Orange County’s housing market started the year quickly.
The latest Orange County home inventory report from Steve Thomas and ReportsOnHousing.com — data as of February 2 — includes these thoughts:
•Demand, the number of new pending sales over the prior month, is up 13 percent vs. 2011
•In two weeks, demand increased by 24 percent.
•For homes priced below $500,000, demand is up 26 percent.
Why?
Thomas guesses: “Typically Super Bowl Sunday marks the beginning of the Spring Market. I would argue that the housing market is experiencing an early spring that started in mid-January. Could it be the warm weather that is stimulating demand? Record low interest rates? Experts declaring that a bottom has been reached? It’s probably a case of ‘all of the above,’ plus a bit of optimism going into a New Year. Regardless, the housing market has absolutely surged and it is not due to a first time home buyer tax credit or other government program.”
Thomas’ signature housing measurement is his “market time” benchmark. It tracks how many months it theoretically takes to sell the entire inventory in the local MLS for-sale listings at the current pace of pending deals being made. By this Thomas logic, as of February 2 — we see …
•Market time of 2.50 months for Orange County buyers to gobble up all homes for sale at the current pace vs. 3.20 months two weeks ago vs. 3.82 months a year ago vs. 2.42 months two years ago.
•Of the 8 Orange County pricing slices Thomas tracks, 8 had faster market time vs. 2 weeks ago; and 6 improved over a year ago.
•Orange County homes listed for under a million bucks have a market time of 2.18 months vs. 7.85 months for homes listed for more than $1 million. So, basically, it is 3.6 times harder to sell a million-dollar-plus residence!
•And just so you know, the million-dollar market represents 18 percent of all homes listed and 6 percent of all homes that entered into escrow in the past 30 days.
DISTRESSED DOWN
While distressed properties were 34 percent of Orange County homes listed for sale and 48 percent of the residences recently put into escrow, Thomas will tell you they’re hard to catch.
His latest report — as of February 2 — says that “in the past two weeks, the foreclosure inventory dropped by 24 homes and now totals 546. You have to go all the way back to June 2010 to find fewer foreclosures on the market. Foreclosures will be a very hot commodity throughout 2012. The expected market time is an unbelievable 1.1 months, a deep sellers market. The short sale inventory decreased by 245 homes in the past two weeks and now totals 2,175. That’s the lowest since December 2009. The expected market time dropped to 1.6 months, also a deep sellers market.”
Thomas found 2,691 distressed Orange County properties were listed for sale — 34 percent of the 7,823 listed overall. (Note that 14 percent of the distressed listings were foreclosures being sold by banks; 86 percent were short sales.)
And distressed residences sell quickly.
Thomas found 1,504 new escrows were opened to buy distressed Orange County properties in the past 30 days. That is 48 percent of the 3,134 new pending sales countywide.
When Thomas calculated his “market time” for this niche, we see 1.79 months worth of distressed properties on the market vs. 4.07 months worth of non-distressed homes.
So, distressed homes currently sell 2.3 times faster than non-distressed homes.
TOWN-BY-TOWN
At the neighborhood level, Thomas and his ReportsOnHousing.com found …
•The Orange County town with the fastest-selling homes in terms of Thomas’ “market time” (supply of homes for sale vs. new purchase deals inked in past month) is Ladera Ranch at 1.2 months to theoretically sell all for-sale homes at the current buying pace. A year ago, this town was at 3.1 months.
•Next fastest was Portola Hills at 1.5 months and Lake Forest at 1.5 months. The 5 “fastest” markets combined have a market time of 1.4 months and comprised 7 percent of the supply of homes for sale and 12 percent of homes in escrow.
•”Slowest” market to sell a home in, based on the same math, is Corona Del Mar with market time at 8.5 months to theoretically sell all for-sale homes at the current buying pace. A year ago, this town was at 6.4 months.
•Next slowest was Laguna Beach at 7.0 months and then Newport Beach at 5.6 months. The 5 “slowest to sell” markets have a combined market time of 5.7 months and were 15 percent of the supply of homes for sale and 7 percent of homes in escrow..
Contact the writer: (949) 777-6727 or jlansner@ocregister.com