December 2020 Orange County CA Real Estate Update
This year will be a year to remember, and in some cases to forget, for many reasons. The real estate market will be one of them as it has outperformed expectations given the circumstances in our region, nation, and around the world. There is an ongoing seller’s market for years now and it is due to a low inventory of homes available to purchase coupled with strong demand boosted by historically low mortgage rates.
The above graph shows the active listings on the light blue and the buyer demand in the dark blue, both demonstrating this dynamic of low inventory and high demand. The bottom line is that the strength in the market is because of low inventory and high demand!
It is not going to get easier anytime soon for buyers. Waiting is not the answer. Based upon today’s supply and demand, the longer a buyer waits, the more homes will appreciate. That will be the story in 2021 as well. Additionally, mortgage rates are at unprecedented record low levels. According to Freddie Mac’s weekly Primary Mortgage Market Survey® released on November 25th, the 30-year fixed remained at 2.72%, its thirteenth record low this year. Mortgage rates are not forecasted to go any lower in 2021. In fact, there is a stronger chance that they will slightly rise as the economy improves next year. Higher rates combined with higher prices does not work in a buyer’s favor.
Here is a graph showing the breakdown of the market segments in price and how the speed of the market is for each in terms of Days on market.
What does this all mean for you?
If you are a buyer, waiting is not a good approach. Take advantage of the low interest rate environment and jump in NOW in December and January before the spring selling market gets here and a flood of competition joins you. You also might consider having your real estate agent help you look at brand new homes (no competition there,) just select a lot and wait for it to be built. Your agent is still able to represent you, even though it is through a builder.
If you are a seller, now is your time!
- Looking to move to a different neighborhood?
- Want to rightsize your home after the kids are gone?
- Do you need a bigger home because your family has grown?
- Are you seeking to move out of state for a new opportunity?
This is the market you have been waiting for to maximize value in what you walk away with for the next home. It is important to work with your Realtor to imploy strategies of contingencies in selling as you buy the next home, and strategies for buying that new home in a tight inventory market. There are a lot of folks considering making a move so there is a pent up demand to sell, even ones that never hit the market.
Should you ever have a question about the market or your specific situation, please call or email me anytime! Happy Selling and lets make 2021 a great Year!!
Mike Rains- Re/Max Realtor
(714) 293-4786 firstname.lastname@example.org
Mike Rains, Realtor
Huntington Beach, Orange County, CA