Orange County California Market Update with Tim Smith | February 2023 | Smith Group Real Estate
Curious about the real estate market? Well this video is for you. Don't turn it off, watch, click the links, call me. I'm Tim Smith, Coldwell Banker Realty. Here is my February Market Update, we're going to talk about data, trends, and my overall thoughts.
We're going to start with inventory. Today we're sitting at just over 2500 homes on the market in all of Orange County. That's amazing. The last three years, we've averaged 4640. So we're at 83% less, but if you trend back the last 10 years, we were at 5500, so we're looking at 110% lower inventory. What we're seeing now in January is, although we started with low inventory and low demand - and there is a tug of war - inventory is going to win, pricing is going to continue to go up, we will see a deceleration in appreciation, but in the last two weeks, we've seen a 4% uptick in new escrows, which is huge. And what we're feeling right now is I'm in the busiest January I've ever been.
Buyers are now thinking or have a perception that interest rates are near or at the top. And we've seen that consistent with mortgage rates falling this year, we've seen a 40% take down in mortgage rates. So we started January 2022 at just over 3%, we shot up to just over 7% and now we're in the 6.4 range, which means for you as a buyer, 10-year IOs, I'm starting to see the best rates in the high fours, that's still much higher than last year, but it's coming down which is creating huge energy in the market. With demand being slow. We're starting to feel that buyers now are thinking you know what, maybe the Orange County real estate market is different than the rest of the nation. Meaning we're not going to have the options or the discounts people see, do don't try.
If you're a buyer, it is my recommendation, I'd advise you to find the home that your family loves, make the best deal you can on it and don't miss it, because there's not going to be pricing coming down.
Sellers the opportunity for you right now - if you have something unique and special and what I mean by that is something that's brand new turnkey - it's time to have the confidence to stretch in pricing. Because as we see demand - we see a very sensitive demand from near and far - very sensitive to being able to move-in without doing anything. That right there is the unicorn properties that are getting the highest price. The other inventory, the stuff that's in between, may need a remodel, or the teardown stuff, you need to call me because we can take your house through a process - and I promise you we will make sure that you don't spend a penny you don't have to to elevate the house to get the most.
Teardown inventory, you're probably going to see some downward pressure on pricing because construction costs over the last three years are up 70% That's not going to change. I know lumber is down and everyone is anticipating these costs coming down. But for now, I don't think you should plan on it. And when you're factoring in land costs versus construction costs, that's going to take some of the wind out of the sails for those buyers. Days on market. Days on market from June 2022 to December 2022 spiked up dramatically. We're now seeing that change days on market are coming down.
New pending inventory and escrows - we've seen a 4% uptick in the last two weeks what that means we are seeing more buyers in the marketplace in January than we've seen in years and they're looking for the right inventory. And so we are on the front of a shift. As I've been predicting in November, October - the surge is coming and what we're gonna see overall for 2023 (23 is my favorite number) this is going to be a fantastic year, we are going to see pricing continue to stabilize and go up in coastal Orange County. Now we may have a little deceleration in appreciation from the COVID market. But we will see the market strong so sate stay true and be confident. Coastal snapshot.
We're currently looking in coastal Orange County out of an inventory of just under 1600 total homes, which is dramatically lower than we've been in the last 10 years. Right? Over 15 million - so far this year we've seen three homes sell, close one over $20MM and two in escrow - we anticipate a very good year. It can be confusing when you turn the TV on when you read all the articles about the real estate market. I would caution you: do not lump our coastal Orange County market or bubble into the overall market because it's not the same.
Thank you for tuning into our February Market Update if you're thinking of selling or buying click the link below to schedule an appointment with me, DM me, call me, I'd love to assist in navigating through this market to assist you in buying or selling a home.