Housing market is Shifting and Number of Homes are dropping. Is this a good time to sell.
Have we peaked out in home prices, not just in Anaheim Hills, Orange County, or California, but nationwide? Because if you’re a seller, you may be wanting to go to another state and see how the prices are doing.
In all honesty, I myself thought that the home prices peaked in 2017. They have gone up 30% to 40% after 2017. And as you know, in 2011 housing started going up in 2010, and in 2011 after the recession in 2008, and first time in history, home prices have gone up almost 11, 12, and 13 years as of 2022. This is the first time it has gone up straight for that many years. Never has happened before. And the big question is, as of June 2022, are they still going up?
As of today, the federal rate increase is going to be announced. We all know they’re going to increase by half a point today. I have not checked the news today. Today is June 15, 2022, and it may go up three-quarters of a point and they’re already at five and a quarter percent over 5% compared to 3% over a year ago. Let’s look further. Here is a quote from Lawrence Tune National Association of Realtors the median single-family existing-home price rose at a faster rate nationally at 15.7% from one year ago. That’s a huge increase. Home prices, 15% increase in just one year, let alone 510 years. Demand is the number of homes going in escrow. Even as of June 2022, there are still multiple offers going out there. I wrote an offer on two homes for first-time buyers in Orange County, actually in the city of Anaheim, listing prices in the 800 to 875 range. Both the offers and we’ve written several offers on these homes, different homes, and still could not get it. And there were multiple offers even at a high price, even at 5% interest. There is more demand for homes to purchase than there are homes for sale. So that’s why it’s difficult to decide whether we peaked or not, whether you should sell and buy if you’re a buyer should you buy.
The listing price on the house was $1.299M. And the house was on the market for 15 days and had no offers. Did I say 15 days and no offers? Yes. A year ago, the days on the market in Anaheim Hills were only seven days. That means when a house came on the market, it pretty much went into escrow within seven days. This particular house, is a nice house, with four bedrooms, two and a half baths, and almost 2200 sq. ft. listed for $1.3M, approximately sat for 15 days. I showed it to my buyers and we’re in escrow, almost $60,000, 70,000, and $80,000 under the list price. There are a lot of price reductions from the listing prices. What we’re seeing is a drop in listing prices, but we have yet not seen a drop in the close prices. So it takes a lot of thought. So one more scenario if you’re a seller and thinking about putting it on the market and thinking about waiting. So one trend that we are seeing in the last few months is that the home inventory is slightly increasing. In January, the inventory of new homes coming on the market was 326,000 homes coming for sale, single-family homes. And in April that was almost 540,000 homes for sale, new listings. So you can see there’s a significant increase in the number of homes for sale. And as you know, the more homes there are, the more competition there is. The more competition there is, the longer it takes to sell a house.