to understand as part of your buying or selling strategy. Let me help you get the competitive edge!
Source: Current as of January 10, 2018. The report above was written using data from CRMLS, Inc as reported by the Orange County Association of REALTORS®. The accuracy of all information is deemed reliable but not guaranteed and should be personally verified through personal inspection by and/or with the appropriate professionals.