Market Talk with Vickie: January 2018
2018 continues the trend of rising home prices and low inventory, especially among attached properties. This month on “Market Talk with Vickie,” we will review the Orange County market data that concluded in January 2018. For a deeper review on the financial indicators mentioned below, please refer to this previous article.
Is it a buyer’s or seller’s market?
While the demand side of the housing market remains optimistic, the supply side continues to be tight in Orange County. January finished with low figures in Months Supply of Inventory (MSI) with 2.3 MSI for detached homes and 1.7 MSI for attached homes. Comparing the year-over-year change, the MSI has fallen 8.0% and 5.6% for detached and attached properties, respectively.
Are prices continuing to increase?
The median price has been increasing steadily on a year-over-year basis through last year, and January 2018 maintains this upward trend ending with a median price of $779,000 for detached homes and $500,000 for detached homes, a 3.9% and 17.4% year-over-year change respectively. The January MSP for detached properties dropped from December by 2.0% while the MSP for attached properties increased by 5.6%.
How long will it take for my home to sell?
While the January Days on Market (DOM) increased since the end of 2017, the numbers are still favorable for sellers. For detached homes, the DOM is 50 days compared to 40 days for attached homes; with year-over-year reductions of 26.5% and 32.2%, respectively. As sellers attempt to take advantage of low inventory and rising prices, expect buyers to be more selective as well. The strong stock market is an attractive alternative route for investors.
How much of my asking price will I get?
In January, detached homes in Orange County sold for 97.0% of their original listing price while attached homes sold for 97.7% of the original price. The year-over-year and month-over-month changes have been consistently flat with less than 1% in variation. Some cities in Orange County, such as Aliso Viejo, Fountain Valley, Irvine and Lake Forest, have been able to sell for 100% of the listing price.
How affordable is the market?
Home prices are expected to increase in 2018 with the imbalance between supply and demand. However, with upward pressure on prices, housing affordability will be negatively impacted and act as a force to counterbalance the price appreciation. Market competition and housing unaffordability will keep price appreciations under control. In January, 50% of households were able to afford the median price of a detached property while 87% of households were able to afford the median price for an attached home.
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 February 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.